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LAST UPDATE | 14 May 2021
WHEN THE EUROPEAN COMMISSION recently looked at Ireland’s affordability crisis, it warned that ‘the surge in house prices in recent years seems to have been mainly driven by increases in land prices and construction margin’. As ever, land and money. And as in the past, it is not only the physical environment that is changed by housing, the economic and electoral landscapes are affected too.
Of course, all housing is politics, because all politics is competition for resources. Land and money have always been fought over, and never more so than public money and private property.
Historically, housing and politics have always been happy bedfellows. In the 1930s, the Land Commission had a reputation for allocating land on the basis of party affiliation and not the recipients’ capacity to work it.
At the time Fianna Fáil were the party of the ‘landless men’ (think today’s first-time buyer) wanting to settle many homesteaders on small farms, whereas the opposition (nowadays Fine Gael) wanted to create large single-owned ‘ranches’ (think today’s large investment funds).
More recently, the close links between politics and housing brought us first planning corruption and windfall profits for landowners and developers (see: Tribunals), followed by a speculative property bubble and banking crash (see: national debt). These gaps were closed off – the days of councillors and brown envelopes are gone, as is irresponsible lending by the banks.
However, positive outcomes for developers and landowners are now achieved by lobbying to influence national policy, which has the added benefit of being legal. Research into this political lobbying has proven how easy it is for large players to get things changed, to the cost of everyone else.
Power imbalances
The Strategic Housing Development (SHD) process sends planning applications for more than 100 residential units straight to An Bord Pleanála on a so-called ‘fast track’.
Interviews with the key players behind this policy by academics Mick Lennon and Richard Waldron show how it came about because Department of Housing civil servants had become ‘very close bed fellows’ with the lobbyists, and that ‘in a lot of ways the development (sector), the CIF [Construction Industry Federation] and people like that, Property Industry Ireland, have captured the State in terms of policy’.
Lobbyists confirmed giving then Minister for Housing Simon Coveney and his officials their SHD recommendations who ‘took it lock, stock and barrel and stuck it into the new housing bill.’ At that time, then opposition spokesman Darragh O’Brien said: ‘It is evident that a lot of power is concentrated among a select group of developers.’
There are many aspects to this SHD process, but one of them is that we now have democratically-elected political representatives (councillors) spending two years in research and consultation, only to have their Development Plans over-turned by an administrative body (An Bord Pleanála), and it all ending up in the High Court, as the only appeal mechanism to a SHD decision by An Bord Pleanála is to take a judicial review.
It should be no surprise that courts are finding in favour of those taking the judicial reviews in about 80 per cent of all cases. The implementation of this poorly thought-out legislation has meant that communities, politicians and developers have ended up frustrated.
Prior to Covid, it should be noted that despite removing opportunities for meaningful public participation – a way of balancing power and influence between different parties – less than two per cent of all housing with planning permission under the SHD process had been built. This does not add weight to central premise of the SHD lobbyists that public objections were holding up development.
In parallel, other political lobbying is happening on space and building standards, including for fire safety. New apartments sizes have shrunk, most are sold to funds for rental, buildings are more tightly packed, with less daylight, fewer balconies, lifts, stairs, parking spaces, outdoor amenity, playgrounds and creches.
So again, families are pushed out to the commuter belt. There were more new homes completed in Naas (176) and Drogheda (197) in the first three months of this year than there were in Dublin postcodes 1 to 8 (137). Neither is this exodus to commuter land consistent with national planning policy, also written by the Department of Housing.
The deregulation of apartment standards for build-to-rent and co-living has enhanced profits, inflated land values and raised prices for potential purchasers and renters. It has also made Ireland a very attractive place for institutional investment.
As a result, decent housing in urban areas is increasingly out of financial reach; the cost of housing is damaging Ireland’s competitiveness and putting serious pressure on government finances. According to Gillen Markets, an experienced advisor to large funds, the greatest risk to investors now is that the government might do something to make housing more affordable.
Where we live and how we vote
The problems of housing are mainly urban ones, and Ireland has been urbanising fairly rapidly since the mid-1960s when it was 50 per cent urban and 50 per cent rural. This is significant for political parties because where we live affects how we vote and right now about two-thirds of the population now live in an urban area.
When first preference votes are tracked, the declining share of the rural population and the declining share of general election votes of Fianna Fáil and Fine Gael mirror each other on a six-decade downward trend.
In the 1965 election, Fianna Fáil got 47.7 per cent of first preference votes, and Fine Gael 34.1 per cent. In the 2020 election, these numbers had fallen to 22.2 per cent for Fianna Fáil and 20.9 per cent for Fine Gael. Sinn Féin got 24.5 per cent of first preference votes nationally in 2020.
