Ireland after NAMA

Yesterday the Independent published an OpEd that discussed ways to try and start creating housing supply in areas that needed it – principally some urban centres, particularly Dublin.  It gave ideas grouped around land and sites, planning, costs, regulations, finance, and alternative solutions.  The piece was written by Karl Deeter, Ronan Lyons, Frank Quinn, Lorcan Sirr, Peter Stafford and myself, six regular media commentators on Irish housing.  The idea was try and see if six people who hold different views on housing and planning could reach a consensus position that provided practical solutions to creating supply.  The ‘rules’ were all the instruments suggested could be introduced quickly and with minimal or no legislative changes and it all had to be said in 900 words or less.

Inevitably, the list of solutions produced was a compromise and writing such a piece is an exercise in politics and principles.  No signatory on the piece is fully subscribed to each potential solution and all had to concede ground.  From my perspective, I have problems with removal or reform of Part V, I’m cautious about bringing aspects of Dublin planning regs in line with the rest of the country and the reduction of development contributions.  But I’m happy to see the use of the term housing sector not market, the advocacy of social housing and associated HFA financing and a reversal of the cuts to capital spending, and the ‘use it or lose it provisions’ on planning and land zoning.  I’m a little cheesed off that the Indo editors altered a couple of bits of the submitted piece, especially removing the phrase the “inventions should be time delimited”.

Some of the critique of the proposals on twitter and email has been that they overly favour market and developer interests.  There is, however, I think some degree of balance.  Ideas such as derelict/vacant site tax and a more aggressive use of the Derelict Sites Act are not in land owner/developer interests.  Moreover a range of interventions favoured by such interests were kept off the table: tax incentives, reduction of construction labour wages, radical laissez faire change to the planning system, alterations to build quality, radical changes to density targets, and state provision of housing.

What the piece hopefully does is move the discussion on from diagnosing the problem to practical solutions and towards action.  It provides a selection of options that can be debated and I would welcome counter-pieces.  If the piece does that, then it has done useful work.  At the same time, we also need to move towards action.  We have a real problem that has real consequences and is quickly getting worse, yet very little is being done to address the issue.  We therefore need that action soon, not in two or three years time.  If that requires compromise solutions, then I’m prepared to consider them.  And as this exercise proves, other interests are too.  What we can’t afford to do is nothing.

Rob Kitchin

New paper: Post-politics, crisis, and Ireland’s ‘ghost estates’ by Cian O’Callaghan, Mark Boyle, and Rob Kitchin published in Political Geography. The paper is available here (open access until 27 September 2014).

Abstract: This paper argues that the global economic recession provides an instructive point to reconsider recent theorisations of post-politics for two reasons. First, theories of the post-political can help us to understand the current neoliberal impasse, and second, current transformations provide us with an empirical basis to test the limits of these explanatory frameworks. While the resurgence of neoliberal policies, evidenced through the state-sponsored rescue of the financial sector and the introduction of harsh austerity measures in many countries, appear to confirm post-politics, various protest movements have testified to a concurrent re-politicisation of the economy. Furthermore, crises constitute periods of disruption to the discursive and symbolic order, which open a space for hegemonic struggle, however fleeting. We focus our analysis on Ireland’s ‘ghost estates’ – residential developments left abandoned or unfinished after the property crash – and their treatment within mainstream print media. We argue that in the context of crash, the ‘ghost estate’ functioned as an ‘empty signifier’ through which hegemonic struggles over how to narrate, and thus re-inscribe, the event of the crisis were staged. We explore the double role played by ‘ghost estates’: firstly, as an opening for politics, and secondly, as a vehicle used to discursively contain the crisis through a neoliberal narrative of ‘excess’. We argue that our analysis offers an instructive example of how post-politicisation occurs as a process that is always contingent, contextual, and partial, and reliant on the cooption and coproduction of existing cultural signifiers with emergent narrations of crisis.

