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The Housing Games Part 2: Their Plan

Words by Aisling Hedderman and Seamus Farrell (own opinions)

In 2014 after the boom of the Celtic Tiger, the Economic Collapse of 2008 and 6 years of austerity, the housing system was left in tatters. House Prices were low, building had halted and both rents and homeless were rising.

Housing in Ireland, since the foundation of the state had been focused on ownership, but now a plan began to emerge, a ‘rebalancing’ of the Irish Housing system which would put renting at the centre. Our proposal is that, as important as office space, hotels and mansions in Dalkey continue to be, a new engine is needed to drive the money making wheels of Irish property speculation, and this is emerging as the private rental market.

Housing for Rent

Renting and a strong profitable rental market has begun to emerge as the central vision for Irish housing. There are four pieces to this new housing picture, which together make up the first push towards the private rental market becoming the profit making engine of Irish housing.

Piece 1: Developing the Renters

There is a weak rental market in Ireland by international standards. Small landlords dominate an unstable mix of housing types, spread across the city, poorly managed and maintained. This made renting unattractive for many during the Celtic Tiger and now creates a range of problems as more and more people are forced to rent.

A rental market of small landlords and poor housing quality currently makes a profit but it could make far, far more. To do this the landlord class needs to be professionalised. This can be done in a number of ways. Firstly the small landlords could merge, secondly larger Irish landlords, investors and developers could push the small landlords out by buying up their properties or thirdly the development, investment and management of the rental market could be opened up to vulture funds and professional international rental agencies.

The main shift seems to be towards the final option, open up the market to the international rich. Many development areas in Dublin City, from the Docklands built to serve Ireland’s tax avoided multinationals, to Kilmainham, across the outer reaches of the South Side from Tallaght to Blanchardstown and Swords rental apartments are at the centre of new developments. These have either been developed from the start by or bought off banks and receivers by international companies. Rental Apartment development has become an important part of new developments in other cities across the island and even small to medium towns. This is only the beginning, if government efforts to court more and more international vulture funds bares fruit, such developments will only grow.

Piece 2: Public Housing: Moving the Poor into Private Rental

The 2014 Social Housing Strategy and the announcement of a new model of Housing ‘Public Housing’ in 2015 by the head of Ireland’s most powerful City Council, Dublin City Council signaled the second piece in the housing jigsaw.

The Social Housing Strategy, in the middle of the crisis, with homelessness rising and 140,000 plus people on the social housing list, basically outlined how it would avoid providing social housing. 10,000 homes were proposed per year for 5 years, but behind the smokes and mirrors, any direct work by the council has been largely focused on regenerating a small number of estates and refurbishment (counted as providing even though nothing new was built). The remainder by in large will not be provided directly by the state. Instead voluntary bodies, housing associations and charities are set to be the providers.

If only 10,000 social houses are to be built in the entire country, now largely not developed by the council directly, how will the waiting lists be cleared and what of future demand for social and affordable homes? A new scheme emerged in 2015, supposedly to tackle all of this, ‘Public Housing’. It was and is a call to eliminate social housing, and hand over low income families to an unstable and expensive private rental market, subsidised by the state. The centre piece of Public Housing, is the Housing Assistance Payment (HAP). The state is and will form contracts with private landlords and pay the majority of the rent for tenants under the scheme. This would count as public housing and clear people of the waiting list. It is envisioned that 150,000 people would be on HAP across the country. A whole new range of schemes would also be part of public housing, cost based rental, affordable rental and supported rental. All would involve private landlords providing what was once the role of the council and state. According to Dick Brady head of housing at Dublin City Council, “Developers would get guaranteed rental income and profitable returns over the period.”

As with the social housing strategy, public housing cemented the idea of the council as manager not provider. According the Dick Brady “the key was to “marry” the roles of housing developers and housing managers for the public good. The public good here seems to be the investors pocket and the end to a housing system based on security of tenure and fair rent based on income paid to the state and redistributed to the rest of society.

The move towards public housing, aka private rental instead of social housing has begun. The Private Rental Tendency Board has become the Rental Tendency Board, as all rental disputes merge, HAP has begun its role out and has already begun to dominate parts of the housing and homeless section of councils work and major charities. The government is backing measures to sell the existing social housing stock through low cost loans and right down of prices of social housing for existing tenants to buy these homes. Finally new developments, on public land, are largely being reserved for commercial and private rental development.

The goal of a private rental market as the king of Irish Housing is not yet a reality but its idea is guiding housing policy up and down the country.

