# How do we deal with  falling home ownership/ build more houses - long thread



## Brendan Burgess (7 Aug 2022)

We have a serious and growing problem that a large group of Generation Rent will not be able to ever get on the housing ladder.

This has serious implications.  Ownership of one's home has generally led to lower housing costs and increased wealth.  While long-term renting is expensive and uncertain.








ESRI chapter on Intergenerational Inequality



			https://www.esri.ie/system/files/publications/CB202104.pdf


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## T McGibney (7 Aug 2022)

Very easy.

1. Build loads of more houses and apartments for rental and owner occupier use.

2. Dramatically cut building regulations and levies back to early Celtic Tiger era  levels.

3. Do likewise with planning restrictions.

4. Cut CGT on residential development land to 10% for a 3 year period.

5. Reintroduce a form of section 23 relief for new properties built or restored from dereliction within the same period 

6. Ignore the naysayers and objectors.


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## The Horseman (7 Aug 2022)

T McGibney said:


> Very easy.
> 
> 1. Build loads of more houses and apartments for rental and owner occupier use.
> 
> ...


I would add to this list. Extend the rent a room relief to landlords. Any rent up to a given figure then no tax anything above than tax on all of it.

Private renters rent reduces, landlords remain in market (available rental bed spaces remain) why supply of new properties to buy increases.

Savings on rent for private renters saved for use as deposit on property purchase.


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## ryaner (7 Aug 2022)

The lack of home ownership by itself isn't directly the problem. Look to multiple continental countries for longer term renters living in decent accommodation, with security of tenure, and generally affordable costs for examples. There does need to be a mix of high quality accommodation on both sides, for renters and owners. And especially with apartments, we need to improve the quality and also the rules around ejecting bad tenants.


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## Sophrosyne (7 Aug 2022)

This discussion paper from the UCD Geary Institute titled “*Varieties of home ownership: Ireland’s transition from a socialised to a marketised policy regime”* traces home ownership since Ireland ceded from the UK.

“Introduction

For most of the 20th Century home ownership rates in the Republic of Ireland rose steadily and were among the highest in the developed world. In 1971, 70.8 per cent of Irish households were home owners, compared to 50 and 35 per cent of their counterparts in the United Kingdom and Sweden respectively (Kemeny, 1981; Central Statistics Office, various years a). By 1991 Irish home ownership rates had risen to 80 per cent, compared to 65 in the UK and 39 per cent in Sweden (Bokovert, 2006; Central Statistics Office, various years)”


It is an interesting read. If you don’t want to read it all, the paper concluded:


“As the Irish case demonstrates when government supports are rolled back, home ownership declines, particularly among low income earners and average levels of associated debt increase.

Thus properly ‘neo liberal’, in the sense of entirely marketised housing systems are not characterised by very high (80 per cent plus) levels of home ownership but by home ownership among a small majority of the population accompanied by higher than average levels of (unsubsidised and unregulated) private renting*1*, and small, highly targeted social housing sectors.”

*1:* _the paper was written in 2013 and so does not take account of legislative change in the private rental sector since then. However, the rest of the content is still relevant._


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## nest egg (7 Aug 2022)

ryaner said:


> The lack of home ownership by itself isn't directly the problem. Look to multiple continental countries for longer term renters living in decent accommodation, with security of tenure, and generally affordable costs for examples. There does need to be a mix of high quality accommodation on both sides, for renters and owners. And especially with apartments, we need to improve the quality and also the rules around ejecting bad tenants.


I'd agree, the solution shouldn't revolve around home ownership alone. Let's have a choice, especially for people who want greater diversification of their assets.

We should encourage investing via tax sheltered accounts (such as ISAs in the UK, Assurance Vie in France etc.) If the return on your investments cover your rent, you don't need to own your home.


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## skrooge (7 Aug 2022)

On the esri chart you could argue that through the selling off of social housing some of those lines are artificially high. I agree that homeownerhip isn't the glorious panacea to a housing crisis (unless what people really mean by housing crises is actually a homeownerhip crises?). 

I'm not sure lowering building standards does anything in the longer-term. We want to avoid building the tenements of tomorrow for the sake of a short term fix.  We don't have a great track record of meeting standards at the best of time and a considerable amount of construction resources will be spent fixing the problems of previous builders over the next couple of years. They could have be used elsewhere if the State had been on top of regulating building work. 

What we need is consistency of approach/message. We're all waiting for the next knee-jerk government reaction. I know that the incentives to build tomorrow will be more than they are today, so why not wait to build. We need to take the politics out of it. A cross party agreement on housing might provide some level of certainty and actually lead to greater output.


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## Bow tie (7 Aug 2022)

If the gov decides not to build, build, build to bring the price down....we could incentivize parents to supply deposits to children.
We already have a form of this when parents are landowners and can give a plot, we could go all out and allow this one form of support tax free for all. The plot legislation includes clawbacks for timeframe and use- just apply the same to the purchased house.


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## NoRegretsCoyote (7 Aug 2022)

Bow tie said:


> we could incentivize parents to supply deposits to children.


A parent has to give more to than €335k to a child before CAT is payable.

What more incentive do you need?


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## Pinoy adventure (7 Aug 2022)

NoRegretsCoyote said:


> A parent has to give more to than €335k to a child before CAT is payable.
> 
> What more incentive do you need?


Remove the 335k threshold.


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## Silversurfer (7 Aug 2022)

Looking at the figures of home ownership to those born in the 1950’s & 1960’s it seems that their children will inherit at some stage. So that is 60% with at least a sizeable deposit. It might not be soon enough for their liking but it will be available. For those on low incomes the Government should expand their plans to build modular homes as a form of social housing. Large numbers are living like this in the private sector. Our kids are going to school in these modular units too. Young people should be encouraged to start saving early and get well educated for jobs that pay well. Art degrees for 3 years and a masters for 2 years combined with travel for another couple of years means they are entering the housing market years later than their parents did.


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## Bow tie (7 Aug 2022)

NoRegretsCoyote said:


> A parent has to give more to than €335k to a child before CAT is payable.
> 
> What more incentive do you need?


