Coalition housing policy fails
- but then that's what it was designed to do.
13 February 2023
New build housing.
In 2021 the coalition government published its new "Housing for All" policy, underpinned by the promise of record state investment in excess of €20bn over five years. It replaced the "Rebuilding Ireland Strategy" launched in 2016 which was widely seen to have failed.
The Taoiseach, Leo Varadkar, boasted that the Government’s main housing target for 2022 was met and exceeded, as they had targeted the construction of 25,000 homes and that it was likely to be closer to 28,000. However, the targets that the government set are deliberately low. They claim that they will average 30,000 per year in the future, but housing groups argue that because of a long tailback of failure, the real figure that might meet demand is between 48000 and 60000 new builds per year.
Varadkar came under sharp attack around the issue of social housing, where a target of 9000 units had been reduced to 8000 and then missed anyway, with a build of 6500 achieved.
The government bases its policy on a market-based supply and demand model. If they supply enough in the way of incentives the housing stock will grow and prices will fall. When housing stock lags and mortgages and rental costs grow and grow, then more needs to be done to support developers and increase supply.
This is all rationalisation. Ireland is famous for its refusal to charge transnational institutions significant taxes. What this means is that property developers are guaranteed double the return they can achieve in continental Europe. Rather than resisting this, local capitalism changed the law to enable real estate investment trusts (REITs) and join in the feeding frenzy.
This has led to systemic crisis. On paper Ireland is one of the richest countries in Europe, with over €5 billion surplus in the current account. In reality the majority of the working class, and sections of the middle-class live lives of quiet desperation.
How can Ireland access major funds on a low tax take? They make the offer so attractive that money floods in. Unfortunately, this is unproductive capital and does not generate value. As a result, public sector wages and pensions are tightly controlled and all public services involve substantial privatisation with minimal provision. When services fail the government conspires to deny compensation. Alongside economic dependency goes political dependency, so the government is devoting substantial resources to the Ukraine war, is quietly integrating with NATO and has doubled the military budget. Ireland, with a very poor record on refugee rights, has admitted tens of thousands of Ukrainian refugees not because of its humanity, but because of demands that it play as big a role as possible in freeing resources for the Ukrainian state. With no proper provision the state is failing in its statutory rights to Ukrainian refugees to other refugees and to indigenous homeless.
All these tendencies have now reached crisis point. A housing plan which costs billions has failed the population and no longer holds out any hope of resolution. The number of homeless has reached record levels. Rental costs are so high that teaching posts in Dublin cannot be filled and new projects in major transnational companies, and even in construction, are being choked off by property and rental costs.
But by far the biggest problem lies with the response. The sad announcement that the government will not meet its housing targets has, inside Parliament, been met with fairly routine condemnation. Outside Parliament it has largely been met with a resigned shrug.
The reality of Irish economic dependency is well understood. There is little resistance because few believe there is an alternative.
The trade union leadership accepted the economic logic of the capitalists and have operated it through decades of formal partnership. Privatisation is a political matter and therefore unions limit their response to wages and conditions. The announcement of a multi-billion housing budget was enough to wind down the rather anaemic "Raise the Roof!" Housing campaign and union leaders now serve on the implementation bodies. Sinn Féin claim to offer a radical alternative on housing, but have no convincing policy and have collaborated with housing privatisation in the Northern state.
What there is of a socialist movement in Ireland is parliamentary and reformist. Criticism of union leaders is rarer than hen's teeth. Recently the historically low corporation tax was raised from 12.5% to 15%. This was at the insistence of the US and EU. The programme of the union leaders and the left was a plaintive plea that the transnationals behave themselves and pay the full 12.5%!
Around the immediate issue of housing, the programme of the left is for social and affordable housing, proposals that fit within the market model of the government and which represent its biggest area of failure.
It is a long standing saying that the rise of the right flows from the failure of the left. This is proving true with the rapid rise of a racist anti migrant movement and the mobilisation of a fascist movement in the background.
We must not sigh about abstract failures. We must ascend to the concrete. In the immediate term we can help the Ukrainian refugees most directly by mobilising against the war. Perpetual war and perpetual exile are not in their interests.
Overall, there is only one answer to the housing crisis. That is direct public housing. That in return will involve the negation of some private property rights. In a commodity market many sites are reserved to increase profit and these must be expropriated.
Emergency housing public housing programmes are nothing new. Most European countries launched such programmes after World War II. Even the Irish state built mass public housing between the 60s and 80s.
The obstacle to such a programme is not technical, it's political. Direct intervention in the housing market would cut across the vulture capital that the government serves and would also lead to falling prices and affect the assets of local landlords and developers.
At the end of the day the housing crisis and the associated crises of health, education, energy and transport are all expressions of class oppression. That mechanism of oppression is becoming more chaotic, through internal contradictions and through the ending of the international cheap money regime that has applied on the banking system since 2008.
The capitalists will resolve their problems by turning to racism and fascism. It is up to the socialists to build a revolutionary alternative. The starting point is a political programme based on the needs of the workers, not local capitalists or their imperialist masters.