'Housing For All' Will Not Solve The Housing Crisis And Will Actually Make Things Worse. Here's Why.
On Thursday the Dublin government launched its long-delayed and much-hyped ‘Housing For All’ housing plan. The leaders of the three coalition parties - Martin, Varadkar and Ryan - were all on stage for the launch, along with the current hapless Minister For Housing, Darragh O’Brien.
The 160-page ‘Housing For All’ document promises a lot, including a public spend of €20bn on housing over the next five years and the construction of over 300,000 new private and pubic homes by 2030.
The establishment politicians weren’t shy about making promises either. This was, we were told, an all-of-government effort that was going to end the housing crisis and deliver secure, affordable homes for all sections of society. It all sounded really good. Too good. It also sounded very familiar. Way too familiar.
Anyone with a memory longer than the average goldfish will recall another much-hyped housing launch not so long ago. On that occasion it was Kenny, Donohoe, Coveney and English who were on stage to launch their ‘all-of-government’ housing plan, with Fianna Fail supporting the plan from the sidelines through their then ‘confidence and supply’ arrangement with Fine Gael.
Simon Coveney was the Minster For Housing that launched the failed ‘Rebuilding Ireland’ plan.
On that occasion we were told that ‘Rebuilding Ireland’ was an unprecedented all-of-government initiative that was going to end the housing crisis and homelessness within its five years lifetime. Fast forward five years to 2021 and the housing crisis is immeasurably worse.
Unsurprisingly there wasn’t much talk about ‘Rebuilding Ireland’ at Thursday’s launch. No explanation for why house prices and rents have skyrocketed over the last five years. No explanation for why the homeless figures almost doubled in the years that followed the launch of ‘Rebuilding Ireland’. No explanation for why so many ‘Rebuilding Ireland’ targets were missed.
Most critically there was no explanation for why any rational person should believe that ‘Housing For All’ will succeed where ‘Rebuilding Ireland’ failed when both plans share a near-identical analysis of the causes of the housing crisis and propose near-identical solutions to it.
Of course, there is an explanation for why ‘Rebuilding Ireland’ failed so spectacularly and for why ‘Housing For All’ is going to fail. But nobody in the political establishment is willing to speak that truth. Instead they chose to continue with the Big Lie.
Exposing the Big Lie wouldn’t just undermine the ‘Housing For All’ plan. It would also fatally undermine the entire current approach to housing. And beyond that it would undermine the private banking, private insurance, private real estate, private rental, private media and private legal industries that all service and profit from a housing sector that has been built on the Big Lie.
The politicians at the launch might have changed but the core analysis and proposed solutions contained within ‘Housing For All’ and ‘Rebuilding Ireland’ are virtually identical.
The Big Lie tells us that the housing should be treated is a regular product that must be traded in a private market place — that private ownership of housing is part of the natural order of things.
And that house prices and rental rates will be determined by the relationship between supply and demand in the private market place.
In other words, house prices and rental rates will go up when the supply of homes is less then the demand. And vice versa, when the supply of homes is greater than demand, house prices and rents fall.
Promoters of the Big Lie assert that the current housing crisis is caused by a temporary imbalance in the market place that will be solved by simply increasing the supply of housing without changing the actual structure of the current housing system.
It all sounds very logical and straightforward. But it’s a lie, as born out by decades of real world experience.
For the last twenty years (at least) the housing policies of successive Dublin governments have been based on the Big Lie. For twenty years that have handed responsibility for housing to the private sector.
For twenty years they have used planning regulations, taxation, legislation and public monies in a vain effort to fix the dysfunctions of a market that is inherently unfixable.
And from twenty years housing has lurched from one form of crisis or another.
The Celtic Tiger housing boom and the ghost estates that it produced were by-products of the Big Lie. Today the Big Lie is once again driving over-priced homes and extortionate rents.
Government housing policy over the last five years has been shaped by ‘Rebuilding Ireland’. Staying true to the Big Lie, that plan sought to dramatically increase the supply of the three main tenures of housing - of traditional social housing, of privately purchased housing and of privately rented housing.
Taking each in turn, it becomes clear that the very measures that were designed to make housing more affordable by increasing supply actually had the opposite effect.
To increase the supply of traditional social housing ‘Rebuilding Ireland’ boosted the housing budgets of the Department of Housing, Local Authorities and Approved Housing Bodies.
With their increased budgets these agencies went on a spending spree, buying up individual existing homes, buying ‘turnkey’ new developments from developers, engaging private contractors to directly build social housing and leasing housing from private landlords via HAP and a range of other similar schemes.
Pumping billions of euros of additional public money into a private market where demand outstripped supply had an entirely predictable result. It helped drive land prices, construction costs, house prices and rents ever upward.
To increase the supply of privately purchased housing a new Help-To-Buy scheme was introduced. Under this scheme first-time buyers were effectively given up to €30,000 of public money to help them buy or build a private home.
