The Government’s Housing For All plan was launched with much fanfare last September with the ambition to fix the housing crisis.
Is it working? Well, an update report published last week claims “significant progress towards the government’s plan to increase the supply of housing to an average of 33,000 units per year”.
Similarly, housing minister Darragh O’Brien and Taoiseach Micheál Martin both claimed signs of progress in the housing crisis when asked in recent days.
But, how can massive house price inflation, rental increases, and rising homelessness be described as ‘significant progress’? The number of families homeless was 11% higher at the end of 2021 than in 2020. In Dublin alone, 1,606 families were made homeless in 2021 -that is 30 new homeless families each week. 786 children and their families have spent over one entire year living in emergency accommodation.
If we go behind the soundbites and headlines we can see that, while housing commencements increased, the housing supply targets were not met last year, and will not be met this year either. Just 20,433 homes were built last year, 12,000 under the Government’s 33,000 target. New builds in 2020 and 2019 were similarly behind the target, leaving an undersupply of 36,992 homes over the last three years. This deficit should be added to the 2022 Housing For All target, raising it to a required new supply of 69,992 homes. This would reflect real housing need.
The report did not explain the central question of how much of the new supply is actually affordable homes? It should have provided analysis of the type of housing being supplied, affordability, is it in the right parts of the country, and so on. I hope we will we see this in future updates.
Housing Minister Darragh O’Brien claimed signs of progress in the housing crisis when asked in recent days, but, how can massive house price inflation, rental increases, and rising homelessness be described as ‘significant progress’? Picture: Niall Carson/PA
Take new apartments, which increased in supply by 30.3%, to 5,101 units. Most of these are being bought up by investor funds as build/buy to rent at unaffordable levels. In Dublin, new US real estate fund developments are advertising two bedroom apartments to rent at €2,250 a month. That rent would eat up 72% of the monthly take home income of someone on €50,000 a year. How can they afford to live on that? Not all supply is the right supply.
The report also fails to mention that not one affordable purchase home was delivered by the state in 2021, a real failure of policy at the height of a housing crisis. Obfuscation appears to be the method of delivery in this report. It states that “Cost Rental homes is a key affordability measure” yet just 65 cost rental homes have been delivered to date. A further 1,580 are planned in 2022 but there’s no detail on how or who will provide these. They will be 20% below the original 2022 targets.
Housing For All commits to building 9,000 new social homes each year. But in the first three quarters of last year, just 3,144 new social homes were built. The deficit should be added on to the 2022 social housing target.
Importantly, two-thirds of these ‘new builds’ were not actually new homes built by local authorities or approved housing bodies, but forward purchase agreements from the private market. These turnkey construction units are deals where social housing is bought off a private developer. Describing these as new build social housing is misleading as it gives the impression social housing providers are actually building. It also takes supply away from potential home purchasers in the private market.
A worrying ‘action’ of the report is the move for Government Departments to “investigate their land holdings” and to “place them on the market” if they “may be suitable for conversion to residential accommodation”. Why is the State selling land when it should be used for building affordable and social homes?
Housing for All also committed to stop rising rents and “give stability for renters”, but rents grew by 8.3% last year. New rental properties coming to the market are completely exempt from rent caps and are driving up rents. Many are expensive investor fund apartments. The update makes it clear that the landlords have the green light to rent out new tenancies at whatever price they want.
The Government’s position on renters is contradictory. They claim they want to get renters “out of the rent trap”, yet the new supply of homes leaves renters with little option but to be pushed further into the trap.
The update also makes a misleading claim that it has “enhanced security of tenure for renters” through legislation providing for tenancies of unlimited duration. Renters have no genuine long- term security of tenure when a tenant can be evicted by the landlord for ‘no fault’ reasons like the sale of the property, moving a family member in, and refurbishment.
Finally, the report makes it clear the delivery of Housing for All is completely dependent on the private market, and particularly, global investor and vulture funds. Of the €12bn a year required to build the 33,000 homes, €10bn, will come from “private capital sources”.
And of this “the majority will be required from international sources… coming from well-established investors”.
So the private market and investors are to provide 83% of new homes, with the state playing a small role, less than one-fifth of all new building. This is history repeating itself. The causes of the current crisis is the low level of state building of social and affordable housing since the 1980s. Now we have the addition of global funds who view Irish housing as the “gift that keeps on giving” to them.
And, according to the update report, our very own Department of Housing and Government is actively courting global real estate funds to continue to come to Ireland. This seems quite a reversal of the claims by the Taoiseach that the role of institiutional investor funds in Irish housing delivery was being exaggerated. The report states they are leading “engagement with institutional investors, including tradeshow events, to communicate policies and encourage sustainable investment in residential accommodation”.
The rents the funds charge are hardly ‘sustainable’ from a renters perspective. Then the report notes a department “investment group has invited funding partners to attend and present to the group on their role and experience in funding residential housing delivery”.
But there is no detail on who is this investment group and who they met. We need to know this and who is driving our housing policy and delivery. It seems the private developers and investor funds have a firm grip on the steering wheel.