The privatisation of social housing

A thoroughly superb article on housing by Fintan O'Toole, who grew up in social housing in Crumlin (shock, horror), in this morning's Irish Times. The statistics are absolutely stunning evidence of how far to the right the Irish state has moved even since 1995. Free market ideology is, without question, the new fundamentalism of Irish society. This state would rather spend billions paying private landlords to supply substandard temporary "homes" and perpetuate the problem rather than put that money into building social homes. The utter madness of social policy being hijacked by for-profit businesses. That's a colossal ideological shift to the right and nobody is shouting stop. A must read for anybody who cares about our society.


Fintan O’Toole: Snobbery is at the root of the housing crisis

.... This pernicious attitude developed side by side with the Celtic Tiger. In the period 1933-1943, more houses were built in Ireland by local authorities than by private developers.

In 1975, 33 per cent of all new houses were built by local authorities. A decade later, in 1985, the proportion was 27 per cent, and 10 years after that it was still more than 25 per cent. It was in the Celtic Tiger period that the percentage plummeted. In the years of the boom, from 1995 to 2007, just 6 per cent of newly built homes were local authority houses.

This is when the idea took hold that for-profit development would house almost everybody and that those who were left over could be accommodated as a by-product of the commercial market.

Termites on crack
During those boom years we were building houses like termites on crack. We were building houses so fast that we had to build houses to house the builders who were coming from all over Europe to build houses. So, if ever there was a time when private builders were going to deliver on social and affordable housing needs, this was it.

We thus have the benefit that current policies have already been tested in ideal conditions. We can ask a simple question: how many social, voluntary and affordable houses were actually provided by private developers in those conditions?

In the seven most manic years of the boom, 2002 to 2008, a total of 2,786 social, 1,133 voluntary and 8,214 affordable houses were squeezed out of the private building machine. That’s 12,133 in total. It’s pitiful: a mere 2.8 per cent of the overall output by private developers in those years.

Aside from the human cost, this failure has been woefully expensive. The gap between real housing needs and what the market provides is filled with public payments to private landlords.

In 1990 the State spent just €7.8 million on rent subsidies for people who could not afford market rents. By 1999 the cost was €127.7 million, and by 2003 it was €331.5 million. The Government expects to spend more than €3 billion on rent subsidies over the next five years. The combined cost of the three main rent support programmes – rent supplement, the housing assistance payment (HAP) and the rental accommodation scheme (RAS) – is expected to be about €535 million this year.

On the Government’s own projections, this will rise to €714 million in 2021. So between 1989 and 2021, the direct cost to the taxpayer of not building social housing will have increased by 9,054 per cent.

subpar

Giving someone a house for life is akin to a win on the Lotto paid for by taxes.

Everyone in the State has a fundamental right to shelter , that does necessarily mean a State supplied house or apartment in an area of their choice. Furthermore the social housing units that were built in the period from 1950 to the end of the century should never have been sold off to the occupiers , these housing units were a national asset and were only sold off because the local authorities no longer had an interest in maintaining them and decided that the private sector could supply public housing needs . However many small scale private landlords have since discovered that dealing with problem tenants and maintaining property is not the easiest way to make money.

seamus

Any comparison with previous decades' output is pretty silly.

The government were building cheap houses because nobody else would.

We don't want or need the state to big big sprawling public housing developments anymore.

The thrust of the article is fine, but the harken back to when Ireland was an economic septic tank is fairly disappointing.

whisky_galore

seamus wrote: »

Any comparison with previous decades' output is pretty silly.

The government were building cheap houses because nobody else would.

We don't want or need the state to big big sprawling public housing developments anymore.

The thrust of the article is fine, but the harken back to when Ireland was an economic septic tank is fairly disappointing.

Somehow the 'septic tank' economy could build them and the modern day economy can't. (Or won't! )

Wheeliebin30

Nobody who wants 100s of thousands of social houses has put a costing in this yet.

We’re talking possibly 100 billion euro.

Anyone remember what caused the last recession??????

Wheeliebin30

whisky_galore wrote: »

Somehow the 'septic tank' economy could build them and the modern day economy can't. (Or won't! )

The cost back then was a fraction of what it costs now.

