Ireland after NAMA

After four years of little tangible progress in respect of planning policy agendas, the government recently published a new Planning Policy Statement (PPS) “to reaffirm its strong belief in the value of a forward-looking, visionary and dynamic planning process” together with the heads of two new planning bills. The first introduces a new vacant site levy and revised provisions in relation to social and affordable housing. The second presents proposals for the long-awaited planning regulator, following the recommendations of the Mahon Tribunal. It also sets out the legislative context for the successor to the National Spatial Strategy (NSS) – the National Planning Framework (NPF).

Both bills have also not been without their criticisms from, for example, the Irish Planning Institute and An Taisce. The proposed vacant sites levy mechanism appears so cumbersome so as to be unworkable in practice and exposes the strategic error in opting for a property tax over a more progressive Site Value Tax. I have previously blogged on the criticisms surrounding the independence of the planning regulator. Regulating planning is not like regulating the taxi industry. Planning is spatial politics – making choices on the use of land which are irreversible and will have profound intergenerational impacts. While I acknowledge that the track record of most former ministers inspires little confidence, the idea of handing such power over to a technocratic regulator outside of democratic oversight would be fraught with danger. It cannot be simply assumed that the regulator would be a benign or progressive force.

The high-level political commitment in the PPS is, of course, welcome – basic ‘Planning 101’ type stuff. The new mantra for the planning system is to ensure that “the right development takes place in the right locations and at the right time”. However, what is actually happening in the micro-politics of everyday practice, and which will no doubt continue, is more like ‘any development, in any location and at any time’. For example, in the majority of local authorities, ad hoc ‘one-off’ housing currently accounts for well over 70% of all new residential units granted planning permission and in many cases it is over 90% i.e. diametrically contrary to the lofty principles of the PPS.

The broader point here, and relevant to the preparation of the new NPF, is Niklas Luhmann’s famous assertion that planning is possible if people are used to being planned. Irish people clearly are not. The political class is equally apathetic, even ideologically hostile, to long-term policy planning. The reason the NSS failed was due to thousands of individual acts of resistance – death by a thousand cuts – which cumulatively undermined the whole foundations of the strategy. This was aided and abetted by the vague nature of NSS policies and objectives which simultaneously offered something to everyone and nobody at the same time. Text could always be pulled out of the NSS to justify almost any manner of development proposal regardless of location, the upshot being a complete loss of steering capacity.

While there will always be broad acceptance of notional long-term planning strategies and feel-good intentions as advocated by the PPS, short-term considerations will always win out in concrete practice. Such outcomes are often tied to emotional pleadings around children of landowners and the promise of local jobs which are impossible to resist. We are already seeing a return of the ‘development-at-all-costs’ culture which gripped the Celtic Tiger, where those questioning development proposals on the grounds of national policy are being pilloried by national and local politicians. Surely, it must be a concern that in almost 50% of planning cases where a decision of a planning authority is sent for an independent review to An Bord Pleanála, that decision is reversed?

In short, we must be realistic about the prospects for the NPF. There is growing academic evidence of the widening gap between the theory and practice of spatial planning, and Ireland is obviously a clear case in point. In fact, it is difficult to point to any instances where national spatial planning has actually worked. Simply, persisting with all of the borrowed buzzwords of the late 1990s (e.g. balanced development, gateways, hubs, networks etc) for continuity’s sake would be foolish in the extreme. So would be to try to ignore the contentious spatial politics at national level by shirking responsibility to the new ‘super regions’.

The fact of the matter is that Ireland is not a blank page onto which we can sketch abstract spatial policies. This has been amplified by the legacy of the Celtic Tiger which has accreted a complex economic, social and political geography which creates manifold path dependencies which cannot now be unpicked. These geographies are adversarial to national planning and present as countervailing headwinds to any strategy aimed at focusing development and infrastructure into a limited number of growth centres. Our widely dispersed settlement patterns make both the politics and technicalities of such explicit choices impossible. In fact, it is hard to conceive of a more unfavourable environment for conducting national spatial planning. Concentrating resources in one location inevitably means withdrawing them from others. Spreading them too thinly automatically undermines a strategy aimed at spatial concentration. The recent HIQA report on the under-performance of regional ambulance services, and the subsequent political outcry, is instructive here.

So in the end the NPF, like its predecessor, will fudge it. Within the fog, all development regardless of location will be justifiable. This depoliticised consensus will of-course suit the wider elite political project of maintaining the primacy of Dublin and Ireland’s competitiveness at the global scale. The NPF and the illusion of balanced development implies a form of spatial Keynesianism whereby resources are redistributed territorially. However, imposing artificial constraints on the growth of Dublin will inevitably be presented as counter-productive. FDI will simply not move to peripheral regions, but overseas. Figures released by the DJEI show that almost half of all FDI jobs created in 2013 were in Dublin with Cork, Galway and Limerick accounting for the majority of the balance. Demographic analysis by the Western Development Commission also shows that population is projected to become more regionally concentrated, particularly in Dublin and the Mid-East regions.

