Affordable Housing Schemes

Sleepy

Is helping people buy property really a useful, sensible or equitable usage of the taxpayers' money? Why should my taxes pay for someone else's property purchase? Is it not a sign of how land obsessed we Irish are that we consider helping someone to purchase a house more important than educating them or providing them with decent health-care?

Jackie laughlin

Sleepy,
Would you be prepared to talk in terms of rights? Let's begin a list of rights but remember that rights are serious. By definition they can be vindicated.

A right to an education in accordance with ability.
A right to full, adequate health care.

Would you agree to the following?

A right to a comfortable home.

I would go on but I doubt that many Irish people would even come this far with me.

Sleepy

I agree with the first two in their entirety (and would add a right to protection from criminality/access to justice) but the third I'm afraid I only agree with to a point. I believe people are entitled to housing if they can't provide it for themselves, however I don't believe anyone is entitled to be given that housing as an asset. I cannot accept that it's fair for some to be given a house at a knockdown price whilst others who can't afford to buy their own property's taxes are paying for this.

I'm aware the scheme is paid for from a tax on the developers but I would argue that this tax should be used to provide people's basic rights rather than given away on something of a lottery basis...

dermo88

What is really required is a Housing Development Board, on the lines of the Singapore model. Responsible citizens are those who have a stake in the development of a nation. Who own their own homes. But to have this, many people need a hand up, NOT a hand out. The younger people are when they get this, the better. We get a more mature, and mentally fit population.

The current situation of people being stuck under their parents roofs into their 30's is not desirable for the development of Irish society. The obsession with housing as an asset as opposed to housing as a home, where people can grow, create, and have families is harmful to Irelands future.

We have been reactive as opposed to proactive in dealing with this.

Please, all you who complain, please remember that many of your Parents and Grandparents had access to social housing, and it was one facility that they could not have done without

It was possible to do that in 1955 with a poorer country, why not now in 2005.

However, the terms and conditions attached to any kind of social housing, and its purchase must be as tight as a nuns (xxxx).

Sleepy

I have no problem with someone being provided with cheap rental accomodation. There's a huge difference between that and giving someone a house for two thirds of it's value though.

dermo88

My belief is that if anyone wants social housing, there should be a minimum housing requirement, based on marital status. The right to buy should apply after between 10 and 15 years residence in social housing. There should be clawback clauses applicable at the 15 to 25 year stage of residence.

The perceived problem we face in Ireland is in fact down to the cost of money. Interest rates have fallen to such a degree that we forget that a mortgage for IEP25,000 in 1986, when the Irish property market was in freefall had to be borrowed at a 12% interest rate. This bought a three bedroom house in Dublin 24. Repayments were IEP4,000 per annum, or in real terms EUR10,000 now, relative to inflation. (EUR2.50 (2006) = IEP1.00 (1986). One person just needed a job, could pay that back then, and still survive, and it was a 25 year mortgage. More people have jobs, skill levels are higher, and the rat race to get on the property ladder is much tougher.

In 2006, the interest rates are 3.5% and the same house goes for EUR300,000. It feels like my balls are being chopped off, and theres only one way for interest rates to go. Upwards. In 1986, they could only head one way, and that was downwards. In Macroeconomic terms, you can't get much higher than 12%, but you can't go much lower than 3.5%, and an economy/currency with interest rates at 12% is truly up **** creek.

Social housing has a bad name because a small minority misbehaved and gave it a bad name. My perception, rightly or wrongly is that the politicians were quite happy to ignore the ghettoes knowing that the people in them did not vote. That they were apathetic. That the 'peasants' were placated with soccer, beer, johnny blue, curry and chips. That the drug addicts were contained, and were'nt harming them in their establishment areas. Unseen, unheard, unknown, forgotten.

