Do children inherit their parent's social housing?

[TheBigShort]

Do you agree in principle that this should be so?

Realistically how do you evict them?
Lets be real here, when talking about high-income, or "well able to afford to pay for their own private accommodation", how much are we talking about here?
I think incomes of less than €35k for a single, €45k for a couple qualifies the income threshold in DCC, subject to the other criteria of not having anywhere else to live.
Now if a couple occupies a LA and progresses their careers so that they now earn €55k are you seriously suggesting they be evicted without any other suitable alternative accommodation?
Are you suggesting that they just rent or buy wherever they get? That no consideration is made for their employment prospects or educational opportunities? What about their kids at school?
And lets be honest here, its not as if the housing crisis is a result of nowhere to live. It is a result of nowhere suitable to live.
I think there are some 100,000 vacant properties in the State. By your simplified logic then there should be no housing crisis.

On the other hand if a couple are earning €100k + it is my guess that generally they will willingly vacate LA housing and buy/rent for themselves. Why wouldn't they?
As the Dub_nerd example testifies, when people get the opportunity to earn significant income or generate wealth they will take advantage of that. In turn they will willingly vacate social housing.

Does that mean nobody should ever leave a any house in the absence of suitable accommodation?

What do you think? Should they willingly vacate a property and become homeless? As in the absence of alternative ans suitable accommodation that is what you are suggesting.

If not then why should Social Housing Tenants be different?

??

I don't know but given that there are 150,000 social housing units in the country even if it's 2 in every 1000 tenants that would free up 300 houses, house 300 homeless families and save the State over a €100,000,000 in houses that they would not have to build

Its so simple isnt it?
There are 100,000+ vacant properties in the State, only 10,000 homeless. So how is there a housing crisis at all?

Is it because a lot of these vacant properties are not suitable to prospective tenants? Private or public? Even unsuitable for homeless?

There will be the same amount of people in social housing but more people in social housing that actually need it. It would also make the system fairer and therefore more legitimate to the public at large.

In the ideal, simplistic world of Purple and co.
But back in the real world, there are 100,000+ vacant properties in the State, but FTBs cannot get on the ladder.
There are 10,000 people in emergency accommodation.
By your simple reasoning, there should be no crisis.

 

[Purple]

Realistically how do you evict them?
Lets be real here, when talking about high-income, or "well able to afford to pay for their own private accommodation", how much are we talking about here?
I think incomes of less than €35k for a single, €45k for a couple qualifies the income threshold in DCC, subject to the other criteria of not having anywhere else to live.
Now if a couple occupies a LA and progresses their careers so that they now earn €55k are you seriously suggesting they be evicted without any other suitable alternative accommodation?
Are you suggesting that they just rent or buy wherever they get? That no consideration is made for their employment prospects or educational opportunities? What about their kids at school?
And lets be honest here, its not as if the housing crisis is a result of nowhere to live. It is a result of nowhere suitable to live.
I think there are some 100,000 vacant properties in the State. By your simplified logic then there should be no housing crisis.

On the other hand if a couple are earning €100k + it is my guess that generally they will willingly vacate LA housing and buy/rent for themselves. Why wouldn't they?
As the Dub_nerd example testifies, when people get the opportunity to earn significant income or generate wealth they will take advantage of that. In turn they will willingly vacate social housing.

That's a really long way of not answering the question.

What do you think? Should they willingly vacate a property and become homeless? As in the absence of alternative ans suitable accommodation that is what you are suggesting.

That's a shorter way of not answering the question (well done).

??

?? right back at ya.

Its so simple isnt it?
There are 100,000+ vacant properties in the State, only 10,000 homeless. So how is there a housing crisis at all?

Is it because a lot of these vacant properties are not suitable to prospective tenants? Private or public? Even unsuitable for homeless?

That's a strawman argument.

In the ideal, simplistic world of Purple and co.
But back in the real world, there are 100,000+ vacant properties in the State, but FTBs cannot get on the ladder.
There are 10,000 people in emergency accommodation.
By your simple reasoning, there should be no crisis.

That's another strawman argument.


I don't think you are trying.

Let's keep it simple. Can you answer the first question;
You said

Your whole mantra is about getting those who occupy social housing but who can well afford to buy/rent their own housing that they should vacate the social housing.

and I replied with a question(in this context an aact or instance of asking) ;

Correct. Do you agree in principle that this should be so?

