LATE LAST MONTH the Irish Times published an article entitled (an appropriate word) ‘‘It’s my property, I’ll do whatever I want with it”. The quote comes from the owner of a vacant property who was contacted by the Peter McVerry Trust at a time when over 12,000 people were homeless. The rest of this article is directed at such vacant property owners.
About two-thirds of our income levels are determined by the country in which we are born. Most of the other third is determined by other accidents of birth. The good news is that people’s economic status, whether they are born at the top or bottom of the pile, eventually reverts to the mean. The bad news is that the process takes about 350 years.
Any reasonable person born into a position of privilege would have the good sense to act with a bit of humility and self-awareness. Few of us manage to climb far up the economic ladder in one lifetime. One of my favourite books on inequality is ‘The Son Also Rises’ by Gregory Clarke. He argues that the chances of moving from the middle of the pack to the top half a per cent in a generation are about one in five hundred million. To put this in context, it is unlikely that anybody in England has ever accomplished it. The probability of moving from the bottom half a per cent to the top of the pile is essentially zero. Nobody in human history has ever managed it.
Why do we tolerate this level of inequality of opportunity and outcome? Many of us just take it for granted. The most insidious forms of inequality are often so embedded that we don’t see them. Those who do, often feel powerless to change much, though not opposing property taxes or new buildings would be a good start.
A planning system that gives voice to the people who live in an area but not the people who would like to is inherently flawed.
Several years ago, I included a pitch for a vacant property tax in a pre-budget submission on behalf of a state-funded organisation. For reasons best known to himself, the head of a state body insisted that it was removed. Why argue against a proposal when you can silence it?
Residential property taxes are standard fare in much of Europe. Housing is a major component of wealth everywhere. The average renting family in Ireland has net assets of just €5,000. Owner-occupiers are 60 times wealthier, at €303,000. And yes, this is net wealth, so accounts for mortgages. For most of us, having a second property that we care about so little to leave it vacant is unfathomable. There are some good reasons why houses may be left empty and fortunately, we have the data. In many cases, people are in hospitals or nursing homes, or the houses are being rented or sold.
But an astonishing 48,000 houses or apartments were vacant in both the 2016 and 2022 censuses, representing 2% of the housing stock and enough to house all the homeless families in the state several times over. Remarkably, nearly half of these houses were also vacant in 2011. The usual excuse is that they are in remote areas. Again, however, we have the data, and this is patently untrue. Dublin City has more vacant units than anywhere else in the country.
For over 3,700 of these properties, we have no idea why they are vacant. This constitutes a major moral failing, by both individuals and the state.
Houses carry ongoing costs to the state, like servicing and lighting adjacent roads and providing fire, police, water and sewage services. They are thus a significant burden on society. The most sensible thing (and again the standard in much of Europe) is to apply an annual tax directly. Instead, we have collectively decided to do this primarily through general taxation, which favours homeowners. Why we insist on subsidising some people twice, when they show so little regard for the rest of society, is very difficult to understand.
Ciarán Casey is an economics lecturer at the University of Limerick. He is the author of ‘The Irish Department of Finance, 1959-1999′ (IPA, 2022) and ‘Policy Failures and the Irish Economic Crisis’ (Palgrave MacMillan, 2018).
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