With up to 500,000 households in serious housing distress in the State it cannot be any clearer that the crisis has become an emergency, writes Rory Hearne
DECLARING the housing crisis a national emergency would allow the Government to shift the debate and framework around next week’s budget to one that prioritises dealing with this growing social catastrophe.
At the most acute end of the housing crisis are 607 families and 1,275 children living in emergency accommodation in Dublin. But if the number of families becoming homeless continues to grow as fast as it has done in the last two years — there will be at least 3,000 families and 6,000 children in emergency accommodation by 2017.
The human impact of this, particularly on children, is horrendous. A recent radio included a seven-year-old girl living in a hostel with up to 40 other families. She described how she wakes up each morning feeling “sad and worried”, doesn’t tell anyone at school where she lives, and isn’t looking forward to Christmas because she “doesn’t know how Santa is going to get in”.
If current policy does not change radically then we will have a generation of children growing up in these modern-day tenements.
The scale of the housing crisis is way beyond anything witnessed in recent decades in this country. The number in need of social housing has grown from approximately 27,000 households on the social housing waiting list in 1996 to just over 40,000 in 2005 and rising dramatically to over 90,000 in 2013.
On top of this 40,000 of the 80,000 households in receipt of rent supplement in the private rented sector have to top up their payments to cover the cost of the rent. There are also 30,000 rental accommodation scheme households not even included on the housing lists. And this is before you include the area of mortgage arrears.
While the numbers of mortgages for principal dwelling houses (PDH) that are in arrears has decreased over the past 12 months there are still 98,137 in arrears.
is contributing to the homelessness crisis, particularly in the private rented sector. However, the number of repossessions is only a trickle (approximately 350 PDH repossessions in first half of this year) in comparison to the flood that will hit if the court proceedings initiated to repossess 23,000 homes and 8,600 buy-to-lets are carried out in the coming months and years.
So putting all these households together we can see that between homelessness, emergency accommodation, mortgage arrears, escalating rents and substandard housing (the scale of which is also thought to be considerable given Priory Hall and Longboat Quay) there are at least 500,000 households (upwards of 700,000 people including children) in serious housing distress in this country. It cannot be any clearer that the crisis has become an emergency.
The Government states that the Social Housing 2020 strategy and the capital investment plan will address these issues. However, these plans will only see investment of around €500m per annum in social housing.
In fact the capital investment plan shows social housing investment decreasing from €580m in 2018 to €450m in 2019. Of the 110,000 social housing units in the social housing plan 75,000 are to come from an already overheated and dwindling supply of private rented accommodation.
Reducing the requirement of private developments to provide 20% social housing to just 10% is unlikely to help. The tax relief for real estate investment trusts (Reits) which have been buying up Irish property, often on behalf of global real estate vulture investment funds, also makes things worse.
Reit investment adds further competition to the rental and property markets. Nama has also played a role in selling residential property to vulture capital and investment funds.
The PriceWaterHouseCoopers 2015 Global Outlook for Emerging Trends in Real Estate report has an impressive name with some frightening analysis on how the Dublin property market is being eyed up by global investors.
It explains that global investment in real estate is “almost back at the pre-crisis level” with sovereign wealth funds and institutional capital, much of it from Asia, looking for areas of high rates of return.
Dublin has become the second most sought-after city in Europe for investment property. So prospective first- time buyers are now competing with international wealth funds.
Landlords and banks are also availing of the global interest in Dublin property by evicting private tenants and selling their properties. The budget next week offers a timely opportunity to move away from this speculative investment model of housing and property and introduce policies that meet people’s housing needs and rights.
An appropriate response would be tripling spending on social housing, introducing rent certainty, removing the tax reliefs for Reits and redirecting Nama away from the vulture funds to deliver social and affordable housing on a large scale. Alongside this is a need to fund local authorities to enable them compulsory purchase the thousands of vacant and derelict buildings we can all see and use them for housing.
Declaring a national emergency would provide the Government with a very decent rationale to explain to the public why the budget is to be shifted away from tax cuts and instead focus on increased spending on housing. Applying to the European Commission would free up fiscal and procurement rules to fast track housing projects.
After the 2008 crash, people should realise a rising property market is not necessarily a good thing. The current housing crisis is now affecting competitiveness and is a significant contribution to rising poverty and deprivation.
But there is a growing sense of realisation that a radical change is needed. Recent opinion polls show the public are behind a shift in policy to investing in public services such as housing and health rather than tax cuts that mainly benefit top earners. There are multiple causes of the current housing crisis and many potential solutions.
But the idea that simply tinkering around the edges is going to solve the problem is as, Peter McVerry has described, Alice in Wonderland thinking.
Rory Hearne is a senior policy analyst with Tasc
© Irish Examiner Ltd. All rights reserved