SINCE TAKING OFFICE, this Government has continued to pay lip service to home ownership by actively pursuing policies that are detrimental to people’s chances of being able to buy a place of their own.
In 1991, Ireland had one of the highest rates of home ownership in the European Union. Almost 80% of households owned their own home; 10% of households were in secure social housing; while the remaining households renting privately were predominantly made up of students and younger people.
Fast-forward 30 years and we have a very different picture. Home ownership levels fell to 66% in 2022 according to the census results released yesterday – their lowest level in more than 50 years. While renting suits some people, research consistently shows that most of those in the private rented sector don’t want to be there and would much prefer to have the security of a long-term home, either through homeownership or a secure social housing tenancy.
So why is home ownership in sharp decline? It is worth noting that the peak of home ownership of almost 80% reached in the early 1990s was not an accident. This was achieved after decades of very substantial and much needed investment by the State.
In the 1920s, most people were renters and the security of homeownership was almost exclusively enjoyed by better off households.
In rural areas, most people rented their homes from large landlords, while in urban areas overcrowded, crumbling tenement buildings provided housing for working-class families. A massive and persistent investment by the State, which began with the Land Sale Acts of 1870 and formally concluded when the Land Commission was wound up in 1999, saw more than 85% of land transferred legally from landlords to their tenant farmers. This resulted in very high levels of home ownership in rural areas.
In cities, vast resources were invested over several decades in clearing slums and providing good quality social housing to replace them.
Affordable purchase housing was also delivered by the State. In the 1920s, more than 1,200 affordable purchase homes were built in Marino, based on the Garden City model, in a very well-planned development built around communal greens. One hundred years later, Marino continues to thrive and is held up as an example of a successful and cohesive community.
Land for social housing was acquired by local authorities, both with agreement from landowners and through very extensive use of compulsory purchase orders. In 1954, in my constituency, Dublin Corporation used a compulsory purchase order to buy up 240 hectares of land for social and affordable purchase housing in Coolock, Kilmore, Artane and Edenmore. This contrasts sharply with the practice in recent years, where instead of buying up sites to provide housing, large tracts of publicly owned land have been sold off to private developers.
However, after decades of investment in housing over the course of the 20th century to make homeownership a reality for most people, we are now in a sharp reverse. The share of 25 to 34-year-olds who own their own home more than halved between 2004 and 2019, falling from 60% to just 27%.
There are now more than 350,000 adults in their twenties, thirties and forties still living in their childhood bedrooms.
We continue to witness an escalating homelessness emergency. The latest figures show there are now 12,259 people, including 3,594 children, living in homeless emergency accommodation – the highest number in the history of the State.
This is a crisis of the Government’s own making. Instead of putting resources into building affordable homes, the State has incentivised expensive Build to Rent (BTR) schemes through favourable tax treatment for investment funds. As interest rates have increased, private investment in the Build to Rent sector has dried up as investors seek better returns elsewhere. Instead of seizing this as an opportunity to shift development towards affordable purchase and cost rental housing, the Government is instead directing resources towards rescuing a flawed Build to Rent model.
The Irish Strategic Investment Fund is investing hundreds of millions of public money in rental-only developments.
This heavy promotion of rental-only developments by the Government is contributing to falling rates of home ownership and increasing levels of housing insecurity. This comes at a considerable social cost. According to the ESRI, only 65% of people aged 35-44 are likely to become homeowners by retirement, compared to more than 90% of those currently aged 65 and over. This will create a retirement timebomb requiring significant State intervention to subsidise rents for pensioners and will lead to increased risks of homelessness for the elderly.
So what can be done to reverse this trend? Instead of incentivising and financing expensive Build to Rent schemes, State resources should be focused on supporting affordable purchases and affordable rental development. Last year, just 323 affordable purchase homes were delivered. This is a drop in the ocean in terms of what is needed.
However, we should not despair. The Ó Cualann Cohousing Alliance is a great example of how the State can provide high-quality homes at prices people can afford.
By using discounted land from local authorities, having their development levies waived and building on a not-for-profit basis, Ó Cualann is delivering new three-bedroom homes in Dublin for €250,000.
There are wider economic benefits of affordable housing as people will have more disposable income. In fact, research carried out by Ó Cualann has shown that for every 1,000 affordable homes built, an extra €6.5m of income is generated in the local economy each year.
The Ó Cualann model is providing urgently needed homes for people who cannot afford skyrocketing house prices on the open market. It can and should be scaled up to meet the huge demand for homes that are affordable.
Today, the Dáil will debate a Social Democrats’ motion calling for a reversal of Government policies that have contributed to a collapse in home ownership levels. It is time to stop incentivising the wrong type of housing and rewarding developers with publicly funded State subsidies.
Nothing less than a dramatic increase in the delivery of genuinely affordable purchase homes will solve this housing crisis.
Cian O’Callaghan is a Social Democrats TD for Dublin Bay North and is the party’s housing spokesperson.
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