The Irish Times view on providing affordable housing: a tricky policy challenge

There is no doubt that the new national housing plan due for publication shortly will involve a bigger role for the State. The scale of the housing crisis means this is inevitable, but there are potential pitfalls, too, in subsidising the purchase of housing.

The one most discussed in the run up to the publication of the new Affordable Housing Bill was the danger that the shared-equity scheme will, at a time of high demand and low supply, push up prices.Managing local authority affordable housing stock will also bring challenges, particularly if the overall market were to see a significant fall in prices.

The arrival on the market in recent days of an affordable house built by co-operative Ó Cualann Cohousing Alliance in Ballymun just over three years ago highlights another hazard; that there is nothing to prevent a house, sold at a discount to a purchaser the State has determined needs a leg-up financially, from being sold on to a private buyer at a much higher prices.

The resale arrangements mean the State will get its money back if the property is sold before the charge on the stake it invested, ie the percentage discount the affordable buyer got, expires. In fact the State may, in many circumstances, make a profit because as the value of the property increases, so does the value of its percentage stake.

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However it does raise other policy questions. These homes are intended for people not earning enough to buy a market value house, and to contribute to a long-term build up of stock in this area. However they could ultimately end up in the hands of those who would never quality for such a scheme because of their high income. Equally while the affordable purchaser can’t rent out the home, there is nothing to stop the future private buyer from becoming a landlord.

The building of housing to be rented out to tenants via cost-rental schemes or as social housing offers a clearer pathway in terms of the building up of a stock of housing for the long-term. The real solution to providing affordable housing , meanwhile, for the group who do not qualify for social housing but struggle to buy, is to have a market which can deliver through normal channels at a reasonable price.Unfortunately, at present, we are a long way from that goal.