There are now 730 families living in emergency accommodation in Ireland. Focus Ireland estimates that that figure will approach 1000 by next year as the rate at which families are being made homeless increases drastically. 83 lost their homes in Dublin in August alone, compared to a monthly rate of 8 in 2012. As of September, the total number of people estimated to be homeless is 5,100, according to the Peter McVerry trust. The number of people on the social housing waiting list has increased substantially as well. While the government claims that there are only about 90,000 on the list, data collated by Fianna Fáil from the 31 local authorities indicate that this figure is closer to 130,000. Many of those on the list are joint applicants and families so the total number of people waiting for affordable accommodation is likely much higher – possibly around 300,000, according to Fianna Fáil’s environment spokesperson Barry Cowen.
This crisis is ultimately driven by a lack of supply, and a consequent skyrocketing of rents and house prices. According to a daft.ie’s latest quarterly report, authored by TCD lecturer Ronan Lyons, the availability of rental homes, at just over 4,000, is at the lowest level since their data series began in 2006. Rents have risen by 30% nationally since 2012 and are increasing at a sharply accelerating rate, according to the report. Since last year the cost of renting in Dublin, Cork, Galway, Limerick, and Waterford has increased at a rate of between 8% and 10% per city. On the other hand, average weekly income has only risen by 0.5% between the first quarter of 2014 and the first quarter of 2015.
Rising rents are regarded by Focus Ireland as the main cause of homelessness in the last year. Even those who have managed to hold on to their homes will find that housing costs are considerably diminishing their weekly income.
Lack of government response
This, by any standard, constitutes a housing emergency. It’s over a year since the housing activist Fr Peter McVerry warned of a “tsunami of homelessness,” and conditions have taken a sharp turn for the worse. Despite this crisis, the government has reacted with a shrug. There was no commitment in Budget 2016 to introduce rent controls – though they already exist in many European countries such as Germany and the Netherlands, and cities such as Paris. Belatedly the government has brought in a plan whereby private rents can only be raised every two years. This scheme will last for four years, after which the present system of annual rent reviews will be restored. This scheme is totally inadequate as it places no actual limit on the amount rents can be increased by. Indexing rents to inflation is the absolute minimum that should be done, given their current sky-high levels. With a two year review landlords will simply implement a double increase every second year, as highlighted by a recent news story in the Examiner about a single mother with two sons who had her rent increased from €900 to €1,400.
There was no increase in rent supplement either, a shocking lack of response given that the Simon Community’s Locked Out report, released this August, estimated that “92% of properties on the market are outside of the reach of people on state rent support.”
Most paltry of all however has been the level of social housing construction. The current dire situation would have been somewhat attenuated if the present government had at the very least kept up the previous government’s level of social housing supply. Building social housing not only directly provides affordable homes for people in an inaffordable market, but also serves to make the market more affordable for private renters by having a disinflationary price effect (as an increase in supply will, all things being equal, reduce price, ie rents).
Under the Fine Gael-Labour government there has been a catastrophic fall in the number of social housing units that have been constructed and acquired by local authorities. The Fianna Fáil-Green coalition built or acquired over 17,000 houses over the course of their government. By contrast the present government’s figure is only 1,650. The number of social houses built in 2008 numbered nearly 5,000. The number built last year: 158. That’s 0.03%. That proportion is even more miniscule when compared to 6,200 dwellings completed on average annually between 1970 and 1985, a period during which GDP per capita was roughly a third of present levels.
The rhetoric of the government, and in particular the housing minister Alan Kelly, has been highly disingenuous and inconsistent. Last November he and his junior minister, Paudie Coffey, set out a plan to accommodate every household on the social housing waiting list in the Social Housing Strategy 2020. This list is based on the old 2013 figures which, as pointed out above, underestimate the true figures by 40,000. So in five years time, if all goes according to plan, less than 70% of current applicants will be housed. That’s assuming that the crisis doesn’t get any worse. And that’s also assuming that we can take Kelly by his word. As Pat Rabbitte cheerfully admitted, making promises that they don’t intend to keep is what Labour “tend to do during elections.”