Del2005

whisky_galore wrote: »

Somehow the 'septic tank' economy could build them and the modern day economy can't. (Or won't! )

We could spend money as we pleased then and there was no accounting, so while we look back with rose tinted glasses we have no idea if they were built efficiently. But we definitely know that council rent collection then and now is at a shocking low level and even less risk of eviction, so that is why council stopped building homes. They cannot collect even the token rent they charge so they stop providing housing and instead passed the buck to the private rental who were never supposed to provide social housing.

beauf

[Deleted User] wrote: »

... This state would rather spend billions paying private landlords to supply substandard temporary "homes" and perpetuate the problem rather than put that money into building social homes. The utter madness of social policy being hijacked by for-profit businesses. ....

Utter drivel.

They outsourced it to the private market too save money and cost cutting. As that's the point of out sourcing. A market that doesn't want that business and had to be forced into taking it.

beauf

subpar wrote: »

...However many small scale private landlords have discovered that dealing with problem tenants and maintaining property is not the easiest way to make money.

I don't think anyone anticipated the govt would spend 20yrs increasing tenants protection while leaving the landlord with almost none.

Leaving the landlord with almost no way to deal with problem tenants while being fined for having them and massive losses.

Zorya

Free market capitalist fundamentalism, OP, where the rich get subsided and the poor get blamed. We are the good boys and girls in the global corporatist new order. Doing what we are told, chasing money at the cost of all other human qualities. You are not going to get much traction here with your kind of opinions

People are forgetting how to know the weight of things.

beauf

They have manage to make the problem so bad now not only is there a need to build social housing but now we also need affordable housing.

Amirani

A large proportion of the council housing built by the State was terrible. Really crap, sub-standard accommodation that was cheaply built and horrible to live in. They were often built en masse together, leading to big social issues and no-go areas in cities.

The recent phenomenon of looking back to the good old days of large scale social housing projects is utter rubbish. The State probably does need to build more to fix the issue, but not like it has done in the past, which is a completely failed model. In fairness, most recent social housing projects the State has delivered are of a much higher standard, but they are very expensive.

seamus

Del2005 wrote: »

We could spend money as we pleased then and there was no accounting, so while we look back with rose tinted glasses we have no idea if they were built efficiently.

It wasn't. It was absolute trash. If we built like that again there'd be no end of the same people complaining that the government are letting people down with awful housing.

The publically built housing of the past has cost us multiples of the original built costs in refit and renovation costs.

beauf

Its expensive regardless who buys or builds it.

hatrickpatrick

seamus wrote: »

We don't want or need the state to big big sprawling public housing developments anymore.

Who the f*ck is "we"? Not students, single people, or young people working entry level jobs, anyway. Those are the people who are being f*cked over by the current situation.

beauf

seamus wrote: »

It wasn't. It was absolute trash. If we built like that again there'd be no end of the same people complaining that the government are letting people down with awful housing.

The publically built housing of the past has cost us multiples of the original built costs in refit and renovation costs.

It was built the same as other housing of the era.

Similar Private housing of the same period has had loads spent on it over the years also.

But it less likely to be abused and neglected.

VonZan

Fintan O'Toole has to be the biggest idealist in the state.

'Do this, do that' without a thought on the cost or consequences.

A dangerous individual who thinks he's a morale authority on just about everything.

beauf

Zorya wrote: »

Free market capitalist fundamentalism, OP, where the rich get subsided and the poor get blamed. ....

Actually the govt got blamed on this thread not the poor.

But don't let reality get in the way...

The biggest barrier to social house building in Ireland are the people who refuse to pay. How much is owed in rent? What’s being done to collect what is owed? Not much, because they’ll still have to be housed at a cost to the state. No one has the stomach for evicting families with small children or those in relationship difficulties. When you see able bodied people marching to publicise the “homeless” situation complaining about having to pay €45 a week rent, you know that you’re on a hiding to nothing.

Zorya

beauf wrote: »

Actually the govt got blamed on this thread not the poor.

But don't let reality get in the way...

Damn those poor people for being in need and putting the govt in an awkward position. Can they not just get with the program like all the rest of the successful ones living in identikit private dollhouse estates sprawling in the commuter belt, putting their kids in creche at dawn so they can fight through traffic to be paid mediocrely for working at bull**** meaningless jobs so they can get home exhausted and have frozen meals and IKEA weekends. Damn them poor that are not making this Utopia work for them.

