Housing in Ireland

Housing is a problem in this country. It’s not affordable for many people, whether renting or buying, and it’s often not up to the standard you would expect – as in built to last, well insulated, damp-proofed and adequately sound-proofed. It’s embarrassing to state it so baldly but let’s not let embarrassment stop us from dealing with a serious long-term problem in our state.

This is not some recent problem caused by the world-wide recession that began in 2008. This is not some problem that has been visited upon us. This is an on-going issue for decades now and it is the result of a serious lack of planning, vision and attention – on the part of us all who have put up with paying too much for poor quality housing/accommodation for years. We need fiscal policies in place to ensure stable prices in the housing market that would deter speculative investors, we need measures in place to make rents in the large cities (particularly Dublin) more affordable and more secure (I favour rent control but I know this isn’t popular with landlords – 2 years fixed rents isn’t enough though, not when rents are already beyond what many can afford to pay), we need proper procedures in place to ensure that housing standards are adhered to (and improved upon), strong penalties for those that fail to follow them, and a clear complaints and enforcement procedure.

It’s true that the recession of 2008 and the decisions made by the then government and its successor in order to deal with the banks-facing-serious-liquidity-problems-recession made the situation a lot worse. Actually for a moment in 2010 it looked like it might have actually help things. In 2010, for the first time since the 1990s, the rents in Dublin city seemed to be priced at what you would expect to pay for the property. So much so that people quickly started looking to rent rather than buy. Not that there was anything much to buy because house prices had fallen hugely so people were holding off on selling, whenever they could, waiting for prices to go up. So they were waiting for the prices to become unrealistic once again. There was very little building happening because developers, those that were still in business, could see that they couldn’t get the sort of prices needed to make the development pay. It also costs a lot to build here as well as buy. Had the then FF-Greens government (or the following FG-Labour one) invested in a program of social housing on a major scale it could actually have greatly helped the situation.

There are many reasons why this didn’t happen, most obvious are the following ones. 1) previous social housing programs did sort of seem like “splash the cash” deals between government and developers (that is being unfair – but with all the housing related scandals emerging at the time it could have been a hard sell to the electorate). 2) If done right, the development of well made, affordable homes would have ensured that the houses prices that fell so dramatically would not have much hope of recovering returning to being valued at grossly inflated prices, meaning this would not only be a hard sell to the thousands of people dealing with negative equity at the time, the banks would also have been against it as it would almost certainly mean mortgages being restructured (i.e. devalued) in the future (and of course that is something the people with negative equity would want but how many households would end up out on street before the banks were actually forced to do this – would you want to risk it being yours?). 3) Those damned credit rating agencies kept downgrading our rating so that borrowing became prohibitively expensive and we ended up (or so the government of the day believed – I think we could have demanded a lot more help from the EU) being forced to bring in the IMF (and the EU (the Commission) and the ECB – the holy troika). I really can’t see how the credit rating agencies (Standard & Poor’s et al) could justify doing that. How exactly were we a credit risk? That question needs to be asked over and over again – but that is a different issue…

But this is all just talk of the neverwas. There was no major program of affordable social housing in 2010. And there couldn’t have been. Because none of us were paying close enough attention to demand it. I’m sure that agencies working in the area – like Focus Ireland – might have made calls for this sort of investment, but calls from groups that don’t make a major contribution to the economy only get as much attention as the public at large demands.

Maybe you feel you were paying close enough attention. Well I know I wasn’t. I remember when the rents dropped over 2009/2010 I actually found myself thinking “maybe market forces will sort this out”. Like magic. I wasn’t paying attention. And frankly I don’t believe many of us were. How else could we have allowed the creation of NAMA?

I wrote A Call for Dreamers and Dreams last September. Since then I have been thinking a lot about ways to add more definition to my idea of integrated individualism. Yeah I know it sounds like wishy-washy nonsense but I’m actually serious about it. I believe the first step towards it is to have a system where we vote on policies not people. But what do I mean by that exactly? Honestly, I don’t know how such a system would work but I believe that the way to find out is to focus on one policy area, understand what factors affect it, who is responsible for getting things done, basically trace out exactly how the systems in place work at the moment, and then look to design a system where people get to vote directly on what direction policies should take. Sounds pie in the sky? Well, it might be. But there has got be a better system than what we have currently.

I think that housing is the policy area to focus on because it’s a huge problem and, until fairly recently, it’s largely a domestic issue.

So since the end of last year I’ve had this idea to start tracking housing policies and issues with regular posts on twimii.

Since the end of last year? Yeah. But it’s now March. I know. – It’s because I feel it’s an important issue so I’ve been a little worried about not doing it right. And there is plenty on this site to explain why that fear is probably justified.

There’s a bit in The Fountainhead where Howard Roark goes on about how if you want to get something done you have to ignore how it will benefit others and just focus on the work. That’s actually true. But I believe that rather than it being because you’re at you’re most productive best when you’re being selfish it’s because you can feel too great a weight of responsibility to do anything if you say to yourself it’s very important that this be right.

I know that no one is likely to take stuff here seriously anyway but even me thinking it’s important is enough of a deterrent. Generally I need to develop a “sure feck it” attitude in order to do things.

Over the past two weeks I’ve seen three things that have helped me develop the essential arragh-feck-it ‘tude. One was The Big Short or as I like to call it A Load of Pants. The second was this article about DCC not receiving enough applications in the tendering process for building the modular housing units. The third was this article about the new institutional investors in the Dublin residential properties which riled me up enough to make me start writing this post.

It’s pretty obvious why the articles would cause upset. And I would have thought it was pretty obvious that The Big Short is both infuriatingly condescending and completely beside the point but I read (another Irish Times article) an interview with Joe Higgins of the Socialist Party in which, just as a by-the-by, he recommends people watch The Big Short. I was gobsmacked. I wouldn’t agree with many of his policies but I would have thought that anyone with any sort of leftist leanings would immediately see how irrelevant this film is to understanding how to protect our economies from what happened.

We need to learn that essentials, like housing, should be protected from, not governed by, market forces. Yes, the lesson is that simple and that profound. Learning the names of different financial instruments that existed up till the 2008 crash is pointless. Even more annoyingly the films tells you “they don’t want you to understand this, they want you to go away” – almost in a “what’s the matter you too chicken to fight?” sort of way. It’s maddening. We need to regain control over housing, education and healthcare. The provision of these essentials should not be affected by the vagaries of the international financial markets. That’s where the real fight is. And the fight will not be won by scrutinizing old financial instruments. This fight won’t be won by fighting at all. We need as a society to come to a consensus about what should be a given, what should we be able to count on? I’m not talking about the state taking ownership of banks or construction companies or anything like that. Because that doesn’t work. I don’t want a revolution. I want fiscal incentives to entice developers to do necessary works like the modular housing (and if that doesn’t work then the state must at that point intervene and simply hire builders to do it) and fiscal disincentives that would strongly discourage institutional investors from buying up properties here – and that we profit as much as we can from those that have entered the market.

I want a housing market that charges prices that seem appropriate for the properties concerned. Remember in the boom-time the property sections in the papers, there’d be pieces that compared what you’d get for your money in other places – actually they may be back I’ve stopped reading them – so you’d have a modest 3 bed in Dublin going for €500,000 or something ridiculous, and you’d have a gorgeous house in France, and a mansion with a pool in Morocco or somewhere, going for the exact same price.

If we’re getting stepped on we need to know it and shout as loud as we can. We need to start paying more attention.