A difficult period lies ahead for the Coalition on housing after the publication of its latest plan. The political problem is that it will be a considerable time before it is clear what impact it will have. And in the meantime, the familiar problems in the market will persist: sky-high rents, homelessness and locked-out buyers.
The challenge for Ministers is twofold – first to make sure the new plan is implemented relentlessly. And second is to hold their nerve and hope that it works. Neither of these things is going to be easy, especially as public confidence in housing delivery is so low and – as ever with policy change – many will be discommoded and will object. But for once, policy needs to tilt in favour of those needing a home and away from those who already have one.
Central to the housing story is the “locked-out” generation. I recently came across the case of a young woman looking to buy – let’s call her “Kate” – which illustrates a lot of the key issues.
New housing plan promises 300,000 new homes. Can it deliver?
The first is affordability, which is particularly challenging for Kate as a single buyer. On a decent income of €65,000, she has done everything “right”, building up savings of €110,000. But this still leaves her facing difficult choices. There is a huge lack of supply in the second-hand market, including in North Dublin, where she is looking to buy. And the most she can afford in the second-hand market is about €370,000, taking into account solicitor’s fees and other costs. For every second-hand property on the market, there are many potential buyers, including the State via local authorities. Under the new plan, State purchasing will step up to try to tackle homelessness, illustrating the difficult trade-offs facing policymakers in a supply crunch.
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Kate does qualify for State support – if she wants to buy a new house. This includes the Help-to-Buy scheme, which offers a tax refund of up to €30,000 and the First Home Scheme, under which the State can take an equity stake of up to 30 per cent. Taking these two together, she can afford a new home of up to €500,000 – the limit for Help-to-Buy and also, in Dublin, for the First Home Scheme. But the availability of new homes at this price tag around Dublin is low and generally requires moving a significant distance from the city centre. Kate could move to, say, Meath, where there are new developments at this price, but would then have to join the long list of car commuters which clog up the roads converging on the M50 every day.
These are the incentives offered to many first-time buyers right now, and they go against the national policy, underlined in the new housing plan, of more people living closer to city centres and on public transport lines to avoid car-based commuting. But developing the transport and infrastructure links has been ponderously slow and getting planning approval for so-called “brownfield” developments of housing or apartments close to the city centre is notoriously difficult.
Will the new plan help Kate? Probably not, unless she is willing to put her buying plans on hold for a couple of years. It will allow her to avail of the first-home scheme if she buys a vacant or derelict property, once an agreement is reached with the banks on how to do this. But even in an optimistic scenario, a real bump upwards in supply – what new buyers need to increase their options – is unlikely before late 2027 or into 2028 at the earliest. The big question is whether this plan can achieve this.
Opposition critics say that the document involves “nothing new”. And to an extent, they have a point. The strategy is, as Dermot O’Leary, economist at Goodbody and a member of the Housing Commission put it, “evolution rather than revolution”. The Government is promising to follow the same general approach as its Housing for All plan, but to do it a lot better.
The new plan does involve a coherent strategy through the different stages of the process. But the real question is whether all the barriers which have stymied previous plans can be swept away – the planning delays, the lack of coherence between different agencies and departments, and the failure to do so much of what was promised under previous strategies.
This puts a big focus on the plan to be published in a few weeks by the Accelerating Infrastructure Taskforce – a group of private sector executives and senior public servants appointed by Minister for Public Expenditure Jack Chambers to advise on how to get things done more quickly.
The taskforce will recommend new legislation to speed critical infrastructure projects, consideration of emergency powers being used in the case of vital strategic developments and a sweep of regulatory and administrative barriers. The latter will be critical. Key to speeding housing delivery, for example, will be to align all the different parts of the planning system from national to local level – a review of the Office of the Planning Regulator which oversees this link from State policy to local authority action is one of the potentially significant measures in the new plan.
Beyond that, there is the work of actually delivering – and encouraging the private sector to do so. Serviced land with planning approval must be developed much more rapidly. The role of the State now in housing is so all-encompassing and the amounts being spent are so large that failure would involve an enormous waste of resources.
Making this omelette is going to require breaking some eggs. The Nimby members of the comfortable classes will object. The quangos will kick up. The environmentalists will have concerns. And the legal profession – which saw off the Troika’s calls for lower costs – will engage in trench warfare to protect its patch.
There will be much talk of constitutional rights and fair process. And these are important. Let’s be clear – the goal must be a proper planning process, not an absence of one. But the younger members of society have rights, too, including access to housing. Buyers like Kate deserve to have better choices. Does the Government have the courage and determination to take on the vested interests to deliver this? We will soon find out.
