Commentaries


Below is the text of the talk delivered at the MacGill Summer School in Glenties, Donegal by Lorcan Sirr as part of a panel on the future of housing policy in Ireland.

INTRODUCTION

At a zinc bar in Granada, I pondered how I would reply to Dr Mulholland’s invitation to speak here. As I did, the barman was playing Led Zeppelin on the stereo, a song called ‘What Is and What Should Never Be’, and from this of all things I got my cue about how to discuss Irish housing policy.

I’ve taken the liberty of changing it slightly as can be seen: what is, what should, and will never be.

WHAT IS

Ireland’s housing policy as it currently stands is a four page pdf document from June 2011 and one of those pages is a cover. It is called the ‘Housing Policy Statement’, a rather ambiguous title leading to confusion over whether it is actually policy or a statement about policy. Or indeed, just a statement.

The Housing Policy Statement is notable for three things.

Firstly, it reads as a form of mea culpa; an admission – if not quite an apology – of wrongdoing and a thinly veiled blaming of the previous administration’s approach.

Secondly, through its analysis of the role of housing in the crash, it is a detailed checklist of what not to do in housing.

Thirdly, it is more significant in being ignored and contradicted than implemented, which is somewhat ironic given its analysis of what went wrong.

The most positive aspect of the policy is the idea of basing the future of the housing sector on the concept of equity across tenures. Sensibly, it also proposes that the housing sector should make an appropriate contribution to the economy, rather than be a driver of it. There are subsequent strategies of course, but these should emanate from the policy, so it’s policy that’s crucial.

WHAT SHOULD BE

Although the economic role of housing (in job creation and asset wealth generation) is important, housing plays many more roles in Irish life. You wouldn’t know it from politicians, but housing is of critical importance in areas of health (and particularly mental health), in education, in human rights, in ageing, in quality of life and in general well-being. It is also deeply embedded with the concept of human dignity.

We now have a good handle on the issues that we face, and which a housing policy should provide guidance in tackling.

In terms of HOUSING, thanks to data from bodies like the Housing Agency, we know exactly how many houses we need and what locations we need them in. For example, we know that from 2014-2018 Clonmel will need 480; and the Dublin region will need 37,581 in the same period. This is significant step forward compared to previous housing practices where housing was provided with little or no regard to where housing was actually needed – the results of this crazy Late Late Show ‘one for everybody in the audience’ methodology can be seen in the ghost estates littering the country.

We know that supply of land isn’t the total problem – there is plenty of land ready to be built upon – the issue is an ability and willingness to build. We know we need to achieve housing affordability, but not necessarily at the expense of standards – there is a concerted attempt to reduce standards mostly from people who ignore other costs, especially social costs.

Our new-found ability to unearth uncomfortable evidence demonstrates that we have both an ageing population and a population with far more diverse household sizes (by 2018, nearly 60% of Dublin households will be one or two person, for example). So we know we need housing for people at difference stages of life and different household compositions: one-size fits all three- and four-bed semi D’s should no longer be the default position but yet are exactly what the industry is determined to build.

Connecting all this of course is the issue of increasing the supply of both private and social housing for both sale and rent. And in addressing issues of supply, of course, we also address issues of affordability, which should be the key component of any housing policy. Relying on traditional methods of housing supply, construction and location will not bring affordability, however, but this is what we are doing. And Einstein had a quote for that: doing the same thing twice but expecting a different result is the definition of ‘not quite being at the top of the class’, to put it politely.

Regarding the PRIVATE RENTED SECTOR, a housing policy should recognise the new importance of the PRS in Irish society.

In a very short space of time, the private rented sector has sprung from obscurity as a refuge for students, immigrants and separated fathers, to occupy a prominent position and role in Irish housing. In 2015, just under 20% of households currently rent their accommodation. The PRS still provides refuge for students, immigrants and separated fathers, but its function and importance has expanded in line with issues surrounding access to credit, new work practices, affordability and the availability of social housing.

The PRS additionally houses two new cohorts of renters: there are those who are actively choosing to rent, usually for reasons of quality of life. And then there are the multi-lingual, highly-educated, largely international workers in high-tech service industries such as Facebook, Oracle, AirBnB and, of course, Google. Affordability in the rental sector is now of economic importance because when rents rise one of two things happen: these bright young things will choose to go elsewhere to work, thus depriving Ireland of their potential taxable income; or if already here, their first concern is a pay rise to compensate for their expensive living costs (i.e. rent). The PRS therefore affects our ability to be competitive in a global marketplace.

By implementing things like the long-awaited deposit retention scheme for tenants (20 years plus waiting), full mortgage interest relief for landlords (or at least incremental in line with the length of time a tenant has been in situ), secure occupancy (governments seem to think that a long lease equates to security of tenure; it doesn’t – unless reasons for termination are addressed then the length of a lease is meaningless); by creating the conditions for viable long-term renting; and generally treating being a landlord like a business, we can make renting an attractive prospect for both sides of the economic supply and demand equation – that is, landlord and tenant.

