As a university student coming into fourth year, for my peers and I the housing crisis will likely have most effect in the next two-three years, so we have skin in the game. However, from a broader standpoint it has been interesting to note Micheál Martin’s emphasis on how the crisis for “young buyers” worries his government.
There appears to be two distinct components to the housing crisis: The crisis in the private rental/purchases sector, and the one in the area of social housing.
One could be forgiven for perceiving a distinct move by the two leading government parties to decouple the private sector crisis, from which they are haemorrhaging younger votes which are instead going to Sinn Féin, from the social housing-homeless crisis generally, from which there are fewer votes to lose if displeased.
The crises in this area over the past decade have been instructive: From 2012-2017 it was controversy over potentially illicit property transfers from Nama, alongside distressed mortgages being repossessed and the “moral hazard” attached to this; then it was the huge jumps in homelessness and finally after 2017 it arguably became more of a front-and-centre political issue, as the lack of incoming housing supply began seriously to constrict the middle-and-upper classes.
Whether one believes these two issues are both of equal concern is up to the reader, but the Government parties’ arguably decoupling of these to “focus on the votes” could be described as cynical-and they can’t even manage that particularly well, judging by the polls.
It seems that the recent events around the bulk-buying of entire housing estates by vulture funds caused near-universal revulsion. However, when one reads policy documents of the opposition parties, a near-universal pile of buzzwords jumps out, words like "social" versus "affordable" housing; and then there is "the Vienna model" (a cost-rental based social-housing model) thrown in.
Amongst the parties there does not seem to be one single joined-up holistic conception of the housing market. Much has recently been made of a “rent freeze”, but there is so little follow-on thinking for the after-the-rent-freeze period that this almost smacks of exam-night cramming by people who should-and do-know better.
The fundamental question that must be asked is, is there a requirement for the formal conceptualisation of a “social imperative”, a social purpose to the purchase/rental housing sector that the state conceives in the name of citizens (arguably as a consumer right, since renters and house buyers are basically just consuming a good), which balances against the general freedom to make unlimited profit in the market?
If so, then political thinking must surely turn away from grab-bag policy buzzwords like “rent freeze” and Vienna model.
One can freeze existing prices-but what happens then? Surely there must be a more holistic approach to the sector, addressing the necessary balance between the rights of tenants and purchasers on the one hand and the profit sustainability of the sector on the other? There must surely be a balance there, between the two sides.
To address the argument that “if we kick out REITs (real estate investment trust) we’ll lose investment in housing construction”, it seems somewhat incongruous that the state bailed out the banks to the tune of €67.5bn-40bn of which is still being repaid-for the purpose of having a functioning financial system that could both provide and circulate capital around the economy, only for the state to still (supposedly) be relying on investment firms to be providing construction capital.
In terms of the tacit expectation of government that investment groups would “grow a social conscience” and self-limit their profits, it is worth asking the reader, would you if you were an investment fund? I know I wouldn’t-I’d be running a profit-making enterprise, not a charity. If one accepts that basic premise, that no-one would artificially restrain themselves from making money, then surely it is clear why efforts to woo them off scalping profits has not worked?
As for the argument that increased supply alone will reduce scarcity and thereby price and so financing should be found wherever it can rather than constraining private actors, on its face this seems plausible. However, according to UCD researchers the country saw a peak of 93,000 properties constructed at the height of the boom without off-setting the property bubble. Surely the same could happen again, supply increasing without a consequent reduction in prices, especially if investment landlords are prepared to leave apartments vacant to artificially constrict supply and thereby artificially maintain the high price ceiling?
Three issues seem to be at play: Rents, tenancy rights, and supply - in that order. If this is the case this would surely require a passive-active combination of measures; providing long-term tenancy security for tenants once they have agreed reasonable contractual terms of occupancy, rent ceiling limits (at least until the market stabilises) and potentially direct central state housing construction, while also addressing the financial implications, such as a potentially increased reluctance by landlords to foot apartment repair costs.
Fundamentally this must be underwritten by a “social imperative”, the embedded covenant that there is a social purpose to the housing sector and that this must be guarded on behalf of the electorate by the state.
Frank Fitzgerald is a student of politics and public administration at the University of Limerick.