Piece 3 Mortgages: Pushing the bottom Mortgage Holders to Private Rental

Since the housing crisis blocks had been put in place to avoid large scale evictions in the mortgage market. These measures left families in terrible debt and improvised in homes but avoided large scale evictions for a time. Two measures in 2014 and 2015 came together in the mortgage system to facilitate this. The first was the Land and Conveyance Act which came into effective in 2014. This quietly lifted limits in place on eviction. In 2015 restriction were also put in place on mortgage borrowing. Prospective mortgage holders would be limited access to the mortgage market if on low income.

In Dick Brady’s words “Public housing would capture …those who have been squeezed out of home-ownership”. Mortgage holders evicted due to arrears and new prospective home owners unable to afford a mortgage would be set with one last option, private rental.

Piece 4: A Homeless Industry

An unstable rental market has already meant a massive increase in homelessness, and with that an emerging homeless industry.

As sick as it sounds, a homeless industry is both a need and an opportunity for the Irish Establishment. It is an opportunity as private business can make money out of this suffering and charities and NGO’s can build their organisations and enrich their board and management. A homeless industry is needed to take in those economically pushed out of the private rental market. It is also needed as a social control, the fear of homelessness means that those who hope for security and are not getting it in the private rental market will stay quiet out of fear homelessness.

This is not a pipe dream, this system in all its brutality is already in place and growing. Councils are moving out of prevention, through the cuts to services, community resources and other measures taken. They are moving away from providing accommodation. In cities, this entails more and more contracts for companies and charities. On traveller halting sites, this means councils refusing to service the sites and/or directly closing sites across the country. For direct provision and refugee accommodation this means private companies providing spaces, and charities checking on conditions, acting as management/regulators. Modular housing has emerged as temporary accommodation that is more stable then hotels but which keeps people in homelessness while creating a new market for private developers and management companies. Homelessness is being made permanent and profitable.

The Cost of a New Renter System

The push to make the private rental market the centre of housing in Ireland is the most right wing push on housing, the most damaging attack on the idea of housing based on need, in a generation. While a small number will benefit, investors, landlords and the rich, there will be very real costs for the majority, if their plans go through.

Instability

The private rental market is unstable by nature, the law, and gardai back up landlords who can evict and the price is set by landlords and investors who will always seek higher profit and therefore rent will go up. The current plan will make this acutely worse. Currently there is not enough private rental supply. The private rental market needs to massively expand to take into those who would be seeking social housing, those coming into the private rental market and those being forced out of mortgages. The numbers simply don’t add up.

HAP the main way of clearing the waiting lists and moving people into private rental will be voluntary for landlords, therefore landlords will not have to accept payments and there will be little or no punishment if landlords pull out of the scheme. When this is combined with the fact that there is no security of tenure or rent controls, tenants are always going to be worried about high rents, rent increases and the risk of homelessness.

Damaging Communities

Economic instability create social instability. A rental system with no security of tenure and rising rents means people forever moving from home to home, breaking any bonds formed with the community and the services they avail of. Without community, without support we see isolation, mental health problems, and breakdown for people’s day to day lives. Austerity has made this worse already by cutting funding to all supports for people and communities. If you fall through the cracks there is little to pull you back up.

Unaffordable

The private market will be expensive for the immediate tenants and in the longer term for society.

With prices set by the markets (who are investors, developers and landlords), a lack of supply because of an investment strike by the rich and with attempts to move large numbers of people from mortgages and social housing into private rental we are likely to see rents continuing to go up.

For private renters on no payment from the state, and with wages low this will push more into poverty. For those on HAP, the state will be paying increasing amounts of money to landlords. For the rental system to work there will be a need to have a large homeless industry. Currently in 2016 costs are 102 million in state subsidies for such a system. When you factor in the loss revenue from social housing sell offs, tax breaks and incentives and spending by the state on subsiding new developments, the housing system will be extensive for everyone without any direct security or stability for the majority.

Deepening Class Divide

Irish society is deeply divided by class, and property is at the centre of this. Despite Dick Brady’s assertion that private rental market, via public housing will create “mixed tenure communities” efforts to create a private rental model seem more likely to deepen rather than loosen class division. Renters are being between private, those who will have a wage to rent without support largely a multinational or managerial middle class, affordable and public for those working but with low incomes the working class and finally social housing for those without work, the lowest section of the working class, to be stigmatised and divided from society further. Homelessness adds an extra layer of brutal class divide between renters and the homeless and within homelessness. The homeless will be seen as having nothing as less then renters. Within homelessness there already is a divide between the respectable and deserving homelessness those who do their time and keep their head down, versus the troubled homeless whose who stand up against their mistreatment or struggling with their living in terms of substance abuse of mental health problems. Stigma and fear will drive the class divide at the centre of modern visions for Irish Housing.

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