That's pretty true, forgot about that. 
I have thought for a long time that the housing market here might be moving toward requiring multi generational wealth. 
Certainly in the last tiger people were encouraged to have parents go guarantor, give gifts etc. So if the purpose is transfer of wealth back to the younger generation maybe increase it?


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## Bow tie (7 Aug 2022)

Silversurfer said:


> Looking at the figures of home ownership to those born in the 1950’s & 1960’s it seems that their children will inherit at some stage. So that is 60% with at least a sizeable deposit. It might not be soon enough for their liking but it will be available. For those on low incomes the Government should expand their plans to build modular homes as a form of social housing. Large numbers are living like this in the private sector. Our kids are going to school in these modular units too. Young people should be encouraged to start saving early and get well educated for jobs that pay well. Art degrees for 3 years and a masters for 2 years combined with travel for another couple of years means they are entering the housing market years later than their parents did.


A society does need a mix of people though, students can't just be corporate fodder.
In addition not everyone is able for the courses that lead to well paying jobs.
There will always be some strata of people.


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## skrooge (7 Aug 2022)

Most of the measures I've heard so far are focused about increasing demand/purchasing power. Net effect will be a little more housing but more expensive property across the board. By increasing the benefits of homeownership I don't see how it's going to reduce the inequality? It's like trying to slow a car down with only the accelerator. 

If it's inequality we want to deal with why not tax away the implicit benefits. Increases in LPT to fund an increase in social housing. Homeownership might be a dream for all but it's not going to be a reality for all. Higher property tax will make homeownership less attractive. It could also incentives empty nesters to downsize. Part of our problem is inefficient allocation of housing. There may be a time in my life when I need a 5 bed house but that will pass and the system should be designed to encourage me to move with I don't need it. 

Another approach might be to tax the capital gains. 

Of course this is all theoretical no government would bite the hand that elects it and the reality is most of the electorate are homeowners so we're left with the accelerator only.


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## Bow tie (7 Aug 2022)

As I've said in other threads, I don't think policy should railroad older people from their homes.

How about we do invest in local council housing again- however, it's only as a stepping stone to ownership.
A combination of very low rent, and say 25% rebate of your total rent paid becomes your equity when you move from a public council house to private? Have people considered for a 'move' application every 5 years?


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## odyssey06 (7 Aug 2022)

skrooge said:


> Most of the measures I've heard so far are focused about increasing demand/purchasing power. Net effect will be a little more housing but more expensive property across the board. By making increasing the benefits of homeownership I don't see how it's going to reduce the inequality? It's like trying to slow a car down with only the accelerator.
> 
> If it's inequality we want to deal with why not tax away the implicit benefits. Increases in LPT to fund an increase in social housing. Homeownership might be a dream for all but it's not going to be a reality for all. Higher property tax will make homeownership less attractive. It could also incentives empty nesters to downsize. Part of our problem is inefficient allocation of housing. There may be a time in my life when I need a 5 bed house but that will pass and the system should be designed to encourage me to move with I don't need it.
> 
> ...


Tax away the implicit benefits and you discourage home ownership. Which translates to more people needing government support later in life from HAP and social housing etc instead of having the expense covered because they own their own home.  And how are those supports to be paid for?

So all you have suggested will only increase inequality and encourage moral hazard.

Also, you only seem to care about inefficient allocation of private houses, what about all the inefficient allocation of social housing?


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## Silversurfer (7 Aug 2022)

Bow tie said:


> A society does need a mix of people though, students can't just be corporate fodder.
> In addition not everyone is able for the courses that lead to well paying jobs.
> There will always be some strata of people.


Society does indeed need a mix of people.  My comment was a suggestion for those attending college to study a course with a career path and start work earlier. Many are attempting home ownership in their mid thirties. Which with a 35 year mortgage being the norm makes it very difficult. Unfortunately ‘corporate fodder’ and mortgages go hand in hand. Those that are unemployed don’t have to live in expensive areas and perhaps could relocate.


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## skrooge (7 Aug 2022)

Bow tie said:


> As I've said in other threads, I don't think policy should railroad older people from their homes.


Happy to have them stay where they are but I see no harm in them paying for the privilege. The LPT shouldn't be about railroading anyone but the LPT could reflect the cost to society of the 4 beds that might be underused? Is it really a bad thing for a couple in their 5 bed mansion to consider downsizing to a 4 bed smaller mansion?



odyssey06 said:


> Tax away the implicit benefits and you discourage home ownership. Which translates to more people needing government support later in life from HAP and social housing etc instead of having the expense covered because they own their own home.  And how are those supports to be paid for?



That's a big leap you've taken there - no grey area with you it's all black and white! Your basic premise would seem to be that there is no inequality. Are you really suggesting that a tax increase will drive everyone onto HAP? I don't think exisitng or potential buyers are that fickle. The reality is people will want to own. It's as much a cultural thing as a anything to do with the tax benefits. 

The average property price in Ireland is just over €300k. that's probably a mortgage of €1,300 a month. The LPT on that property is about €315 a year (or €27 a month). The average rent in Ireland is €1,500. There's plenty of scope to increase the LPT and have the average renter and new owner pay the same. 

That's not even taking account of the fact many people own their home outright without a mortgage. The reality is many people have scope to pay more tax. 

But my all means argue the point that pushing up demand for owner occupied housing is the way forward.



odyssey06 said:


> Also, you only seem to care about inefficient allocation of private houses, what about all the inefficient allocation of social housing?


No the problem exists there was well but thanks to the shortsighted view of previous governments there isn't a lot of social housing around the place at present.


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## Sophrosyne (8 Aug 2022)

skrooge said:


> The average property price in Ireland is just over €300k. that's probably a mortgage of €1,300 a month. The LPT on that property is about €315 a year (or €27 a month). The average rent in Ireland is €1,500. There's plenty of scope to increase the LPT and have the average renter and new owner pay the same.
> 
> That's not even taking account of the fact many people own their home outright without a mortgage. The reality is many people have scope to pay more tax.


Have you factored in property taxes and house and garden maintenance costs, particularly for older houses in your comparison of owner v renter? There is also insurance costs and in apartments, community fees payable by the owner.


