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SINCE TAKING OFFICE, this Government has continued to pay lip service to home ownership by actively pursuing policies that are detrimental to people’s chances of being able to buy a place of their own.
In 1991, Ireland had one of the highest rates of home ownership in the European Union. Almost 80% of households owned their own home; 10% of households were in secure social housing; while the remaining households renting privately were predominantly made up of students and younger people.
Fast-forward 30 years and we have a very different picture. Home ownership levels fell to 66% in 2022 according to the census results released yesterday – their lowest level in more than 50 years. While renting suits some people, research consistently shows that most of those in the private rented sector don’t want to be there and would much prefer to have the security of a long-term home, either through homeownership or a secure social housing tenancy.
So why is home ownership in sharp decline? It is worth noting that the peak of home ownership of almost 80% reached in the early 1990s was not an accident. This was achieved after decades of very substantial and much needed investment by the State.
In the 1920s, most people were renters and the security of homeownership was almost exclusively enjoyed by better off households.
In rural areas, most people rented their homes from large landlords, while in urban areas overcrowded, crumbling tenement buildings provided housing for working-class families. A massive and persistent investment by the State, which began with the Land Sale Acts of 1870 and formally concluded when the Land Commission was wound up in 1999, saw more than 85% of land transferred legally from landlords to their tenant farmers. This resulted in very high levels of home ownership in rural areas.
In cities, vast resources were invested over several decades in clearing slums and providing good quality social housing to replace them.
Affordable purchase housing was also delivered by the State. In the 1920s, more than 1,200 affordable purchase homes were built in Marino, based on the Garden City model, in a very well-planned development built around communal greens. One hundred years later, Marino continues to thrive and is held up as an example of a successful and cohesive community.
Land for social housing was acquired by local authorities, both with agreement from landowners and through very extensive use of compulsory purchase orders. In 1954, in my constituency, Dublin Corporation used a compulsory purchase order to buy up 240 hectares of land for social and affordable purchase housing in Coolock, Kilmore, Artane and Edenmore. This contrasts sharply with the practice in recent years, where instead of buying up sites to provide housing, large tracts of publicly owned land have been sold off to private developers.
However, after decades of investment in housing over the course of the 20th century to make homeownership a reality for most people, we are now in a sharp reverse. The share of 25 to 34-year-olds who own their own home more than halved between 2004 and 2019, falling from 60% to just 27%.
There are now more than 350,000 adults in their twenties, thirties and forties still living in their childhood bedrooms.
We continue to witness an escalating homelessness emergency. The latest figures show there are now 12,259 people, including 3,594 children, living in homeless emergency accommodation – the highest number in the history of the State.
This is a crisis of the Government’s own making. Instead of putting resources into building affordable homes, the State has incentivised expensive Build to Rent (BTR) schemes through favourable tax treatment for investment funds. As interest rates have increased, private investment in the Build to Rent sector has dried up as investors seek better returns elsewhere. Instead of seizing this as an opportunity to shift development towards affordable purchase and cost rental housing, the Government is instead directing resources towards rescuing a flawed Build to Rent model.
The Irish Strategic Investment Fund is investing hundreds of millions of public money in rental-only developments.
This heavy promotion of rental-only developments by the Government is contributing to falling rates of home ownership and increasing levels of housing insecurity. This comes at a considerable social cost. According to the ESRI, only 65% of people aged 35-44 are likely to become homeowners by retirement, compared to more than 90% of those currently aged 65 and over. This will create a retirement timebomb requiring significant State intervention to subsidise rents for pensioners and will lead to increased risks of homelessness for the elderly.
So what can be done to reverse this trend? Instead of incentivising and financing expensive Build to Rent schemes, State resources should be focused on supporting affordable purchases and affordable rental development. Last year, just 323 affordable purchase homes were delivered. This is a drop in the ocean in terms of what is needed.
However, we should not despair. The Ó Cualann Cohousing Alliance is a great example of how the State can provide high-quality homes at prices people can afford.
By using discounted land from local authorities, having their development levies waived and building on a not-for-profit basis, Ó Cualann is delivering new three-bedroom homes in Dublin for €250,000.
There are wider economic benefits of affordable housing as people will have more disposable income. In fact, research carried out by Ó Cualann has shown that for every 1,000 affordable homes built, an extra €6.5m of income is generated in the local economy each year.
The Ó Cualann model is providing urgently needed homes for people who cannot afford skyrocketing house prices on the open market. It can and should be scaled up to meet the huge demand for homes that are affordable.
Today, the Dáil will debate a Social Democrats’ motion calling for a reversal of Government policies that have contributed to a collapse in home ownership levels. It is time to stop incentivising the wrong type of housing and rewarding developers with publicly funded State subsidies.