 

[TheBigShort]

do you think it is fair that high earners should occupy social housing while poor families are homeless?

Not at all. Its totally unfair, I never suggested otherwise.
Im asking you what do you do to resolve the issue?
My view is that a policy of eviction is futile.

 

[The Horseman]

Not at all. Its totally unfair, I never suggested otherwise.
Im asking you what do you do to resolve the issue?
My view is that a policy of eviction is futile.

So we don't evict and we incentivize people to vacate properties and they don't take the incentive. What then? Remember we have a finite amount of land to build on. So if we can't evict and people don't take the incentives and people still need to be housed how do you suggest we "square this circle"?

 

[TheBigShort]

So we don't evict and we incentivize people to vacate properties and they don't take the incentive. What then? Remember we have a finite amount of land to build on. So if we can't evict and people don't take the incentives and people still need to be housed how do you suggest we "square this circle"?

The proposal to incentive downsizing is only a sticking plaster. It could be introduced quickly. According to CSO 40% of private owned housing is under occupied. That is about 800,000. If only 2% of that is incentivised then that will bring some mobility into the market.
My other, primary proposal, is to build more houses.
Notwithstanding is your point that we only have a finite amount of land to build on, you can rest assure that while this is true, we are nowhere near, not even close, to actually running out of available space.

Depending on who you talk to around here, the cost build of a three bed terrace (?) is anywhere between €150k and €300k. Taking the top figure, LA are currently getting €3,500 per annum. Thats less than €300 a month.
If new housing is provided for working people, typically FTB who cannot get on the property ladder then a private property company can manage the property, investing in quality furnishings (if desirable) and providing affordable rents while making a profit.
The State can deliver the housing. And as it has no intenrions of ever retiring, the cost build can be re-couped over 100yrs, 150yrs +

Professional landlords can now manage the property by providing quality accommodation at affordable prices (relative to mortgages) therefore providing a real alternative to the house ownership model.
Tenants can now get on with their education and careers building an attractive workforce for future investment. They can also aspire to own their own properties one day if they want. Or they can rent at affordable prices for their whole lives if it suits.
The housing market could be mobile and competitive, not like the failure it is today causing hardship and resentment.

Of course that is just an outline, im happy to accept that it is not viable if fundamental factors are outlined.
But the difference between what im proposing and what anybody else is proposing is that im targeting solutions for FTB's, families who wish to trade up and the homeless. All to be done with causing the inevitable conflict that proposals of eviction would ignite.

 

[The Horseman]

The proposal to incentive downsizing is only a sticking plaster. It could be introduced quickly. According to CSO 40% of private owned housing is under occupied. That is about 800,000. If only 2% of that is incentivised then that will bring some mobility into the market.
My other, primary proposal, is to build more houses.
Notwithstanding is your point that we only have a finite amount of land to build on, you can rest assure that while this is true, we are nowhere near, not even close, to actually running out of available space.

Depending on who you talk to around here, the cost build of a three bed terrace (?) is anywhere between €150k and €300k. Taking the top figure, LA are currently getting €3,500 per annum. Thats less than €300 a month.
If new housing is provided for working people, typically FTB who cannot get on the property ladder then a private property company can manage the property, investing in quality furnishings (if desirable) and providing affordable rents while making a profit.
The State can deliver the housing. And as it has no intenrions of ever retiring, the cost build can be re-couped over 100yrs, 150yrs +

Professional landlords can now manage the property by providing quality accommodation at affordable prices (relative to mortgages) therefore providing a real alternative to the house ownership model.
Tenants can now get on with their education and careers building an attractive workforce for future investment. They can also aspire to own their own properties one day if they want. Or they can rent at affordable prices for their whole lives if it suits.
The housing market could be mobile and competitive, not like the failure it is today causing hardship and resentment.

Of course that is just an outline, im happy to accept that it is not viable if fundamental factors are outlined.
But the difference between what im proposing and what anybody else is proposing is that im targeting solutions for FTB's, families who wish to trade up and the homeless. All to be done with causing the inevitable conflict that proposals of eviction would ignite.

What if nobody takes the incentive. People can already choose to downsize if they wish so why are they not doing so?

