The Taoiseach is correct when he says that changes are needed to increase the pipeline of housing and apartment supply. This, at least, is welcome, though the Government will realise that this is easier said than done. Everywhere it looks it will see difficult trade-offs and – and as evident from the reaction of the Opposition in recent days – political danger. Nonetheless, the poor outcome for housing completions in 2024 carries the message that change is needed. And if the Government wants to see results during its time in office, it needs to move quickly enough.
Nowhere are the pressures in housing more obvious than in the rental market. Micheál Martin’s recent comments that the rent pressure zone (RPZ) legislation needs to be reconsidered is correct – in fact, the Housing Agency was already engaged in this task. The more difficult issue is what should replace it and how the balance is struck between returns to landlords and the vital protection of tenants. A free-for-all is not an option.
The RPZ system has led to a two tier market, protecting those already in tenancies but disadvantaging those looking for somewhere to rent, because of its impact on supply. The Commission on Housing proposed one possible option for a new system of rental controls and there may be different options worth considering too.
Other issues need to be examined, as well, including the delays and uncertainty caused by the planning system. The new planning act, when implemented, may help here, but more is needed too, for example aligning planning guidelines to clearly support development, particularly of so-called brownfield sites – former industrial or retail sites close to city and town centres.
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There are also suggestions of the return of some form of targeted tax incentives to encourage development. While there may be ideas worth considering here, great care is needed that any such reliefs deliver for the public.
Underlying this are structural and economic problems which have reduced private sector spending on new apartments. The debate here tends to divide between those who say " vulture funds” should have no place in the market and those who support private investment.
Public and private investment will both be needed to increase housing supply. Looking at apartments, there is space for build-to-rent developments, but also the need for build to-buy projects and social and cost rental properties.
All will require a different level of public sector involvement. In some areas the State will – in on form or another – be the prime mover, in others it will be providing supports to developers or renters. The key thing is to use State money wisely to get the kind of developments Ireland needs and, in the social and affordable areas, build up a stock of housing for the future.
