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Debate Room: Has Budget 2018 moved towards solving the housing crisis?

Paschal Donohoe has delivered his first Budget. But has it been a Budget that tackles the housing crisis?

Various

We asked commentators on both sides of the debate to tell us what they thought of Budget 2018 and its impact on Ireland’s housing crisis.

YES. The government’s announcement of a €750 million fund to be administered by the newly established Housebuilding Finance Ireland to drive house building is to be welcomed. The establishment of this agency and the €750 million ISIF fund might bridge the funding gap by providing funding at competitive levels where there is an established demand for housing but no lending from traditional sources available.

The additional €75 million for the Local Infrastructure Housing Activation Fund will go a long way towards facilitating essential infrastructure to enable additional housebuilding. The €500 million announced to deliver new build social housing is very welcome and signifies that the government are again “building” social housing. Getting the funding model to enable this extraordinary increase in social housing builds will be critical.

The HTB scheme has meant that banks have begun to lend to builders for activity in this segment again. We also support the principle of a site value tax aimed at preventing land hoarding. However, the increase in the site levy of 7% must applied fairly and impartially so that genuine landowners/housebuilders’ experiencing viability issues are not unnecessarily penalised.

Tom Parlon is Director General of the Construction Industry Federation.

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NOT QUITE. The only mention of social housing provision directly from government is a pie in the sky promise about going further than the provisions of Rebuilding Ireland which have already been debunked as unachievable in their current format. We need to see real detail about how this can be achieved. The establishment of a new body the Homebuilding Finance Ireland agency is to rely on what the Minister calls the expertise of NAMA. I don’t think you would find many who would find confidence in hearing that NAMA will be a key player in addressing the housing emergency. The Social Democrats have consistently called for a Housing Delivery Agency which would have a coordinating role to coordinate local authorities, housing agencies and the private sector where economies of scale could help reduce costs. A key focus of all housing initiatives must be the establishment of sustainable and vibrant communities rather than just units.

Catherine Murphy is a TD and Social Democrats Co-Leader.

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YES. Ireland’s housing crisis originates from an imbalance between the number of people who need accommodation and the number of homes available. With our population likely to keep growing this can only be resolved by increased building.
For the first time in years I detect the emergence of a coherent, supply-focused housing policy. Relaxing height restrictions and car parking requirements will make development more viable for existing landowners. Those who still don’t intend to develop have been incentivised to cash-out by today’s reduction of the CGT holding period.
For remaining developers with viable sites, the prospect of a penal vacant site levy will focus minds and get construction going. I am optimistic.

John McCartney is Director of Research at Savills.

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NOT QUITE. What we needed was a game-changer on housing and investment in better services, but instead we got a series of small measures that will not address our high cost of living, which is already above the EU average. At a minimum we needed to see the government commit to an emergency programme of social housing provision with a target of 50,000 homes over five years, along with a series of measures to penalise land hoarding, in order to tackle the biggest single crisis facing our society.The change in the Vacant Site Levy is a step in the right direction, but of itself it will do little to solve this very serious problem. Overall, the measures in Budget 2018 will do little for those who are homeless and those who find it impossible to find an affordable home. Equally, it will not address the high cost of housing for tens of thousands of people.

Patricia King is General Secretary of the Irish Congress of Trade Unions. 

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YES. The government has been in the unenvious position of trying to find viable solutions to the housing crisis in this year’s budget. This presented a myriad of diverging interests from trying to urgently help the homeless, to supporting first time buyers and those in the rental market, whilst also trying to incentivise the construction industry to start building again.

Although Budget 2018 does commit substantive funds to these complex issues, long term vision and innovative strategies are blatantly lacking. It is most positive however that the Capital Gains Tax exemption has been reduced from 7 to 4 years, as I have championed for in my recent article on the topic, which will undoubtedly have a positive impact on lands becoming available for much needed development.

 Jason O’Sullivan is Solicitor and Public Affairs Consultant at J.O.S. Solicitors. 

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NOT QUITE. We welcome the Budget of €1.83 billion for housing in 2018 and the more active role that the government will play in building social housing. However, there are at least 90,000 households on the social housing waiting list. The extra 3,800 social housing homes provided next year will not be sufficient to meet demand. There was no mention of empty homes and particularly no mention of a vacant homes tax. The full Empty Homes Plan must be published urgently now that the Budget has been announced including any revisions in the Repair and Lease Scheme. We have been waiting for this since last May.The increase in funding of €149m for HAP is very welcome and must be accelerated. Preventing people from becoming homeless is absolutely key to ending this crisis. We welcome the commitment to increase funding towards HAP Placefinder as people urgently need assistance to find homes. We await more detail on this. Any expansion of HAP is dependent on supply in the Private Rented Sector. This budget does not address the issue of rent certainty and enhanced security of tenure which is urgently needed.

Niamh Randall is National Spokesperson for the Simon Communities.

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