Building more local authority homes could be a way to tackle the current housing crisis, an ESRI economist has said.
Mr Tony Fahey of the ESRI told a conference in Maynooth, organised by the Red Stripe Collective, a group of radical economists, along with the university's Department of Sociology, that providing more local authority accommodation must be considered as a major policy option.
One of the most striking aspects of the current crisis, he said, was that the local authority option had not entered the debate. It had not even been considered in the Bacon report, he said.
Mr Fahey said that local authority housing had been targeted for cutbacks in the late 1980s because of the State's fiscal crisis. It had been largely ignored as a means of meeting the housing needs of people ever since.
"Now, in the 1990s, the money is there, the need is there, but people have gone off the idea," he said. The ghettoisation of many local authority estates - encouraged to some extent by official policy, the high cost of some schemes and the spectacular debacle of Ballymun - had created the impression that local authority housing had "failed," he said.
However, many of these things would have happened anyway because of the rising unemployment and poverty of the 1980s. There had been a vast over-reaction and people seemed to forget that the housing situation would be far worse today without a local authority system.
Mr Fahey pointed out that, historically, between 20 per cent and 25 per cent of housing in the State was provided by local authorities. One in four owner-occupied dwellings in the State had originally been built by a local authority.
Not only the unemployed, but a third of today's wage-earners, fell below the house-purchase threshold, he said. While existing residential property-owners, who tended to be middle-aged heads of households, benefited from rising house values, young families felt the resulting pressure at a time when they were most vulnerable.
In the past many of these young couples could have availed themselves of low-cost local authority housing, but the cutback in public housing programmes had denied them this option. They were often forced into the private rented market, where supplementary rent allowances paid by the State had risen from £9 million in 1989 to £115 million this year.
Private housing grants cost the Exchequer a further £43 million, Mr Fahey said, and tax relief on mortgage interest cost £160 million more. Tax relief for private landlords and urban renewal developers was £89 million.
In contrast, expenditure on all social housing, including voluntary and local authority schemes, was £319 million.
The State was now providing less than 10 per cent of new housing stock, and it had to be asked whether Irish society needed to be one where 90 per cent of people were home-owners or private-sector tenants. Mr Fahey proposed that the Government refocus its housing investment programme.
Supports for private housing should be restricted to the provision of water, sanitation, transport infrastructure and other services. The cost of these should be recouped eventually through the introduction of user charges.
He supported the idea of abolishing mortgage relief, but did not see the reintroduction of property tax as a viable political option.