There are OTHER ISSUES too, far too many to mention, but here are a few:

We know we need to have and maintain high building standards, although when the self-build lobby jumped up and down the floor in the minister’s office reverberated and the government reacted immediately by proposing reducing standards which given our history of poor construction is a very irresponsible thing to do.

There is no point in having standards if there is no inspection, however, and self certification causes more problems than it solves. Housing needs state building inspectors. We have more dog wardens than local authority building inspectors in Ireland, and given national and international building tragedies, we should not be attempting to scrimp on this (but we are…). The UK residential inspection rate is 100%; at our best we managed about 3%.

We know we need to exercise more financial prudence with lending. However, the government’s first – and unfortunately predictable – reaction to the Central Bank’s lending restrictions earlier this year was to criticise them, and then try to help purchasers circumvent them. It begs the question: why have a Central Bank if this is what government does?

Then there is also homelessness, asset-based welfare, and social housing delivery to be considered.

Everything I’ve mentioned we can do, and we have lots of GOOD IDEAS to supplement these facts.

The old hands-off leave-it-to-the-market ways no longer work. Methods of housing delivery, housing finance and housing typologies have moved on considerably since housing was last a driver of the Irish economy, and it is important not to revert to the laziest, lowest common denominator solution of a construction free-for-all which is currently what we’re heading for.

Instead, by delivering housing by bundling parcels of land where 500-1000 private and social housing units are needed at a time, we can tender across the EU for housing construction using a body like the National Development Finance Agency who manage all state accommodation works, to control the specifications and delivery, and thus we can control affordability. Building 50-100 housing units at a time has its place in Ireland, but will make little inroads into real housing supply needs.

And we’re not even thinking about new tenures such as temporal ownership whereby a property is bought via cash or a mortgage and ‘owned’ for a specified period of time (say ten years). Access to this housing tenure is easier and repayments more affordable than rent; and there is total secure occupancy for the purchaser.

There are also things like community land trusts, and we could do with land zoned exclusively for long-term rental.
So will this happen? Will we get a housing policy that addresses the real needs of housing in Ireland for the next half century, rather than the needs of those with access to the ministers?

I’m not so sure.

WHAT WILL NEVER BE

There are several reasons why I think we’ll struggle to produce a decent housing policy. Some of these are readily identifiable, and some are more obscure.

The factors that are readily identifiable, I call ‘waves’.

Examples of these barriers to a decent housing policy include:
* the power of, and a reverence for, the construction sector in all its forms from the CIF to self-builders;
* an essentially conservative civil service, especially at policy-formation level;
* the challenge of evidence-led policies versus evidence-free politics;
* the influence of a dominant rural ideology on political thinking and housing policy – as with 90 years ago, rural

Ireland’s housing issues are first to be solved – in 1914, rural Ireland was the best housed region in Europe as Dublin lived in slums; this ideology is also in total conflict with Ireland’s rapid rate of urbanisation;

* a preference for light-touch regulation in finance and building standards;
* the constant preferable treatment given to home-ownership and the reliance on the house as a welfare asset;
* a lack of creativity leading to a constant reversion to outdated but familiar practices;
* a Dáil where parochial canniness too frequently passes for political debate;
* a fear of cities and a reluctance to countenance real urbanisation as evidenced in the poorly thought out National Spatial Strategy;
* the individualisation of housing and the consequent reliance on family patrimony to house people through land or deposits; and
* a preponderance of poorly educated politicians compared to our European neighbours – at any one time c.30% of EU prime ministers will have a PhD: we have had one, ever.

This is the easy stuff.

Then there are the ‘undercurrents’ – or influential systemic issues – which flow beneath these waves.

And here it’s interesting in that Ireland has more in common with southern Europe than northern Europe. For both southern Europe and Ireland the driving impetus has always been to protect, facilitate and extend home ownership. For example, the Housing Policy Statements’s drive for equity across tenures is ignored when the ability to buy a property is potentially curtailed by the Central Bank – the first response is to reach for the state cheque book to provide assistance. Like much of southern Europe, we have also managed to muddle along so far to meet housing needs without developing a strong social housing sector or especially a strong private rental sector.

Most importantly, has been the strong conservative presence of the church.

Across southern Europe and also in Ireland, particularly in the last century the church has been an advocate of the withdrawal of the state from collective provision, including housing, thus promoting reliance on the family or the church’s charities – for housing this has meant the provision of accommodation whilst saving for housing, the supply of land on which to build and the donation of finance to assist building or purchase. The responsibility allocated to the family and other charitable institutions in safeguarding individuals against social exclusion is significant. Assets from – and dependence on – the family are, in fact, a major source in filling gaps in the welfare and housing system (see childcare in Ireland for example). It has also meant a reliance on ‘patrimony’ – the distribution of wealth, often property – through family structures.