We have previously marshaled great effort and expense to produce a NSS which ultimately proved pointless. Before we embark on another fool’s errand we should first be asking ourselves the simple question – unless we are willing to confront the spatial politics that such a strategy implies, is there any point? Our experience  is clearly that a spatial strategy based on a bland depoliticised consensus is equal to no strategy at all.

Gavin Daly

Previously published in the Irish Examiner

THE Central Bank’s proposed mortgage lending regulations — through the introduction of a 20% deposit requirement for borrowers — have drawn criticism from the Government, property market interests, and the ESRI, for its likelihood to restrict the ability of people to get mortgages to buy housing.

The ESRI state that “Irish house prices still appear to be undervalued” and that “most commentators have identified a lack of housing supply as the main policy concern in the Irish housing market at present”.

Instead, they want to give a different “signal to the market”, ie tell property developers that financial institutions will be allowed give lots of people lots of credit to buy homes, and thus they should start building again.

Prices will stabilise, their theory says, and we will have another generation of happy homeowners living the property dream.
Of course the reality will be developers and sellers pushing up prices in the knowledge that borrowers will be able to get mortgages at multiples of their incomes and deposits.

Doesn’t this seem eerily familiar?

Wasn’t the expansion of unsustainable borrowing for home ownership one of the fundamental causes of the crash?
Have we learned nothing from the fact that 130,000 households are still in mortgage arrears?

If the concern of policymakers and economists is to provide young families and low to middle income earners with high quality, affordable, secure housing in sustainable communities, then clearly this is not the way to do it.

There is a need to explore alternative ways of addressing this need rather than creating another housing bubble and unsustainable levels of indebtedness, poverty, and stress.

One obvious area that offers great potential is the private rented sector.  Many people looking to buy a home are doing so, not because of some insatiable desire to own property, but simply because of the failure of the private rented sector to meet their needs.

The private rented sector now accounts for a fifth of all households.  In urban centres it is even more significant with almost 40% of people renting in Galway, 35% in Dublin, and 29% in Cork.

However, the recent annual report of the national housing charity, Threshold, detailed chronic failings “that need to be addressed before anyone living in a rented dwelling can really consider it their long-term home”.

Threshold has found that “loopholes in the law are enabling landlords to remove tenants from their homes and then re-advertise the same properties at substantially higher rents” and they are “increasingly witnessing such economic evictions, where families are forced to leave their homes because of exorbitant rent hikes”.

In the absence of any regulation, rents have increased dramatically, in some cases up to 40% in the last four years.
The introduction of rent control is imperative to change this and provide a functioning housing system that can meet people’s needs.

The youth campaign We’re Not Leaving recently produced a report that pointed out Germany only allows increases in rents for sitting tenants of up to a maximum of 20% over three years, with some cities permitting no more than 15%.

The Netherlands has rent control between and within tenancies where the initial rent for a unit is regulated and there is a maximum rent for each dwelling based on a points system awarded according to size, quality, area etc.

This shows that the argument that rent control reduces supply is not true. These countries have a much larger provision of rental properties than Ireland.

The issue of supply could also be addressed by the use of the 43,707 vacant properties in Dublin (including 16,321 apartments), 6,168 vacant units in Cork City, and 3,755 in Galway City.

Refurbishing and rebuilding derelict units or converting the thousands of empty retail and office buildings into suitable accommodation could also help supply.

Nama’s €3bn development fund should focus on funding local construction workers to undertake that work and provide low-cost rental accommodation rather than funding the large developers and real-estate investors.

Another issue raised by landlords and property economists is that rent control would contravene their private property rights enshrined in the Constitution. It is true that Article 43.2 protects “the right of private ownership”.

However, Article 43.2.1 states that this right “ought to be regulated by the principles of social justice” and the State may, “delimit by law” these rights for “the common good”.

Essentially, the Constitution protects the right to private property but states that these rights can be superseded by laws and measures (such as rent control) that are in the interests of social justice and the “common good”.

An expert on housing and property law, Padraic Kenna of NUI Galway, has detailed how there is no property rights impediment to rent regulation at an Irish and European level.

He has pointed out that the European Court of Human Rights has established that rent controls are accepted as a means of state control on the use of property in the general interest.

For example, in 2013, the ECHR held in a Dutch case that laws on rent control which imposed caps on rent increases of 2.5%, 1.2%, as well as rent reductions, did not impair landlord’s property rights.

So there is nothing stopping the Government from passing regulation to restrict the rate of rent inflation in any one tax year to, for example, 5%, and then recouping a higher rate of tax on rental incomes where a landlord has breached this cap.
We need a national debate about who really benefits from the current housing and property market based around homeownership, and spiralling house prices and rents.

The big beneficiaries remain the banks, developers, estate agents, solicitors, landlords, and increasingly, international capital and vulture fund investors who are buying up huge swathes of Irish residential property (often from and with Nama).
They all have a vested interest in a rising property market.

It is unsurprising, therefore, that property commentators, who are generally in some way connected with one of the above interests, argue against rent control.

