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.
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.
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.
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