Amongst everything else that went array during the boom years in Ireland was the lack of any significant critical media analysis of the property sector and related fields. As has been documented by Julien Mercille, the majority of commentary during this time gave further fuel to the unsustainable model then being pursued. This was supplemented by newspaper property sections festooned with glossy adverts for the latest in lifestyle possibilities. It should therefore be seen as a positive step that one of the key differences between now and then is that the level of discussion and debate has moved on somewhat. For example, with particular reference to Dublin, we have had a significant amount of discussion within various media outlets as to whether or not we are witnessing another bubble. Such discussion is something that should be welcomed.

However, for all the positives within this discourse, the debate continues to be dominated by discussion that is fundamentally oriented towards market forces above all else. While there is a certain level of discussion about the need for social housing, the rhetoric of ‘supply and demand’ represents the dominant discourse around housing. This, on one level, is hardly surprising given Ireland’s recent trajectory. Yet it is deeply problematic in terms of thinking through the wider dynamics of the built environment. We are seeing the continued dominance of something that is fundamental to our everyday human needs by a set of economic assumptions that often run against those very same fundamental needs. This is a set of assumptions which perceives the very tools which we should be promoting and fostering as being the key problem and blockage. For example, in a recent piece, Ronan Lyons commented: “What the decade to 2007 tells us is that planners should be very wary of directing where buildings and people should go“. In laying the blame at one particular cohort, this is an approach which deems planning as something which is simply about regulation and stands outside wider societal norms, politics or economic forces. To place blame on planning or planners without taking into a account weaknesses in governance and wider structural forces misses a significant amount about how intertwined the economic boom was with Ireland’s built environment. Following from this, in recent days, Karl Deeter, writing in the Irish Times, in an otherwise critical piece, put forward the following: “The solution is to swamp the market with supply. To do this we need to make the right to build on land you own implicit.” Again, we see a worrying desire to revert to a Laissez-faire approach to housing development and planning more generally. This is justified through a selective reading of German and Swiss land-use policies. While for the most part Deeter is opposed to going back to a boom-time scenario, he seems to miss the possibility that the deregulation of planning may actually lead us back to such a scenario again.

If anything, now is a time where we need a greater focus on the potential for regional and urban planning, not a cry for less regulation. For this to even become a possibility, there is a need to shift the discourse around the built environment to one that puts the use-value of housing first and foremost. In so doing, it becomes important to recognize that housing is also just one element amongst many within the built environment. It is a central building block of our communities, towns, cities and, thus our entire society. There is a need to actively promote the discussion of housing in a much broader sense and recognize that for a functioning, balanced and more equitable society we need approaches which are about the tenets of society first and fore-most, not the abstract modes by which these are delivered. As a starting point, such a discussion would entail looking more holistically at different sectors, and bring together discussion about housing (including social housing) and societal development.

Philip Lawton

The ESRI published a report this morning concerning housing supply projections up to 2021. Along with the Housing Agency housing supply report published in April 2014 and the CSO regional population projections published in December 2013, it suggests the need to create substantial new supply in the Dublin region and the other principal cities — no surprise to anyone who has been trying to buy in the region or is on the social housing waiting list.

To summarise: housing need projections

The ESRI report details projected housing supply need until 2021. It argues that there will be an increase in household demand of 180,000 units, but because of oversupply in many parts of the country only 90,000 new units will need to be built, some 12,500 per year. 56,000 (60%) of these need to be in Dublin, 8000 per year. 26% more will need to be in the Dublin commuter counties of Meath, Kildare, Louth and Wicklow. Overall, 86% of all new build will need to be in the Greater Dublin region. However, in many counties, the report suggests that new supply will not be needed because of existing oversupply. Indeed, Donegal, Kerry, Mayo, Tipperary, and all the Upper Shannon counties of Leitrim, Sligo, Cavan, Roscommon and Longford are projected to still have oversupply in 2021.

