Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
THERE IS “TOO much tolerance” of housing objections based on the “character” of an area, Public Expenditure Minister Jack Chambers has said.
Chambers made the comments as he launched a new taskforce to find blockages in the delivery of infrastructure.
A mindset around objecting to housing developments based on the character of a given area “has to change”, the minister said.
Chambers said he had heard from many young people that others living in an area for decades had sought to block developments based on the “character of an area”.
However, Chambers said such objections can be “nebulous” and “block” the broader social and economic goal of increased housing supply.
He made the comments after Government approved a series of actions designed to accelerate the delivery of strategic infrastructure.
This includes a review of the National Development Plan, the establishment of a new infrastructure division which will second experts from key delivery agencies, and the creation of a taskforce to accelerate infrastructure delivery.
The minister said “provocative zeal of reform” will be the “core focus” of the division, as he criticised objections to housing delivery.
An evidence-based assessment of the “barriers impeding timely infrastructure development” is to be done, which will inform an action plan of “high-impact reform measures”, said the minister.
Asked if there was room to change planning regulations to prevent objections from slowing down delivery, Chambers said:
“Anything that can achieve faster and more accelerated infrastructure delivery has to be on the table.
“And the last number of years have shown how too many individuals have had too much of a say in impeding infrastructure and housing across our economy.”
The minister said there were “countless examples” of people in housing trying to “frustrate” and “undermine the broad public good”.
He added that in recent months, he has seen examples of housing getting stopped because it undermines the character of the area.
“What does that mean?” he asked.
“And you know, for me, it’s about housing. It’s about infrastructure and cutting through some of the nonsense which is just impeding the broader economic and social objective.”
The minister has previously said he had seen examples of “eminently sensible proposals” for housing supply in Dublin which were refused on aesthetic grounds.
“I think additional housing, people, new people living in an area enhances the diversity and character of an area – and the fact that people think they have a veto on more people living around them, I think is a mindset that has to change.
“It’s just a frustration I see and hear from many young people who would like to live in many urban areas, but they have people who’ve lived in places for decades objecting to housing on the basis of a character of an area – which I think is a nebulous reference that just seeks to block and object the broader social and economic objective,” he said.
He said areas can have enormous character but that shouldn’t impede additional housing or community infrastructure.
Asked if he was signalling an era of the deregulation with the new approach, Mr Chambers said it was an attempt to “balance regulation”.
He added: “If the regulation doesn’t fit the the broader public interest or objective, then it should be assessed – and we just need to have a balanced approach around that.
“And endless regulation which constrains infrastructure or housing delivery on our economy isn’t, in my view, in the long term economic or social interests of the State.
“And I suppose it’s having a balanced approach to that is what’s ultimately important, protecting – obviously – certain standards that we have which are important for for people who would like to live in, in particular, housing, for example, and but we need to have a balanced approach to that.”
To embed this post, copy the code below on your site
Of course there should be a cap – its a no brainer. We shouldn’t even be having this discussion.
It’s a bit of pointless having a cap on borrowing when cash buyers are driving the demand.
Cash buyers are a minority – capping lending will still peg prices to a more sustainable long-term level.
Totally agreed Avina.
Avina that’s not what the agents are saying, and have you looked in daft lately and seen the “cash buyers only” sales
Very misinformed if you think cash buyers are a minority, very close to buying a 2 bed apartment for cash, you get much better value if you pay by cash.
I wouldn’t agree with 80% of the loan value as that just gives more power to cash buyers without any significant help to traditional buyers, 4 years income does sound very smart though as it will stop people from buying property that they can’t afford or don’t need.
I mean why would a family of 4 need 5 bedrooms when 20 years ago a family of 7 (2 adults and 5 children) fit perfectly in a 3 bed terraced house?
Welcome to Ponzi, Snake Oil, Casino Ireland.
Where your home is a stock to be traded on a far off index.
Where basic fundamental shelter is nothing more than a cash cow for a corrupt/criminal cabal of vested interests.
Noonan should also introduce a tax on second home buying.
Speculation is driving up prices also.
Should put the stamp duty on second homes up to four or five per cent.
Foreign investors should also pay a tax / duty. investors speculation with property in this country should be distinctive, houses for the people not gamblers .
