The National Economic and Social Council (NESC) has estimated that meeting social housing needs over the next seven years would cost €1.4 billion a year - or €500 million to €600 million more than existing annual capital expenditure.
In its report, Housing in Ireland: Performance and Policy, the council says a net increase of 73,000 social housing units, either owned and managed by local authorities or co-operatives, will be necessary between 2005 and 2012.
"If the needs identified are to be met, a higher level of capital spending in these areas will be necessary. While this need not exclusively be Exchequer financed, it seems likely that there will be a need for higher Exchequer capital expenditure," it says.
The report argues that the resumption of social and affordable housing provision in the past decade was a reflection of the fact that the market "will not, on its own, meet the housing needs of those on low incomes or with special housing needs".
"Despite its dynamism, the private market for owner-occupied housing has not met the housing needs of many and the market for private rental accommodation has displayed rent levels that are not affordable for some households.
"There remains a gap between the projected provision of social and affordable housing and the number of households that will be unable to achieve home ownership on the open market, or who will face affordability problems in private rental accommodation."
As the report says, private investment in the provision of "Section 23" apartments for rent was "significantly dependent on the expectation of increasing asset values" which, in turn, led to a significant change in the distribution of wealth in Irish society.
The NESC recommends an expanded stock of housing available at a social rent to ensure an adequate safety net for vulnerable households and a wider range of supports for "intermediate" households, as well as more resources for social and affordable housing.
It says "Section 23" tax incentives should be reviewed, with the focus on retargeting subsidies in return for agreed approaches to the allocation of housing and rental levels. The report calls on the Government to explore ways to assist young people to buy their own homes, through providing tax relief on savings for a deposit or a State loan to cover it - a proposal welcomed yesterday by the National Youth Council.
The NESC also believes consideration should be given to a special tax on holiday homes, to reflect "the true costs of connection, services, environmental damage and lost amenity", as well as the fact that they can drive up prices of primary homes in resort areas.
The Green Party housing spokesman, Mr Ciarán Cuffe TD, last night welcomed the report's conclusion that 8,000 new social housing units were needed each year until 2012.
