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'Do we invest money into private pockets, or into public housing, that we own?'

It is entirely feasible to establish a State company that can borrow off balance sheet, writes Éilis Ryan.

Éilis Ryan Dublin city councillor, Workers’ Party

LAST WEEK ON Dublin City Council, councillors voted through a seemingly-innocuous amendment to the Dublin City Council “Scheme of Lettings” – the document which sets out how the council makes decision about what order people awaiting homes get housed in.

The amendment introduced the Housing Assistance Payment (HAP).

A few moments later, a second vote took place, this time voting through council approval for a massive-scale Public-Private Partnership, which will enlist private developers to build – and profit from – public housing on public land.

With every new vote, it becomes clear: the impact of Dublin City Council’s actions on housing over the past two years will be the wholesale privatisation of public housing in Dublin.

Lining the pockets of landlords

HAP is a subsidy paid by the state to private landlords, to bridge the gap between what a low-income tenant can afford to pay, and the full private rent.

In exchange for receiving a modest reduction on the market rent, the council pays the landlord even when the property is vacant, and carries out all necessary maintenance duties for 10-20 years.

It’s an atrocious deal for the State. Subsidies to landlords have cost the State over a billion euro over the past ten years. That’s enough to build over 6,000 houses outright without borrowings, which we as a State would then own.

Instead we have paid that money on a short-term solution that doesn’t even given security of tenure to tenants. A landlord can choose to end the agreement at any time.

Rent subsidies were never supposed to be a permanent solution – but in Budget 2017, Minister Simon Coveney announced that HAP was set to increase by a further 220%. The cost of rent subsidies to landlords is now seven times higher than it was in 2007, while over the same period spending on social housing has languished.

Privatising public housing

This is what happens when a State effectively privatises the provision of public housing.

During the boom years, public housing in Ireland was generally provided for through an agreement known as “Part V”. In theory, this meant that 20% of every private development should have comprised of public or affordable housing, though in reality, the output was far lower.

This meant that when the private housing market collapsed, so too did the output of public housing.

So, in 2016, we learned this week, only 37 public housing units were delivered through the private sector. The State had no public building programme to fall back on, no “Plan B” other than pray for the market to recover. But it hasn’t.

Bridging the gap – state-subsidised private development, or state-funded public development?

Meanwhile, for middle-income households too, secure housing remains elusive, as credit dried up.

The average asking price of a house in Dublin is now almost nine times the CSO’s estimate of average household income in Dublin, at approximately €39,000. This gap is not a new one.

Back in 2005 – when supply was most definitely not a problem – an average property in Dublin was priced at 11 times the average worker’s income.

In the past, this gap has been bridged either by lending massive unaffordable loans, or giving huge subsidies to private developers. At the moment in Dublin, it’s subsidies to developers that are flavour of the month, primarily by giving them access to public land.

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But not just any old public land. The most valuable land we have. In 2015 Dublin City Council went looking for developers to build housing on public land in Cherry Orchard. But the developers came back and said they would prefer to build on the O’Devaney Gardens site in Dublin 7 – a far more profitable site.

In PPPs like the one in O’Devaney Gardens, 70% of public land is used for private, for-profit housing. Meanwhile, on any private site, only 10% of housing will be public. So where do we expect the houses we so desperately need to come from?

Bridging the gap – the alternative

In reality, housing – no matter what kind – requires State investment. In Ireland, we’ve chosen to invest that money through tax breaks, land giveaways, and billion euro subsidies in private landlords.

So the question is not whether or not we have the money to invest in housing – the question is whether we choose to invest that money into private pockets, or into public housing – which we as a people own and democratically control.

On Monday night, I proposed an amendment to the PPP initiative, and called for a State company to be established to develop the sites in question. The motion echoes a proposal developed by the Nevin Institute and the Workers’ Party amongst others, showing that it is entirely feasible to establish a State company that can borrow off balance sheet – and do exactly the same job being attempted under the PPP.

Such a State company could be given control of empty state land, which it could easily borrow against, to build public housing. If built at scale, this public housing could be opened up to both low- and middle-income households, creating healthy, integrated.

In this way, we would solve the crisis of public housing for low-income households, and at the same time open up a new model of public housing to middle income households who are shut out of the private market.

Éilis Ryan is a councillor for the Workers’ Party in north inner city Dublin. www.facebook.com/cllreilisryan

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About the author:

Éilis Ryan  / Dublin city councillor, Workers’ Party

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