Budget Choices 2023 must begin to deliver Housing for All
Housing affordability continues to present a serious issue in Ireland. Prospective homeowners have faced increases in house prices of 15.2 per cent in the year to March 2022; asking rents advertised on Daft.ie increased by 11.7 per cent annually to Q1 2022; and the Residential Tenancies Board (RTB) Rent Index indicated an annual growth in new rents in new tenancies of 9 per cent to Q4 2021.
This is despite the publication of the Government’s housing strategy Housing for All in September 2021, which promised to demonstrate the Government’s “commitment to build the required amount of housing, of different tenures, to a high standard, and in the right location, for people of all circumstances.”. In addition to the affordability crisis, we also have a persistent homelessness crisis, with the number of people accessing emergency homeless accommodation exceeding 10,000 in April and May 2022.
Despite the impact of inflation on the construction industry, the Government could address the housing and homeless crises by:
Double social housing stock by 2030
Other European countries which we would like to emulate have a social housing stock that is 20 per cent of their overall housing stock compared to 9 per cent in Ireland. The real need for social housing is under reported as those in HAP tenancies, DSGBV refuges, Direct Provision and many at risk of losing their home due to mortgage arrears are not included. We estimate the real numbers in housing need are closer to 133,000. To achieve the target of 20 per cent by 2030, Government must double its Housing for All targets at an additional cost of €1.4bn, meaning the overall construction budget would be closer to €3bn in 2023. This investment will require a skilled workforce. Inclusion of a new construction apprenticeship programme whereby one in every fifteen is required to be an apprentice earning at least the Living Wage must form part of any rebuilding scheme. This would also result in an additional 60,000 properties, currently being used as social housing, entering the private rented sector for use by private tenants.
The process of addressing housing affordability on the supply side should also begin as soon as possible with the establishment of a construction procurement working group and the winding down of demand side schemes that artificially maintain high house prices. The removal of the Help to Buy Scheme would save the Exchequer €200m in 2023.
In order to deliver cost effective social and affordable homes and keep costs at a minimum, the land costs must be kept as low as possible. Building on land already owned by the State makes this feasible. According to a 2014 Residential Land Availability Survey, there was sufficient land in the ownership of the State to provide for the construction of 414,000 dwellings. Using less than half of this land would meet the 20 per cent target we propose. Once the houses are built, it is vital that they remain social.
Government should adopt legislation to prohibit the sale of State lands suitable for residential development and use this land to build social housing.
Legislation should also be introduced to ensure that Approved Housing Bodies retain their social housing stock as social housing and prohibit its sale on the private market.
To ensure the sustainability of social lettings, the services and infrastructure communities require must be in place. Community health networks, social care supports, community policing, safe spaces should be a priority. This regeneration would require an initial investment of €100m in Budget 2023.
Homelessness and Homelessness Prevention
Protections introduced during the pandemic resulted in monthly decreases in homelessness during 2020/21. Notwithstanding commitments in Housing for All to eradicate homelessness by 2030, Government lifted these protections and, in May 2022, 10,325 men, women and children were officially counted as homeless. Increasing social housing provision, winding down the use of Family Hubs and investing in Housing First for families experiencing homelessness should be a priority for Government. Social Justice Ireland propose an investment in Housing First for Families of €200m in Budget 2023 funded from the cessation of the failed Help to Buy scheme.
As at December 2021, the latest data available, there were 5,406 mortgages in arrears over 10 years, with an arrears value of €865 million and a total balance outstanding of €1.5 billion. Government could prevent these households becoming homeless by acquiring an equity stake in properties in mortgage distress leaving families in situ and increasing the State’s social housing stock. Social Justice Ireland propose a pilot scheme for those mortgages in arrears of more than 10 years, at a cost of €100m in 2023.
Finally, housing strategy going forward must be evidence based. Setting and then failing to meet targets that seriously fall short of need will not solve the problem. We can only hope to meet the needs of citizens once their need has been recognised. We can begin this process by ensuring accurate data capture on homelessness. Government needs to align data collection with the ETHOS methodology and resource the necessary ICT infrastructure at an initial cost of €3m in Budget 2023.
Develop a functioning Private Rented Sector
Our Housing Costs and Poverty 2022 briefing showed how renters in the private rented sector are hardest hit by the current affordability crisis. Security of tenure must be a vital component of a private rental market that households are accessing for longer periods of time. The rate of Local Authority inspections of private rented property has been consistently low, while the rate of non-compliance with basic health and safety regulations among those properties that are inspected has been high. Regulation of the private rented market must reflect its increasing importance as a housing provider, as reliance on the private rented sector increases across all socio-demographic profiles. To do this, Government must invest in increased rental property inspections, doubling the budget to €13m and implement the Deposit Protection Scheme set out in legislation in 2015. Legislate to increase tenants’ rights and introduce long-term tenancies.
Budget Choices 2023 is available to download now.
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