Government incompetence or something else ?

[trajan]

The Irish Times comments this morning on how delays to policy framework changes are an ongoing brake on new housing estate construction.

Does anyone in the country believe that such things may happen in state administration unless there be other reasons for it, i.e. reasons unrelated to government or administrative competence ?

Even the date of the National Planning Framework document, 2018 - itself a time when house prices were up high enough - shows a desire to slow down new greenfield construction even as demand started to become acute.

 

[Purple]

The State, that is the Government and, more importantly, the structures and the State employees that run them, is systemically incompetent. That's the case in most countries but the fact that we are awash with taxes we've effectively stolen from poor countries means that we've had to resources to paper over the cracks for decades.

That in turn had led to high costs and a remarkable deterioration in labour productivity outside the very capital intensive multinational sector and the indigenous companies that supply them and trade internationally.

 

[Howth Head]

The problem is - all of those planning framework policy plans are out of date as soon as they are published. *A few years back I remember reading reports about a possible lowering of housing needs due to the Covid shutdowns, possible sluggish economic recovery and much lower immigration!

As we all know the complete opposite happened and our population growth since about 2021 is nearing half a million - most of it driven by inward migration which remains at truly astonishing levels. This could be managed at more controllable, predictable levels but Government has little interest in pursuing that kind of policy.

There is zero chance of those targets coming even close.

Fewer houses may be needed after Covid hit to immigration

The fallout from the Covid-19 pandemic could narrow the gap between housing needs and supply if it means a slow down in immigration over the next few years.

www.independent.ie

That could mean migration into Ireland falling from 33,700 in 2019 to just 5,000 a year.

 

[Purple]

That could mean migration into Ireland falling from 33,700 in 2019 to just 5,000 a year

That's a lot of high value jobs and the associated tax revenues going elsewhere. We already have a labour shortage, particularly in areas where the job is actually hard like construction and care workers. Without immigrants that problem will get far worse.

We need immigrants and lots of them. We also need reforms to the welfare system so that people who can work but choose not to get nothing. Not letting people we need into the country because the State is incompetent (That is individuals in Government Departments and Local Authorities are too lazy or incompetent to do their job) is a crazy way of doing things.

Of the 120,700 immigrants who came to Ireland in 2022 28,900 were returning Irish nationals, 24,300 were other EU nationals, and 4,500 were UK nationals. That leaves 63,000. Of them 28,000 were Ukrainians. That leaves 35,000 people. Many of those are high skilled people on work visas.

The net migration figure for 2022 is 61,100. There was 1300 net migration of Irish citizens (all those teachers, doctors and Nurses coming back from UE with their blood money).

The real figure that you should be worried about is that the number of people over the age of 65 increased from 13.3% to 15.1% between 2016 and 2022, an increase of 139,100. That's a much bigger drain on our grossly inefficient health system and increases the number and proportion of under occupied households.

If our average household size (the average number of people living in each house) was the same now as it was 30 years ago we'd have more than enough houses. That's actually the real driver of our housing shortage.

In 1991 the average household size was 3.34 people. Now it's 2.74. That means we've built 348,000 more homes since 1991 to house the same number of people.
At an average construction cost of €320,000 that means we've spend over €111 billion in todays money building homes since 1991 without housing a single extra person.

 

[Howth Head]

By December 2022 67,000 Ukrainians had arrived in Ireland - not 28,000 - with almost all of them having to be accommodated by the State. (The final number reached 112,000 with 75% of them still here.) There were ambitious plans to build modular homes all over the country but as we know, the original costs more than doubled and the construction timelines were way off kilter to say the least. The State simply didn't have the resources to cope with this kind of influx in any other way than an ad-hoc, emergency basis. (And they're still moving Ukrainians around the country due to hotel contracts ending, taking children out of school during term-time, causing understandable distress. The Government simply doesn't have a lot of other options.)