The Housing Agency report analyzed housing need for 272 towns and cities across the country for the period 2014-18. It argued that there was a need for 80,000 new units, or 16,000 per annum. 37,500 units (47%) would need to be built in Dublin, or 7,500 units per annum.

Both reports use a fairly standard housing projection model using housing stock, population projections, household size, vacancy and obsolescence.

The CSO regional population projections gave a mid-term estimate of population numbers in 2031 using two scenarios. The projections predicted that Dublin population would grow by between 96,000 and 286,000, and the Mid-East region by 77,000 to 144,000. In the upper scenario the Greater Dublin region would therefore see its population grow by over 400,000. In contrast, in the lower scenario, the Border region population would increase by just 18,000 and the West by 17,000. Although these figures relate to population, they will clearly need to be housed and these figures suggest the need for substantially more housing stock over the next 17 years.

There is pretty good harmonisation between the ESRI and Housing Agency reports, both suggesting that c.8000 houses need to be built in Dublin per annum to meet demand.  The overall national required rate of between 12,500-16,000 per annum is actually quite modest.  Typically over the past forty five years new build has been 20-30,000 per annum, rising to 40,000+ post 1998.  12,500 is in fact lower that the lowest build rate going back to when DECLG records start in 1970.  In other words, this is by no means an excessive ambition.

So why do we need supply in Dublin given the crash, oversupply, emigration, etc?

In short, the oversupply of the boom for houses in Dublin as a whole was relatively small, and there wasn’t one in South Dublin. There was, however, a reasonably large overhang of apartments. However, since 2008 the three main drivers of housing demand have been growing: natural increase, in-migration to the city, and household fragmentation. These have soaked up the oversupply. On the other side of the equation housing supply has been minimal. In 2013 only 1360 units were built in the four Dublin local authorities (only 8301 nationwide, over half of which were one-offs and generally not for sale on the open market). In short, over the past seven years we’ve moved from having excess supply to excess demand in Dublin and some other urban locations.

So if there is demand why isn’t there supply?

Good question. Housing supply is shaped by a number of factors: demand, available zoned land, planning permission, building costs (materials, labour), regulatory conditions/costs (taxes, levies, fees, etc), finance (for developers and consumers), and ability to make a profit.

In theory a lot of the right criteria for creating supply exist. There is an excess of demand. There are 6400 acres of zoned serviced land available in the four Dublin authorities for 132,000 units. There are a lot of outstanding planning permissions still in effect and LAs want to give permission for developments that meet development plan/zoning criteria. Material and labour costs of significantly lower than the boom time.

And yet, supply does not seem to be coming on stream and there seem to be blockages across the board. With respect to land, it may be the case that owners are not bringing it to development because they bought it in the boom and can’t afford to develop at present house prices. With respect to planning, it may be that developers are seeking permissions that contravene development plans or are trying to alter existing permissions. The property industry also say that the system needs streamlining and simplifying. They also make the case that there are too many taxes and disincentives attached to building such as development levies, VAT, stamp duty, building reg costs, etc that amount to a sizable proportion of any sale price. Finance is a critical issue. Developers need a sizable amount of upfront cash to secure development loans, yet many are bust from the boom or do not have such reserves.

So what are we to do?

The government needs to quickly evaluate each of the potential blockages and work out solutions that are fair and do not undermine good planning and build quality or excessively boost profit at the state’s expense. By quickly I mean weeks, not months and certainly not years. The longer that supply is constrained the more demand there will be on existing stock and house prices will continue to rise. The Construction 2020 strategy is full of task forces, review groups, consultation exercises and very short on actual policy and implementation. We need supply coming on stream as quickly as possible in the Dublin region and some other urban locales (though certainly not in many parts of the country). Construction 2020 thus needs to be fast tracked. After all, 2020 is meant to be an end date, not the date ground is broken.

Rob Kitchin