The church has also been a strong advocate of home ownership (more for reasons of morality and preventing socialist tendencies than for improving housing stability), and an opposer of urbanisation and planning. And over many decades it has been a significant player in retarding the development of the welfare state since it viewed it as a competitor against its own welfare institutions.

A lot of this translated itself into housing reality through the individualisation of housing – transferring the obligation and risk for housing people onto individuals and away from the state. But this isn’t really workable any more, so now Ireland faces several housing challenges. These challenges are:

1) Accessing housing that is affordable (limited supply of private accommodation and social housing, growing demand, partly driven by…)

2) Changing family structures (divorces, children outside marriage etc.) are challenging traditional patrimony. Separation in particular increases demand for housing but with lowered financial resources. An economic crisis also reduces individual means with which to afford housing.

3) The state remains at one remove from supporting those in need (individualisation of housing provision), especially regarding social housing leading to a lack of supply, and driving people into an under-developed rental sector.

In effect, Ireland’s ‘spiritual’ home is with the other peripheral countries in southern Europe such as Spain, Malta, Italy and Greece, but its neighbours and recent ‘economic advisors’ are north European. And north European means high taxes for state provided services such as health, childcare, and education, and significant state involvement in housing provision, especially social housing. It also means a large functioning PRS and urbanisation. Housing in northern Europe frequently means the romanticisation of rural areas, which they do through protecting the countryside from development – definitely not conducive to one-off housing. There is less individualisation in most north European countries, less home ownership, less asset-based welfare and there is more social expenditure.

So there is an ideological conflict between doing what our geographical and economic neighbours and occasional masters do, and doing what has been traditional in the Irish system. This traditional approach is now severely out of date though. With effectively two ministers for building and no minister for housing, the government is listening to those who shout the loudest rather than to those with most to say, and what has resulted to date is housing policy stasis.

CONCLUSION

So, the obvious question is of course, what should be in a housing policy?

A housing policy needs to be a plan for say 100 years (as in Portugal) centred around three principles – for example, affordability…delivered by efficiency, creating accessibility – with goals and targets. It needs to anticipate where and in what properties the average Irish person will be living in thirty years, how much of their salary they will be paying for housing, and the security they will have, whether renting or owning.

Specifically, housing must be looked at as part of a broader, integrated national social and economic ecosystem: when was the last time you heard a minister for housing or the environment discuss housing in relation to education, mental health and welfare, childcare or road safety? Direct access to rural roads is a contributory factor in 15% of serious road collisions and fatalities, but you’ll never hear a minister for housing mention this because: a) they probably don’t know it; and b) even if they do, it doesn’t suit the narrative.

Secondly, housing should be regarded as a critical part of the country’s infrastructure to ensure control of quality and location and to assess how it fits into the state’s other infrastructure. Right now there’s little control over this crucial aspect of our lives, with developers deciding what should be built and where – and they’re qualified to do neither.

Finally, as we head for 2016 and the 2020s, it seems that Ireland’s housing policy is more akin to that of 1916 and the 1920s with overt political interference, an innate fear of urbanisation/densification and cities, and the continued dominance of a fundamentally rural ideology. We know the issues, we know the solutions – the question is do we have the political bottle to develop a housing policy that will last longer than five years and will efficiently deliver affordable and accessible housing for Ireland for the next hundred years.

Dr Lorcan Sirr

Universitat Rovira I Virgili, Tarragona, Spain
Lecturer in Housing, Dublin Institute of Technology

Article Published in the Irish Examiner, July 4th 2015.

GREECE is being told to follow Ireland’s crisis solution of harsh austerity and acceptance of bank-and-bailout debt. This narrative conveniently ignores that the Irish ‘recovery’ has been built on major human rights violations and the undermining of long-term social and economic development.

There is a dark side to Ireland’s ‘success’ that requires discussion about the most effective responses to financial and fiscal crises.

The eight austerity budgets between 2008 and 2014 involved €18.5bn in public-spending cuts and €12bn in tax-raising (revenue) measures. Key public services, in particular health and housing, have been weakened as a result.

Public service staff have been reduced by 10% (37,500). Health spending has been cut by 27% since 2008, resulting in an 81% increase in the number of patients waiting on trolleys and chairs in emergency departments. One-third of all children admitted to hospital suffering with mental-health difficulties have been put in adult wards and the waiting lists for youth mental-health services have increased to 2,818 people.

Funding for local authority housing was cut from €1.3bn, in 2007, to just €83m, in 2013. This meant a loss of 25,000 social-housing units. This is a major contribution to the homelessness crisis, with 1,000 children and 500 families now living in emergency accommodation in Dublin. Because of the decision to prioritise bank recapitalisation and developer debt write-down, homeowner mortgage arrears have escalated.