You would be surprised, but in the likes of London, the 7 Towers of Ballymun would have become a Housing Association. It would have been privatised, taken out of Dublin County Councils hands, and retained. Instead, because it was neglected and as a result failed, it was demolished. The flats there were solidly built by todays standards. I have seen the 1960's flats in the UK, and people there joke that they were built to withstand an atomic bomb. Ballymun were constructed to similar standards.

Jackie laughlin

Dermo88, To which politicians do you refer? Do you see politicians as a class? Does this mean that you reject democratic choice or do you think that no choice is available?

I'm by no means expert in this but "social housing" is a relatively new phenomenon whereby developers were required to sell some properties at sensible prices. True to form FF allowed builders to escape by donating land well away from prosperous purchasers. Mixed income housing was therefore avoided as it might have lowered property values.

There are many other ways in which a valuable asset can be acquired by a person of modest means and sold at some stage at market value. By far the greatest number of these instances involve council/corporation tenants buying out their houses.

gilroyb

Sleepy wrote:

I have no problem with someone being provided with cheap rental accomodation. There's a huge difference between that and giving someone a house for two thirds of it's value though.

It's cheaper for the government in the long run to sell the house off. It creates a sense of ownership among those in these houses and helps to create long term bonds in the community.

Sleepy

How is it cheaper to give away an appreciating asset than to maintain it?

And why should anyone get a house for under it's market value? I just don't get why my taxes are used in this manner. If you can afford to buy a house at two thirds of it's market value, you can afford to rent it. Why should the taxpayer help you buy it?

Jackie laughlin

There are all sorts of State handouts for the rich: grants, tax exemptions etc. Why shouldn't the poor get a few quid off a house?

Sleepy

Grants for being rich? Never heard of those before! Tax exemptions are (supposed to be) used to bolster industry in a bid to keep/create jobs, not to line the pockets of the rich. Besides, that argument holds about as much weight as the classic "there's a mustard forum, so there should be a vicky polllard forum too, innit?" from here on boards.ie

TBH, I think I qualify for the affordable houseing scheme (think the cut off limit is around 40k?). I don't deserve for the state help me buy a house for me when I can afford to rent myself and neither does anyone else tbh. I'm not rich but I'm not destitute either. And if I was destitute, seeing how the state has provided me with healthcare, an education and access to justice, it'd really be my own fault in this economic climate. If we were in harder times and there simply wasn't the work to go around, I really don't believe the state has any further responsibility to me than to feed, clothe and house me (i.e. dole and social housing/rent allowance). Further education (e.g. FAS) could be an entitlement if there was work to be had in other sectors but I don't think they should have to buy me a house or give me assets.

Jackie laughlin

I don't think the state should give away assets either but it happens. Why emphasise the the amount given away in housing. The state has given away shares to Aer lingus workers. It has given away broadcasting licences and mobile phone licences. Grants are paid for growing trees and for growing nothing. Very few tax exemptions are designed to encourage risk taking investment; they mostly line pockets at no risk.

esskay

Jackie laughlin wrote:

I'm by no means expert in this but "social housing" is a relatively new phenomenon whereby developers were required to sell some properties at sensible prices.

Ah, I think you are talking about the regulation that meant developers had to set aside 20% of each development for Social and Affordable Housing. Unfortunately, no long after this came out it was ammended cause the price of houses in exclusive estates was being brought down. The "Upper Class" didn't want to be rubbing shoulder with the "lower classes". Also, due to the land prices, sites (particularly in Dublin) worth millions which were being developed woul have cheap housing on them that would normally have sold for a small fortune. IIRC developers can now just pay a wad of cash and not bother with the 20% affordable housing.

Jackie laughlin

Yes, Esskay, that's my understanding.

I take it the amendment was sorted out in the FF tent at the Galway races.

Sleepy

Jackie laughlin wrote:

I don't think the state should give away assets either but it happens. Why emphasise the the amount given away in housing. The state has given away shares to Aer lingus workers. It has given away broadcasting licences and mobile phone licences. Grants are paid for growing trees and for growing nothing. Very few tax exemptions are designed to encourage risk taking investment; they mostly line pockets at no risk.

