In November Leo Varadkar got his knuckles rapped for playing down the level of homelessness in Ireland. While accepting that it was an increasing problem, he stated that Ireland’s figures are low by international standards. The Simon Community, a charity, disputed the claim, stating that other countries use broader definitions of homelessness.
A report published in 2017 by the OECD backs up Mr Varadkar’s claims; Ireland’s homeless are 0.08 percent of the total population. The only OECD countries with lower numbers are Croatia, Lithuania, Mexico, Portugal, Spain, and most impressively Japan where apparently we are supposed to believe that there is no homelessness at all. The report has information missing for twelve countries, and there are indeed differences in the methods used to count the homeless, so the report is not an apples-to-apples comparison. Japan’s figures only count rough sleepers and not those in emergency accommodation, whereas Ireland’s figures do include those in shelters.
Nonetheless homelessness is a sensitive subject in a country like Ireland where memories of starving families being evicted from their cottages are burned into the cultural memory, and where close-knit communities find it abhorrent that anyone should not have a roof over their head.
Mr Varadkar has defended the government’s Rebuilding Ireland action plan that was launched under Enda Kenny’s leadership in July 2016. This tackles the problem on various fronts including supplying funding for social housing, acquiring vacant homes for social housing, increasing land supply including low cost state lands, allowing plans for large developments to be submitted directly to An Bord Pleanála to streamline the planning process, and many more measures.
The 2018 budget allocated €1.9 billion for social housing, an increase of 46 percent on the previous year. The aim is to get 25,000 people off waiting lists, but only 3,800 new homes will be built by local authorities. The remainder will be rented from private landlords using a Housing Assistance Payment (HAP) where rent is paid to the landlords directly by the state. Critics have been quick to point out that reliance on the private sector to fix the housing problem has not worked in the past and is unlikely to do so in the future. Eoghan Murphy, the Minister for Housing, has acknowledged that there is a heavy dependence on the private sector and it needs to be “rebalanced.”
Progress in increasing the housing supply has been frustratingly anemic. In 2015, Over 1000 social homes were supposed to be built by local authorities; a pathetic 75 were actually built. 8,000 families were supposed to be housed by HAP; 5,680 were actually housed. 2016 saw mixed results. There were supposed to be 1,500 new social housing units; 600 were built. An almost doubling of HAP funding was supposed to house 10,000 families; over 12,000 new HAP rentals were recorded. However a Public Private Partnership scheme was supposed to have 500 homes under construction; the actual figure was zero.
It is tempting to lambast the government’s lack of progress, but solving the housing shortage is not an overnight job. Actions taken now can take months or years to take effect. There is no one simple answer and no single silver bullet solution, hence the length of the Rebuilding Ireland plan and the multitude of measures laid out in it.
Other countries have many lessons to offer. New Zealand’s parliament recently passed a law banning the sale of homes to foreigners to prevent foreign speculators from getting into a bidding war that drives up prices. The impact of this in New Zealand remains to be seen and it is said that foreign buyers only affect a small part of the market, 2 to 3 percent of purchases according to various sources. However such a measure in Ireland would probably have a bigger effect. According to the Central Bank foreign institutional investors have played a bigger role in cash purchases in recent years, and cash buyers have risen to account for half of all sales, limiting the Central Bank’s ability to control the market. It would be interesting to see the effect of shutting out foreign speculators from the market.
Germany offers the lesson of locally-managed house price controls and a steady release of land for development based on population growth. This resulted in a steady decline in home prices in real terms over decades, although low interest rates in the Eurozone have helped drive prices up in the last seven years. Nonetheless, a hefty speculation tax continues to discourage people from buying homes for the sole purpose of flipping at a profit, and the German financial regulator has been given various powers such as the ability to step in and tighten up lending requirements to dampen the market if it gets out of control.
Assuming no more Garda scandals jeopardize Fianna Fail’s confidence-and-supply agreement, another Irish general election is not due until 2021. The government may be under pressure to produce results on the homeless issue, but it has time for its policies to take effect. If Mr Varadkar’s leadership fails to make progress in the next three years then Fine Gael will not deserve to lead the next government.