Does the Government know what it wants to achieve with its big housing plan? The delay in publication of the Housing for All document follows a frantic period, with senior officials and Ministers tasked with getting it done and out before the end of July. The document is largely written and was due to be published on Tuesday. But someone decided to pull the plug on publication late in the day.
The spin is that it didn’t make much sense for Minister for Housing Darragh O’Brien to publish before the bank holiday weekend and that it will come out in late August or early September. But it looks more like a case of last-minute jitters at the highest levels of Government about a plan which will go a long way to defining the Coalition’s future.
The Government, after all, only has one shot at this one.
There is a political cost to this delay, and so we can be sure that the decision was not taken lightly. The main parts of the documents are largely agreed and the money has been signed off. But delivering it will be a huge challenge and the Coalition will not want to set itself up to fail. The big blockages still remain in getting houses built – planning, regulation, financing, capacity in the industry, land availability and the rising cost of building in Ireland. And it is here that the document will be worked on over the next six weeks, to try to provide a more coherent plan for actually delivering.
Whoever is in Government, getting this done is a challenge which goes way beyond finding the necessary money. The draft national development programme, the overarching document for State capital investment, recognises some of the risks here, warning that finding the required building capacity is a big challenge and that investing too much could lead to inflationary pressures. Just throwing money at the problem, in other words, won’t fix it.
It suggests that reducing private sector investment on non-housing construction projects is one way to free capacity. This could happen naturally if office demand slumps post Covid-19 – but the document even suggests that tax measures could be needed to discourage commercial building and direct resources to housebulding. The State trying to engineer a slump in commercial building would be some change after years of incentives to development.
The old problem, of course, is that housing supply will take time to build up, while demand measures – like the new shared equity scheme – will act immediately. The likely result is rising house prices. Not only in Ireland but in many other countries house prices have remained firm through Covid-19. The people whose jobs are hit by the crisis are more likely to be renters than buyers – meanwhile, among potential buyers and their families savings shot up during lockdown. Here, house prices were rising at an annual rate of 5.5 per cent in May. New supply takes time, while demand can accelerate quickly. The political desire to “ do something” fights against the economic reality that it just takes time to build stuff.
The new housing plan needs to be realistic about the blockages to supply and try to do something about them. It needs to find a way to get under the skin of why house building costs so much in Ireland and why, despite demand, it took so long for supply to respond after the financial crash. These are issues which could be addressed by the new housing commission. But this is only being established in September, chaired by outgoing housing agency head John O’Connor.
The cart of the plan is going before the horse of the commission, so some way needs to be found to allow it to feed into policy as it evolves.We will no doubt be told that the housing strategy is a “ living document”, which is another way of saying that parts of it will probably be torn up in time and replaced by something else.
Marrying the political need to have a “ plan” with the realistic message that this will take time will not be easy. But if the Government plan does not tackle the fundamental issues head on, then it will just be the latest collection of schemes and wheezes. Like throwing paint at a wall, some may stick but a lot won’t.
And underlying it all are some nagging questions on just how we see housing in the future. Are we emphasising a public or private building model, or some hybrid? How do we get homes – particularly apartments – built at a reasonable cost? What about planning delays? How does State policy of getting people to live in more densely populated areas close to city centres stack up with the world post-Covid? And how does this all fit in with the climate agenda?
There is no point trying to pull policy levers, if you don’t have the vision sorted out. The idea of “ denser” living close to where people work for example, has featured in many policy documents, but I don’t think it has been plainly outlined or debated.Yet it is a central part of housing strategy, as is the related debate on long-term renting.
If the older generation of policymakers is going to pioneer a new way of living for younger people, then there is a lot of explaining – and more importantly listening – to be done. We haven’t even started this discussion yet. After all, this is those living in the suburbs with gardens and mortgages paid trying to explain to younger people that they can only aspire to something smaller.
And the younger generation can legitimately ask whether those of us who own properties are happy to see prices fall to make them more affordable for them. Because, in the long term, if any housing plan is to work, homes will have to cost less.