Why aren’t we grasping the opportunity to invest our spare billions in housing?

Rory Hearne: This bending to privileged interests is a profound act of generational injustice

Just pause and think. What could €56 billion do? It could solve the housing crisis, provide major new public transport across the country, fund major health and climate infrastructure. It could fund the building of a quarter of a million homes, enough homes to end homelessness, eliminate the social housing waiting lists, and provide a substantial proportion of Generation Locked Out with affordable housing. Imagine we had an additional €56 billion available to us as a country that we hadn’t expected?

Oh, if only, one can but dream. But we do – in the massive “windfall” budget surpluses over the four years 2023 to 2026. In 2024, the budget surplus (ie, the money left over after all spending is allocated) will be just under €12 billion. Yet instead of allocating the budget surplus to significantly increasing investment in critical economic and social infrastructure like housing, transport, climate and health the Government is instead putting it into “future funds” and paying down the national debt.

In the coming Budget 2024 the Government will allocate just 2 per cent of the budget surplus to additional spending on capital infrastructure – just €250 million. Inflation costs essentially means that will be swallowed up covering rising costs to keep existing projects going, not doing additional things.

It is hard to understand why there isn’t general uproar and societal public outcry around this decision not to invest the budget surpluses now and instead put them into funds that are claimed will “provide for the future”. The decision that is in the process of being made, and likely to be passed in October’s budget, will enact a grave generational injustice and bad economic policy.


We have a €10 billion forecast available to us this year that we could be spending but we are not. We are deciding to leave record levels of homelessness, a generation locked out of a home – as shown again in the recent census – derelict buildings strewn across our country, rising child poverty, the chronic lack of public transport and so on.

The decision will compound a lost decade of economic and housing policy decisions that put the interests of the banks, older wealthier cohorts, multiple property owners and investors over the needs of younger generations and wider society. We saw it in Nama, the austerity decimation of public housing building, allowing rents and house prices to rise year after year, to the failure to seriously act on climate. Generation Rent has been ignored, made pay the price of economic “recovery”.

But the decision not to invest the surplus immediately in building public homes on a major scale, tackling vacancy and dereliction, expanding public transport, investing in radical climate action will be an even more profound act of generational injustice in terms of the scale of funding and potential available that is being spurned in favour of conservative timidity and bending to privileged interests and market ideology.

The argument that putting the funding aside for the future – in terms of pensions and capital investment in the case of economic shock – might have some logic if we had already in place all the essential social and economic infrastructure. But we are in a state of chronic deficits across the economy.

People ask, if it is logical to invest this now why isn’t it being done? Surely even crude politics would mean investing more would gain more political support? But the neoliberal straight jacket of fiscal conservatism – the messianic belief that the market is best and the state’s role should be restricted – remains firmly in place in Ireland among Government, senior civil servants and mainstream economists.

The root causes of our current infrastructure deficits are not population growth; they result from this neoliberal economic outlook pursued for 40 years that constrained and privatised State expenditure reaching its zenith in the disproportionate cutting of capital investment in the austerity period.

Ultimately it is about ideology and interests. The Government, the Irish State, the Irish Fiscal Advisory Council (Ifac), Ibec and most economics advisers and economic commentators who dominate the media commentary (who are mainly economists from banks, stock brokers, financial advisers and broadly “centre-right” pro-market economists) do not ideologically believe the State should play a major role in, for example, housing. They believe that the market is best. They never argue for investing significantly more in public housing or public transport because that would require a greater role for the State, less market, and less profit for the major private interests who dominate those markets.

The argument is being made by Government and Ifac that investing this money now would have inflationary impacts in a constrained economy. But this is not correct.

It is based on the assumption that you are just pouring money into the same market, using the same approaches, with no innovation, and it also fails to see that part of the causes of inflation are the very infrastructure deficits themselves. Unless you address infrastructure deficits inflation will continue. Providing infrastructure investment through the public sector can actually reduce inflation by reducing rents, prices costs. There are many ways to invest this surplus that would actually have an anti-inflationary impact. For example, as I argued here recently, investing €2 billion of the surplus in forming a national sustainable home-building agency would directly employ construction workers and directly build homes, thus expanding overall capacity within the system.

Another example is where we are currently spending almost €1 billion a year on the Housing Assistance Payment (HAP) scheme to private landlords to house 60,000 social housing tenants. This is a huge loss of public money and tenants have to pay higher rents than regular social housing. Allocating just €2 billion a year could buy up, within three years, 30,000 private rental homes (landlords say they want to sell – so why not buy them?) Within a few years this would increase the public housing stock, lift HAP tenants out of poverty, and free up €500 million per year in current spending – allowing it to be allocated to build additional public housing. A win-win.

Allocating a further €2 billion a year to local authorities and local community trusts to buy up vacant and derelict property would bring into use over 10,000 derelict homes per year. This would bring current unused stock into use – adding to supply of homes – thus reducing prices. That would be anti-inflationary.

Similarly, investing an additional €2 billion in expanding public transport on a serious level to and within regional and rural towns and cities would open up huge potential for new housing, again bringing additional capacity into the economy.

Providing widespread public affordable housing and cheap public transport will ease the cost-of-living crisis permanently and provide real wellbeing for Generation Locked Out and wider society.

Are we so blinded by conservative thinking that we cannot see that these billions represent the real possibility of meeting the short and long term needs of our society on a permanent basis? Why are we not grasping this?

Rory Hearne is assistant professor in social policy at Maynooth University