Nothing less than a dramatic increase in the delivery of genuinely affordable purchase homes will solve this housing crisis.
Cian O’Callaghan is a Social Democrats TD for Dublin Bay North and is the party’s housing spokesperson.
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The housing market is not broken, it is working exactly as FFG want it to. They have driven up the price of property to inflate the profits of developers and investment funds. They have allowed chaos in the rental market to funnel money into the pockets of landlords and leave tenants screwed at every turn. The only thing more tragic is the fact that FFG is still the largest party with the most support.
@Mogh Roith: you should change the above to….. “funnel money into the pockets of landlords which the government claim 52% tax on”
Most landlords have jobs, they pay 52% tax on additional income, in this case, rental income plus rtb fees, property tax and when they go to sell they pay capital gains tax.
Being a landlord in Ireland isn’t worth it.
@Jonny Spuds: Don’t forget the government need that extra tax take or the would receive additional scrutiny of the running of the economy. Thus the circle of it works for us is complete…..
@Daniel Kelly: they
@Jonny Spuds: Evwn more accurate, “funnel money into the pockets of build-to-rent investment funds, and other corporate entities paying almost no tax”
@Zmeevo Libe: exactly. These large foreign investment groups are paying essentially 0 tax
@Mogh Roith: “it is working exactly as FFG want it to” – conspiracy theory nonsense. Who are these people that upvote this crapulence?
Look at the number of middle men, who profit from the property market and you’ll get why it is so expensive. Solicitors/Engineers/Auctioneers/Developers/Builders/Planning office/Architects and that is a lot of people for one property.
@Emmet Murphy: Which of these should/could be scrapped and why?
@honey badger: a person building an average house has to pay around 30k in government imposed costs, start there I’d say.
@NotMyIreland: OK. What are those costs?
@honey badger: Levies to local authorities would be one of them.
@Emmet Murphy: try designing a house, putting it through planning & having the construction supervised so it’s done correctly without an architect/engineer. Each trade has it’s own set of skills and requirements that are integral to the design and building of a house hense their requirement for the process.
@Emmet Murphy: It would be hard to develop a housing estate without these roles and many more being involved but, yes, for the average nth hand house on the market there is too much bureaucracy adding unnecessary costs. You could try doing the job of the solicitor and find out why you need a solicitor to take one of those roles as a victim, and also find out that conveyancing is in general a race to the bottom.
In the 1990s we scrimped and we saved to buy a house. We then saved to furnish it.
Our first house had a sheet on the front windows until we could afford curtains or blinds.
Anyone that says that we are lucky to have our own home, I say to them, we damned well earned it the hard way. No handouts.
@Donal Ronan: exactly, I built my house gradually in the 80s I didn’t do the entrance gates ,garage, lawn etc until years after
There is more expectation now everything need to be done right away
@Donal Ronan: My parents bought their house in 1990. My Dad was out of work at the time and my Mam was working as a receptionist. They had no problem getting a loan for a nice new build three bed in the city. Good luck doing that on a single receptionist salary now.
The housing crisis will never be sorted because there are too many vested interests. TD’s, their friends and cronies being landlords have ensured the current situation will remain for a long time yet
As pil said anger is an energy, but what ffg has done should be considered criminal malice , steal from the poor and give to the rich is their inheritance from the brits. Anyone that voted for ffg and still believes they have empathy, is dillusion ,
Looks like they cannot fix anything. Health, education. They did fix their pensions and expenses though.
We don’t have a housing crisis, we have a migration crisis. Simple supply and demand stuff. If we first work off the basis this government is not working to enhance the lives of the ordinary Irish working person but rather to implement an EU globalist agenda to destroying this country demographically then we might get somewhere. If the same effort we have seen these WEF puppets put into bringing in and housing hundreds of thousands of foreigners was out into providing housing for their own native citizens we wouldn’t have a housing crisis. Saw recently where a qualified nurse who worked all through Covid is living in her car and when she contacted her local TD for help he ignored her. That I’m afraid shows you what this disgraceful government thinks of its own people. They moved heaven and earth to house illegal chancers who destroyed their documents en route here but don’t give a damn about their own. Peter Sutherland trained them well.
The system is working. The policy devised by FF and supported by FG is to turn the provision of all housing into profit-making vehicles for the chosen few. The driving focus is to make money, not provide homes. It really is that simple., We need an election to get rid of this failed everyman-for-himself ideology once and for all
Sensible article! The Government needs to stop thinking of housing as an investment opportunity for others to make money.
We also need to look at the social changes in the country over the past thirty years and how they have affected out housing needs I.e. divorce, second relationships, marriage or commitment to a relationship at a later age, preferences for living alone, remote working, social housing needs, and yes, immigration in its many forms.
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