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## Purple (8 Aug 2022)

skrooge said:


> Happy to have them stay where they are but I see no harm in them paying for the privilege. The LPT shouldn't be about railroading anyone but the LPT could reflect the cost to society of the 4 beds that might be underused? Is it really a bad thing for a couple in their 5 bed mansion to consider downsizing to a 4 bed smaller mansion?
> 
> That's a big leap you've taken there - no grey area with you it's all black and white! Your basic premise would seem to be that there is no inequality. Are you really suggesting that a tax increase will drive everyone onto HAP? I don't think exisitng or potential buyers are that fickle. The reality is people will want to own. It's as much a cultural thing as a anything to do with the tax benefits.


It's not about paying for a privilege and there's nothing wrong with some inequality. If I'm not as smart or hard working as my neighbour I'll probably have less than them. That's the way it should be. It's about having a relatively equal society which has social cohesion and low levels of real poverty and crime. Taxes are the price we pay for that and in general taxes should not discourage wealth creation. 


skrooge said:


> The average property price in Ireland is just over €300k. that's probably a mortgage of €1,300 a month. The LPT on that property is about €315 a year (or €27 a month). The average rent in Ireland is €1,500. There's plenty of scope to increase the LPT and have the average renter and new owner pay the same.
> 
> That's not even taking account of the fact many people own their home outright without a mortgage. The reality is many people have scope to pay more tax.
> 
> But my all means argue the point that pushing up demand for owner occupied housing is the way forward.


We need to increase supply and reduce the cost of providing that supply. The State is grossly inefficient and adds huge costs to housing and the construction sector is also grossly inefficient and ridiculously labour intensive. That labour intensity means there's no easy solution since no matter what else we do that labour supply shortage constraint will still be there.


skrooge said:


> No the problem exists there was well but thanks to the shortsighted view of previous governments there isn't a lot of social housing around the place at present.


Ah there is and it's also very badly allocated. There's plenty of 3 bed social houses near me with single occupants in them. If we are going to start social engineering older home owners out of the houses they actually own then we should start by making sure all social housing units are properly and efficiently allocated.


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## michaelm (8 Aug 2022)

Purple said:


> We need to increase supply and reduce the cost of providing that supply.


Then the job would be oxo.  I'm not sure the policy makers can fix much.  Me thinks they've ended up with Father Ted's car. It will probably fix itself over time as people have fewer kids, later in life, and the population stagnates. I've advised my kids to try to marry an only child .


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## skrooge (8 Aug 2022)

There are 2 separate points here. 1) increasing supply of housing, 2) dealing with inequality. 

Ramping up supply will help some people, it doesn't deal with the broad inequality. Just because more people own doesn't mean the gap between the well off (owners) and less well off (tenant) is any way reduced. 

As for dealing with the inequalities a combination of taxes (on owners) and/or subsidies (for tenants) would go some some way to leveling the field.


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## Gordon Gekko (8 Aug 2022)

Build a new purpose-built town in the Midlands with a high-speed rail link direct into Dublin City Centre. Cap the price of the  properties to suit the proverbial “nurse and the guard”.


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## Purple (8 Aug 2022)

skrooge said:


> There are 2 separate points here. 1) increasing supply of housing, 2) dealing with inequality.
> 
> Ramping up supply will help some people, it doesn't deal with the broad inequality. Just because more people own doesn't mean the gap between the well off (owners) and less well off (tenant) is any way reduced.
> 
> As for dealing with the inequalities a combination of taxes (on owners) and/or subsidies (for tenants) would go some some way to leveling the field.


Increasing supply in a normal market will reduce cost. We already have the highest levels of social transfers in the EU so I don't think inequality is a problem. We just have to tax capital a bit more and tax labour a bit less. 

This from Finfactsis a very good overview of the property market and the issues it faces. There's no "if only they just did this" type solution.


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## T McGibney (8 Aug 2022)

skrooge said:


> I agree that homeownerhip isn't the glorious panacea to a housing crisis


It certainly worked in averting a looming crisis in the 1990s


skrooge said:


> I'm not sure lowering building standards does anything in the longer-term. We want to avoid building the tenements of tomorrow for the sake of a short term fix.


I live in a cosy, warm and structurally sound house built around 22 years ago for circa €100,000. It would be illegal to build the same house anywhere in Ireland today. That's crazy.

As for your 'tenements of tomorrow' cliche, I guess you don't know what a tenement is?


skrooge said:


> We don't have a great track record of meeting standards at the best of time and a considerable amount of construction resources will be spent fixing the problems of previous builders over the next couple of years.


Vastly more will be spent on the consequences of the housing and homelessness crisis.


skrooge said:


> I know that the incentives to build tomorrow will be more than they are today, so why not wait to build.


Because, more than a decade into this ever-worsening housing crisis, during which time almost nothing has been built, we can't afford to postpone corrective action any longer.


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## T McGibney (8 Aug 2022)

Gordon Gekko said:


> Build a new purpose-built town in the Midlands with a high-speed rail link direct into Dublin City Centre. Cap the price of the  properties to suit the proverbial “nurse and the guard”.


Purpose-built new towns normally equate to ghettos.


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## Bow tie (8 Aug 2022)

T McGibney said:


> Purpose-built new towns normally equate to ghettos.


Agreed. And if you set a low price, they won't be desirable and you place a ceiling on the type of place it will become socially.


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## Purple (8 Aug 2022)

Gordon Gekko said:


> Build a new purpose-built town in the Midlands with a high-speed rail link direct into Dublin City Centre. Cap the price of the  properties to suit the proverbial “nurse and the guard”.


Who'll build it? Our construction sector workforce is still more than 30% lower than it was 20 years ago, despite our population being 20% more people in the country, and the construction sector is just as labour intensive, wasteful and incompetent as it was then.


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## skrooge (8 Aug 2022)

T McGibney said:


> It certainly worked in averting a looming crisis in the 1990s


And contributed to a different crises a decade later. 



T McGibney said:


> Because, more than a decade into this ever-worsening housing crisis, during which time almost nothing has been built, we can't afford to postpone corrective action any longer.



