Here We Go Again as Developers Dictate Housing Policy

October 1, 2015

Just what is the Government up to in relation to its housing strategy? Is history repeating itself?

Latest reports suggest that Minister Alan Kelly is now proposing to subsidise builders to keep the price of new homes down. How more Fianna Fáil can you get?

With every proposal being floated by Ministers, it seems that the Government’s strategy has turned into a charter for developers.

  • Minister Noonan, after meeting builders, wants the Central Bank cap on mortgages lifted.
  • Minister Kelly gave an explicit direction to Dublin local authorities not to zone further land for housing, thereby protecting the inflated prices of existing land holdings.
  • The long promised “use it or lose it” tax on land hoarding will not kick in until 2019.
  • Government-backed Councillors have been happy  to go along with a loosening of standards for apartment sizes in Dublin City Council.
  • The inspection rules for one-off housing have been dispensed with.
The latest kite-flying has all the hallmarks of a bailout for developers – another one. It is a ludicrous idea and completely unsustainable. It might make the Government popular with a certain section of house-buyers but it will be the tax-payer who picks up the bill – a bill that can only get bigger the longer the scheme lasts. It seems no matter how bad things get in Ireland, no lessons are learned by the political establishment.What the Government should be concentrating on is increasing supply.

In the short term we need initiatives to release the substantial amount of unused and under-used housing that we have throughout the country. These initiatives could include bringing back the Financial Contribution Scheme for Older People, incentives and penalties to release unoccupied accommodation over shops and commercial premises, and reforms of the Fair Deal Scheme to make it easier and more attractive for older people to sell their property if they have moved permanently into a nursing home. These kind of fiscal measures could bring additional housing on stream very quickly.

In the medium term we need to start building sustainable social and affordable housing in appropriately mixed communities. The capacity of local authorities to deliver social housing in this manner has been seriously depleted because of a lack of financing and Government policy which appears to hand over responsibility for social housing to the private sector. Central Government needs to take responsibility for a major public housing programme and agree to fund and equip Local Government so that these homes can be delivered.