‘Rebuilding Ireland’ also saw the state provide low-cost, fixed mortgages to those who could not secure mortgages in the private sector - mortgages that will potentially be heavily subsidised with public money in the future.
Giving every first time buyer tens of thousands of euros of additional purchasing power didn’t increase the supply of housing to any measurable extent. But it did give each of those buyers enough additional financial fire-power to help drive house prices higher, something which even the Economic and Social Research Institute couldn’t stay quiet about.
Leo Varadkar as Taoiseach and the then Minister for Housing, Eoghan Murphy, oversaw the implementation of the disastrous Rebuilding Ireland.
To increase the supply of private rental housing ‘Rebuilding Ireland’ oversaw a truly all-of-government effort to entice the world’s largest vulture landlords into the state. Planning regulations were changed, tax breaks were introduced and every public agency involved in housing was directed to prioritise the development of Built-To-Rent housing.
The drive to entice vulture landlords into Ireland represented a rare ‘victory’ for Rebuilding Ireland. By 2019 vulture landlords were buying up 95% of all new apartment developments. Ground-breaking research by Éirígí shows that the vulture landlords are now on track to double the number of Irish homes that they own by 2023.
While the vulture landlords brought billions more euro of (primarily foreign) money into the private housing market, that didn’t drive down rental rates in the private rental sector. Quite the opposite in fact. During the tenure of ‘Rebuilding Ireland’ private rents went to their highest levels ever - even higher than the highest peaks of the Celtic Tiger.
Clancy Quay in Dublin, one of the many housing developments that are now owned by Vulture Landlords
‘Rebuilding Ireland’ has demonstrably failed to deliver affordable housing in either the private purchase or private rental sectors. It failed because is sought to increase the overall supply of housing within the confines of the Big Lie.
Real structural changes to the housing sector were never even considered, never mind implemented.
Instead a single primary ‘lever’ was used in a vain attempt to increase the supply of housing. That single lever amounted to little more than throwing billions of euros of public money, in the form of direct budgets, grants and tax breaks, at the problem.
Thus the buying power of all three of the biggest players in the private housing market - the state, owner-occupiers and vulture landlords - were all directly or indirectly boosted by ‘Rebuilding Ireland’.
And then all three players went head-to-head to buy up as much housing as they could, it once again brought predictable results.
In countless cases individuals and families found themselves in bidding wars with either the state or vulture landlords, bidding wars that they had no chance of winning. And all the time, house prices and rents continued to climb.
Pumping more money into a construction sector that is already operating at full capacity can only drive prices ever higher
‘Rebuilding Ireland’ failed to recognise that there are very real limits to both the amount of sought-after housing development land and the overall capacity of the construction sector.
By throwing vast amounts of additional public money into the private housing market, the government actually helped to drive up the cost of development land, construction costs and ultimately house prices and rental rates.
Now, the failures of ‘Rebuilding Ireland’ are not only being ignored but actively erased, to the point that the document is no longer available to download from government websites.
And ‘Housing For All’ is now poised to repeat all the mistakes of its predecessor plan by pouring tens of billions of more public money into the private housing market over the coming years. Make no mistake about it, the result will be higher construction costs, higher house prices and higher rents.
The responses of the main opposition parties to ‘Housing For All’ have missed the fundamental flaw at the heart of the plan.
Just like the government, the housing policies of Sinn Féin, Labour and the Social Democrats are all based on the Big Lie that housing should be primarily held in private hand and driven by private market forces.
The housing policies of the main opposition parties may differ form the government in emphasis and in the scale of their promises, but not in the substantive structure of the overall housing sector.
Fine Gael, Fianna Fail, Sinn Féin, Greens, Social Democrats and Labour all broadly agree that housing should be made up of the same four tenures of owner-occupiers, social housing, cost-rental and private rental (including vulture landlords).
The housing policies of all of these parties will do little to change the current ratio of 70% owner-occupier, 20% private rental and 10% social housing / cost rental. And they will do nothing to deliver secure, affordable housing for all.
Éirígí holds a fundamentally different position to all of these establishment parties. We understand that housing is not a normal commodity that can be made affordable through the simplistic supply / demand equation of the private market.
We hold that access to secure, affordable housing is a fundamental right that the state has a responsibility to directly deliver to all citizens.
The only way to turn that aspiration into a reality is by embarking on a genuine all-of-government effort to change the fundamental structure of the entire housing sector - to effectively de-commodify housing and end the need for a private rental sector entirely.
The fight for housing justice is also a fight to break the anti-democratic economic and political power of land speculators, developers, bankers, landlords and all of the other parasitic elements that have grown rich and powerful off the back of the current approach to housing.
Universal Public Housing is the key to delivering that level of structural change and beyond that to breaking down income inequality and class barriers - to transforming Irish society for the better.
If you’re ready to join the fight for for housing justice and a New Republic, please get in touch today.