November Golf

Wheeliebin30 wrote: »

Nobody who wants 100s of thousands of social houses has put a costing in this yet.

We’re talking possibly 100 billion euro.

Anyone remember what caused the last recession??????

Nobody put a cost on it? How do you figure that

Where did you pull the 100 billion from?

We do remember what caused the last recession, developers building 100s of thousands of houses on borrowed money to make huge profits.

Its certainly wasn't caused by government building social housing.

Wheeliebin30

Mike Foxtrot wrote: »

Nobody put a cost on it? How do you figure that

Where did you pull the 100 billion from?

We do remember what caused the last recession, developers building 100s of thousands of houses on borrowed money to make huge profits.

Its certainly wasn't caused by government building social housing.

How many houses do we need?

I heard Sinn Fein saying 150,000 at least.

At 300,000 a pop that’s nearly 50 billion.

Shower Doctor

Amirani wrote: »

A large proportion of the council housing built by the State was terrible. Really crap, sub-standard accommodation that was cheaply built and horrible to live in. They were often built en masse together, leading to big social issues and no-go areas in cities.

The recent phenomenon of looking back to the good old days of large scale social housing projects is utter rubbish. The State probably does need to build more to fix the issue, but not like it has done in the past, which is a completely failed model. In fairness, most recent social housing projects the State has delivered are of a much higher standard, but they are very expensive.

It was the people living in them that made them no go areas. People with no drive in life, leeches of the state, women firing out babies as fast as they could to get more dole for cans and drugs.
What do you expect for nothing, the council put a roof over peoples heads with what money they had. If people wanted a nicer home go out and work and pay for one.

beauf

Zorya wrote: »

Damn those poor people for being in need and putting the govt in an awkward position. Can they not just get with the program like all the rest of the successful ones living in identikit private dollhouse estates sprawling in the commuter belt, putting their kids in creche at dawn so they can fight through traffic to be paid mediocrely for working at bull**** meaningless jobs so they can get home exhausted and have frozen meals and IKEA weekends. Damn them poor that are not making this Utopia work for them.

I stand corrected. You are now blaming the poor.

If there is a model working perfectly in another country a utopia as you call it please let us know.

Guy:Incognito

beauf wrote: »

I don't think anyone anticipated the govt would spend 20yrs increasing tenants protection while leaving the landlord with almost none.

Leaving the landlord with almost no way to deal with problem tenants while being fined for having them and massive losses.

But yet every time a thread comes up about landlords and such people fall over each other to tell us all the politicians are landlords and that's why everything is skewed in their favour and they won't sort out any issues............

The problem in the Celtic tiger years was that developers were allowed to give money to the councils instead of providing the social housing units in their estates.
It should never have been allowed, massive social housing only estates have not worked. We need mixed estates.
& social housing should not be sold to the tenant. Ever.
The goal for any tenant should be to buy their own house, not the one they live in.

griffin100

Fintan O”Toole is still locked into a left wing student union ideology that provides no real solutions for anything. He is the best / worst example of a champagne socialist. Eoin O’Broin is his spiritual successor.

If Ireland was as a right wing country we wouldn’t be spending billions on social welfare and the very monies the OP is complaining about. We’d let the market rule and all the people housed in hotels and b&bs by the state and in receipt of HAP would be living on the streets.

Franz Von Peppercorn

seamus wrote: »

Any comparison with previous decades' output is pretty silly.

The government were building cheap houses because nobody else would.

We don't want or need the state to big big sprawling public housing developments anymore.

The thrust of the article is fine, but the harken back to when Ireland was an economic septic tank is fairly disappointing.

Eh?

O’Toole showed that nobody is producing cheap housing in the private sector here either.

Franz Von Peppercorn

seamus wrote: »

It wasn't. It was absolute trash. If we built like that again there'd be no end of the same people complaining that the government are letting people down with awful housing.

The publically built housing of the past has cost us multiples of the original built costs in refit and renovation costs.

You got a source for that? Once public housing sells for good money where I live.

For every genuine person in need of social housing there's several wasters already with it.

Guy:Incognito

Franz Von Peppercorn wrote: »

Once public housing sells for good money where I live.

