Mick Clifford: Instinct is to throw tax breaks at housing crisis and hope they work
Tax breaks have a place in the housing market. Recurring nightmares from the overuse and abuse of such breaks during the Celtic Tiger years have rendered the policy toxic, but there is a firm basis for using these breaks as an incentive.
Niall Muldoon brings to mind the line from a Bob Dylan song. “You don’t need to be a weatherman to know which way the wind blows”.
Muldoon, the Ombudsman for Children, was the interviewee last week on the podcast I present for this newspaper. One of the items discussed was the impact of homelessness on children, a topic which Mr Muldoon says leaves him “extremely angry”.
He pointed out that when the housing issue arises, those at the sharpest end, adults, but particularly children, who don’t have a home are never the first priority. “Whatever initiative we take in some way it seems to be about the builder, how do we make life easier for him, the developers, tax breaks for them. It’s never about the parent in homelessness, it’s never about getting them out of homelessness, preventing homelessness.”
The ombudsman must have sensed which way the wind was blowing. Last Saturday, the Taoiseach told political, Editor Elaine Loughlin, that rent pressure zones would have to be re-examined, and, not just that, but more needed to be done to get private sector investment.
“That means we have to look at everything to enable us to do that,” the Taoiseach said. “Nothing should be off the table.” The following day he told RTÉ he was planting tax breaks firmly on the table. During the week he has further ramped up the idea that a major pivot on housing policy is on the way.
Tax breaks have a place in the housing market. Recurring nightmares from the overuse and abuse of such breaks during the Celtic Tiger years have rendered the policy toxic, but there is a firm basis for using these breaks as an incentive.
The rent pressure zones can certainly be examined to check whether they are working out as designed. But why, oh why is it that when a step change in housing is ever attempted it appears to always be led by what suits developers best to the exclusion of all else.
There was nothing in the election manifestos of Fianna Fáil or Fine Gael on tax breaks, nothing at all in the recently published Programme for Government. Of course the development industry is central, a vital cog, in “solving” any crisis.
Most definitely those who do the building have a good handle on where problems are arising. And there is no doubt but that the building of private homes requires major investment. But surely, this far into a so-called emergency, there are other basic priorities that should even belatedly be addressed first.
An obvious priority being studiously avoided is some of the recommendations from the Housing Commission. The body, compiled of experts, including developers, reported last year. One of its members, former chief executive of Fingal County Council, David O’Connor, told a conference last November that the commission’s main recommendation had been ignored.
O’Connor said that this country gets “the worst return for the highest amount of investment in housing”. He pointed out that the commission’s recommendation of a new “housing delivery oversight executive” would provide a coherent plan for building residential houses, electricity, water and transport provision.
“This is a complete breadth of government problem, and unless we have somebody who has the power or the influence to look at it in those kind of respects, there's no way we are going to solve this,” he said. “The term we used in our report was that housing needs a reset. It does need a dramatic reset.”
The previous housing minister Darragh O’Brien rejected this. There is nothing about it in the programme for government. Instead, it would appear the instinctive move is to throw tax breaks at the problem and hope for the best.
While the government’s latest wheeze is once more to address things from a top-down perspective, what about those at the front line of the crisis. On last week’s podcast Niall Muldoon laid out some stark figures.
“Here are now 4,600 children in the homeless figures,” he said. “But we believe there is around another 10,000 who are the hidden homeless. There are about 12,000 children in direct provision and 18,000 Ukrainians.
All of that is before one even begins to contemplate the long-term cost, both for tomorrow’s adults and society in general, of this level of developmental problems being stored up.
“Look at children born into homelessness,” he says. “Staying in one room 10 feet by five with maybe a couple of other children and one or two parents. The impact is enormous.
"And when they’re older they are not able to bring friends home, they are stigmatized, they are ashamed, they don’t even have a place to get homework done. There’s a huge storing up of trauma for those children and we’re going to hear about it ad infinitum in the future, no doubt about it.”
Much of homelessness today is the result of people leaving or being evicted from private rental accommodation. When Niall Muldoon began working in the children ombudsman’s office in 2012 there were around 100 families homeless in the state. And that was in the depths of a recession. Today there are over 2,000 families condemned to such an existence.
Is this matter to the forefront of thinking in re-assessing the rent pressure zones, for instance? It certainly wouldn’t appear so.
Of course the government wants to do all it can to tackle homelessness but all approaches, all policy initiatives, appear to be informed by a trickle down approach in which the requirements of developers have top priority.
More than anything though, the recent comments from the Taoiseach hint at a complete paucity of new ideas. The emergence of the house completion figures for 2024, which were 10,000 down on the 40,000 predicted, appears to have spooked those in government.
There is every possibility that the true figures were known but the publication and reaction, particularly with new forecasts that suggest up to 90,000 new homes will be needed every year, has prompted quick action.
Once more, however, it would appear that the Government is of the opinion there is only a small number of things that can really be done and one of those is the old reliable of tax breaks.
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