It was just something which was discussed on another forum here recently that irked me. I don't agree with the government bending over and dropping their trousers to overly millitant unions that are preventing the privatisation/profitability of our national airline. I thought the broadcasting and mobile phone licences were sold through pretty public tendering processes? Have to say I'd kind of agree with this as it's a way of taxing business rather than the working population of Ireland. Grants for growing trees, again I'd see as a good thing as we need more trees to help deal with increasing CO2 emissions and ensure our kids still have Oxegen in their air.

Gifting our social housing to the population is just one failing of a pretty incompetent government imho. It's just one that winds me up a little as I'm one of the many people in this country facing the reality that I'll be renting for the rest of my life.

Sleepy

Jackie laughlin wrote:

Yes, Esskay, that's my understanding.

I take it the amendment was sorted out in the FF tent at the Galway races.

I'd say you're right there. Why that tent hasn't been bombed yet is still a miracle to me tbh.

jdivision

Sleepy wrote:

? Why should my taxes pay for someone else's property purchase?

When did that every happen? They are provided at cost price. Learn a little about the scheme before posting such drivel

Jackie laughlin

Sleepy,
There is another thread running on this so I'll say very little. There is no business, economic, social or political reason to privatise Aer Lingus.

What you should be concerned about is that your airline has already been part-privatised by giving shares to the workers.

One recipient of a mobile phone licence is now a tax exile but comes home to be feted as some kind of hero. Sometimes I think we've gone insane!

Surely if you have no possibility of purchasing a home, you qualify for one or other of the public schemes?

Well, personally I find it quite annoying. I bought a townhouse in cork last year. 13 Townhouses in a row. 5 of which have been set aside for "Affordable housing". My place cost me 265k euro, which I've had to work towards for the last 5 years. I've already went through one house purchase/sale to get to this newer higher level. And I felt quite content with myself, in spite of paying out on a hard mortgage.

Now 5 houses on my row are allocated to affordable housing, and they're just sitting there empty. Its not as if they're actually being used. They're not even finished on the inside or anything.

How is it that I had to work hard for 5 years, save a deposit of 25k, go through one housing purchase/sale, and find that people can skip the time/money/effort I've had to make?

I know its selfish. But I don't care. Its really bloody annoying.:mad:

And I wonder how many of you that approve of the housing scheme actually have your own houses, with your own mortgage, where this scheme is in effect?

jdivision

Deleted User wrote:

Well, personally I find it quite annoying. I bought a townhouse in cork last year. 13 Townhouses in a row. 5 of which have been set aside for "Affordable housing". My place cost me 265k euro, which I've had to work towards for the last 5 years. I've already went through one house purchase/sale to get to this newer higher level. And I felt quite content with myself, in spite of paying out on a hard mortgage.

Now 5 houses on my row are allocated to affordable housing, and they're just sitting there empty. Its not as if they're actually being used. They're not even finished on the inside or anything.

How is it that I had to work hard for 5 years, save a deposit of 25k, go through one housing purchase/sale, and find that people can skip the time/money/effort I've had to make?

I know its selfish. But I don't care. Its really bloody annoying.:mad:

And I wonder how many of you that approve of the housing scheme actually have your own houses, with your own mortgage, where this scheme is in effect?

There is a clawback scheme in operation for those people who buy under the scheme. They don't get to keep most of the profits if they sell on, it goes to the local authority, in my case I'd get to keep one third of the profit so if I sold it I wouldn't be able to buy anywhere else anyway. The houses are lying empty because of council bureaucracy - they probably haven't offered them yet to applicants. As for you working hard, people who buy affordable housing do so too. In Dublin you can earn up to e52,000 and still qualify. Under the Affordable Housing Initiative the limit is e60,000. The affordable housing scheme was introduced six years ago iirc, you said you have already made one sale etc meaning you probably would have qualified for it first time round but opted against it. I'm not riling you but you made a choice there.

