I wrote here some time ago about the issue of private landlords exiting the market. I raised the question as to whether this really mattered, in so far as every house being sold by a private landlord would either end up in the hands of an owner-occupier or in the hands of another private landlord.
And the answer to that question is not as simple as some might think. There is a demand for rental accommodation, as distinct from owner-occupation. There are many, many people who, for a variety of reasons, cannot or do not want to become owner-occupiers.
To take some simple examples, there are highly mobile employees who want to live in Ireland temporarily. There are people who want to take up employment temporarily away from their family homes, such as junior doctors and nurses. There are technicians and skilled tradesmen and women who need to live in a particular area for the duration of a project. There are visiting academics. Many are single; some have families.
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There are recently qualified younger people who do not want to tie themselves to a mortgage and who prefer to move out of their parents’ homes to share houses with other similar people for a number of years. There are many people whose circumstances have changed for a variety of reasons, including family break-ups and parental death. There are immigrant construction workers and bus drivers whose families live elsewhere in Europe or further afield. There are care workers supporting families in the Philippines. There are students, apprentices and trainees.
I’m renting the home of my emigrant brother. What are the tax implications if he signs it over to me?
None of these people can realistically expect that the State can provide them with instant social housing in the form of a single permanent home wherever they want to live. In an era of population growth and immigration, there will always be a permanent need for private rented accommodation, no matter how many new houses and homes are provided for long-term tenant or owner-occupation by the State through social housing, affordable housing development or by private home developments.
Home-building and home provision is simply not increasing at a rate that will satisfy effective demand
It does matter whether we have an effective private rental sector, and it does matter whether that sector is expanding or contracting.
However, there are also many, many people, including families, who are trapped in the private rental sector because they cannot obtain social or affordable housing and cannot purchase homes due to spiralling prices. They are trapped in a world of ever-increasing rents in a sector where small private landlords will no longer invest because of a series of legislative and policy blunders.
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Our biggest problem is that a single government department has failed horribly in its primary area of responsibility. Its name may have changed – currently it’s the Department of Housing, Local Government and Heritage – but the department based in the Custom House in Dublin has utterly failed in its home-building and provision functions on almost every front.
As the department in charge of local government, it is supposed to oversee the functions of local councils both as housing authorities under the Housing Acts and as planning authorities under the Planning and Development Acts.
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Far from providing homes as its priority, the department seeks as a priority to rigidly control local authorities in acquiring land and buildings, designing social housing, enforcing wholly outdated and counterproductive building standards, and preventing the zoning of residential development land. Through its Office of the Planning Regulator agency, it even requires local authorities such as Dún Laoghaire-Rathdown County Council to de-zone development land, thereby increasing the costs of development.
The Irish State relied on the private rental sector to make up for its massive abdications and misadventures in housing policies for decades
It has meanwhile failed in many whack-a-mole initiatives, such as its strategic housing development and shared accommodation experiments. Its Land Development Agency has been ridiculously slow and limited in its efforts. The department has effectively stopped compulsory purchase of unused or under-used development land. There is no reason in law, statutory or constitutional, why planning and housing authorities should not use compulsory purchase, site assembly and development leasing to ensure major urban renewal in obsolete urban and suburban locations.
While home completions last year reached record levels, they are due to decline this year. Why? Home-building and home provision is simply not increasing at a rate that will satisfy effective demand. That failure means ever-higher rents and higher house prices.
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We need to approach housing policy with effective and reasoned proposals. The Irish State relied on the private rental sector to make up for its massive abdications and misadventures in housing policies for decades. Now it is turning its guns on private landlords as the problem. Tax breaks won’t halt the damage that has been done to lessors of private accommodation by outlawing even four-year leases and substituting permanent tenancies of indefinite duration coupled with tenant-substitution rights, rent freezes and taxes.
The War of Independence witnessed the physical destruction of the Custom House. But what we need now is the political end of the present Custom House regime. We need fundamental change.