Government plans to lease housing from private market again, despite warnings

By Dan O’Rourke

A recent report by corporate consultancy firm EY Economic Advisory for Euroconstruct has warned that the government is set to fall short of housing targets. The report also highlights that a key reason for the failure is the government’s dependency on the private sector to build houses, which effectively lines the pockets of wealthy developers, while providing little or no benefit to working people.

This comes as no surprise to most — an expensive consultancy report isn’t needed to understand the decades-long failure of successive governments. A key reason the housing crisis has continued for so long is because the state’s attempts to deal with the problem, whether through the HAP scheme or social housing projects, have all focused on funneling public money into the bank accounts of landlords and construction barrons.

More of the same 

Although Taoiseach Micheal Martin has pledged to end this failed policy, the state has just launched a €450 million fund to lease 1,000 units from developers, landlords, and property investors. The plan would allow developers to maintain ownership of the properties over the course of 25 years. If the lease goes over 30 years, a clause in the tender allows the state to buy the property at slightly below market rates. Essentially, this is another massive transfer of public wealth to the private for-profit construction industry.

Over the years, and in recent weeks, housing groups, economists, charities, and think tanks have all warned against this policy. Eurostat, an EU agency which monitors and reports on government finances, said the practice of leasing provided no “substantial economic benefits” to the local authorities and significantly benefited private investors who “enjoy most of the rewards”, with the state owning nothing at the end of the deal.

Another consistent flaw in the Irish state’s approach to housing is a failure to provide adequate amenities, roads, schools, water, electricity etc. Speaking to reporters, Annette Hughes, director of EY Economic Advisory, said “…there are constraints on the supply side in converting these permissions to completed units, such as a lack of services and other infrastructure to enable development.” 

Housing should not be a commodity 

This is a result of FF/FF/G’s neoliberal outlook, which views a house as a commodity to be built for the market, rather than a home to be built for human use. The needs of the market take priority, and so basic human and amenities and necessities are not considered.

The state has also come under criticism in the EY report to account for rising inflation, and provide speedy planning permission. 

The government’s ‘Housing for All’ plan has set targets of 29,000 and 33,450 for 2023 and 2024, respectively. However, the EY report has predicted a more likely outcome of 27,000 in 2023 and 32,000 in 2024. This is an overall shortfall of 3,450 houses. 

What we need

Housing is a basic necessity and human right, and just like health, education, transport and other vital public services, it should not be commodified for the benefit of a minority of leeches like landlords and developers.

The neoliberal ideology of the “hidden hand of the market” has clearly failed, and the state’s building projects have become a nosebag of cash for rich property barrons. 

To counter this failed approach, and provide housing on the basis of need not profit, we need a socialist programme for housing, beginning with the understanding that the rules of the capitalist system must be ripped up. 

Together, we must build a ground-up movement to lower and freeze rents, seize the vacant land and properties of profiteers, expropriate vulture fund housing developments, bring major construction firms into democratic public ownership, and kick start a major construction programme to build public homes and resolve the crisis once and for all.

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