# "Election proposals may make the housing crisis worse"



## Brendan Burgess (24 Jan 2020)

A very well written article by John Fitzgerald 









						Election proposals may make the housing crisis worse
					

John FitzGerald: Parties’ plans could exacerbate things without solving underlying issues




					www.irishtimes.com
				




He sums up the rent control argument very well 

_However, research across many countries by the left-leaning German Institute for Economic Research shows that rent controls significantly reduce the supply of rental accommodation. Faced with restricted rents, many landlords choose to sell, so stock leaves the rental sector.

Those who benefit from rent controls are tenants who already have a home, and people who could afford to buy. Those who lose out are people looking for a home to rent in a shrinking market, including the homeless.

The German research findings are valid for Ireland. Here, controls already in place have exacerbated the fall in supply of rental accommodation, pushing rents even higher. Prospective new tenants would fare even worse if further rent regulation were to follow after the election. [broken link removed] and Fine Gael are opposed to such measures. _


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## AlbacoreA (24 Jan 2020)

This is old news. We knew about German and US experience before we tried the exact same thing and got exactly the same results.

We even implemented it in a way that made it worse, as the controls do not effect new rentals only existing rentals.
Which encourages new rentals at higher rents and existing rentals at low rents to leave the market.
There also the possibility that the new large landlords are chasing max profits for shareholders far more than a smaller LL might.
As we attract more multinationals we import more skilled labour. Added fuel to the demand.

On a discussion about a new application for expensive shared living development, that it was too expensive.
It was suggested they aimed at well paid workers who aren't even here yet.

While all this that is great for the economy. Its really blows out of the water the idea anyone is trying to fix the housing crisis.
Which is most desperate at the social and affordable end of the market. Which is almost entirely ignored by policy.
It may appear in the electioneering. But its bit late from both FF & FG, trying to pretend, they want (or will) to tackle this. It not credible.


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## SPC100 (24 Jan 2020)

IIRC There are at least two old large threads on aam making this point before the controls were introduced!

It's good that it gets some coverage in mainstream media though.


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## Purple (11 Feb 2020)

It seems that the good work done by Eoghan Murphy is paying off with a massive increase in completions this year, a stabilisation of rents and a reduction in property prices.
I hope the next minister for housing is as good as he was.


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## llgon (11 Feb 2020)

AlbacoreA said:


> As we attract more multinationals we import more skilled labour. Added fuel to the demand.



I think this can be converted into the past tense now. We're likely to have the opposite problem in the future.


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## AlbacoreA (11 Feb 2020)

Purple said:


> It seems that the good work done by Eoghan Murphy is paying off with a massive increase in completions this year, a stabilisation of rents and a reduction in property prices.
> I hope the next minister for housing is as good as he was.



...Look at the context...



> This takes the total number of new dwelling completions last year to 21,241.
> 
> This is up from 17,952 built in 2018, a rise of up 18.3pc.



.... and net population increase of 64,500





__





						Population and Migration Estimates April 2019 - CSO - Central Statistics Office
					






					www.cso.ie
				







> An estimated 35,000 homes need to be built every year for the next decade to bridge the gap between supply and demand, according to a report on the Irish property market.











						Report: 35k new homes needed annually in next decade
					

An estimated 35,000 homes need to be built every year for the next decade to bridge the gap between supply and demand, according to a report on the Irish property market.




					www.irishexaminer.com


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## Purple (11 Feb 2020)

AlbacoreA said:


> ...Look at the context...
> 
> 
> 
> ...


Yes, and we are making great strides getting to that level of building... or do you think houses arrive here in a box? (They kind of should but for various reasons that doesn't happen).
Oh, and it is usual for more than one person to live in a house.


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## AlbacoreA (11 Feb 2020)

You seem to patting someone on the back for closing the door to the stable long after the horse has bolted. 

I'm just putting a tiny bit of context to these stats which are posted in isolation. 
You'd need more details to get a better perspective...









						FactFind: How many homes is the Irish government actually building every year?
					

Eoghan Murphy says Rebuilding Ireland has delivered 64,000 places to live – but how many are new builds?




					www.thejournal.ie
				











						Just over 4,000 new social houses built last year as target missed
					

House acquisitions by local authorities has also risen.




					www.thejournal.ie
				











						1,000 new social homes built in first half of this year
					

Just over 1,000 new social homes were built in the first half of the year, compared to the Government's target of 6,000 by the end of the year.




					www.rte.ie
				




There is no breakdown where the critical shortages are and how supply aligns to demographics of the demand.
Not to mention lack of transparency of low targets being set and of what was achieved. 

I've only mentioned population growth. You have to add to that whatever demand already has built up over years.


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## AlbacoreA (11 Feb 2020)

llgon said:


> I think this can be converted into the past tense now. We're likely to have the opposite problem in the future.



That's the million dollar question right there. 

A broken clock is right twice a day. There will be a point where the supply will meet failing demand. Whomever is playing musical chairs at the right time, will take credit for getting it right.


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## Purple (11 Feb 2020)

AlbacoreA said:


> You seem to patting someone on the back for closing the door to the stable long after the horse has bolted.


They weren't in office when the horse bolted and it bolted because the Stable was burning down. They have had to rebuild the Stable and are now in the process of getting the horse back into it.


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## AlbacoreA (11 Feb 2020)

They poured fuel on those flames with their policies. Not just with housing, health service, policing, etc. 

You can stretch recapitalizing the economy with foreign investment and labour only so far.


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## Purple (11 Feb 2020)

AlbacoreA said:


> They poured fuel on those flames with their policies. Not just with housing, health service, policing, etc.
> 
> You can stretch recapitalizing the economy with foreign investment and labour only so far.