We’re always banging on about how we should adopt a Scandinavian approach, well this is one initiative that needs to be adopted here, also 90%+ CGT on NPPR sales. Profit needs to be driven out of property speculation, maybe then that money might be used productively in the economy and god forbid create some jobs.
How is it a blessing ? I’d say it’s a curse .
Sometimes people need protecting from themselves (and dodgy banks!).
You should never legislate for stupidity – that is, in itself, an extremely stupid thing to do. Doing something along these lines would cause a massive negative equity surge on virtually all mortgages in Dublin and probably everywhere else too. The way to cure the house-price problem is not to try to remove people’s personal responsibility but to build more houses and apartments. Build up and build out. The prices are rising again due to demand… so increase supply. It really is that simple – ‘over-complexifying’ it with nonsense-legislation is NOT the way to go. Why are more homes not getting built? Time to examine the state’s role: are they slowing the building process down? Are high taxes on building/buying preventing fair pricing? Often, removing the state from the problem will allow the market to recover in favour of the consumer.
The average Dublin house price is €240k… The average Irish salary is €40k meaning the maximum mortgage would be €160k even with a 20% deposit that’s still under €200k
Thus… Such a move would price approx the bottom 2/3s of the population out of the housing market.
I’m not a socialist but even I can see that such a move wouldn’t work unless you heavily subsided low income housing and put in appropriate rent controls…
Even then there will be a squeeze of up affordability on the middle class… Wealthy by most standards but just not wealthy enough to own a house, and not poor enough to have access to any social programs to help them do so
There are 50,000 mortgages in arrears of two years or more that havent been repo’d according to central bank stats. The central bank are doing nothing for first time buyers, the message currently being sent by them is dont bother pay up – you will eventually get a deal.
http://www.centralbank.ie/polstats/stats/mortgagearrears/Documents/2014q2_ie_mortgage_arrears_statistics.pdf
Something is only worth what others are prepared/able to pay for it. In your example if 2/3s of people can only afford 200k that becomes the new price. You cannot sell something if people cannot afford to buy it.
The reduction of the numbers in first time buyers will increase the demand for rental properties, thereby driving up rent and therefore demand for investment properties. Investment groups will buy or build whole estates for rent, leaving home ownership further out of reach for regular people.
No, subsidies would increase demand at a given price point, while rent controls would reduce supply in the medium term. Both would increase prices. The fundamental problem in Dublin is shortage of supply, which is caused by:
- non-use of available sites. The govt had the opportunity to deal with this by implementing the LPT as a tax on the site value rather than the property. It flunked it.
- ludicrous planning insistence on low-density housing
- unsuitability of the high-density housing stock we have for families
- 50,000 properties in serious arrears still unrepossessed and put on the market
- older people continuing to live in houses too big for them, for various reasons including lack of suitable smaller alternatives in their communities and a reasonable fear that any capital they release will ultimately be confiscated by the various limbs of government.
These are all government-generated problems. The govt should sort these out rather than imposing more “solutions” which only create further problems.
Drew
Your analysis isn’t correct.
The absurdly high price of housing does not represent any ‘real’ value of the property in actual costs of building. Hidden in the property price is the price of a tiny piece of land the house stands on, which has only the intrinsic value of what return you could get by farming it. IE a typical 1/4 acre plot is worth virtually nothing by itself. (But is effectively bid up in a failed market to obscene levels.)
The price of a house has been driven skywards by the price of the land on which it stands. And there two factors that cause this. One is the creation of artificial scarcity – in both building land and finished houses – most especially in areas where jobs are available. The second is the availability of bank finance.
Both of these are responsible for what amounts to a Pyramid market in houses. Which is also driven by the fact that we all need somewhere to live – it is not a ‘discretionary’ item of spending – populations tend naturally rise, putting further pressure on demand which drives up the price.
As we’ve seen, leaving such an essential ‘good’ for all of us in the hands of the private sector has led to monumental market failure – akin to a Pyramid scam with a de facto ‘cartel’ of property developers at the top, aided and abetted by a banking sector engaged in what Professor Bill Black has termed ‘control fraud’. (Black is a former US Regulator credited with jailing hundreds of US Bank executives in the US Savings & Loans lending fraud, and author of “The Best Way to Rob a Bank is To Own One”.)
Limiting banks’ lending in the way the Central Bank authors suggest is only one element that is needed to ensure the housing market operates to provide reasonably priced homes for +all+ citizens.
