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Taoiseach says we've yet to turn the corner on the housing crisis, rules out reopening budget

Micheál Martin says a corner has been turned on housing.

LAST UPDATE | Mar 15th 2023, 3:00 PM

Christina Finn reporting from New York

TAOISEACH LEO VARADKAR has said we have yet to turn the tide on the housing crisis.

Varadkar has also dismissed the idea of reopening the budget ahead of October to introduce tax breaks for renters and landlords. 

“Being able to say that we’ve turned the corner on the housing crisis as a whole – I think we’re certainly not there yet,” he told reporters in Washington DC this morning. 

Tánaiste Micheál Martin said yesterday in New York that he believed a positive trend was emerging and that a corner had been turned in terms of house building in Ireland. 

Varadkar said he agreed with the Tánaiste’s comments, stating that home construction is up on previous years. 

Exceeding 30,000 this year 

“We’re now at 30,000 a year. I think we’ll exceed that this year. That’s if you include student accommodation and derelicts being brought back into use, which you should, so what he said was turning the corner on new housing construction. I think that’s correct,” he added.

The corner will not be turned on the housing crisis as a whole until the numbers of people in emergency accommodation, at the very least stabilises or falls, said the Taoiseach.

“And certainly we’d like to see house prices and rents in real terms relative to incomes,” he added. 

“I’d like to see incomes rising faster than average rents,” said Varadkar, adding: “We’re not there yet.”

When asked by The Journal why the decision was made not to take emergency measures to deal with helping renters and prevent landlords exiting the market, the Taoiseach said Cabinet made a decision not to tinker with the finances before October’s budget. 

The Tánaiste poured cold water over the suggestion of reopening the finances to deal with tax breaks for those renting and those renting out properties. 

“We decided that we wouldn’t do that until the budget in October. So that’s the position of the government but we’re very clearly signalling that this is something that we’re going to do and we intend to do. And that’s the position.”

“If you reopen a budget, and particularly if you reopen the tax elements of a budget, then there are a lot of other people who for lots of other good reasons may believe that they need to ask for concessions too and that can make it very hard to hold the line on that,” said Varadkar. 

“That’s the thinking behind it, once you reopen spending, once you reopen the tax package, it’s very hard to just say we’re going to do this one thing because lots of other people have a legitimate case,” he said.

Exodus of landlords 

The government needs to slow down the exodus of small landlords and increase the numbers coming in, he added.

“I think that’s going to be very difficult, quite frankly,” said Varadkar. 

Speaking about the homelessness figures, he said there isn’t an acceptable number of homeless people that would bring about the re-introduction of the eviction ban.

“I don’t have an acceptable number,” he said, adding that no matter when you lift eviction ban you’re going to face the same problem. 

While in Washington DC, Varadkar will meet with a range of businesses, with the Taoiseach stating that housing is an issue that continues to come up, and has done for many years now.

“I’ve always accepted the view that the housing crisis is holding us back as a society and economically. It is an issue that comes up when employers and investors talk to me but I do think we need to put it into a factual context.

“We’ve never had more people that work in Ireland ever before. We’ve never had a better year for trade and investment than last year. So we’re doing extremely well economically,” he said. 

He went on to state that the businesses he speaks to acknowledge that there are housing issues in other countries, such as America.

Varadkar’s comments come after the Micheál Martin said the jury is out on whether more houses will be built this year than in 2022.

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Speaking in New York yesterday, Martin said “we have turned a corner” in terms of housing, stating that 30,000 homes were built in Ireland last year, up from 20,000.

“Now if that’s not turning a corner, I don’t know what is turning a corner,” said the Tánaiste. 

When asked about some stating that there could be slowdown in construction this year, Martin said he has been told there there’s been a very significant rise in commencements in January.

“The highest on record. So I think the jury’s out in respect of the targets for this year, because we’ve increased our social housing targets, we’re hoping to reach close to 12,000 social housing provided,” he added. 

The figure of 12,000 social  homes cannot be dismissed, said Martin. 

When pushed on the issue that both new builds as well as acquisitions are often cited in the government’s housing numbers, the Tánaiste said it is “legitimate to acquire houses, as well as build houses”.

The two Covid shutdowns of the construction sector, the Ukraine war and inflation “did knock confidence in the building market in 2022″, he said.

“We saw that, but that’s coming back now. And that’s not a failure. That’s just a reality of what happens when some exceptional events like a war on the continent of Europe happens,” said Martin, defending the government’s record on housing. 

The government housing schemes like cost-rental, Croí Connaithe and the First Home Scheme are “gaining momentum”, said the Tánaiste.

“There’s a very good trend there, not just for the next 12 months, but beyond that, and that is the issue really, that we can give people certainty that the number of houses that we will build into the future will grow and increase.”

Martin also commented on reports that some pre-budget measures might be rolled out for renters and landlords ahead of the budget this year. The Tánaiste dismissed the suggestion, stating:

“We said there would be a package in respect of the rental sector in the next budget – and that remains the position.”

“Because there can’t be knee-jerk responses to the situation. Because any one measure could have unintended consequences, so it’s got to be fully fleshed through and the budget is the proper context for doing that,” he told reporters.

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