The government has found a new excuse for the housing crisis. The population of Ireland has grown so quickly, it claims, that the housing supply just cannot keep up. They are using a Savills report which claims that 3.8 people were added to the population for every housing unit delivered.
The far right amplify this message by saying that ‘mass immigration’ is the cause of the problems. Both are wrong.
First, the Irish economy has experienced a boom over the last number of years, mainly because of encouraging tax dodging by big corporations.
During a boom, people tend to have more children and so the natural increase in the population from the census of 2016 to 2022 was 167,487. Trying to blame people having more children for the lack of housing is pathetic.
Second, there has been an increase in net migration. The key word here is ‘net’ because many Irish citizens also emigrate. When this is balanced with immigration, CSO estimates that the annual average net migration (36,631) was larger than the annual average natural increase (27,915) between 2016 and 2022. In other words, marginally higher.
Many of these migrants work in the building industry and so help to build the actual houses. In fact, 25,000 migrant workers are in this sector. You would not get even the existing level of houses, if it were not for their labour.
The real source of the housing crisis is government policy. They have left everything to the private sector which is driven by profit. Their approach over the last decade has been to shout about the ‘supply problem’ and then give builders and landlords more ‘incentives’ to increase output.
It is not working.
Goodbody did a report on the Irish construction industry and concluded that it suffers from a “distinct lack of scale” as it is made up of a large number of smaller builders with limited capacity.
Two big companies dominate the industry, Cairns and Glenveagh. But it is not in their interest to massively step up house construction as this would ’flood the market’ and reduce prices.
As a result, they often build up big land banks. Cairns, for example, boasts that it owns a 16,300-unit landbank across 35 residential development sites, over 90% of which are located in the Greater Dublin Area. It even claimed once that the value of its landbanks was worth more than the company’s capitalisation. Glenveagh estimated that its land bank value was €400 million in 2023.
Because their primary motive is profit, the building bosses did not encourage apprenticeships in the recent past. As a result, there is a shortage of skilled workers in many trades.
Government policy has also had a direct impact on supply. It has cut back substantially on the amount of social housing being built. In 1971, rented council accommodation accounted for 16% of permanent housing units – today it has fallen to 8%.
The main policy of the state has been to subsidise private landlords – rather than embarking on a massive building programme of social and affordable homes.
There is a solution – but it requires a left-wing government.
First, public land most be used to build social and affordable homes on a mass scale. The government already has an audit of public land that could be used for housing.
Second, instead of handing this land over to private builders, it should create a state construction company that can build on a mass scale. A state construction company could pay decent wages and attract skilled workers back to this country. It could build homes cheaper because its primary goal is not profit.
So don’t be diverted by talk of a population problem – neoliberal policies have failed. We can solve the housing crisis with left policies.