The Housing Crisis and the Economy

While homelessness is the worst side of the collapse of our housing market and the ultimate tragedy for those many families with children forced to live in hotel rooms, many others are living in precarious situations, in housing that they cannot afford.

In addition to this acute social issue, we should also remember that the adequate supply of housing is also a fundamental economic issue, which should provide additional impetus to action to tackling it. Companies today are finding it a real problem to get back into growth if they need to attract people with specific skills from another part of Ireland, or indeed from overseas, because of the lack of affordable housing.

In addition to that basic bottleneck, it is also the case that the construction industry is itself an important economic driver, and the health of our property market also has a huge bearing on the health of our financial system. Therefore it is in all our interests that action is taken to get the construction industry and property market back into some degree of normal functioning. It was wrong for Government to do nothing when the boom went out of control, and it is equally wrong now not to do more when the industry is still on the floor.

We need an overall strategy to deal with our housing crisis, both for social reasons and for economic  reasons.

We also know from Threshold's clients - of which I am Chair - that many many young people are paying more in rent than they would for a mortgage on the same property, which is the sign of a truly dysfunctional property market. This is because they cannot afford the cost of a deposit. This cost inevitably puts upward pressure on salary demands, adding to the costs of our economic activity.

We need a healthy rented housing market, with long term renting becoming a real option for both families and single people. To achieve that we need regulations on rent increases, and more long-term security for renters, including protection against rented houses going into receivership. The tax code for landlords should also be made fair, with the costs to a landlord allowed to be set off against income in calculating tax.

We need Government - probably through NAMA in the first instance - to play a proactive role in providing capital for house building, and we need to remove any unnecessary obstacles in the planning system - such as deadlock between authorities or agencies unable to agree - that slow down progress. A campaign to attract back construction skills to the country, should be supported by Government, working with the industry.

We also need action to make it easier for people to buy their own homes. The cost of building land needs to be controlled, and we have had a road map for doing this available since the 1970s, in the form of the Kenny Report. The cost of construction also needs to be kept under constant review, which is another reason to systematically encourage skills construction workers to come back, and to restore all of the apprenticeship and other programmes that were cut after the crash. And where necessary, a scheme of grants for first time buyers, to help make deposits affordable, should also be provided.

This whole programme of action is absolutely urgent at this stage, and should be at the top of the list of whatever government comes out of the current impasse. This will be the top of my list of priorities if elected to the Seanad next week for the NUI panel.