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Housing and Coveney

Many housing targets are being manipulated and missed

Coveney’s action plan for housing and homelessness, ‘Rebuilding Ireland’, was launched last July. But it is based, in large part, on Alan Kelly’s 2014 social housing strategy.


It is useful to keep in mind Alan Kelly’s plans.
In November 2014 Kelly, then Labour Minister for the Environment which covered Housing, said the government would supply up to 110,000 homes over the next six years, including 35,000 social housing units at a cost of €3.8bn.
“An enhanced private rental sector” would create “a more flexible and responsive system”.
The social-housing strategy would come in two phases, with the first of 50,000 units to be delivered by the end of 2017, setting a target of 18,000 additional units and 32,000 other homes where most of the rent would be paid under the State’s Housing Assistance Payment, which is replacing Rent Supplement, and the Rental Assistance Scheme.
The second phase, to be delivered by the end of 2020, set a target of 17,000 such additional units and 43,000 such other homes.
In fact fewer than 1,000 local authority and private-sector ‘Part V’ social-housing units were built in the following two years: 2015 and 2016.


Back to 2017. The ESRI has calculated that for a country of our population and size, we need to deliver 25,000 homes every year, to meet the needs of our people, whether for rental or purchase, social or private housing.

Targets

Simon Coveney, now Housing Minister, has set ambitious targets, including:

  • Doubling the number of new homes built to 25,000 by 2021, from a (disputed) 12,600 rate in 2016
  • €5.5bn over five years for social housing. The most recent figures show that there are 91,600 households on the lists for social housing  including homeless people
  • Ending the use of emergency accommodation such as hotels for homeless families by the end of June, though, according to Coveney: “Since December, a total of 238 new emergency beds have come into the system in Dublin and a further 100 are earmarked to come into operation shortly”.
  • Limiting rent increases to 4% annually

Writing in the Sunday Times in early April, Coveney claimed as he often does: “12,600 houses were built in 2015… and about 15,000 dwelling were completed in 2016, up 18% on the 2015 figure, and connected to the grid by ESB networks”. This is dishonest, even if the Minister seems to be becoming paranoid about pretending that other indicators are used: “it is not the only data [sic] we use – we have information on social housing delivery and need and on private planning permissions and construction directly from local authorities”.

On 7 February the Housing Department issued a statement claiming “14,932” completions in 2016 leading to the Irish Independent headline: ‘Home building at highest levels since 2009…’.

Junior Minister Paudie Coffey confirmed to the Dáil a mendacious figure of “15,256” homes completed in the year until the end of January, on 21 March.

And on 3 April, on ‘Morning Ireland’ Coveney said “completions are up nearly 20 per cent”.

Mel Reynolds showed in this magazine (February) that the number of homes built in 2016 was “not 15,000 but 7500”: “Thousands of existing vacant complete homes have been double counted as new completions over the past five years” because the Department of Housing incompetently registers ESB connections as a definitive gauge of completions, even though if completion of a house is delayed it will be registered twice by the ESB.

The fact is until Reynolds’ article the Minister was content to use the 15,000 figure as a single outward indicator. Commencements are incorrect, completions are not accurate and obsolescence has been ignored. Reynolds also claims, “the number of tenants renting may also be underestimated due to CSO measurement methodology”.

Indeed the 7500 figure gives the Department the implausible benefit of the doubt. It uses stamp-duty figures as an indicator of completions. However the 3600 2016 stamp-duty transactions probably represent an inflation of the completion number. This is likely to be much lower since stamp-duty is paid for existing completed vacant units sold to new buyers by an original developer who had to sit on units during the downturn.

Illustration: Elida Maiques

The Minister and his Department know all this but they continue to fill the airwaves and the press with falsity and lies. The Minister needs to address reality on this important issue. So-called ‘rapid builds’, to give immediate solutions for the homeless, have been completed in one place only: Poppintree, Ballymun – 22 units only, despite proposals for hundreds across Dublin and elsewhere.