The quality of the housing is much less important than the location.

Little 2 beds in Drimnagh sell for stupid money because they are beside the Luas and handy for town.

lawred2

seamus wrote: »

Any comparison with previous decades' output is pretty silly.

The government were building cheap houses because nobody else would.

We don't want or need the state to big big sprawling public housing developments anymore.

The thrust of the article is fine, but the harken back to when Ireland was an economic septic tank is fairly disappointing.

Economic septic tank - brilliant turn of phrase

myshirt

People have to learn to paddle their own canoe, but this requires investment and generational change. As a State we have two choices, spend it at the start or spend it at the end. If you spend it at the start you spend it on a productive asset. If you spend it at the end you piss it against the wind. But whatever you do, you spend it. And it costs.

Our problem in this country is that we are split down the middle into two broad groups. Those driven by pure insatiable greed. The type who if they look at a group wedding photo they immediately look for themselves. The type constantly patting themselves on the back and believing they are where they are on the back of nothing but their own effort. The type who believe the only difference between them and a man in the backarse of Timbuktu is the man in Timbuktu needs to pull up his socks.

The second type are those paralysed by fear. Those who won't pursue change, be it personal or for their community, because they do not have the courage to do it, or someone close to them who they love just told them they can't do it. The type who are scared. Live hand to mouth. Month to month. Payslip to payslip. Run through the rat race and don't step out of line. In this group some survive, and others don't. And others fare very, very badly. At this lower end it's a life of misery from cradle to grave. Drug problems, crime, poverty, precarious employment, precarious housing, poor education, suicide amongst friends, and all the poor coping strategies that develop off that right into adulthood.

But group number 1, especially public servants, don't see the link. These people would f#ck your wife, look you straight in the eye and not back up.

I believe in the youth of this country though, and I truly believe the public servant baby boomers and their early genxer offspring will get it in the neck in within the next 10 years. The outrageous wage bill and years of f#ck you to everyone else will come to an end. The youth will rise up to help those less fortunate, we will build those houses, and we will give equality of opportunity to people to eventually paddle their own canoe and not be intergenerational dependent.

Franz Von Peppercorn

Wheeliebin30 wrote: »

How many houses do we need?

I heard Sinn Fein saying 150,000 at least.

At 300,000 a pop that’s nearly 50 billion.

You’re confusing the retail cost with the build cost. You are also confusing the cost to developers (including land purchases and fees) with what public developers could do at a fraction of the cost.

As for where the money comes from - you keep asking that in these threads and it keeps getting answered. The councils take out a loan to build and pay back those (low interest) loans by saving money on HAP and instead of paying private rent, have rental income.

Franz Von Peppercorn

Guy:Incognito wrote: »

The quality of the housing is much less important than the location.

Little 2 beds in Drimnagh sell for stupid money because they are beside the Luas and handy for town.

The point is it largely sells the same as houses from the same era that were always private. So much for shoddy workmanship.

If workmanship were all that influenced the market then new houses would always be more expensive.

Wanderer78

Asset price inflation rocks, along with trickle down and the rising tide, neoliberalism and neoclassical theory, yea right!

Seth Brundle

Doesn't Fintan O'Toole own a holiday home?
And he is critical of snobbery driving up costs?

Franz Von Peppercorn wrote: »

You’re confusing the retail cost with the build cost. You are also confusing the cost to developers (including land purchases and fees) with what public developers could do at a fraction of the cost.

So the council's would need to employ loads of brickies, carpenters, electricians, roofers, etc.
How much would that cost?

Franz Von Peppercorn wrote: »

As for where the money comes from - you keep asking that in these threads and it keeps getting answered. The councils take out a loan to build and pay back those (low interest) loans by saving money on HAP and instead of paying private rent, have rental income.

What happens when tenants decide not to pay the rent?

beauf

Guy:Incognito wrote: »

The quality of the housing is much less important than the location.

Little 2 beds in Drimnagh sell for stupid money because they are beside the Luas and handy for town.

I think the luas is much more of an influence in ok areas. In the least desirable locations the luas hasn't had that much effect. Probably it will eventually but just take longer.

Of this could also because they ran the luas though a lot of the most affluent areas first. Same with the Dart.