And that was just one cohort. The overall immigration numbers have rocketed since 2022 - increasing every year (total for 2024 was almost 150,000 - with net migration around 80,000.) Yes, many/most are bringing much needed skills, have high paying jobs etc., but all need somewhere to live. Have noticed Indians in particular in high numbers at new housing developments lining up to put down deposits - and good luck to them. (For some reason wealthy Chinese are buying mainly largish second-hand houses in mature estates in my area.) But not all immigrants are equal in terms of the demands made on the state's resources. It's quite clear for example that the Asylum System is being openly used as a form of heavily subsidized accommodation for low-skilled labour - the Justice Minster admitted as much recently. Also, non-nationals seem to be over-represented on social housing lists in many Local Authorities. (According to a PQ/FOI a few years back it was 36% non-Irish on the housing waiting list in Laois for example, while 53% - a majority in that county on HAP were non-Irish.)

And while there is also outward migration of Irish nationals - I imagine it doesn't free up as much housing as the equivalent amount of inward migration. (If Saoirse decides to teach in Dubai for a few years she's likely to be leaving an empty bedroom behind in her parents house rather than an empty apartment.)

I just can't see how housing needs or demands will ever be met as long as these figures persist. (Though I heard a Social Democrats "housing expert" and now TD, saying that the impact of immigration on housing demand is a "red herring" - which truly beggars belief.)

I don't know how on earth you could develop a policy framework on housing/planning for the next 5/10 years without a 100% reliable crystal ball. But they have to be seen to do something I suppose. Expect more meddling and tinkering around the edges.

 

[trajan]

It seems everyone so far subscribes to the incompetence & overcomplexity theory to explain why a contemporary government can't get houses up as governments did in 20s - 90s.

I don't accept this at all. IT systems have enabled fairly accurate models of housing supply/demand in the private sector. Similar models must exist in the public sector. No government - nor civil service made up of functionaries with their own families - have an interest in failing to house the public. The answer must lie elsewhere.

I believe that the NPF is a product of an administration which sought to limit new housing construction indirectly so as to assure investment funds who bought NAMA estates and apartment blocks of a good return on their investments. Without the latter, these funds wouldn't have invested in the first go down. And, without the investment obtained from the funds, the post-crash banks would not have been able to break out of their vast negative equity debt level - a level so deep that banks up to then couldn't offer a mortgage to people of eminent borrowability. Have you people forgotten the FOR SALE signs on houses for 2 years before 2014 ?

 

[Purple]

By December 2022 67,000 Ukrainians had arrived in Ireland - not 28,000 - with almost all of them having to be accommodated by the State.

28,000 arrived in 2022. That's according to the CSO. Data for my post here.

(The final number reached 112,000 with 75% of them still here.) There were ambitious plans to build modular homes all over the country but as we know, the original costs more than doubled and the construction timelines were way off kilter to say the least. The State simply didn't have the resources to cope with this kind of influx in any other way than an ad-hoc, emergency basis. (And they're still moving Ukrainians around the country due to hotel contracts ending, taking children out of school during term-time, causing understandable distress. The Government simply doesn't have a lot of other options.)

The very least we should be doing for Ukraine is taking in their refugees.

And that was just one cohort. The overall immigration numbers have rocketed since 2022 - increasing every year (total for 2024 was almost 150,000 - with net migration around 80,000.)

The increase from migration in 2022 was 60,100, an 88,800 net increase of whom 27,700 was the net natural increase (births less deaths).

Yes, many/most are bringing much needed skills, have high paying jobs etc., but all need somewhere to live. Have noticed Indians in particular in high numbers at new housing developments lining up to put down deposits - and good luck to them. (For some reason wealthy Chinese are buying mainly largish second-hand houses in mature estates in my area.) But not all immigrants are equal in terms of the demands made on the state's resources. It's quite clear for example that the Asylum System is being openly used as a form of heavily subsidized accommodation for low-skilled labour - the Justice Minster admitted as much recently.

