Homeownership will remain a pipe dream for Generation Rent

While a State Land Development Agency is much needed, there are major problems in the current legislation that if not changed could lead to the continuation of disastrous housing approaches
Homeownership will remain a pipe dream for Generation Rent

The currently constituted Land Development Agency has the potential to be a Trojan horse that will see public land used to build tens of thousands of unaffordable market homes. Picture: PA

The housing crisis continues to affect Generation Rent and Generation Stuck at Home, the homeless, and many other groups within the Covid-19 pandemic. 

And while the pandemic-related recession has meant increased saving for some high-earners, for many, particularly those in the hardest-hit sectors, their dream of getting a secure home has been pushed further out of reach. 

The need for affordable and social housing is increasing further due to growing unemployment and reduced wages. What has been clear for many years is that a radical change in direction of housing policy is needed, where the State takes responsibility for the delivery of affordable housing and ends the failed approach of handing over housing to the market and financial investors. 

In this context, it is important to scrutinise the proposed legislation for the Land Development Agency, which could be passed by the Dáil this week. While a State Land Development Agency (LDA) is much needed, there are some major problems in the current legislation, that if not changed could lead to the continuation of disastrous housing approaches. 

The importance of the LDA Bill for the future of housing in this country cannot be emphasised enough. It is also of profound significance for our democracy and the power of local government.

To put it in stark terms, the currently constituted LDA has the potential to be a Trojan horse that will see public land used to build tens of thousands of unaffordable market homes, sold to real estate investors, providing huge profits to developers and finance, all paid for by you, and locking Generation Rent into permanent housing penury. 

We could see the LDA making Public-Private Partnership deals like the O'Devaney Gardens plan, with private investors using public sites across the country.

Successive governments have focused their policy on doing everything possible to boost the "housing market", inflating rents and house prices in order to prop up banks’ balance sheets, incentivise private development, and win political support from homeowners. 

Public land has been viewed through this prism. They have approached it as a commodity to pump the market, not to disrupt the market and provide genuinely affordable and social houses on a major scale that could permanently reshape our housing system to create permanent affordability.

Language signals intent, and if we look at the detail of the LDA Bill, it is very worrying in this regard. Its purpose is “to enable urgent measures to be taken to increase the supply of housing in the State and in particular affordable and social housing”. 

Now this seems logical. But why is the support of affordable and social housing just “in particular”. Why is increased supply of affordable and social housing not the sole purpose of the LDA? 

Further on it states, its purpose is “to address deficiencies in the housing market,” and, most importantly, that it will acquire land from public bodies at the “market value of the land concerned”. 

But paying market value for the land will mean locking in unaffordable prices and rents. A public Land Development Agency is supposed to be about radically reducing land prices, thus enabling the construction of affordable homes. 

Further on, it is setting the affordability of homes for purchase and rent linked to "median market prices". But we know market prices are way beyond what most households can afford. Why is affordability not being set related to incomes?  

While the Bill also indicates at least 50% of housing (and in some cases this could be even more) to be built on public land will be unaffordable market housing. 

And so, it appears, the LDA as currently stands is not the game-changer, it could be, but will be another Nama-like Trojan horse facilitating the investor grab of public land. Picture: PA
And so, it appears, the LDA as currently stands is not the game-changer, it could be, but will be another Nama-like Trojan horse facilitating the investor grab of public land. Picture: PA

It also unclear in many of the LDA's proposed projects what percentage will be private market housing. These issues show the fundamental problem of the LDA as proposed. It is essentially a market stimulator, rather than promoting the affordable "non-market" housing system. 

The LDA is being tasked to pursue two conflicting objectives. You cannot use public land on the one hand to promote and underpin the market, and on the other to provide affordable housing. 

Affordable housing challenges and undermines the logic and objectives of the market. The Government should not pretend that these objectives are compatible. 

The LDA will either provide affordable and social homes, or it will be playing a role and contributing to worsening unaffordability through various market forms of land and housing provision in deals with developers and investors. 

As it currently is constituted, the LDA reflects an unchanged policy direction.

There is a need to set out a clear stipulation in the LDA Bill that all housing to be built on public land will be 100% affordable (public cost rental, social and housing for purchase). 

A safety measure to ensure public land is retained permanently for affordable housing should also be included, by which housing built for purchase on public land can only be sold back to the relevant LDA, public housing body or Approved Housing Body, and not become market commodities.

The Bill is also profoundly dangerous to our democracy by removing the powers of local councillors to block the transfer of public land to the LDA. Why is this measure necessary? Local councillors have been the ones defending the use of public land for public housing against its handover for unaffordable housing to investors in public-private partnerships for O'Devaney Gardens and Oscar Traynor Road? 

Rory Hearne: 'The LDA Bill is a historic decision that determines the fate of one of our most important public assets – public land – and therefore requires intense scrutiny. There is a need to pause it as it is currently constituted and ensure this is the correct direction.'
Rory Hearne: 'The LDA Bill is a historic decision that determines the fate of one of our most important public assets – public land – and therefore requires intense scrutiny. There is a need to pause it as it is currently constituted and ensure this is the correct direction.'

If the LDA is actually a new direction that will not involve public-private partnership deals on public land, then there is no need for such a Draconian anti-democratic measure.

The LDA Bill is a historic decision that determines the fate of one of our most important public assets – public land – and therefore requires intense scrutiny. There is a need to pause it as it is currently constituted and ensure this is the correct direction.

We need a land aggregator that has the CPO powers to build up public land banks, and provide land ready for construction at a genuinely affordable price, and we need a public home building agency to work with local authorities and Approved Housing Bodies. 

But the LDA is portraying to be both, but in reality, is neither. It is becoming a developer of public land in the worst sense, pursuing the Nama and PPP objectives of what gives best "economic return" and boosts market supply.

Finally, there is a gulf between a rhetorical commitment to public housing, and the lack of funding available to back that up. There is no significant capital investment allocation to fund the building of public affordable cost rental and purchase homes. 

So the LDA and councils are still faced with the problem of the last decade – they will not be able to develop housing on a major scale on public land without turning to the private market, investors and various public-private partnership deals. 

And so, it appears, the LDA as currently stands is not the game-changer, it could be, but will be another Nama-like Trojan horse facilitating the investor grab of public land. This is vital public land, your public land, the family silver and we need a guarantee the LDA is not about to hand it over to unaffordable housing and investor profits.

  • Rory Hearne is assistant professor in Social Policy at the Department of Applied Social Studies, Maynooth University, and the author of Housing Shock: The Irish Housing Crisis and How to Solve it

 

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