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The dysfunctional housing market has major implications for the Irish economy, our citizens’ wellbeing, the labour market, inward and domestic investment.
We’ve had many government interventions but none have succeeded in taking the housing crisis off the front pages for more than a few days. We continue to have yet another report or another retired civil servant heading up a new quango.
The issue is having a major psychological impact, affecting people’s ability to be productive citizens. It will undoubtedly lead to more tragic homeless deaths, and more families sleeping in Garda stations.
Some €39 million was spent in 2017 on accommodating homeless families in hotels and B&Bs in Dublin. Another €9.9 million was spent on other private emergency accommodation. Almost €50 million in one year. Assuming Local Authorities outside Dublin are spending a similar amount that’s likely to be €100m for short-term temporary fixes.
If this €100 million every year was to be used to pay back interest on a housing bond, the state could borrow €8- €10 billion, assuming a 1pc interest rate, to invest in long term solutions. Ireland can borrow money at record low levels. This would build 30-40,000 housing units at an average cost of €250,000 each.
Whether or not the roof over your head is owned by you, mortgaged to the bank, rented from a landlord or the state itself, it amounts to a place called ‘home’, which temporary accommodation never can do.
Drivers of demand such as net migration, obsolescence, household formation and a strong economy mean that demand for accommodation will continue to rise. Increased supply is the only way to solve the housing affordability problem.
Policy targets and statements of intent are at nought unless the intended output is actually achieved.
Here I propose a 50 point plan for solving our housing crisis. If half of these were implemented we’d be well on our way to doing so.
Con Nagle has a Master’s Degree in Economics, and 25 years’ experience buying, selling and letting new and second hand residential properties.
He is also the author of ‘Selling your Home’, and a director of Global Properties Ltd, estate agents in Cork, and member of IPAV, TEGoVA and the SCSI.
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