There are 37,000 homeowners in mortgage arrears of over 720 days, and legal repossession notices were issued to 50,000 homeowners.

The cuts to welfare have had devastating impacts.Affected areas include lone-parent supports, child benefit, youth payments, fuel, back-to-school clothing and footwear, rent supplement, and disability and carers’ allowance.

But charges were introduced where they did not exist before — putting a further burden on lower-income households. These charges are ‘regressive’, in that they were not tailored to income level. These include water, property, school transport, prescription, A&E and chemotherapy charges. Fees have effectively been reintroduced at third-level (increasing from €1,000 to €3,000). This will have major implications for participation rates from lower-income households.

Funding for local community development, youth organisations, drugs prevention, family support, and to combat rural and urban disadvantage was disproportionally hit. Programme funding was reduced by 50%.

We are likely to see the long-term social impacts of these cuts in the further exclusion from the labour force of youths in disadvantaged areas. Issues of drugs and crime will surely worsen.

An EU report on the impact of austerity showed that the quality of secondary- and primary-level education has also been reduced, with fewer teachers, rationalisation of teacher/student support services, and the abolition of school grants.

The report links early school-leaving to austerity measures, which are highly concentrated in low-income areas. This, along with the cuts in funding to third-level, will seriously damage our education system, the core of the country’s economic development.

Hundreds of thousands of families and children have been pushed into poverty. The child-poverty rate rose from 18%, in 2008, to 29.1%, in 2013.The deprivation rate increased from 26.9%, in 2012, to 30.5%, in 2013, while for lone-parent families it has risen to 63%. Food poverty affects 600,000 (up 13.2%). Austerity has also devastated rural areas and small towns, with unemployment levels remaining much higher in the south-east.

In one of the most disturbing pieces of research into the impact of austerity, UCC and the National Suicide Research Foundation found an increase in self-harm rates of 31% in men, and 22% in women, between 2008 and 2012, while the male suicide rate is 57% higher (that’s 500 additional deaths). They cited a number of factors, including reductions in public expenditure, cuts to welfare, substantial healthcare cuts, falling house prices and personal debt.

Capital expenditure on important public infrastructure, such as hospitals, schools, roads, transport, broadband, water and wastewater was drastically reduced, by 60%, between 2008 and 2014.
Such spending on infrastructure is the bedrock of sustainable and competitive economies, and the lost decade of investment in these will leave Ireland’s economy much more vulnerable into the future.
Don’t forget, also, €17bn of our national pension reserve — which was available to fund infrastructure development and future pensions — was put into the bailout.

The commitment by Irish governments to pay all the bank- and crisis-related debt will damage our long-term social and economic development, and result in ongoing crises in health, housing, and mental health, and in rising poverty and inequality. This is because funding that should be going to these much-needed public services will, instead, be going on debt interest payments. Debt interest payments rose from €2bn (3.4% of tax revenue), in 2007, to a staggering €7.5bn, or 18% of all tax revenue, in 2014. These interest payments will enforce a form of permanent austerity in the coming decade.
Then, there is the often-forgotten issue of forced emigration. Almost 10% of Irish young people emigrated during the recession and emigration worsened as austerity intensified. It rose from 20,000, in 2009, to 50,000, in 2013. Without emigration, the unemployment rate would be 20%.

Finally, almost half of Ireland’s dramatic increase in GDP is from multinational activity, which does not take place in Ireland.

Thus, much of Ireland’s growth is based on facilitating some of the most profitable global corporations and financial services in reducing the tax they otherwise would have to pay to countries across the world. This is an unethical, unfair, and ultimately unsustainable form of economic activity.

It is clear, as highlighted by a recent assessment by the Irish Human Rights and Equality Commission, that austerity hit the most vulnerable and marginalised the hardest in Ireland. But there was, and remains, a choice about how countries such as Ireland and Greece, and the Troika, respond to debt and financial crises. Debt relief is an important option, as is taxing the wealthy, financial services or higher incomes, rather than taking it from public services, the poor and middle-income earners. The Troika and Irish governments favoured the latter and we can see the human misery and economic damage caused, as a result.

The Irish austerity-and-recovery model is being misrepresented on the international stage and should not be followed by Greece or other crises countries.

The Irish case actually points to the human and economic necessity of debt relief and alternative approaches to fiscal crises.

Rory Hearne

Article Published in the Irish Examiner, July 6th 2015.

There remains a lack of a coherent, credible, non-establishment, political alternative that can represent the public mood for change. Recent opinion polls show once again there is nothing certain about the outcome of the next general election. There remains significant political volatility and continuing anti-establishment sentiment which appears to have not yet found a new political home.

We should not be surprised by this, as there have been a number of events that point to growing numbers of ordinary people expressing their desire for social and political change. For example, the Marriage Equality referendum pointed to a citizen-led, ground up, process of positive and progressive change that goes beyond what existing politics represents. The water protests contain similar elements of a community-led, grassroots, movement of opposition.

