Fundamental changes in how we live, fundamental changes in our capacity to realise expectations we hold dear can take hold almost under the radar.
If that change is a quick fix to a crisis then it can be embraced with undue haste. The scrutiny that should lead to positive outcomes is often set aside. This week’s suggestion to an Oireachtas committee by University of Limerick economists that the take-it-or-leave-it €5bn National Broadband Plan should be scrapped so better options can be considered points to one example where desperation has trumped prudence.
That drama has at least the virtue of playing out in public but another far deeper change, one also driven by desperation, has gained a momentum we will come to regret.
The strengthening presence of corporate landlords in our housing market, combined with Central Bank borrowing limits for individuals, affordability, the under-supply of social housing and land/site hoarding conspire, coincidentally or otherwise, to make this an ever-more attractive environment for corporate landlords and their financiers and, consequently, a far less attractive one for individuals or families.
That this re-concentration of wealth, this enforced life as a tenant for too many people, is facilitated by icing-on-the-cake tax advantages for corporate landlords underlines the desperation of Government on housing. It also highlights its visceral empathy with big business all too often blind to citizens’ needs and justifiable expectations.
This recapture of resources has not gone unnoticed.
Earlier this year the UN special rapporteur on housing, Leilani Farha, wrote to Taoiseach Leo Varadkar’s Government challenging its decision to facilitate unregulated global real estate funds through “preferential tax laws”. These advantages can include not having to pay stamp duty or, in some circumstances, capital gains tax or corporation tax. Ms Farha also questioned how our tax regime benefits various schemes — Section 110s, Reits and Icavs — to the disadvantage of smaller landlords and their tenants. The Government, unmoved, defended institutional investors saying they encouraged the development of apartments. Indeed.
Ms Farha’s concerns were echoed in recent days by an unlikely voice. Developer Michael O’Flynn, hardly Jeremy Corbyn’s man in Ireland, criticised the property sector which he warned is “cheerleading” to prioritise the private rented sector model over traditional homeownership.
He warned that a “herd mentality” had taken grip without a proper examination of the role of the private rental sector or home ownership plays in Ireland’s economic model. Property and finance interests usually dismiss these charges by saying we have an “obsession” with home ownership. That argument has served them well even if it deflects the real issue.
We have, for historical reasons, an obsession with security and a natural determination to try to improve the lot of our children rather than the balance sheet of corporate landlords. We use home ownership as a kind of savings plan, a principle recognised by the Fair Deal Scheme which helps fund our needs in old age. How will life-long tenants avail of this scheme?
Will the State have to fund their care thereby, at a few steps remove, subsidise institutional landlords? In a country with an aging population — just two workers for every pensioner by 2050 — this issue is more pressing than is comfortable. Is the idea of working to help our children have a good start in life to be consigned to history — or just limited to corporate landlords’ children?
Yesterday’s suggestion from the ESRI that vacant sites should be taxed more aggressively and loopholes closed to reduce building costs and an earlier warning from Goodbody that fewer than expected properties will be built this year because house price inflation has slowed, underline the unsustainable dominance of market interests over human need. It is not necessary to be a Corbynista to recognise that change, a fundamental rebalancing, is urgently needed.
Clúid Housing pointed to one yesterday when it completed the first sale of a mortgage-to-rent property. The Dublin property, a family home, is the first repurchased by original owners under the Government mortgage-to-rent scheme.
The establishment of a public sector pension fund to underpin development might be another. Sadly, the solutions are far more obvious than Government’s will to tackle this crisis of resources. Sadly, the need for ever-more radical solutions grows with every spurned opportunity.
Sadly, the opportunity this crisis offers to make politics relevant in ordinary lives is being lost. The consequences hardly bear contemplation.