You seem to be missing the point of a private company, its purpose is to maximize profits? why will it take a business risk if it cant benefit from the positives but must take all the negatives. With the current anti landlord stance and Focus Ireland's latest report you wonder why the rental market is shrinking and more people are becoming homeless.

 

[TheBigShort]

What if nobody takes the incentive. People can already choose to downsize if they wish so why are they not doing so?

They do downsize actually.

http://www.thejournal.ie/downsizing-social-housing-3456397-Jun2017/

http://www.thejournal.ie/downsizing-housing-3337119-Apr2017/

Unfortunately, due to lack of mobility in the market children are staying at home longer. Children staying at home is preventing downsizing. House building could alleviate that.

In addition to the numbers already downsizing, I would imagine financial incentives such payment of solicitors fees, stamp duty write-down, property tax deferrals and funds to cover removal costs could reverse the declining trend. Not only that, but if it works it has potential to become a social norm. Meaning that just as lots of us grow up, buy a home, start families, move to another home etc that when we retire and kids have flown nest we can think of where we want to live when we downsize (if applicable).

You seem to be missing the point of a private company, its purpose is to maximize profits?

Im not sure what your understanding of a private company is. The last time I suggested for profit company this is what you said

I did not suggest a free market for profit business you did. I simply suggested the costs of providing the accommodation should be reflected in the rent. if the State already own the land then there is no land cost and only the only initial cost is the build cost.

So just to elaborate.
The State can deliver housing and re-coup the build cost over 150yrs+, unlike alot of private landlords who aim to have mortgage repaid by retirement age. This creates the anomoly where tenants are paying high rents and unable to save to buy their own, thus disqualifying them from getting a mortgage.

The State however has a poor record in managing properties. So what I propose is that the State builds the housing. It can then lease the property to a private, for profit company, who manage the property.
So if the State charges the company €250 per month. The landlord can let out the property for a rent higher than that (for arguments sake lets say €500pm). This is considerably lower than current market rates, dont you think?
If there are enough houses built, then the house that provides the best furnishings, location etc can charge a bit more. It will be market driven. But ultimately, prospective tenants and buyers will have a real alternative to choose from.
If I wanted to live in a two bed Dublin City apartment, I would take time to consider between 30yr mortgage at €2,000 pm or renting out for €500,600 a month with the option of saving and having a better quality of life.

 

[The Horseman]

They do downsize actually.

http://www.thejournal.ie/downsizing-social-housing-3456397-Jun2017/

http://www.thejournal.ie/downsizing-housing-3337119-Apr2017/

Unfortunately, due to lack of mobility in the market children are staying at home longer. Children staying at home is preventing downsizing. House building could alleviate that.

In addition to the numbers already downsizing, I would imagine financial incentives such payment of solicitors fees, stamp duty write-down, property tax deferrals and funds to cover removal costs could reverse the declining trend. Not only that, but if it works it has potential to become a social norm. Meaning that just as lots of us grow up, buy a home, start families, move to another home etc that when we retire and kids have flown nest we can think of where we want to live when we downsize (if applicable).




Im not sure what your understanding of a private company is. The last time I suggested for profit company this is what you said



So just to elaborate.
The State can deliver housing and re-coup the build cost over 150yrs+, unlike alot of private landlords who aim to have mortgage repaid by retirement age. This creates the anomoly where tenants are paying high rents and unable to save to buy their own, thus disqualifying them from getting a mortgage.

The State however has a poor record in managing properties. So what I propose is that the State builds the housing. It can then lease the property to a private, for profit company, who manage the property.
So if the State charges the company €250 per month. The landlord can let out the property for a rent higher than that (for arguments sake lets say €500pm). This is considerably lower than current market rates, dont you think?
If there are enough houses built, then the house that provides the best furnishings, location etc can charge a bit more. It will be market driven. But ultimately, prospective tenants and buyers will have a real alternative to choose from.
If I wanted to live in a two bed Dublin City apartment, I would take time to consider between 30yr mortgage at €2,000 pm or renting out for €500,600 a month with the option of saving and having a better quality of life.

Sorry it was you who referenced "professional landlords" last time I looked anybody who is described as a "professional landlord" is one who is in it to make money or do you know something I don't.

You either have professional landlords or you have the State you can't have both!

 

[TheBigShort]

Sorry it was you who referenced "professional landlords" last time I looked anybody who is described as a "professional landlord" is one who is in it to make money or do you know something I don't.

