Darragh O’Brien is the Minister for Housing, Local Government and Heritage. That is a difficult brief for any politician these days. He has his hands full with a soaring inflation rate, an expanding population, a shortage of homes, high rents, huge delays in building large-scale residential developments, spiralling building costs, and apparent inability of State agencies (including the Land Development Agency) to identify State-owned lands for home-building within the short term.
Since housing is generally regarded as central to the likely outcome of the next general election, O’Brien probably has the fate of the three government parties largely in his hands. Allowing for all that, he seems to be making heavy weather of his portfolio.
The decision to mobilise publicly-owned land for residential development seems to lack urgency in implementation. The news that development of the CIÉ lands at Inchicore will not start for another five years is bad. The Central Mental Hospital has yet to move into its new premises at Portrane. When its Dundrum site will be redeveloped is becoming a movable feast. Docklands, including outside Dublin, are now unlikely to see redevelopment for home-building for years.
The Land Development Agency now has statutory powers to acquire any land compulsorily for provision of housing. But those powers involve applications to the High Court for approval. There is no indication that the agency is contemplating acquisitions under these powers which are in operation since March of this year.
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It is difficult to understand why another agency under the departmental umbrella of O’Brien, the Office of the Planning Regulator, is vigorously pursuing local authorities to amend their existing development plans to de-zone lands currently zoned for housing development considered by that office to be either surplus to current requirements or not suitable for development by reference to sequential “building out from the centre” principles of urban planning. What is the economic consequence of de-zoning?
His department recently intervened to damage the private rented housing sector in a radically misconceived way.
In 2021, it enacted legislation to give tenants (which can include licensees for whom a landlord can show no good reason to refuse tenant status) in occupation for 6 months a new right to remain forever in a rented property – unless the landlord needs vacant possession (i) for sale (carrying with it 33 per cent capital gains tax and conveyancing expenses), or (ii) for development requiring planning permission, or (iii) for occupation by the landlord or his or her family, or (iv) for major refurbishment (in which case the tenant must be offered first refusal of a new tenancy in the upgraded home).
In short, private landlords can no longer decide to end a tenancy on any notice period to, say, re-let the property to a more distant relative or to anyone else of the landlord’s choosing (for instance, a prospective employee, a deserving friend, a cousin or an in-law other than a parent-in-law, or a business partner, or some other relative or person whom a farmer-landlord intends to make an heir).
In the case of a house let to a number of persons, the identity of those in occupation may over time change completely without any choice on the part of the landlord because a licensee has a right to become a tenant unless a landlord shows good reason to the contrary. Relatives can move in as licensees of an elderly tenant and seek to be regarded as permanent tenants themselves.
Provision of furnished accommodation (and the associated liabilities to replace cookers and washing machines and carpets, etc) is now becoming the stuff of landlord nightmares. One political party is even considering allowing tenants of furnished homes to require the landlord to de-furnish the dwelling.
Buy-to-let investment has been made radically unattractive for private landlords. The natural consequence has been an exodus from the market by those private landlords. The 2021 Act has almost turned them into the economic equivalent of building societies – but with far greater obligations than property lenders.
Maybe the calculation in the Department was that exiting private landlords would increase the supply of homes to buy and thereby reduce upward pressure on house prices. But reducing the number of homes to rent may just add to the problem in the short and medium term. And persons made homeless by exiting landlords selling their properties will be a big problem.
Let’s not forget that the same Department in 2009 legislated to ban bedsits – a crazy decision which made thousands homeless and sawed the lowest rungs off the housing ladder for many vulnerable people. That was done at the suggestion of a housing charity! And since then, the Department legislated for what they term “shared accommodation”.
Are we solving or worsening the housing crisis?