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FactCheck: Is the State the ‘biggest player in housing’?

The Taoiseach made this claim multiple times in the Dáil since 2021

THE STATE IS “the biggest actor in housing”, according to multiple statements by the Taoiseach, Micheál Martin, throughout 2021 and 2022.

However, what exactly that comment means, or what data might back up such a claim, is unclear based on his public statements.

In May, 2021, during a Dáil debate, Martin said: “The State – the Government – is now the biggest player in the housing market. That is the reality, but we have to do more than that and there has to be a role for the private sector.”

A day later, he told the Dáil: “Some €3.3 billion was allocated this year for house construction. The largest social housing programme is under way, as are affordable housing initiatives. The biggest actor in the housing market now is this Government.” 

He repeated such a claim in the Dáil again in July 2021, as well as in July this year. He uttered a variation – “The State is the biggest player now in house building” – in September, before returning to the original claim during Dáil debates in October, as well as in statements to the media

However, responses by the Department of the Taoiseach to The Journal, figures released by the Central Statistics Office and the Department of Housing, Local Government and Heritage, as well as an analysis of capital spending into housing in 2022, have shed light on whether Martin’s claim that the State is the “biggest player” in housing is correct.

But, before we could evaluate the claim, The Journal first reached out to ask exactly what the Taoiseach had meant.

The “Biggest Player”

In response to queries from The Journal asking to clarify the Taoiseach’s claim, the Government Information Service (GIS), a division of the Department of the Taoiseach, said: “The State, through the Housing for All plan, are investing a guaranteed €4 billion in capital housing projects (both social and affordable) annually to 2025.

“The Housing for All Plan sets out clearly defined targets and this year the number of social and affordable homes targeted amounts to 13,100 whereas the number of private rental and private homes to be delivered amounts to 11,500 (a total of 24,600).”

This isn’t quite accurate. The Housing For All plan guarantees “an annual average investment of in excess of €4bn in housing”, which includes investment in social and affordable housing, but also includes spending on private housing through retrofitting schemes, pyrite and mica remediation, and private housing grants.

The GIS did not clarify whether the claim was that the State was the biggest investor in housing, or that it delivered the most homes in responses to follow-up questions. 

Nor is it clear why, if the claim that the State is the “biggest actor” in housing is based on targets in the Housing for All plan, the Taoiseach was making the claim in 2021, a year before the Housing for All plan was enacted, and for which no targets apply.

It is also unclear from the government’s statements what the other contenders for “biggest player” are. If the Taoiseach was implying that the state was bigger than any one single developer or construction company, that would be almost trivially true; the state has more revenue and more employees than any single Irish company.

It could also be unfair to treat the state as a single body this way.

“Some will argue that there are multiple actors in the private housing market,” Assistant Professor in Social Policy at Maynooth University and housing expert, Dr Rory Hearne, told The Journal. “But there are also multiple actors within the State (local authorities, AHBs [Approved Housing Bodies], HAP [Housing Assistance Payments] etc).”

Instead, the Taoiseach’s statements are likely comparing the state to the private sector as a whole.

As such, based on the Taoiseach’s statements and the replies from GIS, two possible rationales could apply to the Taoiseach’s claim. Either:

  • The state invested a majority of money into housing in 2021, and so far in 2022, or
  • Most builds in 2021 and so far in 2022 were built or bought with the assistance of the state.

Is the State the biggest investor in housing?

The GIS repeatedly referred to an annual €4 billion investment into housing to explain the Taoiseach’s claim in responses to The Journal questions.

However, there are problems with this claim. Firstly, the government had not spent that money by the time it had made the claim.

An analysis by The Journal to see how much of its target the government had actually spent shows that, as of the end of October, the government was significantly behind its spending targets. 

The Department of Housing told The Journal that “almost €2 billion” had been spent by the exchequer, but never provided a breakdown of this figure, and many programmes The Journal had seen relevant figures for had only spent small fractions of their annual targets.

While the government says it expected to make up much of this shortfall by the end of the year, nothing close to €4 billion was spent at the time the Taoiseach made his comments. It remains unclear if the investment target will be met.

A second issue is that this €4 billion figure includes all capital investment into housing, even if it is not spent on new builds. For example, retrofitting, communal support, repairing, refurbishing and planned maintenance on social housing was all included.

So, should the government’s spending be compared against private builders and developers alone, or should all businesses that carry out maintenance, improvements and refurbishing in Ireland be included?

In either case, the Taoiseach’s claim doesn’t bear weight.

Private spending on building new housing alone overshadows all State capital expenditure into housing, by the government’s own admission.

According to Housing For All, the same plan that guarantees that €4 billion a year is invested in capital expenditure, an average of €12 billion has to be spent every year until 2030 for the plan to reach a target of 33,000 new homes built a year – a target that the housing minister, Darragh O’Brien, recently said would not meet the demand, even if met. 

That is to say, in order for the government to meet its own targets, the private sector must invest more in housing than the State. 

Similarly, in 2021, as the Taoiseach was making the claim, but before the Housing for All plan was enacted ,“total expenditure related to housing” by the government was about €3.1 billion , a tiny proportion of the total spending on housing.

Affordable homes

Although the government is not the biggest investor in housing, could it be considered the “biggest player” in different terms, such as the number of social and affordable houses delivered?

Even on this basis, there is little to support the Taoiseach’s statements.

In 2022, the government had intended for 24,600 homes to be delivered, of which 9,000 were social homes, 4,100 were “Affordable and cost rental homes”, and 11,500 were private rental and private ownership homes. 

However, what affordable housing is, and the government’s role in it, should be clarified. Legislation defines “affordable housing” as dwellings that are made available through local authorities (or through a “Part V agreement”), or that a housing authority provides financial assistance for, such as through the First Home Shared Equity Scheme

However, that scheme involves the State giving up to 30% of the purchase price of a home to buyers, who then purchase a home on the private market, which the State then owns part of.

The result is that, while such a purchase would be considered an “affordable home”, even just considering that one transaction, the government would not be the biggest player  – on the buyer’s side, 70% of the funds for the home are provided by private sources, while no State involvement could be involved in the seller’s side at all.

In other words, even if every single home was provided under this scheme – and therefore was counted as an “affordable home” – the private sector would still provide more housing, and more funding to pay for housing, than the State. The same argument applies to other affordable housing, such as homes purchased with the Help to Buy scheme, which allows applicants to claim up to 10% of a new build’s value. 

Housing delivery

With this in mind, how much social and affordable housing has actually been delivered in 2022 so far?

Figures released by the Department of Housing at the start of November showed that 13,263 had been completed in the first two quarters of 2022, however, only 2,858 new Social Homes were delivered by then, of which 1,765 were new builds.

Mathematically, this means that at that time, even if the government had already exceeded its annual target for affordable housing by the end of June, there is no way that the public sector had provided more housing than the private sector.

Figures provided to The Journal by Deputy Eoin O’Broin show that in 2021, 5,142 social housing units were delivered, about a quarter of all new dwellings completed that year, with the majority of these being provided by private developers and sold to the State.

As such, in 2021 and according to the most recent figures from 2022, the government is not the biggest provider of new housing units.

‘A minority player’

“The State is still a minority player in the Irish housing market,” Dr Rory Hearne, told The Journal by email.

“It has the potential and should be a much bigger player. But it is misleading to put it mildly, and actually factually incorrect to describe it as the biggest actor in the housing market.”

As the State builds no homes directly, invests less money than the private sector, and has delivered less social housing units than the private sector has delivered private homes – both in 2021 and so far this year – we found no basis to the Taoiseach’s repeated claim that the State is the “biggest player in housing”.

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