 

Equally, the rate of social housing completion is slow. In 2016 only 243 Local Authority and 37 developer-provided ‘Part V’ homes were completed – a total of less than 300 social-housing units. Writing in the Examiner, Coveney claimed: “Last year 18,300 social housing solutions were put in place and this year that figure will be over 21,000 and we will spend €1.3bn making it so. In terms of social housing construction, 650 homes were built last year, 1,800 are under construction on sites around the country and 8,430 are at various stages in the pipeline of delivery”.

In other words, two thirds of the ‘solutions’ delivered for social housing came through housing assistance payments. Critics would say Coveney is missing his mark. Activists on the ground, including housing agencies, say any results will take time. In fact, many consider the existing stock of 200,000 empty homes nationwide should be more heavily focused on by officials instead of the push to construct new units.

In the Examiner, Coveney also noted:
“We are a long way off the requisite 25,000 annual home starts that are the target, but the most recent statistics are positive and indicate that at last we are moving in the right direction. I have introduced a series of new schemes worth hundreds of millions of euro to get thousands of vacant houses back into use for social housing – the Repair and Leasing Scheme will see some 3,500 homes returned to use at a cost of €140 million. Last year, we spent €200m buying back houses for social housing. We need to achieve maximum delivery on some large strategic sites that have been in a state of suspended animation because critical infrastructure is missing. That’s why the government brought in a €200m housing infrastructure fund to unlock these sites”.

The recent RTÉ television documentary ‘Ireland’s Property Crisis’ has again exposed the human face of the housing shortage.


The Six Problems

1. Rent

It is too early to analyse the rent caps introduced in December for ‘Rent Pressure Zones (RPZs)’ which were extended beyond Dublin and Cork to commuter towns and other cities in January. It is probable that landlords in other areas will hike up rates ahead of any possible cap being introduced there. There is concern that towns such as Dundalk, Drogheda, Maynooth, Greystones as well as the cities of Waterford and Limerick have not been designated RPZs. While some have welcomed the 4% annual rent rise cap, others say rates in fact should have been forced down or linked to the consumer price index.

2. New builds

The Government has promised to help double the number of new homes constructed annually to 25,000 by 2021.
Eight months since the launch of Rebuilding Ireland, Department of Environment data shows 14,932 new homes were completed in 2016, an increase of 18% on 2015.

The figures are based on ESB connections.

Planning permissions were also granted for 16,375 new homes in 2016, a 26% rise on the previous year.

3. Affordability

€280,000 is seen as a tide line for affordable housing, being 3.5 times two average industrial wages (€70,000 combined). This quarter the average three-bed home in Dublin exceeded this price, at €290,000.

Indeed for the first time in a decade there is serious discussion of a return to boomtime prices. Since rising prices reflect either excessive demand or inadequate supply this indicates a problem.

A report from MyHome.ie, produced with stockbroking firm Davy at the beginning of May, suggested annual house price inflation is running at 9 per cent nationally and at 10.2 per cent in Dublin, where supply shortages are most evident.

Latest mortgage approvals from the Banking and Payments Federation of Ireland (BPFI) show a sharp rise in the number of people seeking mortgage approval. In February 2017, 2,840 would-be home buyers received mortgage approval, up from 1,996 a year earlier. However, it is worth noting that in 2006 drawdowns were running at a rate of an extraordinary 12,500 a month.

The cause of all this is clear: a politically-motivated help-to-buy tax break for first-time purchasers and a decision by the Central Bank – following Government pressure – to ease mortgage-lending rules. These changes are boosting the profitability of builders, developers and the banks but, apparently, not supply.

Two quarterly reports, from property websites MyHome.ie and Daft.ie, linked the latest price acceleration to the Government’s new tax incentive scheme for first-time buyers and a loosening of the Central Bank’s mortgage lending rules.

4. Social housing

The Government has promised to build 47,000 new social housing units by 2021 at a cost of €5.3bn. It is a huge commitment, especially after almost a decade which saw little or no social housing development.

However the percentage of private developments that must be given to social housing (‘Part V’) has been reduced from 20% (under Fianna Fáil and Noel Dempsey before Martin Cullen changed it) to 10% and, though it is no longer permitted to give cash instead of social units, it is still possible to give land instead. In early April the Housing department revealed that the private sector contributed only 37 social-housing units in 2016, half the previous year’s diminuitive figure. Part of the reason for the low figures is that Part V is triggered by schemes of more than 10 units but for example in 2016 only 400 units were built in such schemes.