This comes back to credibility of policy. If a builder knows they'll get better government supports tomorrow (and probably higher profit) why not wait. If we had a cross party agreement on an a single approach it might encourage more construction.


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## Purple (8 Aug 2022)

T McGibney said:


> It certainly worked in averting a looming crisis in the 1990s
> 
> I live in a cosy, warm and structurally sound house built around 22 years ago for circa €100,000. It would be illegal to build the same house anywhere in Ireland today. That's crazy.
> 
> ...


What gets me is the notion that this is somehow a uniquely Irish problem. Housing affordability, a shortage of social housing and price to income multiples are a problem across most of the developed world. I see it as a consequence of the necessary response to the 2008 crash where we flooded the world with new money and the longer term effect of automation and AI on production and productivity where more wealth creation is done by capital so less of the share of created wealth is retained by labour.

The idea that the government of a small democracy which is structed to have strong Parliaments and weak Governments, and which is one of the most open economies in the world, can somehow fix the problem is ridiculous. The most they can do is mitigate the impact of this global phenomenon and if you look at the data they've actually done a relatively good job of doing that.


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## Peanuts20 (8 Aug 2022)

T McGibney said:


> Purpose-built new towns normally equate to ghettos.


not if it is done right, I'm no fan of Milton Keynes and it's numbered roundabouts and roads but I know people who live there and love it and it does seem pleasant if a bit soulless.

Likewise look at the continent and places like San Sebastian where there has been significant new build of appartment blocks in recent years but the ground floor are retailers and businesses, there is a playground or play area for kids within a couple of minutes walk of each block, no shortage of schools etc. 

we need to build communities, not houses


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## T McGibney (8 Aug 2022)

skrooge said:


> And contributed to a different crises a decade later.


No it didn't. It was the panicked decision of the political class in 2009 led by the sadly dying Minister Brian Lenihan to constructively outlaw new housing building and investment that turned a temporary crisis into a permanent one, now mutating into a full-blown disaster.


skrooge said:


> This comes back to credibility of policy. If a builder knows they'll get better government supports tomorrow (and probably higher profit) why not wait. If we had a cross party agreement on an a single approach it might encourage more construction.


Best way to avert this is not to wait at all. Stop the procrastination and solve the problem now. If we have to wait for cross-party support, we'll be here til doomsday.


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## T McGibney (8 Aug 2022)

Peanuts20 said:


> not if it is done right, I'm no fan of Milton Keynes and it's numbered roundabouts and roads but I know people who live there and love it and it does seem pleasant if a bit soulless.
> 
> Likewise look at the continent and places like San Sebastian where there has been significant new build of appartment blocks in recent years but the ground floor are retailers and businesses, there is a playground or play area for kids within a couple of minutes walk of each block, no shortage of schools etc.
> 
> we need to build communities, not houses


San Sebastian is the polar opposite of a purpose-built new town.

The relative success of Milton Keynes does not contradict my point that these places normally equate to ghettos.


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## T McGibney (8 Aug 2022)

Purple said:


> The idea that the government of a small democracy which is structed to have strong Parliaments and weak Governments, and which is one of the most open economies in the world, can somehow fix the problem is ridiculous. The most they can do is mitigate the impact of this global phenomenon and if you look at the data they've actually done a relatively good job of doing that.


It's only a global phenomenon because governments are copying each others' actions with similarly negative results. George Osborne and more recently Michael Gove have at various stages introduced into the UK the same policies that wrecked housing builds and investment in Ireland from 2009 onwards. The UK are therefore now heading in the same path as we took a decade ago. It won't end well there either.

It is an Irish government that will ultimately address and resolve the Irish housing crisis.


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## Purple (8 Aug 2022)

T McGibney said:


> It's only a global phenomenon because governments are copying each others' actions with similarly negative results.


Can you expand on that?



T McGibney said:


> It is an Irish government that will ultimately address and resolve the Irish housing crisis.


The question is how do they do it.


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## T McGibney (8 Aug 2022)

Purple said:


> Can you expand on that?


I already have, see my last post above. 


Purple said:


> The question is how do they do it.


See my first post in this thread.


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## Purple (8 Aug 2022)

T McGibney said:


> I already have, see my last post above.
> 
> See my first post in this thread.





T McGibney said:


> Very easy.
> 
> 1. Build loads of more houses and apartments for rental and owner occupier use.


Who'll build them? We don't have that vast pool of cheap Accession State labour this time around. 


T McGibney said:


> 2. Dramatically cut building regulations and levies back to early Celtic Tiger era  levels.


Get rid of the Levies but we need enforcement of the regulations and the State sector is useless and inefficient at doing that. 


T McGibney said:


> 3. Do likewise with planning restrictions.


As long as ribbon development houses have to pay the full cost of connections to utilities such as eater, sewage, electricity and broadband. 


T McGibney said:


> 4. Cut CGT on residential development land to 10% for a 3 year period.


Will that work? 


T McGibney said:


> 5. Reintroduce a form of section 23 relief for new properties built or restored from dereliction within the same period


Good idea. I'd also ban any reassessments for Rates for 10 years for shops etc that convert their upper floors to residential units. 


T McGibney said:


> 6. Ignore the naysayers and objectors.


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## The Horseman (8 Aug 2022)

T McGibney said:


> San Sebastian is the polar opposite of a purpose-built new town.
> 
> The relative success of Milton Keynes does not contradict my point that these places normally equate to ghettos.


Areas turning into ghettos is not a result of the properties, it is a result of the residents.


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## T McGibney (8 Aug 2022)

Purple said:


> Who'll build them? We don't have that vast pool of cheap Accession State labour this time around.


We didn't have them in 1997-2001 either and things still worked out fine.


Purple said:


> Get rid of the Levies but we need enforcement of the regulations and the State sector is useless and inefficient at doing that.


No, we need fewer regulations. 


Purple said:


> As long as ribbon development houses have to pay the full cost of connections to utilities such as eater, sewage, electricity and broadband.


No. I want to encourage building, not discourage it.


