A major European report on housing has highlighted Ireland’s over-reliance on the private market as a key factor in the ongoing crisis.
The study by the Brussels-based Housing Europe group found that, while a number of positive initiatives had been undertaken by the Government to address the problem, including the provision of more social housing, there was “still a challenge to reverse the dependency on the private market”.
The report suggested that the insufficient supply of new homes predicated on the slow recovery in construction continued to be "the prime driver" of rents and prices in Ireland and elsewhere.
“Housing exclusion”, it said, had been exacerbated by the financial crisis and policies were failing to provide an adequate response in most countries.
The lack of affordable housing solutions had led to an “alarming increase” in homelessness and had placed increasing pressure on the social housing sector.
In Ireland, the report noted that the number of people on local authority waiting lists had doubled between 2008 and 2010, and was currently over 96,000.
The organisation, which is made up of a network of European housing providers, including the Irish Council of Social Housing, also said that the percentage of poorer households here paying “too much” for housing – which it equates to more than 40 per cent of their income – had more than doubled between 2005 and 2015.
One explanation it offered for the slow responsiveness of EU housing supply was the scarcity of building land and the “ever-increasing” price of land.
In Ireland, it noted that work had been undertaken to identify sites, including sites in public ownership, that housing associations can get access to, but there was no co-ordinated programme.
Building costs
Surprisingly, Ireland did not figure in the list of most expensive countries for construction costs despite claims that building here has become prohibitively expensive.
Citing Eurostat data, the report noted that the most expensive countries for construction investment after Switzerland were Scandinavian countries, followed by Germany and France.
The report said housing had now become the highest expenditure for Europeans and that housing inequality was reinforcing income inequality.
“The [financial] crisis could have represented a turning point, showing the importance of investing in affordable, non-speculative housing,” it concluded. “However, so far there has been little change in social housing policies,” it said.
The report said that most EU member states had been decreasing public expenditure on housing and relying on measures to increase supply in the private sector or access to home ownership.
In the UK, it noted that spending on rental subsidies and housing benefits in England alone totalled nearly €25 billion in 2014/2015 while capital expenditure on building new homes amounted to just €5.4 billion.
Currently in Ireland some €730 million of the State’s €1.3 billion housing budget goes towards funding rent subsidies.