As Ireland urbanises, the main parties’ rural voting base declines, and they begin to lose their security of tenure in power. Smaller parties and independents have seen their combined share of the vote increase significantly in parallel to this urbanisation. In the last 30 years, Sinn Féin has gone from zero to nine Dublin TDs.
Over the same period, the Green Party has increased its Dublin representation of TDs by 600 per cent, although from a low base. In contrast, Fine Gael had 15 Dublin seats in 1989 and now has eight, and Fianna Fáil has gone from 21 to seven seats. There are now eight new parties that didn’t even exist in 1989.
Housing – and mostly housing affordability – is increasingly at the heart of these trends.
A blind man gets dressed
The current approach to housing policy could be likened to a blind man getting dressed in a charity shop, in the dark. Without a coordinated approach to housing, planning, energy and fiscal policies the chances of a matching strategy are slim.
The current non-strategic, reactive and inflationary approach to policy merely increases risks for everybody: landlord, developer, first-time buyer, taxpayer, mover, and even the retired person sitting on housing equity. We have been here before.
One of the most remarkable aspects of the recent housing discussion is a resistance to discuss this in economic terms (even by economists). Subsidies of up to €100,000 per home, which always end up in the developers’ pockets, are not sustainable and cannot be scaled up to meet the need.
It has been well-proven on these pages and elsewhere, that the government has access to the land and money to fix this problem, using the tools of design, procurement, and tenure (how homes are paid back). It is mostly a matter of the will to use them.
Since the foundation of the State, Fianna Fáil and Fine Gael have built about the same number of social houses for each year they have been in power, but Fianna Fáil has overseen about 20 per cent more private housing.
To get there, over the decades, both Fianna Fáil and Fine Gael have instigated successful housing programmes. Between 1948 and 1962 the government supported the construction of 60,000 local authority homes and 58,000 in the private sector. Half a million people were housed, and it was a source of pride and votes for the government.
The middle ground
Unfortunately, this ‘housing as public investment’ approach is no longer mainstream political thinking, despite its numerous vote-winning advantages including that of reducing future expenditure on welfare.
As governments have moved ever further to the right on the political spectrum, evidenced by the favouring of a deregulatory, corporate, investment-friendly housing policy, it drags the left-wing parties into the centre.
The housing policies of the parties of the left are actually quite conservative in the context of Ireland’s century-long history. Indeed, their centrist policies are the very ones the larger parties were proud of not that long ago. Building housing that is affordable, rather than helping people buy housing that is unaffordable, is neither radical nor reactionary.
Class has yet to raise its head in these debates – those smaller, darker, expensive rented units are alright for other peoples’ children, but mine will never have to live there (really?) – but it will.
Rather than listen to those in low rise developments cheerlead expensive high-rise, those who own their own homes advocate long-term renting, those in large houses lobby for smaller housing, and those with no mortgages (half of all homeowners) encourage loading first-time buyers with more debt through shared equity schemes, governments might be better off listening carefully to the electorate.
The echo chamber of the comfortable won’t tell you much about the bedsit of the discomforted. The consequences of turning a deaf ear to voters here, and fudging a solution there, are economic, social, fiscal and especially political, dynamite.
Dr Lorcan Sirr is Senior Lecturer in Planning and Development at the Technological University Dublin and not a member of any political party. Orla Hegarty is an architect and Assistant Professor of Architecture in UCD and not a member of any political party.
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The arrogance I heard coming from members of the government in the last week is truly staggering. I heard someone the other night on the Tonight Show say the new measures they are planning to introduce will “give people a dig out” and then she smiled. People don’t want a ‘dig out they want to be able to afford to purchase a property on the average industrial wage or not pay 60% of their salary on rent each month. The government are clueless to the real poverty working people are in with little to no disposable income after paying for rent.
@Alan Wright: they know alright it’s s a Stealth tax with profiteering for all those involved
@Alan Wright: sinn fein recently proposed a solution to the housing crisis by 1) banning vulture funds from buying family homes, as it is in the UK and 2) Ban rent increases for the next 3 years. Every single FF/FG/Greens TD voted against it, all in favour of vulture funds and increased rent. Let this be an insight into which politicians care about the regular struggling irish citizen
@BradysASAccount: banning rent increases and making the issue a landlord issue well done Sinn Fein bunch of numpties .
@BradysASAccount: Flat out banning rent increases is a recipe for disaster. Control of rents, for example banning increases above the rate of inflation would be much better.
