With a by-election coming up in the Dublin Bay South constituency shortly (see our coverage on Pgs. 12-14) this is the perfect opportunity to demand that the housing crisis, a festering sore in the country for too long, is finally addressed. According to the Construction Industry Federation in 2019, something like 95% of new apartments are sold to Real Estate Investment Funds, better known as cuckoo funds, who then lease them back to local authorities for social and affordable housing, at around €2,000 a month per apartment. This is an expensive and idiotic way to address social housing needs; it would make far more sense for these authorities just to build the houses in the first place themselves. Following Independence when this fledgling state was strapped for cash, and emigration rampant, we could still afford to build cottages and homes for our citizens. Why can’t we do that now?
Further, the bulk buying of estates excludes first-time buyers from the market, for with ever-spiralling rents and little security of tenure, they can never aspire to owning their own home as they simply cannot compete with these investments funds. The government’s latest response to this is to introduce a stamp duty which they say will deter investment funds from monopolising the market. However, by excluding apartments it renders it unworkable and makes the whole thing a fiasco. What they need to do is to build homes.
Governments have choices. There is the Vienna model, which we looked at in this paper some time ago, and other options too. In 2018, New Zealand, in an effort to curb inflation, brought in a law which prohibits non-residents from buying property; while Germany has banned these REIFs from buying residential property. Not only has successive governments here eschewed such options, but they have incentivised these vulture funds with all kinds of tax breaks. Their latest attempt at a stamp duty smacks of a sticking plaster solution. It’s time our representatives got out of their cognitive strait jacket of seeing only one solution.
The current situation is simply not good enough, and cannot be tolerated any longer. We must forcibly demand the government do the following immediately: scrap tax breaks to these investment funds, build public homes, legislate for fixed and affordable rents, and put the right of a home in the Constitution. Now is the time to send a message to our TDs, and to all the candidates seeking election in this by-election that change is needed. The time has to be now!
