For Ann, it was a bunk in a hostel or the loss of a new, permanent job. That was her choice.
She has spent weeks looking for a place to rent in Dublin – as far out as Bettystown in Co Meath and Castlepollard in Co Westmeath – but with no luck.
The 44-year-old single mother told The Irish Times last month that she had sent more than 100 emails searching for a place to rent in Dublin in time to start her permanent civil service job, but found nothing.
By this week, Ann had moved to plan B: she had enlisted her 24-year-old daughter to mind her two young sons, aged 11 and eight, at home in Galway while she works in her new job in Dublin. She spends four nights a week in a tourist hostel and continues to search for a home for herself and her family near her workplace.
“Tonight as I lay here I miss my boys so much. I’ve never been away from them since they were born. I miss their bedtime story and their goodnight hugs,” she wrote in an email at 11.07pm.
“I question what I am doing. I did all the things I was meant to – went to college and got a degree while raising a young family. Worked one temp job after another determined to provide for my family and not to be the statistical average ‘single parent’ living off the State. I’m here in Dublin tonight sharing a room with 15 strangers. My kids are 220km away. Is this it? Is this as much as I can hope for my family?”
Ann is typical of the new homeless in Ireland – the working homeless. Unable to rent or buy, she is a casualty of the acute housing crisis.
Its causes are many: too few homes built after the crash; a scarcity of bank lending and the soaring cost of whatever finance (mostly from private funds) is available; a population growing more quickly than anticipated; net immigration; the decline in household sizes; insufficient homes in Dublin for the number of new jobs; the Government passing responsibility for public housing to the private sector; a shortage of rental properties; and soaring property prices and rents.
In short, there are not enough vacant houses to buy or rent, and given the long-term nature of planning, development and construction, there are few quick fixes. The country is entering a prolonged period of catch-up.
Today, Minister for Housing, Planning and Local Government Eoghan Murphy will canvass the views of all 31 of the country's local authority managers at an "emergency summit on housing and homelessness".
Easy solutions are in short supply judging from the size of the gap to be filled.
Total housing stock grew by just 8,800 between 2011 and 2016 when the population rose by 169,724, according to the 2016 census. Department of Housing statistics show there were almost 51,000 homes completed from the start of 2011 until the end of 2015, based on data showing the number of new electricity connections. This figure, according to Lorcan Sirr, a housing lecturer at Dublin Institute of Technology, includes some double counting: some of these completions are ghost estate houses returning to use.
In addition, between 6,000 and 12,000 of existing homes fall into dereliction or disrepair every year, adding to the housing shortfall.
“We are deluding ourselves,” said Sirr, of the huge mismatch between demand for housing and supply.
“A into B doesn’t go. Not only are the houses not there but people are being shoved into the rental sector. You have got the perfect storm of nothing happening. Unless you are adding to the stock of housing, you are taking houses from somebody else. The key is building houses to replace the ones that we lost.”
Supply and demand
The estimates for the number of new homes needed to meet demand has been rising. Analysts at financial firm Davy said the figure was "at a minimum" of 35,000 homes a year and "perhaps as high" as 50,000 up to 2021. The Housing Agency estimated in February that 20,00-25,000 a year was required. The Economic and Social Research Institute, the State-funded think tank, says 30,000- 35,000 units are needed.
Marian Finnegan, chief economist with property agents Sherry FitzGerald, puts the requirement at 38,000-39,000 houses a year up to 2020. She points to just 0.8 per cent of standing stock being available for sale in Dublin when a typical capital city in a developed economy should be transacting 4- 5 per cent.
“It just shows how dysfunctional the market remains. We have seen an uplift in new construction and new home sales, but we are still well below where we should be in terms of supply into the market,” she said.
Trinity College Dublin economist Ronan Lyons suggests estimates in line with Davy's figures – at least 40,000 and probably close to 50,000 new houses are required every year in the medium term. Almost 15,000 homes were built last year and the projections are for about 18,000 this year so there is some way to go.