The other necessary element is to have a State sector in addition, providing social and affordable housing for renting at the bottom end of the market. A ‘right to buy’ could be included +providing+ that for every house sold another is built for rental. This can and should be done without ‘subsidy’ on a cost neutral basis. The state is uniquely able to borrow all the funds required at very low interest rates, with the property providing guaranteed collateral. Rents cover the costs of borrowing and maintenance.
The most socially cohesive way of providing social housing is in mixed developments. As was originally intended in the 20% rule, private developers should be obliged to make provision for a proportion of social housing in all projects over a certain size. (And not be allowed to buy/bribe their way out of the provision, as happened in near every case.)
A further need for State action is to intervene in the market for zoned building land which was (and still is) a key part of the Pyramid market failure. Private developers must be prevented from hoarding and controlling the market in order to make windfall profit off simply the land itself. (The original intention of a property tax was in fact to make it a Land tax to have the effect of adding a significant cost to the practice of land hoarding to discourage it. Before the idea got utterly corrupted by property developer vested interests and their fellow travellers in the political classes.)
Deals are great for the people that are in long term arrears .. Takes a load off their minds :)
The root cause of Dublin’s housing shortages is speculators being allowed to sit on vast tracts of land indefinitely.
When they finally decide to off load, they seek an arm and a leg to let go of their Investment.
Development land hoarders in our capital need to be heavily penalised for undue delays in developing out their assets, especially where residential housing is at issue.
Government needs to shape up on formulating an effective policy to make it unattractive for speculators to dabble long-term in development land.
The current crisis in housing will only get worse for as long as Government allows this scandalous situation to prevail.
Tou’ll find that half of the Government are involved in this….sorry their wives and siblings I mean.
It won’t happen. Noonan has refused to legislate against the sins of FF. It suits the selfish interests of politicians of all parties .
Build more houses and apartments and stop choking supply to keep up prices. A house should be first and foremost a home and not an object of investment for profit.
The Government could tackle the housing crises if it wanted to plenty of skilled labour out there. What about giving these people a wage instead of the dole or job-bridge in a Government Sponsored Construction company to build public housing and other public projects. The spin off from these projects would kick start the economy affordable housing for all……..But our Government will not do that because it will upset the Vulture capitalists,the 1%ers and the Banks that caused this whole fiasco in the first place.
“Should”? Put it into law! Are they impotent or something? The dog on the street knows it should be done. Talking about it is f all use.
loan and mortgage monthly repayment shouldn’t be more than a 1/3 of your monthly incomes. this rule should be followed across the banking system.
Doing so will push nearly every house in Dublin into severe negative equity. And create a complete shit storm the government should market manipulation and the banks should deal with each application on a case by case merit.
The banks did deal with each application on a case by case merit and look at where it got us.
Doing nothing will allow prices to rise again out of control till it all collapses again. Sure some people might regain some positive equity but at what cost to society? It simply needs to stop.
You can’t build a house for 120k ( that’s without the land)
Putting a Cap will not only create a huge amount of negative equity but it will also push rents up. It’ll keep lots of people in the rental market who would otherwise buy.
@Brian
As you rightly point out, putting a cap on lending will cause house prices to fall to a more sustainable level.
Yes this will be tough on those who overpaid for their homes (at a time when the rest of the world looked on and shook their heads in bewilderment) but is essential for long-term stability and sustainability.
Charlie munger has some great views on the banking and finance sector. These light touch regulations always seems to end up with cycles of boom and bust and bonus driven sales, really at the end of the day it’s ordinary family’s with kids that pay the price for speculative practices. You wouldn’t be allowed to do it in any other industry. Why something as important as banking .
Too late for this now. Should have been implemented 10 years ago. This would worsen the property crisis now as those who bought in boom times would struggle to get a sufficient price for their house and therefore hold rather than sell. Banks would lose out where properties were reposesed (meaning the tax payer loses out), and builders wouldn’t bother building as there would be no profit. The recent price increases are due to a supply and demand issue, and a large portion of properties are being bought with cash, not credit….so credit is not the cause of the price increases – natural market economics is at play. Banks are only lending about 4 to 4.5 times your salary now anyway, and 90% of the price. They also stress test for significant interest rate hikes and require evidence of ability to pay and a permanent job. They are being sufficiently prudent.
If we cap the bank loans, where will we get the money to fund our overpriced assets?
have your say