Fine Gael’s Housing Crisis

Ireland’s ongoing housing crisis has provided a discordant note to the official government narrative that we are somehow living in a golden age. The figure of 10,000 homeless is only the tip of the iceberg. For a generation of renters there is the dawning realisation that, unlike their parents, most will be unlikely to  ever own their own home.

What is most striking about the Irish debate on housing is the way in which it is conducted within an agreed ideological narrative. The recent remarks by Conor Skehan, former chair of the Housing Agency, in which he highlighted things like the role of the housing charities and those possibly gaming the social housing system caused a storm. It was not so much that people disagreed but rather that Skehan had dared to break from the official groupthink on the subject.

Much of the ideological framework underpinning the housing  debate is provided by the housing charities. It is only fitting, therefore, that the first myth that should be debunked is that relating to the housing charity sector itself. They may have been set up in the 60’s and 70’s as charities (many by Catholic religious) but today’s organisations are far removed from this.

Focus Ireland has an annual budget of €26m while its CEO receives a salary of €115,000. Meanwhile, over at Threshold Ireland, its CEO gets by on a more modest €80,000. A feature of many these housing charities is that a substantial part of their revenue comes in the form of state contracts meaning that most have now become part of the greater state infrastructure.

Another feature of the housing charities is the prominence of a leftist worldview with the Labour Party, in particular, seeming to hold disproportionate influence. Focus Ireland’s Mike Allen was a former General Secretary of the Labour Party while chairperson of Threshold, Aideen Hayden, ran unsuccessfully for the same party in two Seanad elections.

Accordingly, Ireland’s housing debate tends to be viewed largely through a leftist viewpoint. Invariably, this hinges around simple broad brush statements such as ‘developers and small time Irish landlords are the main impediments to Irish people getting a home’ and secondly, the solution to the housing problem is to simply ‘build more houses.’

This simple narrative plays well with Ireland’s housing charities. In fact, one of the few coherent housing policy objectives of Fine Gael over the last 7 years has been demonising small time Irish landlords. This has seen the introduction of rent controls, prohibitive tax rates of 50% + and an onerous regulatory environment. This hasn’t solved the housing crisis – in fact, all it has done is reduce the supply of rental accommodation.

Equally, the mantra of ‘build more houses’ (usually meaning more social housing) is routinely trotted out as the instant solution to the housing crisis. While everyone accepts that social housing is part of the solution, the disarmingly simple ‘build more houses’ is about as useful a solution as ‘print more money’ is for Ireland’s looming pensions crisis.

Even within a social framework, social housing has to be someway viable if it is to be sustainable. But just how viable is social housing at present? With social housing rents capped at 15% of household income (putting rents well below market values), various local authorities are still owed €73m in rent!

The present housing debate with its constant calls for greater taxpayer funding of housing initiatives has only served to obscure the bigger picture of housing and the globalised economy in which it now exists. As recently as the 1980’s and 90’s, it was a reasonable expectation for people on modest incomes to aspire to owning their own home. This was even possible for a couple with one spouse working. Today, a two income couple has less chance of this and in the Greater Dublin area, it is next to impossible.

What has changed over the last thirty years? For one thing, globalisation has disempowered local economies forcing many workers to eke out an existence in the part-time/temporary economic model that has evolved. In this sense, today’s housing crisis is a logical consequence of globalisation.

The figures illustrating these changes are stark. For example, the 2016 Census showed that 30% of the population are now renting their homes. In fact, more than 50% of young people are now renting compared with 12% back in 1987/88.

The irony of Fine Gael’s housing policy is that alongside placating the socialist grandees of the housing charities by demonising small time Irish landlords, they have also pursued policies which favour globalism and, in particular, the activities of multinational institutional landlords.

Ires Reit, Ireland’s biggest landlord, entered the Irish market in 2014 and now has a portfolio of 2,300 properties (many of them acquired from NAMA at knockdown prices). Unlike their Irish counterparts, these equity-backed institutional landlords pay little if any tax. Another significant difference is that they cater almost exclusively for the accommodation needs of Dublin’s globalised multinational tech giants.

Fine Gael’s housing policy is increasingly characterised by a polite deference to socialist platitudes on the one hand and an unbridled enthusiasm for globalism on the other. The inconvenient truth may be that it is globalism that is driving much of Fine Gael’s housing crisis. The function of Eoghan Murphy, our hapless Minister for Housing, appears to be to put a respectable PR spin on these two conflicting policy directions.

The real victims of the housing crisis are Generation Rent, the people who have effectively been locked out of the ambition of ever owning their own home. And the real victims of Generation Rent are those who are means tested out of taxpayer funded schemes such as social housing and HAP.

With a reducing supply of rental accommodation (caused in part by government policy), these are the people who  also end up having to compete in the rental market with many of the housing initiatives which they are forced to fund through their taxes.

Ireland’s housing crisis is, above all else, a Fine Gael crisis. Sticking rigidly to an agreed narrative on that same housing crisis may have served Ireland’s power elites well – the same cannot be said for the Irish people.