“It is a mess, unfortunately,” he said. “If you ask 100 people, you will hear 101 reasons for the crisis and what needs to be done. To my mind, ignore the rest and focus on costs. If you do, the rest will fall into place.”
Planners say the bottleneck is not in their area, but on the money side.
"We have no problem attracting investment in commercial, hotels and student accommodation but for some reason, housing is lagging way behind," said John O'Hara, city planner at Dublin City Council.
“Whatever is wrong in the investment market – where the money is coming from – is strange.”
The Housing Agency’s director of research David Silke says that even bringing between 5,000 and 10,000 vacant properties (out of a total of 183,312 across the country in 2016) on to the market every year would help matters, but he concedes a property tax on vacant properties would be difficult to administer.
“There are plenty of sites with planning permission that are ready to go. It seems to be more about getting the construction industry going and that does take time because it is a big sector,” he said.
There is a major catch-up process too. The economic collapse wiped out the domestic construction sector and pushed small and medium-sized players out of business, leaving international funds and the National Asset Management Agency as the only significant players in a vastly undercapitalised industry.
High-profile builders such as Cairn Homes, and developers funded by private equity firms such as Oaktree, have strong pipelines of projects but their output so far has been relatively small. Cairn Homes sold just 105 completed homes last year, for example.
One prominent boom-time developer complained that the banks are only lending on construction projects through the large international investment funds. Banks want developers to provide up to 50 per cent of the financing costs for a zoned site and 30 per cent for a site with planning. Post-crash builders with no capital have to turn to private equity funds offering double-digit interest rates to make up the difference.
“If you want to go out to build a house, it is costing you between 11 per cent and 15 per cent. A lot of guys can’t move with that. You could have maybe €20,000 in interest on a house while it is being built – that is ludicrous stuff. That is going to be passed on to the first-time buyer,” he said.
These financing constraints are limiting developers to building on prime sites in Dublin and its suburbs because that is where the prices are highest and they can build at a viable economic value.
Fears that Fianna Fáil's proposal to cut VAT for builders – rejected by Murphy and Minister for Finance Paschal Donohoe – would go straight to their bottom line has put the kibosh on that idea, but others see different types of taxation easing the crisis.
“The largest cost that is totally uncontrolled is the cost of land,” said John O’Mahony, managing director of O’Mahony Pike, an architecture firm that designs large-scale housing developments.
“A land value tax is a way of addressing that. You could introduce a windfall tax on the sale of land and to balance that out – to encourage the sale of the land – you could bring in limited zoning, ‘use it or lose it’ zoning that withers after a certain amount of time. You would need to bring in those two together.”
Dublin problem
The over-concentration of economic activity in Dublin has created a problem that will only deepen further without more State investment into the regions as the population grows by another million by 2040.
Kieran Feighan, president of Engineers Ireland, illustrates the disproportionate settlement of people around Dublin – the city accounts for 28 per cent of the national population but just 1 per cent of the land in the country. Last week's census 2016 statistics on commuting showed Dublin's daytime workforce surpassing 500,000 for the first time – a figure that is five times that of Cork, the next biggest.
Greater investment in public transport from Dublin to the less densely populated surrounding areas creating “high-density transport corridors” is one solution albeit a long-term one, says Feighan.
“No matter how you slice or dice it, you are going to have a major problem of demand versus supply in the Dublin area,” he said. “Being close to your employment from where we have traditionally lived is just not sustainable, particularly given how we have developed Dublin as a low-density city.”
For a complex, multifaceted crisis like this one, a variety of imaginative solutions are required.
“In a housing crisis, you have to take bold moves but nobody is taking them,” said O’Mahony. “There are any number of possibilities being floated about how you build affordable houses but nobody is listening.”
Murphy should have plenty to fill his notebook at today’s summit.
