It will be hard to get beyond the noise when the Government publishes its new housing plan next week.
The issue is at the centre of politics – where the Government feels vulnerable and the Opposition smells blood. In all likelihood, like most plans, it will have its good and bad bits, and – crucially – all will come down to delivery. Promising 35,000 plus new homes a year at the right price is one thing. Getting them built is another. So the short term prospect is for prices and rents to head higher, providing a difficult backdrop from the Government’s viewpoint.
I suspect, though, that the plan, and the debate, will skirt over a vital issue, because this is tricky ground for all parties. How exactly do we want to live in future? Or perhaps more precisely, how do we believe the next generation should live?
Is the generation which lives in suburbs with a bit of space going to successfully persuade those coming next that it would be better to live in smaller dwellings closer to city centres? That is the vision of national policy, not that you hear it discussed too much.
Much of this is driven by the climate change agenda. If people live closer to work and on public transport links, then there are a lot fewer long-distance car commutes. Add in proper local services and the school car run turns into a walk or cycle, as does the shopping trip.
The mayor of Paris, Anne Hidalgo, got re-elected in 2020 on this ticket of the “15-minutes city”, with a goal of having most things accessible withing that time by foot or on a bike. In her previous term she had already pushed through a lot of this agenda, which accelerated during Covid-19 with new cycling infrastructure and green spaces.
So the concept is politically saleable. But in the Irish context we still have to face up to a few of the big questions. Paris – along with many other continental cities – already has a history of a densely populated urban centre and less sprawl.
Here, the idea is to move more newer buyers into the zones near our major cities, trading off the space of suburbia – which many can’t afford now anyway – for the convenience of a smaller dwelling, closer to work.
Given the increased number of smaller households, as well as the climate agenda, this makes a lot of sense, though it remains to be seen how it is changed by the post-Covid working-from-home agenda. If you don’t have to commute to work every day, then the calculation of where to live will change for many.
Lying behind this is one of the oldest housing dilemmas – to buy or to rent. In many continental countries – notably Germany – around half the population spend their life renting.
And even in countries like France where ownership is more common, the majority who live in big cities like Paris are renters. Here renting has typically been seen as a transitory state before buying and rent payments are typically – and oddly – dismissed as “dead money”. In a recent Rental Tenancies Board survey, half of renters said they hoped to own their own home within the next five to 10 years.
Right interventions
No doubt the housing plan will nod in all the right directions – towards affordable, convenient, “green” living. And the State can drive some of this, if it can spend its money wisely. Demographics will also push the case for smaller dwellings. But we still have a lot to sort out.
Apartments traditionally are more likely to be rented – though many do buy as well. But the vision – and starting a public debate on it – will be central. All the schemes we will hear about involve public money in one guise or another – the challenge is making the right interventions. To know what these are, you need to know what your goal is and have a reasonable shot at getting the public on board.
And there has been little wider discussion about how and where people will live in future, whether long-term rental is a goal for more of the population – as opposed to a necessity – and what it would take to attract people to a more climate-friendly and convenient way of living.
Avoiding the long commute is a big carrot. But the Irish attraction to “space” is strong and Covid-19 will open up flexible working for many. The fight over once-off housing in the countryside is only starting.
The risk for the Government is that the new strategy gets blown away in a few months by market trends. A big rental squeeze is coming as people return to the office. Supply is also short in the residential market and demand is boosted by Covid savings. Adding to this via shared equity schemes – in which the State takes a stake to help buyers – looks like a mistake to me. This will push up prices more and even if it is only a minor factor in doing so, the Government will get the blame.
House prices could soon exceed Celtic Tiger peaks. As one estate agent put it to me, “they are going to let it happen all over again”. And in the short term, given the time it takes supply to get going, the frothy market will feel familiar.
The question for the Government is whether it can get a grip on it during its remaining term. It could well be the glue that holds the Coalition together – hanging on until housebuilding picks up. And to get wider buy-in it needs to back up the plan with a vision of where we are going on housing, linked to the climate agenda. This won’t be easy, but if we are going to have to change the way we live, we better start talking about it.