@BradysASAccount: banning rent increases is political populism and will drive down rental supply.
People dont want housing affordable on the average industrial wage.
You sound like you work for FF.
People want housing they can afford. That means social housing.
@Tommy Roche: It has been well highlighted that current allowable rent increases which are capped at 4% just so happens to be the incremental annual return expected by institutional investors.
It’s taken nearly 100 years but at last, voters in this country are starting to realise that FFG don’t care about voters.
next election if Sinn féin run with housing as their focus, it’ll be a landslide.
@Biscuits Patinkin: agreed. It will go against everything in my dna, but I will vote SF for the first time ever, if they have a comprehensive, working solution to housing for the working man, not just homelessness and social housing. From start to finish on mortgage applications etc, total reform, they will have my NO.1 vote. FFG have it within their grasp to fundamentally change this and have a landslide also, but they just won’t go far enough.
@Biscuits Patinkin: true..careful what you wish for…..if there’s one thing that destroys good housing – it’s landslides
@Biscuits Patinkin:
If SF get into the driving seat, you will see entirely different rhetoric. After all, it’s one thing getting there, it’s another thing staying there any they’ll have to keep everyone sweet! There will be no radical left wing policies at all, zilch. The wiff of losing one foreign company or any significant amount of jobs, they’ll be toasted. As night follows day.
@Biscuits Patinkin: but won’t get my money.
@Biscuits Patinkin: All Sinn Fein need to do is run enough candidates, and they will run away with a majority. Not sure it’s what anyone wants but people showed their dissatisfaction last time out.. Candidates only short coming
How badly we need ffg confined to the scrap heap
Too many elected have open conflicts of interest. Just like Noonan previously being a bondholder, being allowed to decide for the nation if to burn bondholders or not (no surprise what he decided), many of our elected are also landlords (and have interests in the drink/leisure industries too) .
They are not stupid. They are not going to embark on a much needed, larger scale national building agenda that might affect them personally or that of their family/mates.
This conflict of interest needs to be seriously addressed. Will it? No. They won’t even allow that conversation to happen. No surprise why! RTE and other biased media avoids this underlying issue too.
@Jeff Rudd: It goes much deeper than this. Yes the current government barely bothers to hide their level of corruption, even if this were to change in the morning it could take a determined effort decades to recover. Then there’s the question of the quality of what has been allowed to be built, the standards are alarmingly bad. A retired colleague showed my son and I around a small site a couple of years ago, pointing out it’s short comings. Imagine the only car on offer has tiny wheels, instead of quality metal it’s made of tin foil and the back seats are removed in the name of efficiency. You pay dearly for extras like a radio and actually using it and it costs four times what it should. And then the government insist they’re doing all they can to improve housing? It’s laughable.
Unfortunately Ireland followed the UK policy (Mrs Thatcher) of the ‘Right To Buy’ That is/was a disastrous policy for people with real housing needs as council housing transferred to the private sector. Property transferred to the private sector was not replaced.
Viewing the interview with the Housing Minister last night does not give much hope for any changes any time soon-he came across as full of ….. it was “we are going to do this and that” just a lot of hot air. I feel so sorry for people with real housing needs
@Matt Joe Caulfield: that’s a good point – public housing should remain in public hands, and stop this nonsense of using public houses as “forever homes” that you can gift to children. unfortunately, one of the answers is private build to let, and that’s been tarnushed because of unregulated rental costs. those investment companies would still block buy if they were limited to an index linked rental cost, but we are choosing a hammer to swat a fly. now, we’ll have no alternative as banks are gone, pension funds are gone and developers are highly leveraged.
@Matt Joe Caulfield: right to buy was first available under the 1936 Labourers Act (Norris, 2018) and the recession of the the early 1980′s combined with the move toward neoliberal policy caused the drop off in the state providing/replacing social housing.
@Matt Joe Caulfield: I have been saying this for years. Its akin to gov buying a BMW and renting it to someone for a fiver a week. Gov still on hook for maintenance and running costs of said car. The guy with BMW asks can he give a tenner a week and own the car in few years. This car is then sold back to the gov in twenty years and they need to put in refurbishment and the cycle continues !!!
The houses that the gov built should remain the property of the state and be rented,refurbished and rented again…..
The present government can immediately change the tax laws so that investment funds pay capital gains and income tax on rents – as they do with the small landlord who owns one or two buy to let properties.
The affordable housing agencies model that is operating now can be cloned and scales … it works!
The Government and the County councils need to do an audit of ALL housing in every county. There are several vacant houses – some in good repair – surely they can be readied for use?
