New housing proposals
Dublin government strains and gives birth to a mouse
24 May 2021
Despite growing public anger around housing provision in Ireland, faction fights in the cabinet and the near certainty that they will be thrown out of office at the next election, the Dublin government has given birth to a mouse.
Reports had shown that Vulture funds, aligned with local Real Estate Investment Trusts (REITS) were block buying in new housing estates and freezing new buyers out of a prohibitively expensive housing market. They were also involved in a similar trend in surging rental rates.
The government now proposes a 10% increase in stamp duty for purchases of 10 or more properties over a 12 month period.
Local authorities will be able to apply an owner occupier guarantee for up to 50% of new builds, on top of 20% reserved for social and affordable housing.
New planning guidelines will be issued to prohibit bulk buying of houses and duplexes.
All this is in the context of agreements with developers where the state will by the cost of the property over 25 years, with a guaranteed profit, and then hand the building back to the developer.
The criticism wasn't long in coming. The most basic was that apartments are not to be included in the new proposals, more or less guaranteeing a further surge in prices. It was also pointed out that the regulations will only apply to new projects and that it will take years before the effect is seen.
The pressure towards higher profits remains. Reserving homes for individual purchases will not be effective if people can't meet the housing cost. At the moment the combined salaries of two average white collar workers will not be enough to buy a minimum price Dublin apartment.
In any case the idea of an owner occupier guarantee feels like camouflage. Does an Irish capitalist government intend to exclude property speculators from the housing market? History says this won't happen.
The current housing budget is over €3 billion, but Ireland has no real public building programme. The housing market is almost completely private, with local authorities and housing bodies buying or leasing from private contractors. When the model fails the government looks to supercharge it with more capital investment through vulture funds and REITs, a policy strengthened by government ministers also profiteering in the market.
A difficult time lies ahead. There is a growing desperation among those looking for homes. The government proposals are widely rejected. A large number of people now look to Sinn Fein and polls show them leading in intended voting patterns.
However the Sinn Fein housing alternative depends on largesse from the European Central Bank that will not arrive. In the Stormont assembly they follow the Dublin lead in transferring public land to speculators.
The Irish economy is based on subsidies and tax breaks for transnational capital, with generous siphoned off by the local capitalists. To build homes on the basis of need we must break that pattern.