Local authorities need to be empowered to address housing crisis, conference hears

The public sector can play a major part in addressing the housing crisis but local authorities need to be empowered to address the issue, a union-organised conference was told on Friday.

The average cost of a house built by local councils in 2022 was under €300,000, senior lecturer and housing policy analyst at Technological University Dublin, Dr Lorcan Sirr, told the Irish Congress of Trade Unions (Ictu) event in Dublin.

The figures, he suggested, pointed to the ability of the public sector to deliver affordable housing even as Government policy tended to rely on more expensive options.

“I got an interesting document the other day,” Dr Sirr told an audience mainly made up of senior union officials, “which shows the average cost of the houses built by councils. For a two-bedroom house it was €250,000, for a three-bedroom it was €270,000, and [for] a four-bed it was €290,000.

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“That would make you think that if councils are doing that then the private sector are doing it too.

“So when you see houses for €600,000, €700,000, €800,000, €900,000, bear in mind that we can still build houses quite affordably. Despite the inflation we’ve obviously had, we can still build houses quite affordably. But we’re losing control of doing it by handing it out to everybody else to do heavy-lifting for us.”

He later confirmed the figures quoted were for rural builds, which tended to cost less than those in urban areas, where the average for a three-bedroom house in the second quarter of this year, for instance, was put at €318,000.

Asked how progress might be made on the issue, Dr Sirr suggested that local authorities, many of which are building very few social housing units themselves at present, need to be given the financial backing and administrative flexibility required to provide substantial numbers of houses.

“At the moment, there’s a four-stage process that local authorities have to go through to get approval, it can take years. That system needs to go. You need to redeploy the power back to local councils, allow local them to borrow,” he said.

“We need to resource our local authorities,” he added, citing the example of planning departments. “We need 540 planners for councils across the country and that wasn’t mentioned once in the budget.”

Dr Sirr said current polices had resulted in a substantial growth in overall completions but that the number of privately built new homes actually being sold on the open market has remained stagnant at about 7,000 in recent years.

“We’re building the same amount of houses for sale every year,” he said. “That’s a problem. If you wonder why your niece or nephew can’t find somewhere to buy, it’s because demand is accumulating every year, but the supply of new housing for sale isn’t increasing.”

Associate professor Aidan Regan of University College Dublin, meanwhile, said political parties were caught between the interests of voters who would be happy to see prices fall, most obviously those who are trying to buy, and those who have recently taken out a large mortgage to buy and therefore see themselves as having an interest in prices remaining high.

Then, he said, there is the matter of the financial system. “I think political parties that are very front and centre about saying ‘we want prices to fall, we want to engineer a house price fall’ are extremely reluctant to do it. Not just because they might lose votes, but because it would send a shock into the banking system. The entire financial system is structurally dependent on prices going up. So it’s a systemic effect. And that’s a really difficult thing for any countermovement to tackle. But it suggests that we need a structural reset.”

Ictu general secretary Owen Reidy said the organisation wants to see a semi-State established to tackle the problem. “The Government keeps talking about the market and supply,” he said. “But for us it’s about affordability, security and stability. We need to break the stranglehold of the private sector. Why wouldn’t you have a State-led approach here. We electrified the State in what were probably more difficult times than these.”