The new housing strategy promises to deliver 18,000 new dwellings by the end of 2017 (and an additional 17,000 by 2020). So how many have been built so far? According to the latest figures from the Department of the Environment and Local Government there have been 20 new social units completed in the first half of 2015. Kelly now claims that the number of dwellings completed by the end of the year will be “up to ten times higher.” In other words, based on the most optimistic predictions of the housing minister, there will be an additional 200 units built in the second half of 2015. According to the journal.ie, a spokesperson for the department later said that when local authority acquisitions are included that figure will be over 1,000. Even if this proves to be the case, that leaves 17,000 more to be built or delivered through other means in the next 24 months. Building and acquiring 8,500 units per year would represent a 13 fold increase over the highest annual total delivered yet by the present administration (and that total is from 2011 when most if not all of the houses would have been completions of constructions begun under the previous government). This is certainly possible given the right level of investment and planning, but there is no reason to believe that these elements are in place.
Dublin City Council, where Labour and Sinn Féin are the main parties in a ruling coalition and where there are 42,000 people on the waiting list, made provisions in its latest budget for only 310 dwellings between 2016 and 2018. This both insufficient, and at odds with what Kelly and other Labour figures have been claiming. For example, in a recent constituency leaflet produced by Eric Byrne – a Labour TD for Dublin South Central whose response to the Paris terror attacks was to read out the lyrics from John Lennon’s Imagine in the Dáil – he claims (implying that he is talking about Dublin City): “9,500 social housing units will be built by 2018, funded through direct investment and PPPs – 3,100 of these will be provided in 2016.” Kelly himself has been inconsistent and unclear. In a May article in The Irish Times, Olivia Kelly pointed out that the minister has repeatedly made announcements of funds secured to build new homes, but these are not additional to but, in fact, already contained in the Social Housing 2020 plan.
Social Housing 2020
If the current administration’s targets already seem fantastic and unreliable, they appear even more so when you investigate the proposed financing of the plans. Under the current social housing strategy, 35,000 new social housing units will be provided by 2020. As pointed out above, this target is well off course. This leaves open the question of how the other households on the official 90,000 figure are to be accommodated (nevermind the remainder of the actual 130,000 figure). The current strategy envisions that an additional 75,000 will be accommodated in the private rental sector through rents subsidised either by the Housing Assistance Payment or the Rent Allowance scheme. Thus the scheme, if it works fully, will only house 110,000 people by 2020 – an already inadequate provision.
Several sources of “off-balance sheet” housing are identified. The first is the expansion of the NAMA special purpose vehicle established to sell or lease residential units for social housing purposes. As of October of this year, NAMA has delivered 1,241 completed properties for social housing and has earmarked a further 359 that are currently under construction. The Social Housing 2020 strategy document envisions that the special purpose vehicle can fund 450 new units and has “the potential for 2,250 Part V units should NAMA’s Dublin residential delivery reach its upper limit of 22,500 units over the next 5 years” (Part V units are properties set aside on private housing developments for social purposes). In other words 2,250 units could be delivered but there is no guarantee that they will.
Another source of funding shall be public private partnerships (PPS). The only concrete plan for PPS laid out in the strategy document is for 1,500 homes to be built with €300m from Budget 2015. Finally, a “financial vehicle” will be set up to fund developments by Approved Housing Bodies (voluntary and non-profit organisations which provide social housing). This vehicle will be capitalised with €400m from the sale of Bord Gáis, and this will provide for “at least 2,000 housing units.”
The plan for how this vehicle will fund further units is so vague that it deserves to be quoted in full: “This investment can then leverage private sector finance which will be raised from a variety of sources which could include the EIB, ISIF, Pension Funds, Credit Unions and other financial institutions, both domestic and international. This funding will then be lent on to qualifying AHBs, giving them access to long term finance. The Government believes that this new source of funding will enable AHBs to better leverage their existing stock with the ultimate aim of delivering more housing from scarce exchequer resources. This funding solution will be part of an incentivised programme where AHBs will commit to deliver specific housing targets and AHBs that are the most active and capable of delivering new housing supply will receive a greater proportion of this funding.”
