Michael O'Flynn: Inflation is the root of our housing problem, not property developers 

Michael O'Flynn disputes the idea that the private sector is at fault for the housing crisis and has issued a list of questions for Rory Hearne to answer 'promptly and publicly'

There are experienced developers in this country who have weathered many economic storms and who have consistently delivered high-quality housing and who can continue to do so if steps are taken to remove obstacles. Picture: Denis Minihane

In his article on Monday, November 7, 2022, under the heading “Latest updates show Government still falling short on housing target”, Rory Hearne alleged that “the reliance on the private market to solve our housing crisis is illogical, and the hoarding of property at such a time is akin to hoarding food during a famine”. 

I have heard some of Mr Hearne’s unsubstantiated allegations in the past, but this latest barrage is a bridge too far. It is wrong and untruthful to suggest that property developers are depriving those in need of housing by deliberately holding back on what they could easily deliver.

One must assume that Mr Hearne would not make such a scurrilous allegation and continue to bang his noisy drum to denounce the private property market and suggest that responsibility for delivering public sector connected housing should be handed over to the public sector if he did not believe that he could back up his claims with facts and figures.

So, I challenge Mr Hearne to answer the following questions and to do so promptly and publicly.

• What proportion of the annual housing requirement of more than 40,000 units does he say should be delivered by the State and how many professional service providers/trades people/construction workers/site agents/project managers etc. does he believe are required to deliver those units?
•  How many from each of those categories with the necessary specialised skill sets does he believe are currently working in the public sector?
• Exactly how long does he think it might take the public sector to gear up to have sufficient numbers to be able to deliver units he believes the State should deliver each year?
• Who within the public sector would have the skill sets currently within the private house building sector for overseeing the design, the construction and delivery of these units? And how long does he believe it might take the State to build up the level of experience to oversee the number of large-scale quality developments as are required?
• On what basis (facts not fiction please) does he believe that the State can deliver housing at a lower cost than it is delivered by the private sector?
• Will he urgently produce a detailed breakdown of all costs associated with delivering a house by private developers and by the State? He should ensure that he includes the cost of land, levies, funding, taxes etc. as well as the hard costs. Land has a value whether owned privately or by the State.
• Does he consider that the administration costs associated with housing delivery should be just “magic-ed” away if housing is to be delivered by the public sector or where are his figures which show what it costs to set up public agencies, to deal with public procurement and to pay long-term pensions to those employed by the State whether in the construction or the administration associated with delivering housing?
• What does he think the current generation should do while the State tries to gear up to replace those in the private sector who Mr Hearne would like to annihilate despite the fact that they have years of experience and qualified persons in place and who could deliver housing now if viability were to be addressed?
•  Who does he think should cover the cost of redundancy for those in the private sector who will lose their jobs as a result of his magnificent plan?
• Perhaps he might increase the font size on the small print in his Utopian proposal as to who will fund the cost if a significant proportion of our country’s housing is to be delivered by the State? Presumably he means the taxpayer?

Does he seriously believe that the taxpayer can bear the cost of delivering the level of social housing for which he advocates without taxes being increased for all? 

The cost of housing, regardless of whether it is delivered by the private sector or the public sector is rising, not because of any profits or hoarding as Mr Hearne would like to believe but because of inflation and many other issues related to funding, planning, zoning and infrastructure.

He should set out the basis upon which he asserts that people would be quite happy to rent all of their lives rather than own a home. He advocates cost rental as the panacea. However, those in cost rental units are currently paying over €1,000/month for a two-bed unit and up to €1,400 for a three-bed unit. The combined contributory OAP for a couple who are both over 66 is €480.30 per week. Can Mr Hearne do the maths?

If Mr Hearne can put a meaningful cost and timeframe on his solution (answering all of the above questions) then he should do so now. We would all love to see it. If he cannot, that speaks for itself. 

It is important to note that in all scenarios of State-funded solutions, in the real world, the words “working population” or “taxpayers” should be substituted for the word “State”. So, the more Mr Hearne demands of the State in terms of bearing of cost, the more he is demanding from the working population of this country.

The last thing we need in this time of crisis is to set the public sector against the private. We will only tackle housing if the public and private sectors work collaboratively with a shared objective of delivering affordable housing of all tenures, including those whose preference is to own their home.

There are experienced developers in this country who have weathered many economic storms and who have consistently delivered high-quality housing and who can continue to do so if steps are taken to remove obstacles. I do not believe that Mr Hearne is among them.

It serves no one to belittle the famine and make scurrilous allegations against those who have been trying very hard to find solutions so that this generation can have the same opportunity to own their homes as previous generations.

The truth is that inflation and its impact on the cost of housing is a worldwide problem. But hey, Mr Hearne has a book to sell, and fiction makes a better story.

• Michael O'Flynn is CEO of the O’Flynn Group, one of the country's largest development companies