Given that we have very high levels of social transfers in this country the same rationale could be used to say that about 70% of the population are being subsidised by welfare since only the top 30% off earners are net contributors to the exchequer.

Also, non-nationals seem to be over-represented on social housing lists in many Local Authorities. (According to a PQ/FOI a few years back it was 36% non-Irish on the housing waiting list in Laois for example, while 53% - a majority in that county on HAP were non-Irish.)

There's no such thing as a non-national. People on lower incomes are on housing lists. First generation immigrants are generally more likely to have low incomes.

And while there is also outward migration of Irish nationals - I imagine it doesn't free up as much housing as the equivalent amount of inward migration. (If Saoirse decides to teach in Dubai for a few years she's likely to be leaving an empty bedroom behind in her parents house rather than an empty apartment.)

There's no net outward migration of Irish citizens.

I just can't see how housing needs or demands will ever be met as long as these figures persist. (Though I heard a Social Democrats "housing expert" and now TD, saying that the impact of immigration on housing demand is a "red herring" - which truly beggars belief.)

I don't know how on earth you could develop a policy framework on housing/planning for the next 5/10 years without a 100% reliable crystal ball. But they have to be seen to do something I suppose. Expect more meddling and tinkering around the edges.

I agree. It's very hard to address the problem without addressing the root causes. The root causes are many and varied and we can't control the main one which is the massive increase in global money supply over the last few decades coupled with very low bond yields. We can control domestic ones which is the incompetence of the civil servants who write legislation, the incompetence of the local authorities, stupid populist laws around rent controls, the State buying homes in the private sector to turn into public housing, and the fact that our rates of property tax are way too low.

 

[Purple]

It seems everyone so far subscribes to the incompetence & overcomplexity theory to explain why a contemporary government can't get houses up as governments did in 20s - 90s.

Our population didn't increase from the 1920's until the 1960's and then only at a slow rate. We as a State got poorer in real terms for the first 40 years after independence. Our housing policies up until the 1970's were monumentally stupid. Thankfully we don't do anything like that now.

I don't accept this at all. IT systems have enabled fairly accurate models of housing supply/demand in the private sector. Similar models must exist in the public sector. No government - nor civil service made up of functionaries with their own families - have an interest in failing to house the public. The answer must lie elsewhere.

I believe that the NPF is a product of an administration which sought to limit new housing construction indirectly so as to assure investment funds who bought NAMA estates and apartment blocks of a good return on their investments. Without the latter, these funds wouldn't have invested in the first go down. And, without the investment obtained from the funds, the post-crash banks would not have been able to break out of their vast negative equity debt level - a level so deep that banks up to then couldn't offer a mortgage to people of eminent borrowability. Have you people forgotten the FOR SALE signs on houses for 2 years before 2014 ?

Given that you must be aware that many countries in the developed world face the same problem with housing costs, many of them worse than ours, you must think that all of those governments have done the same thing and are conspiring with each other... or maybe the answer must lie elsewhere?

 

[trajan]

Most European countries see affordable housing as an essential component of a working economy. UK is a case in point. £270,000 in national average for a 3-bed semi-detached house. I think most here would settle for that.

 

[Purple]

Most European countries see affordable housing as an essential component of a working economy.

So do we. The question is how we make it affordable. I'd like to see the State removing the costs it adds due to it's incompetence rather than the current policy of using tax payers money to subsidise the cost of those inefficiencies.

UK is a case in point. £270,000 in national average for a 3-bed semi-detached house. I think most here would settle for that.

That's around €320,000. The average price of a 3 bed semi in this country is €338,000 (todays Indo). The home owner in the UK will also pay much higher council tax. Their average interest rate is also around 1% higher than here. That means that despite the fact that they have lower wages their net monthly cost is higher.

Oh, and they have more than 10 times our population and are much closer to the mainland so they should have significant economies of scale that we don't have.

