An economic think-tank has urged the Government to ditch its ‘Rebuilding Ireland’ plan in favour of a new housing model centred on a commercial semi-state utility system.
The Nevin Economic Research Institute (NERI) yesterday unveiled its blueprint for what it called a “game-changer” to the “housing emergency” in Ireland.
Calling housing the “single biggest social policy failure”, NERI said the Government’s €5bn plan to build 25,000 new homes per year and add 47,000 social housing units is “insufficient to make a significant impact” and won’t deliver enough output to meet rising population levels.
Adding the plan is too reliant on the private sector, NERI said “a third way” — not reliant on exchequer or private funding — is required.
That “third way” entails the establishment of a new commercial entity — the Housing Company of Ireland — which would target the building of 70,000 new homes in its first five years and then around 10,000 per annum afterwards.
It would act mainly as a rented accommodation tool, largely aimed at alleviating social housing problems. NERI sees it being initially funded to the tune of €12bn by the NTMA, the European Investment Bank, the Strategic Banking Corporation of Ireland (SBCI) and money raised from the sale of the State’s shareholding in main banks.
It’s long-term sustainability would hinge on the putting in place of a European Cost Rental Model (ECRM), already been mooted in the Oireachtas.
Most of the new houses will need to be new builds. The latest National Housing Development Survey shows there are currently 420 ghost estates in existence, down 85% in the past six years. Within them, there are 5,305 complete and vacant or nearly complete housing units, representing just 0.3% of the nation’s housing stock. This compares to just under 2% in 2010.
NERI said the SBCI could be developed into a national investment bank lending or investing in various infrastructural projects — with a €3bn equity injection in the Housing Company of Ireland being a strong start.
On a wider economic basis, NERI said domestic demand will continue to drive the Irish economy this year, with GDP likely to rise 3.8% before its growth slows to 3% in 2018. The national unemployment rate, it added, should average 5.8% next year.
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