The chances of first-time buyers in the Republic being able to afford houses or apartments of their own continue to worsen and rents move eternally upwards while Government inaction ensures that no improvement is in sight. A particularly good analysis of the root causes and the continuing ones was given in an article by Dr. Rory Hearne, Assistant Professor/ Lecturer in Social Policy at the Department of Applied Social Studies, Maynooth University. He is the author of Housing Shock: The Irish Housing Crisis and How to Solve it (Policy Press, 2020). Some pertinent quotes from his article capture the overall position.
“The Government does not actually want you to be able to buy or rent an affordable home. They have created an unaffordable housing system that is focused on delivering housing as an investment asset, not a home.”
“They told people to speculate in the property market and gave tax breaks for landlords to buy a second, or third, home to rent out. These became the ‘buy-to-let’ investors. The banks lent out massively which added fuel to the fire of rising housing prices, and the inevitable crash happened in 2008 and 2009.”
“As the economy began to recover, and rents and house prices started rising, the Government was called on to implement rent controls and to build social and affordable homes. But it refused over and over to do this. This is why we have the crisis.”
“The aim of policy was not to provide affordable housing – but to facilitate and support rising housing prices and rents, so that property would be an attractive investment to global investors, and to provide rising values for banks balance sheets, and recoup more value when they repossess and sell homes in mortgage arrears.”
“Irish Governments have created an investor paradise for vulture and cuckoo funds through our housing and economic policy. It introduced the Real Estate Investor Tax (REIT) break in 2012. This is still in place. This means the funds and REITs buying up homes pay little if any tax on profits made.”
“Government could and should remove the Real Estate Investment Trust tax break, introduce a foreign property purchase tax, implement a vacant homes tax, introduce a property speculation tax in areas of high housing need and require new homes being offered for sale to be sold to home buyers first.”
“The state must take responsibility for ensuring everyone in this country has an affordable, secure, decent standard home. It should use its huge state land bank and access to low-cost finance and build actually affordable homes on a major scale. Let us have a real honest conversation about all this. It is time to treat housing as a home and a human right, not an investment asset for the global wealthy.” The full article can be seen at https://www.thejournal.ie/…/ireland-investment-housing…/.
Posted by Cathal Ó Luain, Convenor Celtic League (25th May 2021)