 

[Howth Head]

Purple, I don't want to get off the main topic into a dispute over figures - but at the very least it's important we get them right, as they are relevant to a discussion on housing demand and future planning. As I said above - over 67,000 Ukrainians arrived here up to the end of December 2022. (You quoted CSO stats in the year to April of 2022 - they only started arriving in numbers a month earlier.) Here's the full 2022 figure.

Just a few other points in your response:

1. Yes, of course we were right to accept Ukrainian refugees as we signed up to the EU Temporary Protection Directive. However, we did have a choice on what our offer should be - and we were without doubt, among the most generous in terms of offering full welfare, taking in pets etc (and paying for car repairs it seems!) We've since had to cut back dramatically on some of that - current arrivals in State accommodation get the same as asylum seekers - something like €38.80. The reason was - it was completely unsustainable and amounted to a "pull" factor for Ukrainians in other EU states.

2. When I said "non-nationals" being over-represented in housing lists/HAP, I of course meant non-Irish nationals.

3. I never said there was "net" Irish outward migration. Not sure why you added that word in response to a point about Saoirse and the likes heading to Dubai for a couple of years - to leave behind an empty bedroom in her parents house.

I fully agree with your point on Irish people on Welfare who should be in employment. (I spent a whole day in the District Court in Blanchardstown recently and I couldn't believe the amount of young, fit, burly young Irish lads up for charges of burglary, assault, motoring offences etc - who were all on "disability." Clearly something wrong with the system.)

Anyway, given that inward migration of all kinds is currently the single biggest driver of housing demand - it seems more than reasonable to include it in any discussion on future planning requirements.

Legal (i.e work permit/student visa) migration is the largest factor - the numbers are just staggering in historical terms...

 

[trajan]

@Purple

Don't underestimate Ireland building materials industry (cement, aggregate, softwoods, insulation, glass, etc) in your estimations.

Where planning is non-obstructive (though not agreeable to every madcap proposal) and where the small builder has access to finance, this price will come down considerably.

 

[Purple]

@Purple

Don't underestimate Ireland building materials industry (cement, aggregate, softwoods, insulation, glass, etc) in your estimations.

We don't make any double glazed window glass in this country.
We are a tiny country with no real economies of scale. That adds significantly to our costs for almost everything.

Where planning is non-obstructive (though not agreeable to every madcap proposal) and where the small builder has access to finance, this price will come down considerably.

The problem is that there are so many small builders. That also adds significantly to our cost base for large scale new builds.

 

[Purple]

Legal (i.e work permit/student visa) migration is the largest factor - the numbers are just staggering in historical terms...

Yes, but we either allow significant migration or we have lots of kids and significantly increase our retirement age and cut State pension rates.

That or we start shooting old people. There's no other way to keep subsidising our elderly.

 

[trajan]

We don't make any double glazed window glass in this country.

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Double- and triple-glazed, Purple.

And shame on you, sir, for your lack of faith

The problem is that there are so many small builders. That also adds significantly to our cost base for large scale new builds.

Most quality-build houses in this country are built by small family builders who do about 3 or 4 houses a year.

Instead of knocking these guys - many of whom are multi-skilled tradesmen, i.e. blocklayers, plasterers, carpenters, glass-fitters - I think we should be asking ourselves what is it we might be able to do to keep these companies going now and for the next crowd rising up.

 

[Purple]

Double- and triple-glazed, Purple.

And shame on you, sir, for your lack of faith

They process glass, they don't make it. Glass for windows is made by floating glass on a bed of molten tin. It's very capital intensive process.

Most quality-build houses in this country are built by small family builders who do about 3 or 4 houses a year.

I know. It's a labour intensive production process rather than a capital intensive process.
That's why they are so expensive.

Instead of knocking these guys - many of whom are multi-skilled tradesmen, i.e. blocklayers, plasterers, carpenters, glass-fitters - I think we should be asking ourselves what is it we might be able to do to keep these companies going now and for the next crowd rising up.

