Paul Hosford: Why 'starter homes' won’t fix the housing crisis — and may create new problems

The Government’s renewed focus on 'starter homes' highlights a deeper issue: housing policy built on assumptions that don’t match real lives

Housing minister James Browne, Taoiseach Micheál Martin, and Tánaiste Simon Harris at the Donore Development site in Dublin as the Government’s new housing plan is launched.

Before we purchased our home eight years ago, my wife and I had agreed to purchase a new-build home on the Meath-Dublin border.

A three-bed semi-detached 118sq m for the then-market-topping-but-now-kind-of-quaint price of €315,000, it was close to schools, a walk to the busy village centre, and overlooked the town’s GAA pitch. And, yet, there is one memory I carry with me of being shown around by a thoroughly nice estate agent.

And that was his description of this beautiful house as “a good starter home”.

Starter? Start what? Existing? Living indoors? Because I had done that successfully for many years prior. Did the house have to be assembled by ourselves, but was at a beginner’s level of difficulty?

I bristled at the term for a few reasons. Namely, we had scrimped and saved and lived at home with our parents for many years in order to be in a position to buy this home. In our heads, we were at a version of an optional finish line, not the starting blocks.

Obviously, we had heard the term before, but it seemed more apt for places that didn’t offer an attic conversion before you moved in which would vastly increase the space or that had plugs on external walls.

Secondly, we did not see our prospective new home as an investment in anything other than ourselves and our future family. This wasn’t an asset in anything more than it fulfilled a basic need, a need too many have unfulfilled.

Like most people who buy a home, we were not speculating to accumulate. We were buying a house.

Thirdly, I bristled because I never wanted to feel that we would be less than if we chose not to or couldn’t afford to ever leave that home. It was and is a family home, though for various reasons we ended up buying another home elsewhere.

The term has existed in parlance forever, though its usage has seemed more judicious as the housing crisis has turned buying and owning a home into a marathon for many and an unachievable dream for many more.

Which is why it was somewhat strange to see the term “starter homes” used as a cornerstone of the Government’s new housing plan. Launched on Thursday, Delivering Homes, Building Communities is the fourth such plan to sort housing in the last 12 years and promises 90,000 “starter homes”. It would be easy and, let’s be frank, characteristic of me to allow my personal discomfort with the word write the plan off, but let’s take a look at what the plan actually promises.

Effectively, the starter homes package envisaged by the new plan is a grouping together of the existing affordability or attainability measures — the local authority affordable purchase scheme and the first home scheme which are shared equity schemes, the help to buy scheme which gives a tax refund for first-time buyers of newly built homes of up to €30,000, and the vacant property refurbishment grant which is a payment you can get if you are turning a vacant house or building into your permanent home or a rental property.

The plan notes that these measures have already supported the purchase of around 90,000 homes, when combined, though the figures don’t account for purchasers who may have used a combination. The new plan, symmetrically enough, commits to them supporting the same figure, or 15,000 a year, by the end of 2030.

So the plan in essence is to do what is being done, but more of it. 

The help to buy scheme, which, research suggests, many people who avail of don’t actually need, will be extended to the end of 2030 and there will be a “standardisation programme across [the Government’s] home ownership and cost rental measures that enables cost efficient and higher volume delivery”.

This means new standards for so-called “starter homes”. While new standards will “build on” to the Department of Housing’s Design Manual for Quality Housing and the Land Development Agency’s (LDA) Apartment Typology Booklet, the plan says that homes will be “sized to reflect their starter-home nature”. It adds that there will be “increased affordable housing delivered by local authorities and the LDA” and that the scheme will “support eligible households to buy new, high-quality, starter-sized homes at upfront reduced prices, delivered via a shared equity approach”.

What a starter-sized home is isn’t made clear, nor is the size of the equity which the State will take in your home.

I have long been open in my belief that housing as a voting issue is a proximate one. I believe that many people think of housing as the most important political and social issue of the day until they have a home and move on to their next most pressing issue. And I have long been open in my belief that the last government’s efforts at housing attainability — because stepping in to subsidise the purchase price isn’t a real affordability measure — have been an attempt to play on that. Make houses gettable and you remove the pressing need for many people and, in turn, they can no longer be angry with you about housing. QED. The plan announced this week seems to have made this Government policy.

Work to ensure people can get homes, even if they’re smaller and not owned in full by the people who buy them, and call that a success which, given the context, it almost is.

But one question seems not to have been considered — if these homes are starters, that implies inherently that they are not for life. So what happens when you try to move on? In Navan, there are seven homes under an affordable purchase scheme due to begin applications in two weeks. Those wishing to purchase will have to pay a minimum of €360,000 with the council taking equity of between 5% and 17%. If you are someone whose circumstances improve and you want to move on, you must account for that percentage coming out of what you sell your house for.

If 17% of your sale price is already eaten up, how much must prices have risen by for your home to be considered the first rung on a ladder you have any chance of climbing?

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The Government’s idea to place its supports under an umbrella makes sense. As does a plan to increase awareness of those schemes — if they’re there to ease the burden of a bad system, they should be used. But the plan seems like it may solve one series of problems by creating another — smaller homes for people who have sacrificed and saved to buy their home for one and the inevitable controversies over equity stakes for another.

All that, and the name is bad.