Purple said:


> Will that work?


No idea. A variation of it worked wonders last time round. It's worth trying. The beauty of it is that if it doesn't work or is a flop, it can be reversed overnight.


Purple said:


> Good idea. I'd also ban any reassessments for Rates for 10 years for shops etc that convert their upper floors to residential units.


Or even their lower floors.


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## Purple (8 Aug 2022)

T McGibney said:


> We didn't have them in 1997-2001 either and things still worked out fine.


Completions went from 35.5k to 47.5k during that time with a growth rate that was consistent since 1991. The big increase in completions came after 2001. We've a million more people in the country, our construction workforce is still 30% below the peek and the whole global economy has changed. 


T McGibney said:


> No, we need fewer regulations.


I'm fine with that but we need to enforce whatever ones we have. That requires State employees and they always slow things down. 


T McGibney said:


> No. I want to encourage building, not discourage it.


But that's a massive subsidy from the State to the home owner. That constitutes very bad value for money. 


T McGibney said:


> No idea. A variation of it worked wonders last time round. It's worth trying. The beauty of it is that if it doesn't work or is a flop, it can be reversed overnight.


True.


T McGibney said:


> Or even their lower floors.


Yep.


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## T McGibney (8 Aug 2022)

Purple said:


> Completions went from 35.5k to 47.5k during that time with a growth rate that was consistent since 1991. The big increase in completions came after 2001. We've a million more people in the country, our construction workforce is still 30% below the peek and the whole global economy has changed.


A good few of the tradesmen who worked on our house build during that time were Irish guys who had recently returned from the US & UK. Once the work is there, people will be found to do it.


Purple said:


> I'm fine with that but we need to enforce whatever ones we have. That requires State employees and they always slow things down.


Again, we need fewer regulations, fewer State employees and fewer slowdowns.


Purple said:


> But that's a massive subsidy from the State to the home owner. That constitutes very bad value for money.


I don't care about that. We're in an emergency and if substituting a subsidy for another bigger series of subsidies has to be done, then so be it. If it's an issue it can be addressed on other ways.


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## Bow tie (8 Aug 2022)

Taking this from a social angle, we could as mentioned by another poster give support for doing up old properties.
Do this with additional supports in villages with a small number of people. Support work from home so people can leave the most urban areas, support the services in these areas- school grants, transport, broadband GPs and hospitals. Basically re-invigorate rural Ireland and accelarate population dispersion across a small island.
I'm not sure that would fly politically though as it would de-pressure and probably reduce value all types of property in the main urban areas. Too many vested interests.


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## Peanuts20 (8 Aug 2022)

T McGibney said:


> San Sebastian is the polar opposite of a purpose-built new town.
> 
> The relative success of Milton Keynes does not contradict my point that these places normally equate to ghettos.


I disagree on San Sebastian as I was referring to the newly built suburbs outside of the old town. but in fairness, I didn't make that clear in my OP.

Same applies to places like Arcachon an hour outside of Bordeaux, much of which is largely new builds on a smaller original town but with the right facilities in place.

plenty of other new towns in the UK, they're not perfect but they've become communities in their own right. My core point however remains the same, we should focus on building proper communities with proper facilities and not Ceaucesu style rabbit hutches for people to live in.


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## Purple (8 Aug 2022)

T McGibney said:


> A good few of the tradesmen who worked on our house build during that time were Irish guys who had recently returned from the US & UK. Once the work is there, people will be found to do it.


The work is there now and we can't find the people to do it.


T McGibney said:


> Again, we need fewer regulations, fewer State employees and fewer slowdowns.


So how do we ensure whatever regulations we have are enforced? Are you okay with the issues we have from the boom reoccurring? 


T McGibney said:


> I don't care about that. We're in an emergency and if substituting a subsidy for another bigger series of subsidies has to be done, then so be it.


Yea, but we'd be doing the opposite. We'd be substituting a small subsidy for aa far bigger one. One-off housing in rural areas in incredibly expensive for the State to provide for, from roads to utilities to access to services. I know you don't think environmental issues should be taken into account so just look at the costs. If the owner can provide their own broadband, water, electricity and water waste management and doesn't expect a paved road where there wasn't one before then by all means let them build.


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## Bow tie (8 Aug 2022)

Purple said:


> One-off housing in rural areas in incredibly expensive for the State to provide for, from roads to utilities to access to services. I know you don't think environmental issues should be taken into account so just look at the costs. If the owner can provide their own broadband, water, electricity and water waste management and doesn't expect a paved road where there wasn't one before then by all means let them build.



If old buildings are available, we should start with those but we should get ahead of things by starting to provide the services in cheaper but less accessible places. We are a relatively small country and looking to the future, will likely require all the land to be useful and accessible not just urban centres.


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## Purple (8 Aug 2022)

Bow tie said:


> Taking this from a social angle, we could as mentioned by another poster give support for doing up old properties.
> Do this with additional supports in villages with a small number of people. Support work from home so people can leave the most urban areas, support the services in these areas- school grants, transport, broadband GPs and hospitals. Basically re-invigorate rural Ireland and accelarate population dispersion across a small island.
> I'm not sure that would fly politically though as it would de-pressure and probably reduce value all types of property in the main urban areas. Too many vested interests.


The problem with doing up old properties and converting areas over shops etc is that it is very labour intensive and so very expensive. Blocklayers are getting €3.50 a block (300 blocks a day is not an unrealistic output) and plasterers are getting the same sort of money. I know someone in a rural town who was recently quoted €32k labour to plaster a 200square meter new build.


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## T McGibney (8 Aug 2022)

Purple said:


> The work is there now and we can't find the people to do it.


There is no building boom now. 


Purple said:


> So how do we ensure whatever regulations we have are enforced? Are you okay with the issues we have from the boom reoccurring?


On balance, yes. We got hundreds of thousands of houses and apartments built. In the vast majority of cases, it went well. Of course there were downsides, but there always are and we can hopefully learn from past misakes.


Purple said:


> Yea, but we'd be doing the opposite. We'd be substituting a small subsidy for aa far bigger one. One-off housing in rural areas in incredibly expensive for the State to provide for, from roads to utilities to access to services. I know you don't think environmental issues should be taken into account so just look at the costs.


