- 16 Jun 21
The coalition government is locked to the assumption that private investment will solve the housing crisis. They are wrong. What's needed without delay is radical action on rent – and the effective involvement of the State, and local councils, in building new homes.
Every week here in Dublin, I meet people who are struggling to find a secure, affordable home or who are anxious about rent increases or being evicted. They know the impact that this housing crisis is having: on their own daily lives, on their health, on their children if they have started a family, even on their ability to remain in a city they call home.
We need a radical change in how housing is delivered in Ireland if we are to solve this crisis and provide people with secure and affordable homes.
The developer-led approach to housing has failed, yet the Fianna Fáil/Fine Gael Government clings desperately to this model.
The first thing we need to do is break that mindset.
Private capital does not tend to produce social good – reliance upon private development will not fix our housing crisis, and this Government has to stop pretending that it will.
In fact, it's not just parties of the left that are now making this argument. Last week, even the Economic and Social Research Institute (ESRI) called for a radical departure in housing policy. They may not use the word 'radical', but their conclusions amount to the same thing Ð we need a significant increase in provision of public housing to tackle the current, ongoing crisis.
Public investment, not private speculation, is the way out of our current mess. A doubling of public investment in housing, as recommended by the ESRI, would see approximately 18,000 new homes being built each year. These homes could be delivered by local authorities or in partnership with non-profit housing associations.
The important thing is that they are affordable – whether people are renting or seeking to purchase a home. Unfortunately, our current Government cannot seem to grasp what affordable means. Hopelessly wedded to the private development model, it views 'affordable' by reference to market value – whether homes are for sale or rent.
As my colleague Rebecca Moynihan has pointed out, this has resulted in a situation where the average rent in Dublin Bay South is €2,111 per month. For this to be affordable, taking that as one-third of their net income, most people would need €6,333 take home pay a month. That's after tax!
Affordability must instead be linked to people's real-life incomes, not to an estate agent's wish list. For decades, those renting social housing from Dublin City Council or other local authorities have paid what is called a 'differential rent', based on their income. If their income changes their rent is adjusted. That is how public housing is also provided in dozens of European cities – and we need to adopt this model to work throughout our housing policy.
No Bigger Social Issue
Significant public investment in building houses will increase supply, provide genuinely affordable homes and give people the housing security they need to get on with their lives.
However, we know this ramping up of supply will take time. So, what is to be done in the meantime?
There are some quick wins that we should immediately implement to increase supply and protect low-income families and individuals, as well as young men and women in their 20s and early 30s, who are being badly hit by extortionate rents:
- Freeze rent increases for three years to provide renters with security now.
- Beyond that point, link annual allowable rent increases to the rate of inflation (currently 1.1%) rather than the 4% provision in place at present.
- Prevent Airbnb and other operators from regaining a significant hold on the Dublin rental market.
- Fund local authorities to return every boarded-up house and flat in their ownership to productive use by the end of the year. Refurbishing these homes should be prioritised to ensure that no family facing homelessness is in long-term hotel accommodation.
There is no bigger social issue facing our country today than the housing crisis. There are real solutions, but they require a radical change of mindset and greater reliance on public investment.
Just over 100 years ago, the poet Tom Kettle wrote that "politics is not as it seems in clouded moments, a mere gabble and squabble of selfish interests, but that it is the State in action. And the State is the name by which we call the great human conspiracy against hunger and cold, against loneliness and ignorance."
Tom Kettle was right. If we want to solve the housing crisis, we need to see the State in action. That must start now.
Ivana Bacik is the Labour Party candidate in the upcoming Dublin Bay South by-election.