I'm a Tradesman and I've the height of respect for those with building trades. They have the skills to work on refurbishing and extending our existing older housing stock but new houses should be built at scale in a factory and assembled onsite. Otherwise it will remain an expensive and slow process, constrained by labour shortages and delays. That adds to financing costs as well as hard production costs.
Factory built homes will, obviously, also be of a far higher quality.

 

[trajan]

Factory built homes will, obviously, also be of a far higher quality.

I suppose you'd see timber-frame houses as factory built ?

Even at that you still need a proper builder to:

(1) Get foundations, drains, footings and ground floors.

(2) External block/brick leaf, plastering outside and skimming inside and anything else the timber-frame gang won't do.

A lot of small builders won't do the above work if they're not getting the structural work too. The price works out about the same be it block or timber frame to the same U value.

If a builder has all the answers to what he has to do (unlike Dermot Bannon managed jobs) there is no reason why the work should last more than 3-4 months. Besides, the job term is in the contract and enforceable bar a pandemic or cement strike.

We all have to be careful that we don't swallow the nonsense about big construction companies only being able to deliver Ireland's acute demand for new houses. Big construction companies can afford to be dog idle till the house prices rise to where they want them - they have the cash in the bank to do so and can lay off any subbies they no longer need. Small builders are essentially working to keep themselves in wages - they have little or no cash in the bank and no land banks whatever. The Big Construction lobby is really today's version of the Big Developer lobby in Celtic Tiger days - it's all being orchestrated by the banks in this country who haven't the balls to take on the real risks of lending to farmers or manufacturing.

Besides, it's the national policy on planning that's holding local authority planning offices from going all in on new housing applications. The delays of years and years with this makes a joke out of the additional delays in building new houses using a small builder instead of a big contractor.

Purple, you need to be taken to one of the many creeks in Co Cavan to be immersed and born again like Jesse and Zee to face the Ireland of today.

 

[Tuscany]

https://www.irishtimes.com/ireland/...king-international-protection-research-finds/

There is some good data in this article relating to the 2024.

Of the 150,000 who came to the country, 20% (30k) were returning Irish citizens; 18% (nearly 30k) were EU nationals; 4% were UK (6k).
Of the remaining 86k, 19k were Ukrainians and 17k were seeking international protection.

That leaves about 50k of which 30% (about 15k) were employment permits, 21% (7.5k) were for education and 19% (10k) were for family reunification. The employment permits are often for jobs such as healthcare assistants, nurses, doctors, consultants; the meat, horticulture and hospitality sector and seem to me to be absolutely essential. The education ones are probably invaluable for the university sector revenues and English language students are also income generating in that sector. The family reunification are probably mixed but they would include, I imagine, some accompanying the employment permit holders.

I think that we can also accept that the 30k EU nationals are gainfully employed in the economy, maybe in some of the sectors also associated with the permit holders.

This article gives some good information regarding Ukrainians; it’s a little dated but still informative. It's the Department's appearance at the Public Accounts Committee.
https://www.irishtimes.com/politics...-in-full-time-employment-in-ireland-tds-told/.

‘’The employment rate is about 30 per cent. That’s an extraordinarily high employment rate for people in that situation.”

‘’The PAC was told that 5,500 Ukrainians are working in the hospitality sector, just under 3,000 in retail, 2,000 in manufacturing, just over 1,500 in support sectors and 1,000 in construction.’’

‘’Mr McKeon said there are around 100 Ukrainians working in the Department of Social Protection “and we’re delighted to have them” with 36 more moving from there to permanent jobs elsewhere in the Civil Service.

He added: “I suspect the construction firms that have the 1,000 Ukrainians are delighted to have the construction staff as would be the [more than] 5,000 in hospitality.”