jdivision

jdivision wrote:

There is a clawback scheme in operation for those people who buy under the scheme. They don't get to keep most of the profits if they sell on, it goes to the local authority, in my case I'd get to keep one third of the profit so if I sold it I wouldn't be able to buy anywhere else anyway. The houses are lying empty because of council bureaucracy - they probably haven't offered them yet to applicants. As for you working hard, people who buy affordable housing do so too. In Dublin you can earn up to e52,000 and still qualify. Under the Affordable Housing Initiative the limit is e60,000. The affordable housing scheme was introduced six years ago iirc, you said you have already made one sale etc meaning you probably would have qualified for it first time round but opted against it. I'm not riling you but you made a choice there.

I wasn't eligible unless I wanted to wait months, without any guarantee that I would get it. I wanted to live my life, and get my foot on the ladder. But what i wonder about is that these schemes aren't targeting housing from the lower rungs, which I had to start with, but rather including some of the more expensive housing.

And I'm not talking about Dublin, who's market is so inflated it can't really be compared to anywhere outside of it.

jdivision

Deleted User wrote:

I wasn't eligible unless I wanted to wait months, without any guarantee that I would get it. I wanted to live my life, and get my foot on the ladder. But what i wonder about is that these schemes aren't targeting housing from the lower rungs, which I had to start with, but rather including some of the more expensive housing.

And I'm not talking about Dublin, who's market is so inflated it can't really be compared to anywhere outside of it.

Boards.ie crashed with my original reply to this so apologies if I'm repeating myself. Again you made your choice, you could have waited and maybe got a 30 per cent discount but chose to buy. That's your opportunity cost. You could have taken a bit of a risk and waited but you chose to get on the ladder, made a few quid and traded up.

The 20 per cent affordable and social housing provisions apply to virtually every new development in Ireland - from what I know the only exception is on sites of less than 0.25 acres or in areas where there is already a surfeit of social housing (north inner city Dublin for example). So the scheme is more likely to apply in affluent areas than anywhere else. The problem is that FF then introduced an amendment allowing developers to either pay to keep social and affordable housing out of particular schemes, or else to provide the equivalent value of affordable housing in another scheme they were developing. It sounds like that's what happened with your terrace. Did you ask before you bought if there was any affordable/social units there? Caveat emptor unfortunately still applies and you can't plead ignorance because you were familiar with the scheme having considered buying with it years ago.

Not really since the scheme came in after I had entered final negotiations for my first home, and considering it at that stage wasn't practical.

But irrespective of that I'm against them because they're placing people in my current housing estate. I'd have no problems if the placement was where I had first bought, thats fairly ok, but the costs involved for me for my present situation in from the building , finishing & mortgage compared to what they will have to pay for the same.

I know they will only receive a small part of the sale price, but they only get part of the mortgage also. They're being set up in a place I had to work towards for five years.

Just curious, but do you have a house/apartment of your own?

jdivision

Deleted User wrote:

Just curious, but do you have a house/apartment of your own?

I bought an apartment on the affordable housing scheme last year - I earn a good wage and have a good job but in Dublin I would have been just about able to afford a one-bed more than an hour's commute from my job and in addition couldn't save a deposit with rent. So I took the risk, went on the affordable housing list two or three years ago and just sat and waited. I've been a cheerleader of the scheme for years, even before I signed up to it byt the way. I've advised a lot of people about it on boards.ie, often through pms rather than posts as I come into contact with it through my job.

Fair play.

I guess I'm just annoyed that people could skip the hassle I went through, and buy into my current estate for peanuts.

Still, I do approve of certain aspects of the scheme, like the reviewing of who can apply and the ability of existing houseowners to complain if needed.

I don't know. I'll be able to post better response to the post, once the house get filled. At the moment, its just too ghostly an objection that I have. Not enough practical experience, or even background information about the scheme.