So, taking the most optimistic projections for the hard figures actually given in the article, off balance sheet funding will provide 5,750 social housing units. Whether or not this figure will be achieved, any plans for further provision of dwellings through this method are entirely uncertain, unclear, and indefinite.
Overreliance on the private sector
With inadequate provisions for the construction of new social housing, local authorities will have to make up the shortfall by leasing. To what extent exactly is unclear. The Department for the Environment and Local Government issued detailed targets to all 31 local authorities earlier on in the year. The Irish Times, which was given access to the targets for the four Dublin authorities and the Limerick, Galway, and Waterford councils, saw that on average three-quarters of new units supplied up until the end of 2017 will be sourced through leasing from the private sector.
This is problematic for a number of reasons. Firstly, as Kitty Holland points out in an Irish Times article, for leased social dwellings the tenancy will not be secure or regulated as the owner can opt out at relatively short notice. Secondly, this does not directly address the supply issue which is pushing up rents. And thirdly, it is doubtful whether the private sector can produce enough units to even meet private and social demand. As Ronan Lyons points out in the daft.ie report, the number of houses being built only meets about a quarter of private demand, while substantial vacancies only exist outside of the urban centres where the demand is greatest. Even in, say, the three year period between 1999 and 2001, before the housing bubble took off, the private sector was completing around 45,000 houses per annum. Between 2012 and 2014 inclusive it only managed a yearly average of 8,500. When you factor in that most of the waiting list is supposed to be cleared through the expansion of the HAP and RAS system, it is clear that there is a heavy overreliance on the private sector.
Even if the private sector were up to the task, there are plenty of more fundamental reasons to spurn it. Historically, the private housing sector has functioned to the benefit of a powerful and corrupt nexus of developers, speculators, bankers, and politicians. The indigenous Irish capitalist class is weak, and unable to compete on the world market in the high value-added sector. Instead a large sector of it has focused on leveraging political and financial networks to extract high economic rents from unsustainable housing markets. Production has been based on profit, not social need, with developments such as Priory Hall and Longboat Quay showing that developers had little regard for safety and other standards of quality. Its unplanned and grab-all nature has created the absurd situation where depopulating rural areas such as Longford and Leitrim still contain high rates of property vacancy while the growing urban centres are chronically undersupplied. The industry’s role in precipitating the general economic crisis need not be rehashed here.
It’s clear that the only method of meeting the social need is a properly funded and costed programme of social housing construction that is an order of magnitude greater than the current strategy. This is fundamentally against the pro-market values of the present government. As Fintan O’Toole pointed out in a recent article, the fact that Ireland in the 1930s, 1940s, and 1950s, when it was still a “poor, primitive, backward economy,” could build social housing on a large scale whereas the modern, developed Irish economy of the 2010s cannot, is a result of the free market ideology that this government is beholden to. This social sclerosis is the product of faulty values rather than insufficient resources.
There are simply things which the Fine Gael and Labour coalition values more highly than it does social housing: paying down debt instalments ahead of schedule; allowing multinationals to pay negligible rates of corporation tax; cutting the top rate of the USC to the greatest benefit of the top two deciles. Commenting on the pathetic rent freeze proposals, Michael Noonan, who fought tooth and nail against indexing rent increases to inflation, said, “I hope it works.” It’s hard to imagine Noonan adopting this indifferent and callous approach to, say, tax incentives for multinational investment, in which case gushing sycophancy is the rhetorical plat du jour. The most recent statutory Assessment of Housing Need, from which the government takes its 90,000 waiting list figure, estimated that nearly three quarters of applicants were entirely dependent on social welfare as a source of income and only 11% had income from employment only.
Providing adequate housing is a basic human right, and one that is not being fulfilled for a large section of the population. The government’s response has been inadequate, inconsistent, disingenuous, and characterised overall by grasping and cynical careerism and a total ideological submission to free market principles.
Illustration by Daniel Tatlow-Devally