Not nearly as expensive as having a housing crisis.


Purple said:


> If the owner can provide their own broadband, water, electricity and water waste management and doesn't expect a paved road where there wasn't one before then by all means let them build.


That's already the case. I don't know where you get the idea that we're all getting free broadband, electricity and water waste management. Or even, unlike urban folks, free water.


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## Purple (8 Aug 2022)

Our under occupancy rate is very high at 70%. Holland and Spain is around 50%. Property tax and a 5 year needs assessment on all Social Housing would help to address that. If we got our level down to Spain's we'd be a long way to addressing the problem.


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## Purple (8 Aug 2022)

T McGibney said:


> There is no building boom now.


Exactly, and we have a labour shortage. 


T McGibney said:


> On balance, yes. We got hundreds of thousands of houses and apartments built. In the vast majority of cases, it went well. Of course there were downsides, but there always are and we can hopefully learn from past misakes.


Fair enough. I'd aim for a middle ground; Fewer rules but actually enforce them. I'd require engineers and QS's to actually go on site and sign off and make them liable in the same way they would be if a bridge collapsed. 


T McGibney said:


> Not nearly as expensive as having a housing crisis.


True but providing that massive subsidy won't solve the housing crisis. It might make it worse by sucking up more state funds.  


T McGibney said:


> That's already the case. I don't know where you get the idea that we're all getting free broadband, electricity and water waste management. Or even, unlike urban folks, free water.


There is a massive subsidy in the provision of all of those things in rural areas. Obviously once they are provided there is a change for their consumption. We should all be paying for water but that's a different barrel of muck.


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## T McGibney (8 Aug 2022)

Purple said:


> Exactly, and we have a labour shortage.


There was also a construction labour shortage in the early to mid 90s, but that wasn't an obstacle to the post-97 boom. The market has a funny way of resolving shortages.


Purple said:


> Fair enough. I'd aim for a middle ground; Fewer rules but actually enforce them. I'd require engineers and QS's to actually go on site and sign off and make them liable in the same way they would be if a bridge collapsed.


Well if you want additional and more onerous regulations, expect fewer and more expensive housing units.


Purple said:


> True but providing that massive subsidy won't solve the housing crisis. It might make it worse by sucking up more state funds.


Well if there are signs that this is likely to happen, the policy can change. But again you'll end up with fewer housing units.


Purple said:


> There is a massive subsidy in the provision of all of those things in rural areas. Obviously once they are provided there is a change for their consumption. We should all be paying for water but that's a different barrel of muck.


In a country where the State eats up a high % of national output, there are massive subsidies for almost everything. We in rural areas pay installation fees for utilities too. Even for water connection, which doesn't come cheap.


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## cremeegg (8 Aug 2022)

The original question was to the effect of  'how do we deal with the inequality' and not 'how do we avoid the inequality'.

While improvements to housing supply are to be welcomed, the premise of the original question was that there is an inequality arising and we must deal with that inequality.

I suggest that in fact, this inequality is not new despite the interesting chart in the first post. The chart shows people born in the 1960s having 60% home ownership by age 30. I suggest that this is very misleading, what we in fact see is that of those born in the 60s *who still lived in Ireland* 60% owned their own home. 

In the 1980s (when those born in the 60s turned 20) there were no jobs. People emigrated. We didn't have a housing crisis (though mortgages were hard to get and expensive) because so many had emigrated.

Today well paying jobs are easy to get but housing is very difficult. The housing crisis is a problem of success. The fastest way to solve the housing crisis would be to nationalise a few MNCs, employment would collapse and a 5 bed detached in Ballsbridge would be affordable for a teacher. be careful what you wish for.

As was said above there is no 'just do it' solution rather ongoing efforts on easing finance, labour, materials, planning and other constraints. And doing something to assist those who will find themselves loosing out anyway.


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## Purple (8 Aug 2022)

T McGibney said:


> There was also a construction labour shortage in the early to mid 90s, but that wasn't an obstacle to the post-97 boom. The market has a funny way of resolving shortages.


I admire your optimism. 


T McGibney said:


> Well if you want additional and more onerous regulations, expect fewer and more expensive housing units.


I don't. I want the ones we want to keep to be enforced. 


T McGibney said:


> Well if there are signs that this is likely to happen, the policy can change. But again you'll end up with fewer housing units.


We'll certainly end up with fewer units if we offer massive subsidies to small scale builds.


T McGibney said:


> In a country where the State eats up a high % of national output, there are massive subsidies for almost everything.


True, though that's the case in most developed countries.


T McGibney said:


> We in rural areas pay installation fees for utilities too.


Yes, but they are nowhere close to the actual cost.


T McGibney said:


> Even for water connection, which doesn't come cheap.


Agreed, but it is nowhere close to the actual cost.


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## cremeegg (8 Aug 2022)

I have always thought that the fact so many Irish households are property owners contributes hugely to social stability here. I am thinking of farms as much as purely residential housing.

Tensions between the caricature ultra liberal female city based lawyer, and the caricature conservative small rural farmer, are behind much political instability. In the US, in Holland at the moment, we saw it in part behind Brexit, it part of the issues in Italy at the moment and very much so in Poland. In Ireland they are more likely to be father and daughter. That doesn't mean their political ideas are similar, but they do understand each other.

This is because small farmers are property owners rather than agricultural labourers and tenants as in the UK, and so can afford to educate their children. This carried on with urban homeowners, I can afford to educate my children because my mortgage is small and nearly paid.


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## Bow tie (8 Aug 2022)

cremeegg said:


> This carried on with urban homeowners, I can afford to educate my children because my mortgage is small and nearly paid.


This 100%.

Personally, I don't think it is fair to penalize those who have worked to achieve a certain standard- of income, home, education by calling it inequality and seeking to redistribute further. I would have no issue with more tax money being spent outside urban towns and cities to get the best use from all the land for all the people.


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## T McGibney (8 Aug 2022)

Purple said:


> I admire your optimism.


Experience, not optimism.


