The head of the Nevin Economic Research Institute has warned that an “almost complete” removal of investment from quality public housing following the financial collapse has left a legacy “that will take years to address”.
Tom Healy said that the total of local authority and housing association house-building construction as a percentage of housing output went from 28% in 1985 to 6% in 2012.
“The impact of fiscal austerity in the 1980s was such as to greatly reduce the proportion of local authority housing as a proportion of housing stock or new housing units,” he said.
“The traditional ratio of public to private dwellings shifted once and for all in the late 1980s and has never recovered. The acute accommodation shortages and escalating rental prices of recent years is not unrelated to this.
“The absence of suitable social housing and quality public accommodation has left a large supply gap. The almost complete removal of investment in these areas in the years following the crash of 2008 has left a legacy that will take years to address.”
Mr Healy said the scale of investment needed is huge.
“A start has been made at least in terms of policy intention and planning as outlined in the recent budget,” he said.
“It remains to be seen how quickly this will be implemented and what impact it will have on homelessness as well as the numbers of persons on the housing waiting list. The time for action is now as this social crisis gathers momentum.”
He said upward pressure in house prices, especially in the cities, together with the chronic lack of suitable accommodation especially for families with children, illustrated an imbalanced approach in public policy which, he said “has relied on a develop-led model to the neglect of social need”.
He said his colleagues in NERI, Daragh McCarthy and Micheál Collins, have previously suggested that the establishment and funding of an affordable housing agency “would draw on the capital assets, experience and knowledge of existing state agencies and should aim to provide 25% of new or renovated housing units as social housing each year”.
He also referenced a report by the National Economic and Social Council which said experience had shown that, in housing, “there are limits to reliance on passive, arm’s-length incentives, however smartly designed”.
“If, as Government wishes, housing provision is no longer to be developer-led, it will have to be led by some other identifiable actor or actors,” the report said.
Last night Michael O’Flynn, the head of O’Flynn Construction, claimed that the housing market will not recover unless there is input from developers.
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