A bit blinkered there, Robert. FFG are a bit soft on white collar crime, would you not agree?
@Jack Cass: You know it’s funny, I’ve heard a lot of people say they wouldn’t vote for SF because of their association with crime. Yet this government are happy to roll out the red carpet to vulture funds who can register as charities, avoiding tax. They buy 95% of apartments, driving up rental prices to astronomic levels, all with the governments blessing. Now they’re threatening to raise stamp duty. Remind who the criminals are?
the fix for this problem is easy for government, borrow and build, rent back to people and keep the housing in public stock, but it involves pain for investment funds and large builders, lets just be clear about this.
Even if we had an election tomorrow, you can be sure while the likes of FF will take a kicking, there is every chance FG would still get a large vote, simply cos a large portion of the voter base have a home, are in good jobs and don’t struggle to pay mortgages and taxes like most do. And while FF have been busy trying to make it out like they care about housing, the same can’t be said for FG. So we need to be careful that when the time comes we punish both parties equally cos if FG get back in the next election as a majority in government, lack of housing will be the least of our worries, you can add things like water charges and the rest while everything else suffers.
@Michael Healy: approximately 20-30% of the vote will always go to FG for those aforementioned reasons however the proportion of this will continue to shrink under FG policies as a new generation of middle class or upper middle class workers find themselves locked out of the housing market then only the small percentage of the populace who are millionaires and can straight up buy their children homes without remortgaging their own house to help them get on the property ladder will remain. FG will always get about 20-30% votes but that’s not a majority and if the green and FF votes transfer to SF there’s not a damn thing they’ll be able to do to “keep Sinn Fein out of government” as they put it last time round.
FF & FG have made an absolute balls of this. But whats the alternative ? Sinn Fein’s policies revolve around paying more social welfare & getting the likes of me to pay more taxes – I think the close to 50% is more than enough in all fairness. Sinn Fein are soft on crime. The leader of our country would have a direct line of contact into the IRA. They want a united Ireland- who gives a shite about a united Ireland? It will only bring back trouble and conflict. Property market in this country is deeply dysfunctional but if we vote Sinn Fein into power this country will go downhill fast. The property crisis will be the least of our worries.
@Robert O Farrell: So you’ll continue to vote FFG?
@Robert O Farrell: FFG’s housing policy is an unmitigated disaster.
SF haven’t had a chance yet – it is urgent that they be given a chance as FFG don’t want to fix it.
@Robert O Farrell: funny how you know all this but SF have never been in power? The two parties that have been in power for the last 100 years have made a complete mess of this country and have you so brain washed to be so fearful of any change. So you’ll continue to vote for them like a good little sheep. Incase you haven’t noticed we are already ‘downhill’.
@Robert O Farrell: sounds like you’re sole concern is YOURSELF!
@Robert O Farrell: Seems you have no problem with the austerity messures that the ordinary taxpayer will be paying for the rest of their working lives or the next generation who also be repaying for the gangsterism of the banks facilities by the same political parties that are again in power. Since the foundation of this State FFG have been in power .They more than once brought this country downhill .The most recent one as you will be aware will be with us for decades. The FFG circus continues.
@Robert O Farrell: ah yes this old chestnut. The most brilliant piece of strategy ever executed by FFG and the MSM was convincing the Irish people they have no alternative and as long as !diots like you keep spouting the same old tripe nothing is ever going to change…
What does this look like in the North of Ireland. I used to work with a team up there and they earned much less then down south but had no problems building or buying lovely houses. Same country, the south are drafting in building trades from the north for years so same builders, I’m guessing same sources for materials … so what’s the add on down south that are not in place up north. ALL costs should be compared and transparent.
@dottiemac: So after Mary Lou (God bless her and the ground she waddles on) has taken the reins of power and united the whole country, will the housing and economic situation in the 26 counties immediately become like that of the 6 counties or will it be the other way round? Answers on a postcard please to: SF Magic Money Tree and Populist Fairy Story Unit, Aras Adams, West Belfast, United Kingdom.
@dottiemac: the add on is land speculation – people get land rezoned and it increases massively in price. If we had a site tax, rather than a property tax, this would dramatically dampen down the inflation of land prices when they are rezoned for development. Add to this a vacant site tax that increases with the age of the site, and the land would be built on in no time, with houses at more reasonable prices.
@Terry Larkin: Why attack her physical appearance Terry? What makes you do that? Why do grown men do this wholesale in Ireland? I am genuinely asking.