Purple said:


> I don't. I want the ones we want to keep to be enforced.
> 
> We'll certainly end up with fewer units if we offer massive subsidies to small scale builds.


Repeats of earlier comments, each already addressed.


Purple said:


> True, though that's the case in most developed countries.
> 
> Yes, but they are nowhere close to the actual cost.
> 
> Agreed, but it is nowhere close to the actual cost.


Ditto, also off-topic.


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## Purple (8 Aug 2022)

T McGibney said:


> Experience, not optimism.


Yea, it sounds like optimism. 


T McGibney said:


> Repeats of earlier comments, each already addressed.


Not really.


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## PGF2016 (8 Aug 2022)

T McGibney said:


> 2. Dramatically cut building regulations and levies back to early Celtic Tiger era  levels.
> 
> 3. Do likewise with planning restrictions.
> 
> 6. Ignore the naysayers and objectors.


This sounds like China. And they have the same issues with young people not being able to afford housing, housing being built in the wrong areas and to poor standards. Not something to aspire to.

And if this does happen we can then have a thread in 10 years on how to fix all the issues brought on by the lack of planning.


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## T McGibney (8 Aug 2022)

PGF2016 said:


> This sounds like China.


It's OK, early Celtic Tiger Ireland was nothing like China.


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## Purple (8 Aug 2022)

Bow tie said:


> Personally, I don't think it is fair to penalize those who have worked to achieve a certain standard- of income, home, education by calling it inequality and seeking to redistribute further.


It is inequality but that's not necessarily wrong. Equality of opportunity is the aspiration. We should never aspire to equality of outcome as that is utterly evil. 
Working to achieve a certain standard is one thing but as I pointed out in another thread my pension fund and house value doubled in less than a decade without me putting a cent into either and all that gain was based on politics, not economics or my hard work. Taxing that gain isn't taxing my work or prudence or the like. It's just taxing wealth to fund the rest of the stuff we want in society. The less ideology in decision making the batter. 


Bow tie said:


> I would have no issue with more tax money being spent outside urban towns and cities to get the best use from all the land for all the people.


Either do I, if it gets the best use from all the land for all the people.


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## Bow tie (8 Aug 2022)

Purple said:


> Taxing that gain isn't taxing my work or prudence or the like. It's just taxing wealth to fund the rest of the stuff we want in society. The less ideology in decision making the batter.


Taxing the notional value gain on shelter/home is a problem in my eyes. A family home which doesn't change hands and which I live in with my family has not increased my wealth except on paper.
There are different types of wealth, with different buyers/investors....and pretending they are all equal in the eyes of the general public/voters is true wizardofozcononmics


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## Purple (8 Aug 2022)

Bow tie said:


> Taxing the notional value gain on shelter/home is a problem in my eyes. A family home which doesn't change hands and which I live in with my family has not increased my wealth except on paper.


That's an increase in wealth. Put it this way, if you didn't own that home would it cost you more to have the use of it, whether through a mortgage or by renting it? That's you having wealth and so not having to pay for the use of someone else's wealth. The people who do have to pay for the access to someone else's wealth (in the form of a house) do so with income that has been taxed at a marginal rate of over 50%.  


Bow tie said:


> There are different types of wealth, with different buyers/investors....and pretending they are all equal in the eyes of the general public/voters is true wizardofozcononmics


I don't understand that point in relation to taxation.


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## Bow tie (8 Aug 2022)

Interesting how most tax conversations eventually seem to centre around who we deem 'rich'.
It always seems to be the person just doing a bit better than us, rather than the super rich/ corporations and so on.
I would also wonder why we are talking about more 'common-man' taxes when the country is sitting on a 5Bn surplus.


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## Bow tie (8 Aug 2022)

Purple said:


> That's an increase in wealth. Put it this way, if you didn't own that home would it cost you more to have the use of it, whether through a mortgage or by renting it? That's you having wealth and so not having to pay for the use of someone else's wealth. The people who do have to pay for the access to someone else's wealth (in the form of a house) do so with income that has been taxed at a marginal rate of over 50%.
> 
> I don't understand that point in relation to taxation.


It's only an actual wealth increase if I crystalize the gain. Otherwise it remains a home/shelter.
This is going around in circles- I also paid for that house, through a mortgage(access to someone elses wealth) and through after tax income at higher rates.


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## Purple (8 Aug 2022)

Bow tie said:


> It's only an actual wealth increase if I crystalize the gain. Otherwise it remains a home/shelter.


No, it's still wealth. It's not liquid until you sell it but it gives you a real tangible benefit each day. Even if it doesn't it's still wealth. It just happens to also have a utility value. 


Bow tie said:


> This is going around in circles- I also paid for that house, through a mortgage(access to someone elses wealth) and through after tax income at higher rates.


You did, but the next guy will have to pay far more than you did for the same property. None of that is relevant though as property tax isn't there to punish people. It's there to broaden the tax base, lower property prices and shift taxes away from wealth creation and onto wealth retention because all that is good for the economy.


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## Purple (8 Aug 2022)

Interesting information on the collapse and subsequent non-recovery in construction employment here though it is a bit out of date.

Employment in the construction sector fell by 65 per cent from 236,800 in 2007 to 83,400 in 2012.
In Q1 of this year that figure was 160,000. 
The population has increased by more than 20% since 2007 so we'd need 284,000 employed in the sector to match the 2007 number as a percentage of population. 

Given that construction is still very labour intensive  we can't fix the housing supply issue without addressing the labour supply issue and the only way we'll really address the inequalities due to falling home ownership rates is by addressing the supply side problems.


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## NoRegretsCoyote (9 Aug 2022)

Bow tie said:


> Interesting how most tax conversations eventually seem to centre around who we deem 'rich'.


A rich person is someone who earns more than I do.


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## Purple (9 Aug 2022)

NoRegretsCoyote said:


> A rich person is someone who earns more than I do.


That's the problem, we see other people's income and say that they are rich. They see their income and expenditure and think they are doing okay but don't consider themselves rich.
If I had no mortgage/rent and no kids I'd have way more money than I need on half my income.
So I suppose the first question to be answered is what constitutes "rich"?