You either have professional landlords or you have the State you can't have both!

Yeh, ok. Good point, lets call them professional property managers then. Or alternatively, if they buy the property from the State as a private management company, they can repay the build cost at over 150, 200yrs +.
When the landlord/property management company owner is ready to retire, he sells his share of the company which will consist of a valuable property for rental use.

Im sure my proposal would need a lot of fine tuning, and require legal statuses and responsibilities etc to be outlined in detail.
But I dont think quibbling over the titles such as 'landlord' or 'property management' would be a fundamental reason not to, at a minimum, explore this concept.

 

[PMU]

The proposal to incentive downsizing is only a sticking plaster. It could be introduced quickly. According to CSO 40% of private owned housing is under occupied. That is about 800,000. If only 2% of that is incentivised then that will bring some mobility into the market.

This is just market churning, I.e. generating market activity that benefits other market players but not the holder of an asset. Irish insurance companies in the recent past have had to pay compensation to their policy holders for encouraging it. If it is in someone's interest to sell an asset such as a property they will do it. If they don't it because (a) they see no need to or (b) the price being offered isn't sufficient to make them sell. So why should they sell? If you encourage someone to sell a property and they find themselves worse off, will you compensate them? While property prices do fluctuate they should over time increase. Buying a property, holding it, and leaving it as a bequest to your children is one of the best investment decision you can make. By and large it doesn't make sense to downsize. Buy and hold, pass it on, and you have a cascade of wealth passing down through the generations. It's sound inter-generational financial planning.

 

[The Horseman]

Yeh, ok. Good point, lets call them professional property managers then. Or alternatively, if they buy the property from the State as a private management company, they can repay the build cost at over 150, 200yrs +.
When the landlord/property management company owner is ready to retire, he sells his share of the company which will consist of a valuable property for rental use.

Im sure my proposal would need a lot of fine tuning, and require legal statuses and responsibilities etc to be outlined in detail.
But I dont think quibbling over the titles such as 'landlord' or 'property management' would be a fundamental reason not to, at a minimum, explore this concept.

You already have them they are called REIT's why should they buy from the State when they already have the funds available?

 

[TheBigShort]

If it is in someone's interest to sell an asset such as a property they will do it. If they don't it because (a) they see no need to or (b) the price being offered isn't sufficient to make them sell. So why should they sell?

If its in their interest to so. There will be no compulsion to do so.
But just as some people like to leave family home to next generation, some could choose to sell to fund their retirement.
My parents could sell their home for €450k and rent a spacious two-bed ground apt locally for €1200pm. All things remaining equal they could fund their rental for next 30yrs. They are in their 80s.
Each to their own, there are many options.

 

[TheBigShort]

You already have them they are called REIT's why should they buy from the State when they already have the funds available?

Yes, but the difference here would be that as the State is only charging the build cost (stretched over 150yrs +) then the property manager will be limited as to how much it can charge from tenants.
Similar price regulation limitations exist in energy and transport.

But hey, perhaps we are onto something here? Affordable accommodation, quality accommodation, private enterprise and entrepreneurship, competitive rental market, alternatives to home ownership, incentives to downsize and increased mobility...all goes towards a healthy housing sector for the population.
And not an eviction in sight, protest, or costly legal battle.

 

[The Horseman]

Yes, but the difference here would be that as the State is only charging the build cost (stretched over 150yrs +) then the property manager will be limited as to how much it can charge from tenants.
Similar price regulation limitations exist in energy and transport.

But hey, perhaps we are onto something here? Affordable accommodation, quality accommodation, private enterprise and entrepreneurship, competitive rental market, alternatives to home ownership, incentives to downsize and increased mobility...all goes towards a healthy housing sector for the population.
And not an eviction in sight, protest, or costly legal battle.

You want to put a "limit" on what the property manager should charge the tenants. Who decides what that limit should be? Price limitations do not exist in the energy and transport market. We do have regulators but they don't really regulate the market competition does.

You seem to think that business (in whatever form you want to call it not for profit/for profit) is supposed to be dictated to by the State and meet the needs of housing people and it takes all the risk. So the State dictates rents but the shareholders in the property management company don't get any say in the running of the business because the State has dictated what can and can't be charged.

Good business plan I can see loads of investors lining up for that one alright.

