The Government's Housing Policy Statement

[Brendan Burgess]

This http://www.environ.ie/en/Publications/DevelopmentandHousing/Housing/FileDownLoad,26867,en.pdf (document)was published in July. It doesn't seem to have received much publicity ( i.e. I didn't notice it)

emphasis mine



Our economic crisis has a variety of causes. However, over-stimulation of the housing market is accepted as a key causal factor in the scale of the economic downturn.

In a climate of low interest rates and rising incomes, a series of disastrous pro-cyclical policies led to a model that provided unprecedented growth, but it was a growth based not on foreign demand for our goods and services – as should be the case in a small open economy – or the productive use of investment capital to create sustainable employment. It was based on a mirage and a false assumption that the normal rules of supply and demand somehow did not apply in Ireland.

We now know that those rules do apply. We now know the consequences of encouraging people to choose their housing options on the basis of investment and yield rather than hearth and home.

...

Housing in Ireland has been characterised by a persistently hierarchical structure for several decades. This paradigm of housing has private home ownership at the top, with supported home-ownership (tenant purchase of local authority housing, affordable housing) next, self-financed private rented accommodation further down, and State supported rental accommodation at the bottom (rent supplement/social housing tenancies).
This structure and the value judgement that underlies it – which implicitly holds that the tenure which must ultimately be aspired to is homeownership – has had a considerable role in leading the Irish housing sector, Irish economy, and the wider Irish society to where they are today.

Our vision for the future of the housing sector in Ireland is based on choice, fairness, equity across tenures and on delivering quality outcomes for the resources invested. The overall strategic objective will be to enable all households access good quality housing appropriate to household circumstances and in their particular community of choice.

It will neither force nor entice people through fiscal or other stimuli to treat housing as a commodity and a means of wealth creation. Clearly, home ownership will continue to be a significant feature of housing in Ireland and is likely to continue to be the tenure of choice for the majority of households. Policy makers must take account of our current economic circumstances which effectively dictate that State provided housing supports must be prioritised towards meeting the most acute housing needs. In so doing we will allow for a future in which housing services are accessible by a wider cohort of people based on a less stratified model of service provision.

 

[Complainer]

Affordable housing
If a household is capable – through the resources it has available to it – of renting a high quality home in a vibrant community but lacks the resources necessary to purchase an equivalent home, that household does not need – particularly where pressures on resources are extreme and the resources available must be focused on responses to the most acute housing needs – assistance from the State.

The move away from State supports to 'affordable housing' is a huge change in policy too - one that has got very little attention or discussion.

The commitment to move away from rent supplement is also a huge change.

 

[bugler]

The reference to yield is quite strange. Yield calculation was abandoned during the bubble because it didn't fit with the mania. It would have been a cold shower to the property obsessed, so was ignored.

 

[onq]

I think your emphases are particularly appropriate Brendan.
They read as admissions of the mistakes made in the past decade.

The first sentences comment "we now know" appears to deny foreseeability.
The second sentence reads like an indictment of the mortgage market in toto.

"... neither force nor entice people through fiscal or other stimuli..."
If that roadmap is derived from mistakes of the past its a legal minefield.

These comments appear to go beyond negligence and into coercion.

 

[onq]

However the below section seems to encapsulate all the mea culpas into one paragraph which I will dissect.

In a climate of low interest rates and rising incomes, a series of disastrous pro-cyclical policies led to a model that provided unprecedented growth, but it was a growth based not on foreign demand for our goods and services – as should be the case in a small open economy

Sound advice

– or the productive use of investment capital to create sustainable employment.

Here we seem to be back to the state as employer which will send all the wrong signals to the public sector

It was based on a mirage and a false assumption that the normal rules of supply and demand somehow did not apply in Ireland.

Now ask why, with all this going on, with our whole knowledge -based economy looking at this, no significant warning bells were sounded in government or academic circles.

Or if they were, why they were ignored - was the calibre of our politicians so lacking?

Are they even now up to the job of governing - what competences do they bring to guiding the ship of state?

The government have got a free pass up to this, but the next budge will show their competence and their mettle.

 

[Complainer]

They read as admissions of the mistakes made in the past decade.

Just to clarify, they are admissions by the current Govt of the mistakes made by the previous Govt.

Now ask why, with all this going on, with our whole knowledge -based economy looking at this, no significant warning bells were sounded in government or academic circles.

Or if they were, why they were ignored - was the calibre of our politicians so lacking?

I was nearly punching the TV screen a few weeks back watching 'Good Time Charlie' McCreevy around 2003 coming out of the EU Finance Ministers meeting, where all the other 14 Ministers had told him that he was creating a crazy bubble. He was blathering on about how they should be following the Irish example instead of criticising us. Look where he got us.

And we all now what Bertie suggested for those with the foresight to see the mess we were creating - he suggested that they go kill themselves.

 

[onq]

Agreed on a fine point - but "the Government" is "the Government" - look at the policies we're implementing.

As for Charlie (Six Bedrooms) McCreevey - yeah, saw that piece - talk about hubris.

As for Bertie the Intellectual - A bit too much looking into De Void...