Addressing Ireland’s Housing Crisis: Urgent Policy Reforms Needed

Posted on Wednesday, 29 May 2024
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Ireland has been in the midst of a housing and homelessness crisis for almost a decade, with recent developments escalating at an alarming rate. The recently published report by the Housing Commission has brought to light the profound challenges facing Ireland’s housing sector. The Housing Commission rightly emphasises the need to fully account for the economic and social costs associated with unmet housing needs. These costs of inaction disproportionately affect younger adults, lower-income cohorts, and those seeking housing near Ireland’s main cities. Further, as Ireland’s demographic profile shifts, these effects of unmet housing needs are likely to extend to older demographics as well.

Social Justice Ireland welcomes this report by the Housing Commission and the recognition of these challenges. We have long advocated for similar recommendations, highlighting the urgent need for robust policy reforms to address the deep-seated issues that have distressed Ireland's housing market for years.


The Current State of Housing in Ireland

Population projections indicate that Ireland’s demographics are shifting from a relatively young population to one with a significant proportion of older people by 2051 and is expected to grow considerably over the next 35 years. This expanding population needs accommodation that is suitable to their needs and supports both family formation and ageing.

According to the latest census data from 2022, there has been a significant increase in the elderly population, with those aged 60 and above rising by 19.7 per cent, and those aged 85 and above increasing by 25 per cent compared to 2016 Census.

Furthermore, the Parliamentary Budget Office (PBO) report on Housing Affordability for Private Household Buyers in Ireland states that between 2011-2022, the population grew by 560,887, while the housing stock increased by only 117,276 units. Meanwhile, the average household size saw a marginal change from 2.73 in 2011 to 2.74 in 2022. Although variations in household sizes over time suggest that housing supply does not necessarily need to mirror population growth precisely, the data highlights a substantial gap between population growth and housing availability. On average, for each new housing unit, there were at least four additional individuals, indicating significant “supply-side issues, with annual output falling below population-driven demand creating price pressures in the housing market.” The persistent housing scarcity has also artificially elevated household sizes as noted by the Housing Commission, further highlighting the need for immediate intervention.

Over the past decade, housing affordability has worsened, with the residential property prices increasing at a much faster rate than wages. Between the period 2012 – 2022, wages rose by only 27 per cent, compared to residential property prices that surged by 75 per cent.

Ireland's housing crisis is a direct result of continual underinvestment. Among the EU 14 countries, Ireland’s investment in housing has been the lowest, falling below half the EU 14 average. This underinvestment has led to a substantial housing deficit, with the Housing Commission estimating that the underlying shortage ranges from 212,500 to 256,000 homes based on the 2022 census figures. This deficit represents pent-up demand before considering future population growth and inward migration. The government’s Housing for All plan, which targets the construction of 33,000 homes per annum, falls short of addressing this pent-up demand. Adding to this, there was a 21.9 per cent annual decrease in planning permissions granted for new dwellings in 2023, raising concerns about the potential impact on future housing supply.


The Challenge of Vacant Properties

A significant yet underutilised resource in addressing the housing crisis is the stock of vacant and derelict properties. Estimates suggest there are between 102,000 to 164,000 such properties across the country. Government schemes like the Repair and Leasing Scheme and the Vacant Property Refurbishment Grant have aimed to bring these properties back into use but have seen limited success. As of 2023, only 288 leases were signed for 554 properties out of 3,182 applications, and just 100 grants were issued from 6,034 applications.

The introduction of the Vacant Homes Tax (VHT) in Budget 2023, which was further increased from three times to five times the basic Local Property Tax rate in Budget 2024, is welcomed. However, challenges arise due to the difficulty in identifying vacant properties and the lack of enforcement capacity within Local Authorities, making the collection of this tax difficult. Addressing these challenges in implementation and ensuring full compliance is crucial to the success of such initiatives.

Building More Social Housing

Ireland’s social housing supply is currently at 9 per cent of the housing stock. According to Housing Europe, this is far lower than our European peers such as Austria (24 per cent), France (17 per cent), Sweden (16 per cent) and the Netherlands (29 per cent). 

Moreover, according to the Summary of Social Housing Needs Assessments 2022, there were 57,842 households on the waiting list for social housing, presenting as a decrease of 2.4 per cent on the previous year. However, the truth is that the housing crisis is worsening as Government continues to look to the private sector for solutions. The Summary of Social Housing Needs Assessments does not include households in receipt of the Housing Assistance Payment (HAP) as these households are deemed to have their needs met. This means that households who would, pre-2014, have been given Rent Supplement and included in the social housing waiting list data, are no longer included, “meaning that the true scale of the unmet social housing need in the State is largely unknown” as pointed out by the PBO. As of 31st December 2021, there were 61,907 households in receipt of HAP. This means that, as of 2022, there were 119,749 households in need of social housing based on the HAP and waiting list figures alone, representing an increase of almost 700 households on the previous year.

We welcome Housing Commission’s recommendation for a targeted increase in the proportion of social and cost-rental housing to 20 per cent of the national stock. Social Justice Ireland has long advocated for this and propose that Government set a target that 20 per cent of all housing stock be social housing by 2030.

Affordable Housing

Aligning Housing Policy with Social Needs

The housing system in Ireland has become characterised by profit and privatisation: private developers building on State land; private landlords receiving large subsidies to provide “social housing solutions”; private operators of emergency accommodation; and private investment in short-term, high-yield lettings. This is a policy failure. Social Justice Ireland welcomed many aspects of the Housing for All plan, as a considerable improvement on its predecessor, however there are still policy gaps through which the very marginalised may fall. We appreciate the Housing Commission's recognition of these concerns.

As highlighted by the Housing Commission in its report, Ireland’s housing crisis requires immediate and sustained policy intervention. Addressing the housing deficit, ensuring affordability, and prioritising social housing are essential steps towards creating a fair and sustainable housing system. These are priorities that resonate with longstanding concerns echoed by Social Justice Ireland.

With this, Social Justice Ireland believes that the following policy positions should be adopted in addressing Ireland’s housing and homelessness crisis:

  • Encourage the right type of supply and reduce reliance on the Build to Rent sector;
  • Address affordability issues by concentrating on supply-side cost reductions rather than demand-side income subsidies; invest in new methodologies and reconsider higher density developments;
  • Set a target of 20 per cent of all housing stock to be social housing and achieve this through directly building more social housing and decentralising responsibility for social housing to Local Authorities;
  • Take a life-cycle approach to housing development and town planning;
  • Invest in an equity scheme for borrowers in late state mortgage arrears of 10 years+;
  • Deal with vacancy and dereliction through the tax system and introducing Compulsory Sale Orders.