Shared understanding of needs vital to Ireland’s housing future

Alongside its preparation of a new housing strategy, Housing for All, the Government has made the important decision to establish a housing commission and has recently appointed its chair. Together these must drive a new vision for Ireland’s housing system.

Ireland’s approach to housing over the past half century had two broad elements. First, there was State promotion of home ownership via tax relief on mortgages, facilitated by urban sprawl on relatively cheap land, and helped by high inflation which reduced the burden of mortgage repayment. Second, there was residual provision of social housing for those on very low incomes, funded upfront by State grants, with generous tenant purchase provisions which eroded the stock of social housing.

The changed environment demands a rethink of how we plan, finance and manage our housing system in decades ahead

The conditions which underpinned that approach have disappeared. Among the many reasons are the transition to a low-inflation environment and changes in the system of finance for both construction and home purchase. Indeed, during the Celtic Tiger, pursuit of the old approach to housing – with its focus on mortgage-financed home ownership – created a huge fiscal, economic, banking and social crisis which we are still paying for today.

The changed environment demands a fundamental rethink of how we plan, finance and manage our housing system in the decades ahead.

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This is evident in the fact that there has been limited progress on reaching the necessary level of both social and affordable housing, leading to a crisis of homelessness and affordability.

There remains a lack of clarity on what system of housing provision Ireland is moving towards. This is exacerbating some of the current problems and blockages and not being helped by the introduction of piecemeal measures across a wide canvass.

A number of examples illustrate this. Resistance to specific development proposals by Dublin City Council and others, as well as tensions on whether to reallocate local authority land to non-profit housing bodies and the Land Development Agency, can be seen as a reflection of the fact that actors are unsure about the medium-term scale of social and affordable housing provision.

Investment funds

Likewise, the shared equity scheme is contentious, partly because there is lack of clarity about the wider prospects for home ownership and affordable rental.

The furious row about international investment funds reflects the same sense that there will not be enough housing within the reach of middle-income families, and uncertainty about whether fund-driven supply of apartments will really improve affordability for low- and middle-income households.

When there is no clear vision of the future system, everything becomes a battle in an ill-defined war of attrition.

A much greater shared understanding of the overall trajectory is necessary to align the various stakeholders. This would, of course, still leave numerous knotty problems to be solved. But it would frame the approach of the many actors who have a role in solving them.

The housing commission can help to create a broad societal, political and stakeholder consensus on how we achieve affordable, inclusive and sustainable housing in the 21st century.

The current levels of antagonism in housing policy remind me of the situation in overall economic and social policy in the late 1980s, when I first started to work in the analysis and social dialogue conducted in the National Economic and Social Council (NESC). In the 1960s, 1970s and 1980s, government, employers and unions operated on the basis of divergent understanding of key economic mechanisms concerning inflation, wages, competitiveness and public finance. This greatly damaged economic performance and social progress.

Through new joint analysis and dialogue, we moved from policy dispute and volatility to significant consensus and effective long-term policy. This enabled the various actors to co-operate in problem solving.

Strategy and cycles

A settled, long-term view is especially critical in housing policy. There is a long lead time between the planning, funding and completion of housing. Policy initiatives require legislation, funding, land, infrastructure, provision of vital public services and institutional change. A shared understanding on the thrust of housing policy would ensure that housing strategy can endure over economic, political and planning cycles.

To create such a shared understanding, the new strategy and housing commission will, ideally, address a number of questions. 1. What should be the core methods of ensuring that housing is affordable to the broad group of households whose income is insufficient to achieve suitable secure accommodation in our current private rental sector and who struggle to purchase a home? 2. How should Ireland achieve both stronger supply of housing for low-income households and greater integration of households with diverse incomes? 3. What financing, fiscal and institutional arrangements can ensure that an expanded system of housing delivery is financially, fiscally and organisationally sustainable? 4. As we greatly expand housing delivery, how can we achieve the compact, sustainable, urban development committed to in the National Planning Framework?

In addition, the Minister has indicated that the Government would like the commission to look at possible constitutional change.

A new vision and shared understanding may not be as far away as is sometimes imagined

To address these questions, the new strategy and the housing commission need to be informed by housing systems that achieve affordability, inclusion and sustainability. The commission should include international experts from countries whose housing systems perform better than Ireland’s.

A new vision and shared understanding may not be as far away as is sometimes imagined. Since 2014, the NESC has published seven reports on housing and related issues. The council’s analyses and recommendations – on social housing, the rental sector, cost rental, housing supply and active land management – were agreed by representatives of the employers, unions, the community and voluntary sector, the environmental pillar and farm organisations.

There is an urgent need to draw together the analysis, deliberation and leadership that will frame a new vision for Irish housing.

Rory O'Donnell is former director of the National Economic and Social Council and a fellow of the Geary Institute, University College Dublin