Just three Part V homes are being acquired every month. At this rate it will take 130 years to reach Minister Coveney’s five-year target of 4,700 homes.

Other measures to reduce the estimated 90,000-long social housing waiting list include expanding Housing Assistance Payments (HAP) for renters and increasing the number of mixed housing developments.

The facts are social housing new builds were among the lowest in the state’s history last year. Only 652 new social housing units were built. While the department notes over 18,000 social housing solutions were delivered, two thirds of these involved HAP payments.

The rest included reusing void units, councils buying existing stock and leasing homes among options.
The issue is the huge backlog in social housing development.

As Sinn Féin notes: “Contrary to his massaged figures, Mr Coveney did not meet the social housing need of 18,000 families in 2016. The total increase in social housing stock was a mere 2,204 units. Councils also refurbished 2,300 long-term vacant units”. In total, it says, “4,492 real social houses were brought on stream in 2016. The remaining 13,900 social housing “solutions” were in fact private homes leased by the State, the vast majority for just two years”.

5. Homelessness

Homelessness has been consistently stated by this Government and its predecessor to be the “number one priority” but it has increased by 190% since 2014. Child homelessness has increased by a shocking 250% in the same period. The year from December 2015 to December 2016 saw an astonishing 55% increase in child homelessness. This same period saw a 28% rise in adult homelessness nationwide, meaning that child homelessness increased at double the rate of adult homelessness.

The most recent data from the Department of the Environment for February show that adult, child, and family homelessness all rose during the month from January to February of this year. There are now a record 2,546 children registered as homeless sleeping in hotels, B&Bs and hostels in Ireland, and 1,239 families (700 in hotels and B&Bs alone). These are the highest numbers ever recorded. Official homeless figures underestimate the extent of the crisis as they exclude other cohorts in emergency accommodation such as non-EU nationals and asylum-seekers.

Certainly, Simon Coveney’s promise to end the use of emergency accommodation for the homeless in hotels and B&Bs by the end of June is bold but the record of the Department and its Minister is not good.
As part of the plan to tackle homelessness, the Government promised 200 rapid-build homes by the end of 2016, a further 800 this year, and a further 1,500 next year.

Just 22 have been built so far in Poppintree, Dublin. It has failed here so far — despite many units awaiting construction. The funds are there, says Government.

6. Housing stock

This is the vaguest of the agendas. Strategies include local authorities doing up and reletting vacant units.

The housing agency is to buy vacant homes from banks and sell them. The repair and leasing scheme with a budget of €32m aims to help owners prepare their properties for the rental market and pressure is exerted on local authorities to do up ghost estates and housing developments that were left half-finished or without facilities after the property crash.

Potentially, less than 7,000 units may be made fit for living in, out of the estimated 200,000 empty units nationwide, under proposed schemes with Rebuilding Ireland, according to TDs.

This is especially acute in Dublin where there are an estimated 40,000 empty units.


The figures given for housing completions 2015-2017 are simply and definitively untruthful and misleading. It is extraordinary that the political Department of Housing and the normally scrupulous Central Statistics Office continue to tout them though the deficiencies have been highlighted by Mel Reynolds in Village and elsewhere.

Section 10 of the Statistics Act, 1993, under the crucial heading “Functions” states:
10.(1) The functions of the Office shall be the collection, compilation, extraction and dissemination for statistical purposes of information relating to economic, social and general activities and conditions in the State.
(2) The Office shall have authority to co-ordinate official statistics compiled by public authorities to ensure, in particular, adherence to statistical standards and the use of appropriate classifications.
(3) The Office shall have authority to assess the statistical potential of the records maintained by public authorities and, in conjunction with them, to ensure that this potential is realised in so far as resources permit.

It cannot really be disputed that the CSO is intended by law to “co-ordinate” the Housing Department’s failure of “adherance to statistical standards”, and not merely to repeat that failure.

By Michael Smith