Yep, but the question is would the alternative poured more fuel on the flames?


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## AlbacoreA (11 Feb 2020)

We are about to find out. 

It will likely coincide, with other issues, like our competitiveness disappearing etc., another boom bust cycle if perhaps shallower.


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## Purple (11 Feb 2020)

AlbacoreA said:


> We are about to find out.
> 
> It will likely coincide, with other issues, like our competitiveness disappearing etc., another boom bust cycle if perhaps shallower.


I was referring to the last government but yes, my fear is that all the additional spending in an economy with full employment which is already overheating will cause another boom-bust cycle.
In the longer term the target should be to deliver public services more efficiently as when the State spends a big chunk of the money within the economy they are the main driver of such cycles.


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## AlbacoreA (11 Feb 2020)

For those currently adversely effected the economy is already broken/bust for them.
This forum is largely not of that demographic.

Public services across all sectors are mostly swamped and unable to cope with demand.
Yes they are inefficient. But demand exceeds their resources. All we are doing is increasing those demands.

If you stretch something too far, something will break. In this case its was the two party status quo.


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## Purple (12 Feb 2020)

AlbacoreA said:


> For those currently adversely effected the economy is already broken/bust for them.
> This forum is largely not of that demographic.
> 
> Public services across all sectors are mostly swamped and unable to cope with demand.
> ...


The Public Sector has not expanded at the same rate as the economy or the population. It certainly needs more resources but it will get far better results by using the resources it has more efficiently. ANd to repeat what I have said here many times, people are not efficient or inefficient rather the structures they work within are efficient or inefficient.


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## NoRegretsCoyote (12 Feb 2020)

AlbacoreA said:


> ...Look at the context...
> 
> 
> 
> ...



That's *population change *which includes natural increase. Net migration is only 33,700 - it's literally in the link you posted!


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## AlbacoreA (12 Feb 2020)

I realised that, I just didn't bother to change it. The pertinent point being that demand is always (in recent years) increasing. Which has an impact on availability of housing.


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## NoRegretsCoyote (12 Feb 2020)

AlbacoreA said:


> I realised that, I just didn't bother to change it. The pertinent point being that demand is always (in recent years) increasing. Which has an impact on availability of housing.



Everyone is entitled to their own opinion, but not their own facts.


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## AlbacoreA (12 Feb 2020)

Purple said:


> The Public Sector has not expanded at the same rate as the economy or the population. It certainly needs more resources but it will get far better results by using the resources it has more efficiently. ANd to repeat what I have said here many times, people are not efficient or inefficient rather the structures they work within are efficient or inefficient.



A good example of this is the current NCT issue with the lifts. The entire system is unable to communicate a coherent message of what people should do. It's dysfunctional.


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## AlbacoreA (12 Feb 2020)

NoRegretsCoyote said:


> Everyone is entitled to their own opinion, but not their own facts.



I've edited the description of the population increase. Panic over. It's only one factor in demand. I don't know how they estimate demand from other sources.


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## NoRegretsCoyote (12 Feb 2020)

AlbacoreA said:


> Panic over. It's only one factor in demand. I don't know how they estimate demand from other sources.



Housing demand is a function of:


Growth in population
Change in average household size

Population change is simply births-deaths+immigration-emigration. The first two are easy to estimate and lead to about a 30k increase per year, the other two far less so - bear in mind Ireland had net *emigration *from 2010-2014.

Irish households are very large by European standards, and I think will need to fall a lot. The population will age and older people tend to live alone, and Ireland's divorce rate is still quite low, and as this changes more adults will need to live alone.

Housing also does not last forever either (which many commentators tend to forget) and even depreciation of 1% per year means 20k new dwellings needed just to stand still.

Medium term, Ireland needs something more like 40k dwellings per year. But if the migration pattern changes then all bets are off.


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## Purple (12 Feb 2020)

Ireland needs far more 1 and 2 bedroom apartments. We probably have enough houses. We certainly have enough social houses but we need lots more social apartments and, most importantly, different tenancy rules so that the State can use it's social infrastructure for the greatest public good.


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## NoRegretsCoyote (12 Feb 2020)

Purple said:


> Ireland needs far more 1 and 2 bedroom apartments.



Exactly, a lot of houses in Ireland have unrelated adults living in them and are better designed for people with children.

More new apartments for single people frees up houses for families with children.


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## AlbacoreA (12 Feb 2020)

During last boom lots of people started single in small apartments but grew into families which then found the apartment too small and the location unsuited.  But ended up unable to move from it. So be cautious about buying too specialised property. We also built apartments too small back then also.


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## Purple (12 Feb 2020)

AlbacoreA said:


> During last boom lots of people started single in small apartments but grew into families which then found the apartment too small and the location unsuited.  But ended up unable to move from it. So be cautious about buying too specialised property. We also built apartments too small back then also.


We need apartments in areas where there is existing social housing so that single occupants of 2, 3 & 4 bedroom social houses can be moved to free up those houses for families. It is unfair to ask an elderly person to move out of a house into an apartment in a different area. It is unfair to leave them in that house if there is an apartment available in the same area when there are homeless families.


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## AlbacoreA (12 Feb 2020)

I'm just pointing out we've been here before.


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## odyssey06 (12 Feb 2020)

AlbacoreA said:


> During last boom lots of people started single in small apartments but grew into families which then found the apartment too small and the location unsuited.  But ended up unable to move from it. So be cautious about buying too specialised property. We also built apartments too small back then also.



On the continent e.g. Copenhagen there are family friendly apartment complexes, with storage and common play areas...
I suppose insurance costs would rule some of that out here!


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