But it wasn’t just opposition, protesters explain they are seeking a “different type” of Ireland, a more “caring Ireland” where people are prioritised over ‘the economy’ and are given “real decision making” about major policy. The water protests continue at a community level and we should not forget that this remains one of the largest social movements in Ireland since independence. But will this unprecedented popular mood and demand for fundamental change be expressed and represented in the coming general election?

The longer-term trend in the opinion polls since shows a move away from the traditional parties (Fine Gael, Fianna Fáil, Labour) who have a combined core vote (when undecided voters are included) of as low as 40%. Furthermore, the combined first preference vote of Fianna Fáil and Fine Gael in the Carlow Kilkenny byelection was just 48% — a minority of the first preference vote. To put the magnitude of the decline in support for the traditional parties in context, Fine Gael and Fianna Fáil received 68% of the vote in 2007 but just 53.4% in 2011. Labour support has collapsed. The most recent polls show the surge in support for non-traditional politics in the form of independents. But they also point to the failure of existing alternatives such as Renua, the Greens and the radical left Socialist Workers Party (People Before Profit Alliance) and the Socialist Party (Anti-Austerity Alliance) to win voters.

Part of this is also down to division among the left, for example, in the byelection, the two socialist parties, as in the European elections, stood candidates against each other.

Sinn Féin also face many challenges and appear static with around 20% of the popular vote which leaves a major gap for them to form a government. So unless some new political alternative emerges that is prepared to work alongside them in an “alternative” government, Sinn Féin will have to choose between long-term opposition or putting Fianna Fáil back into government. There remains, therefore, a lack of a coherent and credible, non-establishment, political alternative that can represent the mood for change.
Unless such an alternative emerges, the general election will result in little substantive change in policy direction. We could see a coalition government of Fine Gael and Fianna Fáil or Fine Gael, Renua, and some independents along with what remains of the Labour Party.

But there is no major economic or social policy difference between these parties. They all prioritise making Ireland “the best small country in the world in which to do business” with the result that society comes second place. They have all imposed austerity, refused to stand up to Europe for justice on our debt, privatised public services, worsened poverty and inequality, and did little to deliver political reform.

The government parties have a strong argument that they have delivered an economic recovery and are returning money into people’s pockets through the budget. And to maintain the fragile recovery people should vote for stability and not any alternatives that might jeopardise this.

However, this ignores the impact of austerity policies and the Government’s decision to focus on tax cuts rather than spending increases on areas like housing, health, and welfare.

Any serious political challenge will have to speak up for the groups still excluded from the recovery and provide positive and inclusive solutions that can achieve a fair recovery for everyone.

The grassroots approach in which the referendum campaign and the water movement have operated shows that if the general election is going to be fought using the traditional ways of doing politics in Ireland, then little will change. They suggest that something new and dramatic is required to “change the rules of the game” and empower citizens to create a new type of democratic, people-driven politics. This is what the successful new political movements of Podemos and Barcelona Together have done in recent elections in Spain. They have developed a new politics of the left that advocates human rights and democracy through citizen participation.

Any new political alternative should draw on this and lead in political reform by empowering and involving ordinary people who have never been involved in politics before through citizens’ assemblies, public forums, online input into policy development, and pioneering policies that will deliver genuine democratic reform such as citizen-initiated referendums.

Rory Hearne

Extended precis (PDF of full paper)

The publication of the Department of the Environment, Community and Local Government’s ‘non-statutory’ Planning Policy Statement (PPS) in January 2015, heralds the prospect of the replacement of the National Spatial Strategy (2002-2020) with a National Planning Framework (NPF). The PPS emphasises that future Planning Strategy should be both evidence-based and plan-led.

As a contribution to these developments, this paper presents a demographic approach applied to the spatial planning context for current housing needs and points to compelling reasons for developing Ireland’s cities whilst curtailing the ongoing proliferation of villages, small towns and one-off housing, and for services provision, infrastructural priorities and related policy issues.

The paper’s first consideration is that of Ireland’s imperative for its emerging housing strategy: to improve its economic competitiveness which is compromised by its small-scale urban content. The State’s modest-sized settlements, with their inevitable diseconomies of scale, present economic handicaps to the provision of both public and private sector services. Unsurprisingly, they are the subject of current services-rationalisation, often of a controversial nature.

The outgoing spatial NSS planning policy is based on the definition of Balanced Regional Development (BRD) which is self-contradictory. In a modern economy, the optimal performance of the State is critically dependent on that of its primary contributors and of their large settlements’ ability to generate urban agglomerative spill-over: not on the BRD definitional illusion of achieving the full potential of each area. BRD is the opposite to achieving settlements of ‘Concentrated Lumpiness’, which would be characterised as centripetal agglomeration: of dense, efficient centres of population and their associated clusters of employment.

