I FIRST BECAME involved in housing because we were in a housing crisis. I wanted a home of my own and couldn’t afford it. I was sick of living in rented accommodation and being at the mercy of irresponsible landlords and sharing with strangers. Sound familiar?
It probably does, but this particular housing crisis, that I am referring to was all through the 1980s and lasted well into the 2000s.
To be fair, I had some good landlords and I met some of my best friends through sharing accommodation with them. However, I also had my share of dodgy cash-in-hand landlords, nasty flats, and undesirable co-inhabitants.
As the old saying goes “if you want to know me come live with me”. By the late 1990s I had moved 14 times in as many years and I had had enough. It was cheaper to pay a mortgage than rent at the time, but I didn’t have enough of a deposit and house prices were rising very fast. Sound familiar?
I got involved in property development through my work in the community sector and my involvement was in the social and affordable housing sector.
Public housing and housing support is a critical part of any housing market, and it meets the needs of people who cannot afford to secure homes for themselves and their families. This takes the pressure off the private market and frees up homes to rent and buy.
The State has built thousands of social homes since its inception and supported thousands of people to build and buy their own, through various schemes, and it is currently spending billions on delivering on its “Housing for All” programme, so why are we constantly in a housing crisis?
There are many excellent articles in the public domain that outline the history of housing in Ireland. Professor Michelle Norris, a director of the Geary Institute for Public Policy and Professor of Social Policy in UCD has written and collaborated extensively on the subject and her work provides a scholarly context for the subject for anyone interested in exploring the how’s and whys.
As to why it is so difficult to get past crisis stage, I am basing my opinion on 25 years’ experience of delivering social and affordable homes.
Housing is a complex system with many moving parts such as how it is funded, how it is regulated and controlled, where materials come from, who is willing to take the risk and borrow money to build them, where is the labour coming from and now added to that is an imperative to improve the circular economy in construction and reduce C02 emissions.
If something impacts on one part of the system such as material shortages – as happened as a result of the Covid-19 pandemic – then that not only has the effect of increasing costs, but it also slows down the entire system and delays the building and delivery of new homes.
When there is less of something it makes it more valuable, so prices are pushed up even further and the system enters an even more vicious cycle of price increases.
Like any system, if you tinker with parts of it without considering the effect it will have on the overall then you are bound to have unintended outcomes.
If you let someone who had never worked on a car in their lives mess with your car engine you wouldn’t be overly surprised if your car started having engine problems or simply ground to a halt now would you?
So why are surprised when we change the rules of the property development system, often in reaction to a populist whim, that everything slows down until the impacts of the change get fully understood and integrated into the system?
Not all change is bad though.
For example, we introduced new health and safety laws in 2007 and while the intention and eventual outcome of this change was to make the industry a much safer place to work, it took some time for the new ways of working to bed in and for the value in savings to balance the cost of this new way of working.
Now not only does the industry benefit from the saving of lives and hugely reduced risk of injury to the people who work in it, but it benefits from more people being willing to work on sites and a better gender balance.
Yes, I am aware we still have a long way to go on the gender front but having started working on sites in the late 1990s, I can confidently state we have come a long way.
Property development is a slow process and typical time from initial conversation to handover takes about five years. That is why having a long-term plan is so important. A plan allows the system to develop and mature.
When we make any kind of change to the system, particularly one that alters the cost of delivering a home, it will have a short-term effect of slowing the system down while developers, contractors, funders (private or state) figure out the impact of the changes and processes are put in place to manage that effect.
Look at the impact interest rate and supply chain increases have had on the build-to-rent sector. And while some commentators may be delighted to see the so-called vulture funds and institutional investors leave the market, the overall effect is to slow down supply, and therefore drive up prices, especially in the apartment market.
Many commentators note the need for a balance between private and public money to fund housing and greater cooperation between the public and private sector to deliver homes.
Mistakes have been made in the past where there has been an overreliance on the private sector to deliver all housing and the State stopped delivering any. When the economic crash of the 2000s hit us then all property development stopped, and it has taken years to get that system up and running again.
However, some seem to think that private investment and or private developers are the devil’s incarnate and the state is “selling out” by even engaging with them.
I am not an economist but if we want to build at a minimum another 200,000 homes between now and 2030 then we will need €70 billion to pay for them. That will cost every man, woman, and child in the state today €14,000 each in taxes on top of paying for health, education and all other State-funded programmes.
If there are private investors willing to put money into the pot, why on earth would we say no? Surely, we are capable of putting rules in place that protect the citizen and State from profiteering while at the same time still creating an attractive investment proposition?
Changes that will come with the new planning bill are welcome and necessary but it has to be recognised that the introduction of these to a process which is already as lengthy and complex as property development will cause delays and, in all likelihood, additional costs.
Until we are prepared to stick with a plan for a period of time and understand that every new tweak we make, whether it be in planning, regulation or funding, will have an impact on cost and efficiency of the delivery of new homes and that changes need time to bed in.
Bottom line is that my experience tells me that until we get the balance of public and private housing right and a balance between what the taxpayer has to fork out for and encouraging private investment in housing, we are likely to be perpetually in a housing crisis.
Until we are willing to stop playing politics with housing and focus our efforts on collaborative solutions, we are – again – likely to be perpetually in a housing crisis.
Fiona Cormican has worked in the social and affordable housing sector since 1998 when she founded a not-for-profit development and construction company to deliver affordable housing for co-operatives in Ballymun and Finglas. Fiona was Clúid Housing’s chief commercial officer for 16 years and took on the role of acting CEO in 2023. Fiona now works as a freelance business consultant with Fiona Cormican Consulting.
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