If the economist David McWilliams were minister for housing he'd introduce "a site-value tax in the morning", he told the Irish Times political correspondent Jennifer Bray at the Summer Nights festival on Monday evening.
“You’d take lots and lots of flak,” McWilliams conceded, “but you know being popular isn’t what it’s all about.
“If you are sitting on a piece of land that you do not use, that is a waste. So, consequently, what we have to do is we have to make it expensive to do that, and therefore what we do is what’s called a site-value tax, and we tax the site value and not the actual house,” he explained.
Probably the most criminal, architectural, urban blight that we have is the fact that we have so many derelict properties. We've derelict properties when we have a housing crisis
“I can tell you there hasn’t been an intervention in the housing market that hasn’t caused prices to rise in my lifetime,” the Irish Times columnist said, adding that he believes this is down to inertia. “It’s just this is the way we’ve been doing things for a while.
“Land has been hoarded by landowners, and the reason they hoard land is that we have locked ourselves into a silly situation whereby, if you get planning permission, it doesn’t have an immediate sell-by date.
“You’ve got to have a use-it-or-lose-it planning permission,” McWilliams said, which would put an end to hoarding and “release lots and lots of land that’s now being planned into supply.
“Probably the most criminal, architectural, urban blight that we have is the fact that we have so many derelict properties. We’ve derelict properties when we have a housing crisis.” This, McWilliams said, is because there are no rewards or penalties for good and bad behaviour.
“Good behaviour is taking an old building and putting it back into use. Bad behaviour is taking a roof off a building, as we see all the time in Dublin and all around the country.”
McWilliams argued that we need to penalise inappropriate owners and “reward appropriate owners that bring things into use”.
McWilliams drew a comparison between the Covid-19 crisis and how the country “galvanised itself into an emergency footing in a very short period of time ... I think that housing should be declared a national emergency and everybody should try to do their part in order to fix it.”
You pool your resources with the objective of creating a co-op that produces housing at the least price. The point is it's not based on land prices, so it stops land speculation, and that's hugely important
Developers and builders should be “brought into the tent. You talk to co-operative people. You talk to the banking sector and you say, ‘Listen, we need to do this. We have a target and we’re going to put the State behind it.’”
Co-operatives offer another potential solution to the housing crisis, McWilliams explained. “Ó Cualann [housing development] is a co-operative ... It’s not any great mystery. You pool your resources with the objective of creating a co-op that produces housing at the least price.” (A house with the co-operative, Jennifer Bray noted, could cost as little as €220,000.)
“And then what you also do, because everyone’s part of a co-operative, there’s actually quite a significant in-built community building, because everyone’s part of something. And if you want to leave the co-op and you want to move on, you leave the co-op and you sell your share of the co-op. The point is it’s not based on land prices, so it stops land speculation, and that’s hugely important”.
The Irish Times Summer Nights festival, sponsored by Peugeot, is a series of online talks featuring Irish Times journalists in conversation with local and international authorities. It runs until Thursday, July 1st.
Still to come in the festival are: Mary Lou McDonald in conversation with Kathy Sheridan; Chris de Burgh talking to Paul Howard; Maureen Dowd interviewed by Hugh Linehan; Gordon Brown and Roddy Doyle talking to Fintan O'Toole; Mona Eltahawy with Róisín Ingle; and Jo Spain talking to Bernice Harrison. A ticket covering all events costs €50, or €25 for Irish Times subscribers.