 

[TheBigShort]

Price limitations do not exist in the energy and transport market. We do have regulators but they don't really regulate the market competition does.

Hmm...a fundamental flaw in my thinking, fair enough. So how to get around this?

The State builds a property complex of 50 units of two and three beds, to be designated as rental properties.
The State requests tenders for the property management of the State. Using set criteria for minimum standards of accommodation, set rent reviews, increases etc the State licenses the property management to the most competitive tender that also meets the required standards.
Unlike REITs who I assume are buying properties at market rates only to let out properties at market rates, these houses will be leased to the most competitive tender which will be able to be priced below current market prices and still profit.
See, its not State setting the price now, but the investor themselves. That wasnt hard to solve, was it?

 

[The Horseman]

Hmm...a fundamental flaw in my thinking, fair enough. So how to get around this?

The State builds a property complex of 50 units of two and three beds, to be designated as rental properties.
The State requests tenders for the property management of the State. Using set criteria for minimum standards of accommodation, set rent reviews, increases etc the State licenses the property management to the most competitive tender that also meets the required standards.
Unlike REITs who I assume are buying properties at market rates only to let out properties at market rates, these houses will be leased to the most competitive tender which will be able to be priced below current market prices and still profit.
See, its not State setting the price now, but the investor themselves. That wasnt hard to solve, was it?

Must sell my shares in the REIT so since their end is nigh.

 

[TheBigShort]

Must sell my shares in the REIT so since their end is nigh.

Unfortunately I fear the political will is not there. There are too many people with vested interests in keeping the property sector as a profit maximizing sector.
They have little understanding of the nature and purpose of housing other than as something to profit from, regardless if it means putting people out on the streets.

Its clear now where your interests lie.

 

[Sunny]

Hmm...a fundamental flaw in my thinking, fair enough. So how to get around this?

The State builds a property complex of 50 units of two and three beds, to be designated as rental properties.
The State requests tenders for the property management of the State. Using set criteria for minimum standards of accommodation, set rent reviews, increases etc the State licenses the property management to the most competitive tender that also meets the required standards.
Unlike REITs who I assume are buying properties at market rates only to let out properties at market rates, these houses will be leased to the most competitive tender which will be able to be priced below current market prices and still profit.
See, its not State setting the price now, but the investor themselves. That wasnt hard to solve, was it?

I don't get it. State builds 50 houses for €10m which is purely the build cost instead of the usual €13m cost that it would cost a private developer. Are you saying that some company then comes along, buys the apartments for €10m and rents them out below market rates to make their money back over 100-150 years???

 

[TheBigShort]

I don't get it. State builds 50 houses for €10m which is purely the build cost instead of the usual €13m cost that it would cost a private developer. Are you saying that some company then comes along, buys the apartments for €10m and rents them out below market rates to make their money back over 100-150 years???

No.

The State delivers the build of 50 units for €10m. It then leases the properties to a property management company. Because the State is not in the business of profiteering from its citizens, it only needs the return of the build cost. And because the State is not in the business of planning for retirement, the return of the build cost can be stretched out over 100,150,200 yrs plus.
So using your figures over 150yrs the State licenses the property management to a private company for a charge equal to the build cost €10m divided by say, 150(yrs) for 50units.
It works out at €111 pm. Round it up to €150 and the State will guarantee the cost of structural defects over the period.

The State could simply let out the properties to low-income tenants but its track record of managing properties is questionable at times.

So a private management companies enter a tendering process where they compete on the quality of furnishings, rent reviews, rent increases etc. Providing a minimum standard of accommodation for all lettings.

Seeing as the license fee is €150pm for each unit (compare this to a private landlord charging rent based on a 30yr mortgage of €1000pm) the scope to provide quality accommodation at affordable prices, whilst making a profit is now a real option.
The most competitive tender, based on a number factors but not least competitive rents to be charged to tenants wins.
FTB's who cannot get on the property ladder, workers who are mobile and dont require ownership, workers who are paying extortionate rents will now have a real option as where to live.

 

[T McGibney]

And because the State is not in the business of planning for retirement, the return of the build cost can be stretched out over 100,150,200 yrs plus.

What discount factor do you suggest should be applied respectively to cashflows receivable in 100, 150 and 200 years? (assuming the invested properties are still standing at each respective point.)