Is rich and wealthy the same thing?

Should we be giving welfare to someone with a low income who owns a house worth €3 million while we tax the hell out of a high income family with a big mortgage and a gaggle of kids?

I love that definition of a middle class socialist as someone who doesn't care about the poor but who just hates rich people. It seems quite apt in many cases. Some people seem to conflate socialism and begrudgery.


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## Bow tie (9 Aug 2022)

Purple said:


> Should we be giving welfare to someone with a low income who owns a house worth €3 million while we tax the hell out of a high income family with a big mortgage and a gaggle of kids?


For me, the idea I was sold was that I would pass through each life stage from one to the other....with the ups and downs of each.
Single; I paid more tax than families, with a family; later our ages and incomes had risen and we pay substantial taxes due to being in the higher bracket. 10's of thousands in childcare, mortgages- this is simply life!
Hopefully when I get to 65, having been a higher tax payer most of my life and paid for service after service, I won't be forced out of a home due to it's value on paper, which I may not have the funds to pay taxes on at that stage.


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## Purple (9 Aug 2022)

Bow tie said:


> For me, the idea I was sold was that I would pass through each life stage from one to the other....with the ups and downs of each.
> Single; I paid more tax than families, with a family; later our ages and incomes had risen and we pay substantial taxes due to being in the higher bracket. 10's of thousands in childcare, mortgages- this is simply life!


Yes, but is it societally desirable or fair at this time, particularly considering the declining rates of home ownership. 


Bow tie said:


> Hopefully when I get to 65, having been a higher tax payer most of my life and paid for service after service, I won't be forced out of a home due to it's value on paper, which I may not have the funds to pay taxes on at that stage.


When you say its value on paper do you mean its real actual realisable value?
If your income is low you should be able to refer your property tax. That way you won't be forced out of your home, even if you are in the small minority of pensioners who end up poor.


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## joe sod (9 Aug 2022)

We have always had a limited supply of houses but we generally had a stable population of around 3.5 million people for many years therefore our construction industry as disfunctional as it was was able to service this population. 

Houses were relatively cheap and affordable for those with jobs because there wasn't huge competition for houses   ,the competition was for good jobs not houses.
We didn't have net migration but immigration therefore the competition for houses here was removed. 

Now we have the complete opposite situation with a rapidly rising population and people coming here from all parts of the world for work. It is the same all over the western world everyone wants to live and work in the west. This is an unprecedented situation that we have never had before in our history.  
Therefore it is very easy to get a job but very hard to get a house. Unfortunately we do not live in a utopia and there are always some things that are restricted and difficult to obtain. It was always thus.


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## Brendan Burgess (9 Aug 2022)

I have started a new thread to focus on the inequality issue here: 






						How do we deal with the inequalities due to falling home ownership rates?
					

We have a serious and growing problem that a large group of Generation Rent will not be able to ever get on the housing ladder.  This has serious implications.  Ownership of one's home has generally led to lower housing costs and increased wealth.  While long-term renting is expensive and...



					www.askaboutmoney.com
				




Feel free to continue to discuss other issues in this thread.


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## Bow tie (9 Aug 2022)

Purple said:


> Yes, but is it societally desirable or fair at this time, particularly considering the declining rates of home ownership.


'At this time' - exactly, and a cyclical market cannot be the basis for fair policy.

Deferring property tax (at a punitive rate) still taxes the PPR again, after being bought through taxed income and having paid property tax all the years of work one could afford to- also from after tax income. I think the existing nominal property tax we have is fair- and paid over a lifetime, this I can accept. 

I disagree with anything punitive or with unintended social consequences. Demonizing owning a PPR due to its value is not the fix for the problems the next generation have. You also run the risk of gentrifying certain urban areas and causing property to climb even more!


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## cremeegg (9 Aug 2022)

Bow tie said:


> It's only an actual wealth increase if I crystalize the gain. Otherwise it remains a home/shelter.


A house bought in Dublin in the 1990s was in a decaying city with few jobs, two universities and a dismal society. The same house today is in a city with vast employment opportunity, four universities and a thriving society. 

Your house may not have changed but you have benefitted from the improvements in Irish life, and your children have probably benefitted even more. That is why your house has increased in value. So even without selling you have reaped the benefit.


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## Bow tie (9 Aug 2022)

cremeegg said:


> A house bought in Dublin in the 1990s was in a decaying city with few jobs, two universities and a dismal society. The same house today is in a city with vast employment opportunity, four universities and a thriving society.
> 
> Your house may not have changed but you have benefitted from the improvements in Irish life, and your children have probably benefitted even more. That is why your house has increased in value. So even without selling you have reaped the benefit.


General benefits gained from where you live? Most parts of Ireland have improved since the 90's.
Dublin was absolutely not a decaying city in the 90s as someone who was there in the latter part of that decade in college in one of the Uni's.


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## T McGibney (9 Aug 2022)

cremeegg said:


> A house bought in Dublin in the 1990s was in a decaying city with few jobs, two universities and a dismal society. The same house today is in a city with vast employment opportunity, four universities and a thriving society.
> 
> Your house may not have changed but you have benefitted from the improvements in Irish life, and your children have probably benefitted even more. That is why your house has increased in value. So even without selling you have reaped the benefit.


Dublin had at least 3 universities in 1990, TCD, UCD & DCU.

I spent a large chunk of the summer of 1991 living in Dublin. It was a great city in which to be young.


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## cremeegg (9 Aug 2022)

Bow tie said:


> Dublin was absolutely not a decaying city in the 90s as someone who was there in the latter part of that decade in college in one of the Uni's.


It was and it still is. Buddleia sprouting from buildings in the city centre. 






						Abandoned Dublin
					

Abandoned Dublin - Dormant buildings, abandoned buildings, boarded up buildings, forgotten. Within a five minute walk of my home there are at least 10 abandoned homes, offices, buildings. Many of which are left boarded up and untouched for years, sometimes decades. And I know this to be the case...




					abandoneddublin.ie
				




The economic situation has been transformed. Of course not just in Dublin, throughout the country.


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