Extensive levels of Government subsidy would be needed for Irish home ownership rates to return to late 20th-century levels, a Housing Agency conference has heard.
Up to the 1980s, successive governments pursued a policy of "socialised home ownership" with generous and universally available government grants, tax reliefs and subsidies, Michelle Norris, head of the UCD School of Social Policy, told the conference on housing tenure in Dublin Castle on Tuesday .
“Government supports were so extensive that home ownership was effectively ‘socialised’,” Prof Norris said. “This system, supported ‘super-normal’ levels of home ownership.”
Subsidies introduced in the early years of the 20th century to help tenant farmers buy out landlords’ estates meant that, by 1922, 58 per cent of all farmland had been bought by tenants.
While the new State was “fiscally conservative,” the policy of socialised home ownership continued, Prof Norris said.
The 1923 Land Act funded the remaining tenant farmers to buy their holdings. In Dublin, suburbs such as Marino were built by the State under the “Million Pound Scheme”. Further legislation in the 1920s and 1930s increased home purchase grants. By 1946, more than half of all homes were owner-occupied.
Highest subsidies
“By the mid-1950s, State housing subsidies in Ireland were the highest in western Europe, both in terms of the proportion of housing capital derived from the exchequer at 75 per cent, and of new dwellings which received public subsidies at 97 per cent,” Prof Norris described.
In the early 1960s, almost 30 per cent of the cost of a standard suburban house could be recouped from government by the purchaser.
Home ownership had risen to 80 per cent by 1991, making the Irish one of the biggest property owners in Europe. However, the latest figures from the Central Statistics Office show that home ownership rates dipped below 70 per cent at the end of 2016, a rate last seen in the late 1960s.
By 1988 the socialised ownership system had been “abolished” with the removal of home buyer grants, and the near total withdrawal of local authorities from the mortgage market.
“Tax subsidies for building societies were withdrawn and mortgage lending deregulated. After this, the banks took over as the principal mortgage lenders” Prof Norris said.“Is it possible to increase home ownership to the levels of the past? Probably not without the level of subsidy provided in the past.”
However, she added: “There’s a lot more competition for public spending now than in the 1950s.”
