The statement that two out of three workers in the State are effectively locked out of the housing market in terms of both rents and prices will not surprise many. But the speaker might. Cormac O’Rourke is chairman of the Land Development Agency, the state body charged with delivering affordable housing. A former investment banker, he has chaired the LDA since its incorporation in 2022.
His comments to the Dublin Economic Workshop over the weekend may be seen as biting the hand that feeds, insofar as it was implicitly critical of the politicians who appointed him. It is more instructive to see it as reframing of the challenge that faces the Government, one which it has not met.
The solution to the housing shortage is not simply to build more houses. If the current somewhat laissez faire approach of throwing money and tax incentives at institutional investors were all that was required, we would be much further down the road to solving the problem than we are.
The real task is to build the right type of houses and apartments at a price that people earning under € 70,000 can buy or rent without beggaring themselves. If you fall into this category – as 70 per cent of workers do – rent on a new home will exceed 35 per cent of your take-home pay, while the price of an average house will also exceed the maximum you can borrow.
RM Block
There is no easy solution. Rent controls are a necessary evil and have been extended across the State. But the Residential Tenancies Board is not adequately resourced to police them. That should be addressed.
Many of the factors that drive up the costs of building, such as energy prices, are beyond the Government’s control. The planning process is not one of them and, as O’Rourke pointed out, the current system’s bias towards the right of the individual over the common good has a direct bearing on the cost of homes.
Addressing these two issues would signal that the Government is focused on the price of new homes and not just the headline number.