The outcome from the 2002-2020 National Spatial Strategy is that its BRD policy has encouraged excessive village and small-town proliferation. Over a fifteen year period to the last census, there has been a 30.6% growth in the proliferation of settlements of less than 5,000 since 1996, but especially so in for smaller town and village categories. Thus future spatial planning should place emphasis on the selective locations for new housing so as to complement and promote urban agglomeration. New house types are likely to introduce double-duplex and other innovative features of urban design, reducing the need for car ownership whilst encouraging more sustainable forms of transportation, suitable for short commutes.

The paper also differentiates between the requirements of the two principal areas of State: the Greater Dublin Area (GDA) and the Rest of State (RoS) areas. It finds that in 2011 there are many striking contrasts between the two areas. Dublin has nearly eleven times the average population size of the four RoS cities. The overall average settlement size for each of the seven categories of towns and villages is also greater in the GDA.

GDA house vacancy rates in 2011 were between just one-third and one half of those of the RoS areas, a contrast that has increased since then. This places an increasing need for focused housing supply-demand research. The wastefulness and inefficiencies of higher levels of current housing vacancy, directly corresponds to the remoteness of a county from its nearest city and particularly so in its further distance from Dublin.

Given the fragile sizes of Irish urban settlements, the emerging spatial planning and development imperative should especially facilitate the growth of larger, selected, populated towns and some cities, so as to counteract the extent of small-settlement proliferation in the RoS villages and Non-Nucleated populations. The housing crisis and affordability issue is also linked to the unsustainability of long and medium-distance commuting, given the census evidence and the geography of daytime working population and to Ireland’s economic competitiveness.

The research notes that from the most recent indications of prospective developments in Ireland’s spatial planning strategy, there is still little evidence that the authorities recognise or appreciate the need for an urban agglomeration ‘top-down’ approach, where the alternative focus continues to be dominated by rural generated ‘bottom-up’ strategies, making the task of achieving urban agglomeration difficult. Thus there have been few opportunities in the RoS area to exploit and take advantage of urban agglomeration forces.

Unfortunately, Ireland has always had a spatial record of eschewing its cities. In 1969 the first ‘modern’ spatial strategy, the Buchanan Plan’s objective of achieving an accelerated growth of fifteen or so of the provincial cities and larger towns was politically rejected. Subsequent ‘politically dominated’ planning strategies have sought to ‘give a little to everyone in the audience’ instead of implementing a policy of concentrating the State’s limited capital resources to a few chosen locations which have the potential to grow at a much faster rate than the norm and thereby ‘capture’ the benefits of scale, of critical mass and of urban agglomeration.

The irony is that if today’s Ireland had such ‘concentrated lumpiness’, this policy direction would have considerably mitigated the depth of the recession that has visited so many of its small towns, villages and open countryside. Agglomerative ‘spillovers’ from larger Regional cities and large towns remains the only certain way to counteract rural decline. Ireland has yet to learn that painful urban economic lesson.

Because of the bias favouring town growth, exacerbated by the population deflection from unaffordable housing in the cities, especially for Dublin, their aggregate growth has been much lower than might otherwise have been expected. During 1996-2011 the State population increased by 26.53% whereas the cities grew by just 16.42%, – i.e. even less than the 17.72% for the non-nucleated rural areas and towns/ villages of 5,000 and under.

This paper concludes that the capacity to generate ‘spill-overs’ are currently constrained, limited perhaps to Dublin and to the CASP area surrounding Cork City. Thus, it should come as no surprise that due to the defects of past strategic spatial planning policies, rural emigration is rife and economic downturn is magnified for regions which do not have large towns but especially cities.

Full paper

Dr Brian Hughes, DIT

 

With NAMA recently entering into its fifth year, Maynooth Geography’s Rory Hearne considers what it has achived. Published in today’s Irish Times

The government’s new Social Housing Strategy correctly identifies the underfunding of the provision of social housing and rising rents in the private sector as the principal causes underlying the current housing crisis. Unfortunately it continues this underfunding as the 2015 social housing budget will be just half of what it was in 2008. Furthermore, the Strategy failed to radically reform NAMA, which is the largest housing agency and property developer in the state. This leaves a fundamental contradiction in housing policy.

While the government expresses a strong concern to address the 90,000 households on the waiting lists it is, at the same time, actively encouraging NAMA to sell off its residential and land assets in the form of ‘packaged portfolios of property’, at the highest possible price, to international and Irish capital investors. The Strategy did not alter NAMA’s primary objective to achieve a maximum commercial return to the state. The uncomfortable truth is that those who will benefit most from current government housing policy, and NAMA in particular, are international wealthy investors and banks, developers and landlords and not the ordinary Irish people who have paid dearly for the write downs on development loans transferred to NAMA.

