Lifting the eviction ban marks the start of the general election campaign. It immediately framed the politics of March. The Dáil isn’t sitting this week because of St Patrick’s Day. It will be next week before a Sinn Féin motion to retain the ban is debated and voted on. It will be early April before the consequences of the policy change are felt. There will be no tsunami of evictions, only a drip feed, punctuated by the occasional high profile ejection from their home of families with few options about where to go. Politically, this will run on and on.
Lifting the ban was the right thing to do. It wasn’t working and small-scale accommodation providers are fleeing the rental market. Tax is one reason and hyperactive levels of policy change are another. Rent Pressure Zones started out in Dublin and Cork in 2017. Another 50 have been added since. That’s a maximum increase of 2 per cent annually in applicable rents. I am not aware of any other sector under the same kosh.
It’s odd listening to complaints about a lack of rental accommodation in an environment where private landlords are demonised. A rental market works on profit for the provider, and certainly on both sides it is a good thing that tenants’ rights are improved, and it is a pity they are not better enforced. Sinn Féin, the main opposition party, wants a rent freeze for three years. Approximately 40 per cent of property sales in the final three months of last year involved landlords selling their investment properties. The landlords are being liquidated; hurrah! This is politics first, not policy.
Politics also insists that lifting the eviction ban to belatedly correct a dysfunctional rental market is a big deal. It isn’t. It is a small symptom of deeper dysfunction. The 2011 census showed a population increase of 1.6 per cent in the teeth of savage recession. In recovery, the 2016 census showed a population increase of 3.8 per cent. In the 2022 census there was an 8 per cent increase in population over 2016.
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This is the first generation of young Irish people who won’t emigrate en masse and can’t be institutionally incarcerated in large numbers. We may be over 5 million people for the first time since the famine, but we remain a sparsely populated country, which can’t house its own people. Housing policy was abandoned in the economic crash. The consequence of the 2011 census was ignored. The kickback of the 2016 general election when calls to “keep the recovery going” were rejected, prompted a rapid rethink. Now the Taoiseach says we need another 250,000 homes. It is not the accuracy of that number that matters, it is the size of the soundbite. The housing situation will get worse before it gets better.
The lesson of the abandonment of housing policy in the crash is the stupidity of pro-cyclical policies
Short-term policies that were supposed to alleviate it, have made things worse. Inflation and rising interest rates are pushing back on the longer-term solutions that are showing signs of success. Money is finding more profitable outlets for investment. Inflation is raising the floor of what can be delivered with the available private investment. Public investment has increased significantly but at €4 billion a year it is not enough. The real issue is how long that level of public investment can be afforded by a country overly reliant on corporation tax, and wilfully refusing to consider a serious property tax.
The lesson of the abandonment of housing policy in the crash is the stupidity of pro-cyclical policies. When costs were down, we did nothing. Now they are up and we can’t build enough at any price. What is singularly lacking is expertise and capacity in Government, in An Bord Pleanála and local authorities. We spend billions in an unreformed system that lacks planners and is a byword for gaping inefficiency. It frequently takes up to six years to build an apartment block in Dublin.
Raising rents to even basic levels is anathema to politicians who won’t raise property taxes and even muse about introducing mortgage interest relief. That is the politics of cynicism, not concern
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Some of the Opposition parties are busy with plans for a new state-owned building company. Paradoxically, the one bit of the system works with a modicum of efficiency is the construction sector. The delays are in planning and the courts. Local authorities are starved of resources by a political system that won’t allow significant self-funding locally. New planning and development legislation, if passed this year, could start delivering shorter completion times by 2025. In the meantime, there are real concerns that Government targets won’t be met in 2024.
The tenant-in-situ scheme may save some from the side of the road after the eviction ban is lifted. But it lumps local authorities with property it doesn’t want, hasn’t the capacity to manage and sooner or later need upgrading to meet public housing standards. Council rents are so low as to be inadequate to pay the cost of maintenance and repairs. But raising rents to even basic levels is anathema to politicians who won’t raise property taxes and even muse about introducing mortgage interest relief. That is the politics of cynicism, not concern.