This is the issue that will either Make or Break the present government
250k for a two bed home in county Offaly glenveagh builders are calling this affordable
Stop voting fffg
The most important thing, apart from ramping up housing output, is not to listen to SF and PBP with their obsession with building large social housing ghettos. Rahoon and Ballymun didn’t work, let’s not go back there. Let’s not have a whole generation categorised by address and kept out of jobs because of their eircode.
Ghettos are preferred by the likes of SF because they create a happy hunting ground for members, but we can do better than that.
A start would be having the far left stop blocking every development at council level.
@John Mulligan: utterly disingenuous tripe. You are attempting to excuse the current failures. Direct building of social housing by governments in the past took the pressure off the rest of the market allowing the purchase of private housing by people on average income.
@John Mulligan: Nonsense.
Getting rid of FFG is the most urgent requirement.
@John Mulligan: All social housing estates are not potential ghettos. This is an insult to people who cannot afford to build ,buy or pay outrageous rents. Social housing estates are located in every town and village in Ireland ,not just in Dublin. How come we never hear about all the estates which are well kept and have their own residents associations. Some of the best known high profile people in Ireland were born and reared in council houses. If the Government adopted a policy that estates built in Dublin and large urban areas are not too large ,this would help the formation of ghettos.
Isn’t it crazy that even on the commuter belt (Greystones, Bray, Naas, Maynooth, etc.), you’re looking at over 400k for a house. This is not an affordable house and adjusted for inflation is nowhere near as high as previous generations have had to pay.
FF/FG have had it way too easy and have had nothing to fear because they knew they would just juggle the power between the two parties. Regardless of what a Sinn Fein government is like, it’ll make FF/FG fight for our vote which is healthy in a democracy.
I fear that even a left wing coalition government (PBP, social democrats, SF) won’t even be able to do much to fix this crisis as it’s just gone too far thanks to FF/FG brown envelopes.
At last a balanced and educated review of housing policy, its many dimensions, the roadblocks, and the ways forward. Congratulations to the authors
The county councils fffg all out , too many fat cats with vested interests in property to care about the Irish people not only are homes unaffordable to buy the rental market is also extortion ,we need a clear out and fast
A very good Article. Thanks.
@Niall O: not even vaguely true. How does a group they owns less than 1% of the housing market make people lose sense of reality.
We do not have a lack of houses. We have an occupancy issue. My mother lives alone in a 5 bed house. In the 10 neighbouring houses occupancy is 1 or 2 per house when they used to house on average 5 per house hold. The surroundings area in Dublin are all like this. We need an incentive scheme to keep these elderly people in the area plus utilise the existing housing stock. Converting several houses for elderly use would enable all of the above.
Hugely unpopular plan as people will claim bed room tax, forcing people out of their homes etc… but this is the quickest and cheapest solution. Environmentally sensible as it reduces construction and travel.
@Craic_a_tower: yeah sure lets all round up the elderly and force them to move out of their houses, sure why stop there, how about move all the wealthy out of the multiple roomed mansions and large estates and build houses on the land. There is a housing shortage and forcing people should not be the solution. My parents live in a 5 bed house and they’ve paid for it pal, they are as entitled to live in what they have paid for as you are as a landlord to own property and rent it to make money. It might even surprise you that regularly have guests too, many stay, my parents relatives and grandchildren often call and stay, my brothers family also come over and stay once or twice a year. Their friends stay overnight after having a few drinks, jaysus woe betide the elderly having friends.
And we all know what happened the forgotten elderly during the pandemic, thankfully my parents have their own home where they could feel safe.. how many more would have died if all the elder were cooped up together as you suggest? It would have been worse than the Nursing Home scandal.
@Da Dell: you are exactly the type of person that prevents even discussion. If you read and comprehended what I said you would realise I predicted your reaction. An incentive is not forcing anybody out of there home and I never suggested any force. Many elderly people struggle to maintain their large homes.
@Da Dell: again never suggest any prison type situation. I am also suggesting they stay in the local area where their support structures and friends are. You made up a worse situation nothing like I suggested.
@Craic_a_tower: And its the ‘ideas’ of vested interests as like Landlords like you that have us in the mess we are in. You spout absolute nonsense in saying there is no lack of housing.
Then you single out the elderly, why not other houses with lots of empty rooms, like mansions which also tend to be on a large amount of land. Many elderly are also well able to look after there own home. If some want do downsize fine, but many would not and where would they go as there is a lack of housing. And you suggest this as the fix to the problem. Part of fix is to incentivize local builders to get building houses instead of incentivizing Investment Funds to buy up houses. Houses need to be built and thats the end of the story.
@Da Dell: great reply
@Craic_a_tower: That’s you out of the will!
have your say