The reality is that NAMA is playing a significant role in worsening the housing crisis through its sale of assets to Real Estate Investment Trusts (REITs). The government encouraged the setting up of Irish based REITs in 2012 through generous tax breaks. Irish REITs are being set up to take advantage of high yield returns from investment in the ‘recovering’ Irish property market. One newly formed REIT is the Irish Residential Properties which includes large property investors from Canada and finance from the UK based Barclays bank. Another REIT, Hibernia, has billionaire investor George Soros’ funds amongst their shareholders. Irish Residential Properties bought the ‘Orange’ portfolio from NAMA for €211m which included 716 residential apartments in Dublin. NAMA advertised that the portfolio would provide a residential rental income of €10.6m and ‘significant rental growth potential over the near and longer term’. Selling to such investors with this expected rate of return will clearly provide a huge upward pressure on residential rents in the coming years.

NAMA is also likely to have a major influence on the residential property market through its intention to provide over 22,000 units in Dublin (half of expected demand in Dublin) and surrounding counties by 2019 through the use of existing units and 1,500 hectares of development land. It is doing this through partnerships with developers including the provision of at least €1bn in finance. However, the objective to ensure a maximum commercial return means that NAMA will make certain these units are sold at the highest possible price thus inflating prices further.

Although we don’t hear much about it, NAMA has a mandate to ‘contribute to the social and economic development of the State’. It achieves this through its provision of social housing yet only 736 units have been delivered. The new Housing Strategy includes an expansion of NAMA’s Special Purpose Vehicle (SPV) set up to sell or lease NAMA residential properties for social housing but only plans to deliver 2,250 units by 2020.

NAMA’s current trajectory is wrong if we want to develop a sustainable economy and society. Its need for rental growth is likely to be one of the reasons the government is refusing to give private tenants (who are the majority of those on social housing waiting lists) relief through the introduction of rent controls. By pushing for maximum commercial returns NAMA is working against the interests of those looking for an affordable and secure home. It is continuing the speculative asset approach to housing that fuelled the crisis. This promotes residential property as a commodity rather than a social good that is developed primarily to meet people’s housing needs.

NAMA is facilitating a massive transfer of wealth (income) created by the Irish people to foreign and domestic capitalist investors. It exemplifies all that is wrong with the current model of financial neoliberal capitalism. Rather than investing in the ‘real’ economy and social requirements it is promoting speculative finance. The result is rising inequality and a more unstable system. The legacy of socializing the costs of the banking crisis in Ireland has been widespread social devastation. NAMA is embedding this for decades to come.

But the government can still reorientate NAMA to play a key role in addressing the housing crisis. It could genuinely expand NAMA’s SPV by transferring the majority of NAMA’s residential development units and land into it. NAMA could then provide 15,000 social housing and 7000 low-cost rented units managed by housing associations by 2020. These could be excellently planned, environmentally sustainable and model community developments in areas such as the 25 acre Glass Bottle Site in Ringsend. Such a social stimulus could help repair some of the societal damage caused during the crisis. If this means NAMA doesn’t make a profit it is important to highlight that those most affected by that will be the private (mainly international) investors who own fifty one percent of NAMA’s shares. Furthermore, NAMA was also set up so that if it makes a loss a surcharge can be introduced on the profits of the financial institutions.

When our financial system was in peril there was no obstacle too large for our political establishment and the state to overcome. Now we face an equivalent crisis in terms of the fundamental housing needs and rights of hundreds of thousands of our citizens. It is legitimate to ask why the same radical approach that determinedly did ‘whatever was needed to be done’ is not applied to the housing crisis. It appears it is because the government is unwilling to stand up to the financial and property investors and transform the residential property market into a system to meet housing needs.
Rory Hearne

In the midst of a mounting frenzy over the Central Bank’s plans to introduce new rules relating to mortgage lending, Rory Hearne offers a detailed and sobering analysis of the bigger picture housing crisis. Published in today’s Irish Examiner.

Providing solutions to the housing crisis have to be central to the forthcoming Budget. But the government needs to be willing to radically transform how the housing market operates in Ireland and reorientate housing policy to meet the needs of the majority of the population rather than the interests of the property development industry. It is surprising how much rising house prices are being celebrated as a new property boom in the media including interviews with buyers (often engaged in cash purchases) about how they are being ‘outbid’ for properties in wealthy Dublin suburbs.

Meanwhile the real housing crisis is affecting hundreds of thousands of households (who are mainly lower income). Fr Peter McVerry has described the growing ‘tsunami’ of homelessness on the streets of our cities and towns. Between January and July of this year 267 families became homeless in Dublin, including 549 children and some of those have been housed in hotels.

But the crisis is much, much, larger than these figures suggest. Almost 90,000 households are defined in housing ‘need’. The majority of these are living in private rented accommodation. Rapid rent increases in recent years (most significantly in Dublin) and the introduction of rent ‘caps’ by the Department of Social Welfare, has meant that more than half of those receiving rent supplement (40,000) have to top up their rent in order to get access to housing.

