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Dublin: 6 °C Saturday 23 March, 2019
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Unless you can magic up a few houses, welfare recipients will need to move away from Dublin

It’s an unpalatable solution politically, but the truth is workers and students need to be in a place while those in receipt of welfare cannot make the same claim.

Aaron McKenna

THERE WILL BE no single-hit solution to the housing crisis that is gripping the capital. We require a range of mitigating actions to be taken to provide alleviation from symptoms until the cure of adequate supply can be administered and take effect. It is depressing, then, to see such salving solutions as moving homeless people to vacant properties around the country be dismissed as “crazy” by opposition politicians.

We do, of course, have something of an historical chip on our shoulders when it comes to population movement. Many people don’t hear “move to available, affordable accommodation in Sligo.” They hear “to hell or to Connaught.” Opposition politicians meanwhile seem to take their title a bit too literally as to mean in all circumstances, make hay.

Vacant and affordable

It is no surprise that as we enter the college season, pressure is increasing rapidly. Homelessness is on the up as people are priced out of the market. Some 556 families were counted as being homeless last month, with many housed temporarily in B&B accommodation. The thing is, there is vacant and affordable property to rent around the country to house these people. For reasons of official lethargy and political sensitivity, we aren’t pursuing the option with vigour.

Folks getting their backs up at the idea that people be displaced for the sake of housing are struggling to win a moral argument with no practical solution to the problem in their back pocket. You can’t magic houses into existence across Dublin. Rent controls don’t work, for reasons I’ve outlined before. But even if we introduced them, the simple fact is that we’re trying to fit more warm bodies into spaces that simply do not exist. A rent control might help keep 500 families, or 1,500 to 2,000 people, in Dublin. But it’ll push out an equal number of students or professionals.

And when the rent control dampens investment into property development, you’ll just see the crisis drag further in time than it is already destined to.

Dublin has a gravitational pull common to all major cities. They suck in economic activity and people, gain the lion’s share of new jobs, college places and general opportunity. If there aren’t enough spaces to house the talent required to fill these jobs, it holds back the economic growth of the city and – as a knock on – the country. If students need to defer college because they cannot get accommodation, it may well hamper their personal economic prospects in the future. This in turn will have a knock on to our economy and society over time.

Politically unpalatable

There is a strong argument for government to incentivise people in welfare assisted housing in general to make a swap and head out from the city in favour of those who need to be there the most. It is a cold reality, and a politically unpalatable one at that. But when we have a situation where supply is insufficient to meet demand, you can try and move people whose housing is paid for by the state to areas where there is more availability and lower cost.

To Let / For Rent signs, Dublin propert Dublin, in particular, is being hit by a chronic shortage in housing supply Source: /Photocall Ireland

We will see housing supply kick up and deliver over time, but it is a long process. New projects are taking a criminal average of 79 weeks to go from planning application to approval and builders on site. Ronan Lyons, assistant professor of economics in Trinity College Dublin, pointed out to the Financial Times recently that the cost of building a home in Ireland is about 80% higher per square meter than in Germany or Northern Ireland.

This is partially driven by populist regulations. People are instinctively getting their backs up at the idea put forward recently that builders be allowed construct smaller family apartments than the current minimum of 85 square meters (915 feet). The same people, who are usually heard to wax lyrical about lower home prices in places like Germany, don’t acknowledge that the European average minimum size for an apartment suitable for a family is 65 sq m (700 sq ft), a 23.5% difference.

It’s not the whole story, but as with the entire crisis it is one part of the puzzle as to why we have more expensive housing and less of it than we require.

As we await the construction of vast housing projects like Project Cherry in Dublin 18, with nearly 4,000 residential units planned in one big lump, we must address ourselves to the problem at hand. We must also avoid the simple minded thinking around panacea solutions, one-hit wonders that we’re told will solve all ills and leave us disappointed when they fail.

Pressure release

An immediate pressure release value that is available to us is to move people out from the city who do not strictly need to be there for the purpose of specific activities they’re carrying out on a daily basis. Students and people at work need to be in a specific place at a specific time. If they can’t be for lack of housing, our capacity to grow the economy and deliver the cash to the state that is required to fix our other societal ills will be harmed.

Moving people will disrupt them as children move schools and perhaps limit training and job opportunities. So the Department of Social Protection would want to offer a move to long term unemployed people with sensitivity to this. But at the end of the day, saying “I don’t want to move” is perhaps not good enough by itself for those in state-funded housing, or no housing at all, when there exists a crimp on housing supply.

It is a terrible thing to have to contemplate doing, trying to move the population around to fit the economy. This is an example of the long-term consequences of economic mismanagement and the bust of the Fianna Fáil years. The current government will get the stick, including from people like Barry Cowen, for the problem. But at the end of the day, they can’t make houses appear in Dublin from nowhere.

Alternative, sometimes harsh, short term solutions will need to be found.

Aaron McKenna is a businessman and columnist for TheJournal.ie. You can follow him on Twitter here.

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