He said there was “no evidence” for the scenario Mr Burke described adding “if I was to say anything our own case officers would say they’re more eager to engage than perhaps some of the other people that we would deal with.”

inward migration which remains at truly astonishing levels. This could be managed at more controllable, predictable levels but Government has little interest in pursuing that kind of policy.

But which aspect of inward migration could be managed and with what consequences for finding necessary workers in the economy.

We need immigrants and lots of them. We also need reforms to the welfare system

Absolutely. If we continue to have a very successful economy then we will continue to need inward movement of people. Any successful economy with inward flow of workers will struggle with accommodation, but there are also other reasons contributing, and of course they need to be addressed. An unsuccessful economy, with outward migration, as we well know, does not have similar housing issues!

I do not believe that that those seeking international protection or Ukrainian refugees have negatively impacted the rental market or purchasing market to any great extent, as they do not compete for these types of accommodation. (There is some speculation that the Ukrainian allowance attracted some landlords but there is no data and I think that the scale would be marginal enough.)

 

[Purple]

I suppose you'd see timber-frame houses as factory built ?

Kind of, but far more can be done off site. Panels with all the first fix included can be manufactured off-site.

Even at that you still need a proper builder to:

(1) Get foundations, drains, footings and ground floors.

Yep, groundworks would have to done in a more conventional way but there is ample room for modernisation and efficiencies there too.

(2) External block/brick leaf, plastering outside and skimming inside and anything else the timber-frame gang won't do.

No, that can mostly be done off site. Houses can be designed and spec'd in the same way as you'd design and spec a kitchen.

A lot of small builders won't do the above work if they're not getting the structural work too. The price works out about the same be it block or timber frame to the same U value.

Yep, leave them to the retrofit and refurbishment of the current housing stock, which is probably where most of them are anyway.

If a builder has all the answers to what he has to do (unlike Dermot Bannon managed jobs) there is no reason why the work should last more than 3-4 months. Besides, the job term is in the contract and enforceable bar a pandemic or cement strike.

That's very unlikely but even so a factory built home will require far less skilled labour, can run 24/7 and doesn't stop with bad weather.

We all have to be careful that we don't swallow the nonsense about big construction companies only being able to deliver Ireland's acute demand for new houses. Big construction companies can afford to be dog idle till the house prices rise to where they want them - they have the cash in the bank to do so and can lay off any subbies they no longer need.

Big construction companies (a relative term by international standards) are also grossly inefficient as they are not open to international competition. When the component parts of houses can be flat packs and shipped from Chine (or large factories on the mainland or even Britain) then we'd have real competition.

Small builders are essentially working to keep themselves in wages - they have little or no cash in the bank and no land banks whatever. The Big Construction lobby is really today's version of the Big Developer lobby in Celtic Tiger days - it's all being orchestrated by the banks in this country who haven't the balls to take on the real risks of lending to farmers or manufacturing.

I'm in manufacturing and we can supply products cheaper than we did 20 years ago because we have changed with the times and adapt to compete internationally. We have robots and automated machinery running production unmanned 24/7. We've higher wages, higher material costs, higher energy costs, higher rates and insurance etc but we've had to find a way of competing internationally. In the 30 or so years I've been working in this sector it has been totally transformed. It is completely unrecognisable. If Charles Dickens, or the aforementioned Jesse, came back from the dead and walked around a present day building site he'd see pretty much the same things as he'd have seen in his pomp.

If a sector isn't open to international competition then it won't be efficient.

The question each year should be by how much construction costs have dropped, not by how much they have increased.

Besides, it's the national policy on planning that's holding local authority planning offices from going all in on new housing applications. The delays of years and years with this makes a joke out of the additional delays in building new houses using a small builder instead of a big contractor.

Yes, planning is one of the factors which is completely within our control and we've made a total balls of it.

Purple, you need to be taken to one of the many creeks in Co Cavan to be immersed and born again like Jesse and Zee to face the Ireland of today.

I try to avoid Cavan