Then we must include the 132,000 households in mortgage arrears on their principal residence. The government appears to be just hoping they will sort themselves out somehow. But a staggering 70% of these households are over 720 days in arrears and the banks are silently, but steathly, increasing repossessions and evictions. In the first four months of this year the banks have issued legal proceedings in 3,093 of these arrears cases and 281 properties were repossessed further adding to housing pressure.

Overall then, approximately 262,000 (16%) of the total 1.6 million households in the state are in serious housing need. This doesn’t include those who are forgoing basic necessities to cover their mortgage or rent nor does it include those affected by substandard conditions in social housing estates throughout the country. This is not a crisis. It is an emergency.

(more…)

What will be said of the Irish crisis when finally it can be spoken of with hindsight? On that happy day, we may be speaking of the deregulation of the financial sector that allowed the riskiest of debts to be bundled together as if there were safety in the herd. Perhaps people will note the dramatic redistribution of income towards the richest 1%, which now has over 10% of Irish wealth. No doubt folk will be full amazed that even when bad bets were made, the financial whizz-kids kept their bonuses and passed their losses to the state.

It will perhaps be a matter of remark that the state decided that those best able to bear these costs should be cosseted from tax demands, so that the painful adjustment was instead demanded from those most deserving of state assistance. The Central Statistical Office estimates that in 2012 some 12.9% of households have had to without necessary heating of their home at some time in the year, up from 6.3% in 2008, and that 23.3% of households reported not being able to afford a morning, afternoon, or evening out in the previous fortnight, up from 11.1% in 2008.

It may be noted that all this contradicts the clear instruction of the 1937 Constitution, which directs that ‘in what pertains to the to the control of credit the constant and predominant aim shall be the welfare of the people as a whole,’ and which imposes upon the state a duty ‘to safeguard with especial care the economic interests of the weaker sections of the community.’

Unemployment map

From David Meredith and Jon Paul Faulkner, ‘The nature of uneven development in Ireland, 1991-2011,’ in Kearns, Meredith, Morrissey eds. Spatial justice and the Irish crisis (RIA, 2014) 107-127. Used with kind permission.

Now, all of this injustice takes place somewhere and when we speak of the Irish crisis we should remember its landscapes of despair. Future archaeologists may one day walk through the rubble of our crisis and bemoan the planning deficit that allowed houses without services, and new shopping centres to compete with half-empty ones. The people who camp inside houses marooned within landscapes pockmarked by the shells of abandoned constructions, the people whose local A & E services have been closed and who find that under-provision in the Ambulance Service mean that should they need timely care there is an odds-on chance they won’t get it, and the folk decanted from their community while their houses were to be repaired and who now find those repairs repeatedly deferred, all know that national averages hide the multiplying and accumulating deprivation inflicted upon themselves and their neighbours. We know that even the children of these sinks of poverty register the appalling reputation of their home area and feel less trusting of other children on their streets. We also know that stress and lack of opportunity translate into sickness, drug dependency, crime and violence.

A new geography of exclusion has been produced by the crisis. It works at multiple scales and it targets particular housing estates, particular small towns, particular parts of cities, and everywhere it corrals the poor and the disadvantaged to protect the property values and refined sensibilities of the rich. When asylum seekers are warehoused in remote places and when they self-harm or go on hunger strike to protest years spent in isolation and limbo, we get glimpses of a new geography of marginality, but we also know that the vicious asylum system is a consequence of under-funding and of a wish that Ireland not be, as so many foreign places once were for the Irish, a haven for the dispossessed and needy. Instead Ireland is once again open for investment and the property porn begins again in the weekend supplements. The government has shown foreign investors that they can bet on foolish speculation and still recover not only their bet, but also the promised winnings.

Will things be any different this time around? Well, the state sector will be carrying cuts already inflicted, and yet more already placed into the pipeline. Instead of addressing financial regulation and implementing directive planning, the predominant ideology of successive governments has been that it was the Irish state sector that over-spent the country into recession. So, we must expect further rounds of spatial injustice, further concentrations of poverty, and further marginalization of those who deserve assistance. Perhaps water charges will fund metering so that the privatization of water can be made attractive to investors. Perhaps the property tax will continue as a most regressive taxation. Perhaps the 1% will continue to milk the state for the subsidies that coax the speculation on which they thrive. Or, we just might hazard a wealth tax. We might build social housing. We might even direct government to ‘safeguard with especial care the economic interests of the weaker sections of the community.’

 

Gerry Kearns is Professor of Human Geography at Maynooth University and with David Meredith and John Morrissey has edited Spatial Justice and the Irish Crisis, published by the Royal Irish Academy, ISBN 978-1-908996-36-7, €20.00.

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