The truth is, rent regulation along with significantly increased security of tenure for tenants, and improved standards, would help to make the private rented sector a realistic long-term housing option.

It would also immediately help address the homelessness crisis.

Rory Hearne

Previously published in the Irish Examiner

AUSTERITY, unemployment, and the recession have affected some groups in our society more than others.

A generation of Irish youth has been, and remains, disproportionally impacted.

Almost 10% of our young people emigrated during the recession. That equates to over 30,000 young people, aged between 15 and 24, leaving each year.

Emigration has steadily worsened the longer the crisis has dragged on. Just under 20,000 Irish emigrated in 2009. This rose to 30,000 in 2010 and then reached over 50,000 in 2013. Some have questioned if this is actually “forced” emigration.

The Higher Education Authority has emphasised that not everybody emigrating is doing so because they have to and, in fact, the increasing employment of graduates overseas shows that the higher education system is producing graduates who are in “high demand” internationally.

Michael Noonan, the finance minister, also captured the views of the so-called insider classes when he glibly remarked that many of those leaving have been doing so as a “lifestyle choice”. This attempted dismissal of “forced” or “economic” emigration downplays the impact of government policies such as austerity and the failure to provide decent employment opportunities here in Ireland.

Last year’s study by the department of geography in University College Cork showed the majority of emigrants were between 20 and 29 and the majority were emigrating in order to find a job. It also found that almost half (47%) were employed full time before leaving, 13% were working part-time, 23% were unemployed and 15% were students.

Almost 70% of emigrants had a third-level qualification such as valuable IT or health professional skills. Young people are, therefore, being forced to emigrate not just because of a lack of jobs in Ireland (the unemployment rate among those 15-24 is 30%) but also because of under-employment — low pay, insecure contracts, and poor career prospects. The public sector reduction in recruitment levels and pay for new entrants has added to the problem. At third level, for example, there is an increasing issue with the use of short-term and non-contract teaching staff.

For those young people who do not want to leave or cannot leave, austerity has hit them hard. The Fianna Fáil-led government in 2009 cut jobseeker’s payments for those aged 22-24 by €44 (to €144) and for those aged 18-21 by €88 (to €100).

The Fine Gael-Labour government reduced it further for 22-24 year olds to €100. Work incentive initiatives such as JobBridge have been criticised for exploiting young people and worsening the inaccurate narrative that youth are lazy and to blame for their own unemployment.

It has resulted in the displacement of employment opportunities. Public and private-sector employers are using the JobBridge and internship schemes to replace what used to be fully paid entry-level positions. Thus the jobs market for young workers increasingly resembles that of the United States, where working for free or for little pay as an intern is becoming an essential part of a modern curriculum vitae.

Furthermore, almost 20% of 15-25 year olds are NEETs (not in education, employment or training). Ireland has the fourth highest NEET population in the EU. Many of the integral supports to such young people have also been radically cut, such as community and youth workers in disadvantaged areas.
Their possibility of attending third level has been further reduced by rising fees and reductions in the availability and amount of the student grant.

All this shows the way in which the insiders in Irish society, ie the “older” generation and existing “order” — those in power, in senior positions in civil service, business, and civil society organisations have protected themselves at the expense of our youth. It is not an exaggeration to say they have imprisoned and sacrificed a generation of young people with the costs of austerity and the banking crisis.

Young people are an easy target They traditionally do not vote. They don’t have a voice in the media. Most commentators are closer to 60 than 20. They have been outsiders in a system that sought to protect its privileges at the expense of those more vulnerable and the young and future generations. They are the victims of an acceptance of emigration as a “natural” phenomenon.

It is sad to see how recent developments are being warped into a celebration of the international ‘competitiveness’ of our graduates. But our education system just turns young people into commodities. They are taught at secondary and third level to study as an individual, in its narrowest sense. To focus on getting the highest mark and making themselves marketable and employable as their primary aim.
They are rarely taught to be critical thinkers, aware of the challenges faced by their surrounding society, nor are they inculcated with a passion or idealism of commitment to better their country. And so they pursue the strategy they are taught. They leave. We export them to a country that wants to purchase their commodified skills.

But they are not products. They are our children, they live in our communities. Their leaving represents our collective destruction as a nation and the slow rotting of our communities. Of course it suits the political system that potential critical and radical youthful voices leave. Throughout Irish history emigration has provided a very useful political safety valve. Figures suggest that without it the unemployment rate would be around 20%. It removes the problem of angry young people who might demand alternatives.

Just look at the streets of Spain and Greece — young people dominate the protests. A new youth campaign, called We’re Not Leaving, has been campaigning against what they have termed the “social catastrophe of forced emigration”. They explain that the crisis has had a detrimental impact on the mental health of our young people.

The cut to guidance counsellors at secondary level hasn’t helped in this regard and neither has the on-going underfunding of mental health services.

The legacy of this crisis in creating a lost generation of youth is already profound and its implications are likely to be devastating for decades to come.

Rory Hearne