Sleepy

jdivision wrote:

When did that every happen? They are provided at cost price. Learn a little about the scheme before posting such drivel

jdivision, I know how the scheme is financed and run and I still don't agree with it. The tax levied onto the property developers could easily be used to be invested in other more deserving areas than helping people who earn more than the industrial average wage to buy houses. Clawback scheme for two thirds of any capital gain or not, the net result is that anyone who's been gifted a house in this fashion has done so off the back of other taxpayers. And that's the reason I'm not applying to join this scheme: I don't want to steal from my fellow countrymen.

Jackie Laughlin, if you want to post a link to the thread I'll argue with you about Aer Lingus in another thread. I can think of plenty of sound business, economic and social reasons for privatising it. Though politically, it will hurt any party with the guts to sell the thing.

jdivision

Sleepy wrote:

The tax levied onto the property developers could easily be used to be invested in other more deserving areas than helping people who earn more than the industrial average wage to buy houses. Clawback scheme for two thirds of any capital gain or not, the net result is that anyone who's been gifted a house in this fashion has done so off the back of other taxpayers. And that's the reason I'm not applying to join this scheme: I don't want to steal from my fellow countrymen.

Nope they haven't, cost price: no tax on developers, no cost to you because the council charges buyers for their expenses. People who buy using it haven't been gifted a house, they haven't done it on the back of other taxpayers, they've done it because they qualify for very strict criteria.

Sleepy

So developers handing over a number of houses in a development or paying to avoid doing so isn't a tax? :rolleyes:

And you don't think that the developers aren't passing the cost of this onto the rest of the house-buying public?

Economics 101 mightn't be a bad idea jdivision...

jdivision

Sleepy wrote:

So developers handing over a number of houses in a development or paying to avoid doing so isn't a tax? :rolleyes:

And you don't think that the developers aren't passing the cost of this onto the rest of the house-buying public?

Economics 101 mightn't be a bad idea jdivision...

So house buyers in that particular development are paying for it, not taxpayers in general. Nice try but you've just shown your argument doesn't stand up. By the way affordable housing schemes are not limited to here, they're in the United States and the UK too and probably cases in Europe too.

jdivision

By the way Klaz, I empathise with you in that you saved etc to buy a place. I have my problems with the affordable housing list too, particularly the favourable discrimination of people from that area. What that means in effect is that kids of affluent parents (I'm talking about in Dublin because I don't know situation in Cork) get first choice to buy in the affluent areas, when I think it should be luck of the draw. The real problem as always is that the government of the time didn't implement the Kenny report to stop people making money from the rezoning of land and then on top of it the current government reduced cgt on it from 40 per cent to 20 per cent. Both things have led to a surge in land values and in turn have contributed to spiralling house prices. Outside of labour, it's actually been getting cheaper to build residential units.

Sleepy

jdivision wrote:

So house buyers in that particular development are paying for it, not taxpayers in general. Nice try but you've just shown your argument doesn't stand up. By the way affordable housing schemes are not limited to here, they're in the United States and the UK too and probably cases in Europe too.

OK, let me make this clearer for you:

Government takes houses at cost price from developers, costing them money (i.e. taxing them). Developers up the price of the rest of the development to recoup some of this loss.

Now, we have the situation where the government have taxed the developers, who have in turn passed some of this cost on to the consumer.

This tax could be used to provide social housing to those genuinely in need of it (you know, people who can afford to house themselves), or they could use it to pay for improved education, health, policing, national infrastructure or any one of a million other more deserving things than giving people property for less than it's market value.

So in taking social housing, you've helped rip off other house-buyers who now pay further over the odds for properties they buy at market value and the rest of the tax-paying public because the tax revenue being collected from the developers (in the form of cheap housing) is being given to you instead of passed onto them in either social services or tax cuts. Well done.

Oh, and if it was as simplistic as your post implies that only "the house buyers in that particular development are paying for it" would make it alright that Klaz has to pay some of the price of his neighbours house (which he already is due to the inflated cost of his own house)?