Even without the luas many of these areas would still have risen to stupid money. Almost everywhere has. Unless it's in the middle of no where or not a great area anyway.

beauf

Seth Brundle wrote: »

Doesn't Fintan O'Toole own a holiday home?
...

What's the big deal about dacha's sorry I mean holiday homes.

Guy:Incognito

Franz Von Peppercorn wrote: »

The point is it largely sells the same as houses from the same era that were always private. So much for shoddy workmanship.

If workmanship were all that influenced the market then new houses would always be more expensive.

When there's more buyers than houses then that's always going to be the case. Instantly add 150000 houses in dublin and then watch when people can be picky.

beauf

The same builders built both private and public housing and if a builder took shortcuts he did it to both. If anything the public housing got inspected more. But in general enforcement of standards and inspections of same is abysmal. Which is why BER ratings are so compromised.

Guy:Incognito

beauf wrote: »

I
Of this could also because they ran the luas though a lot of the most affluent areas first. Same with the Dart.

.

The Red and green lines opened 3 months apart.

ednwireland

seamus wrote: »

It wasn't. It was absolute trash. If we built like that again there'd be no end of the same people complaining that the government are letting people down with awful housing.

The publically built housing of the past has cost us multiples of the original built costs in refit and renovation costs.

do you own house ?

Any house after 20 years needs some major maintenance.

If you have new house I'd start saving now

Specialun

why dont they build social housing away from the city or business area’s. leave those area’s for the people that need to live there

Franz Von Peppercorn

Seth Brundle wrote: »

Doesn't Fintan O'Toole own a holiday home?
And he is critical of snobbery driving up costs?


So the council's would need to employ loads of brickies, carpenters, electricians, roofers, etc.
How much would that cost?

The same as a private build.

What happens when tenants decide not to pay the rent?

Still cheaper.

Maybe the best example is to simplify this to one house. The state is housing a large family in a 4 bedroomed house at the cost of near market rent. The rent is 2K+ and the house cost 400k for the private landlord to buy. Rent will increase over the lifetime of the tenants as well.

Instead of that insanity the state builds a house for much less than the retail cost. It gets a 30-40 year loan (a bond) at fixed rates. Ireland can issue bonds at close to 1% now.

Now instead of paying 2000k a month it pays the bond payments. The house also generates income. How much per month?

David McWilliams estimates the cost to build for a government is 175k.

( that’s the gross cost btw. The government immediately gets VAT, and income tax back. So a bricklayer that costs a private company 50k and prsi (ie 55k) costs the government 40k because all the taxes and prsi end in the governmeht coffers)

Latest 30 year bond rates I see for Ireland are 1.07%. So that gross cost (ie financing 175k at 1% over 30 years) for the house would be about 600 per month. Then you subtract the rental income from that cost as the state is now a landlord not a renter. Eventually the state generates gross revenue from these houses.

I would change a bit from previous forms of social housing. The houses should be rented with no furniture or white goods or even flooring and the renter will have full responsibility for everything except structural problems. This is to offset the ongoing costs.

I wouldn’t have mixed housing at all. That aggrevates people who buy at market prices. And social housing will depend on people being social not anti social. So there has to be some mechanism to evict.

Tl/dr : the government is a renter. Like all renters in the present situation it’s better to get a mortgage.

Franz Von Peppercorn

Guy:Incognito wrote: »

When there's more buyers than houses then that's always going to be the case. Instantly add 150000 houses in dublin and then watch when people can be picky.

Older ex council houses in good areas were the same prices during the bust as similar houses in a private estate. The government didn’t build shoddy housing. It built to the standards of the day.

Qrt

Specialun wrote: »

why dont they build social housing away from the city or business area’s. leave those area’s for the people that need to live there

Ah yeah let's create low-income ghettos away from any pre-existing services. That's worked great in the past!

What we need is a fundamental shift from council housing to housing association style housing. Where I live, it's clear which is association and which is council.

ShaneC93

Wheeliebin30 wrote: »

How many houses do we need?

I heard Sinn Fein saying 150,000 at least.

At 300,000 a pop that’s nearly 50 billion.

There's about 90,000 on the housing waitlists right now and I believe those on HAP are not included in those figures.

It's quite telling though that despite Sinn Fein's constant outrage over the lack of housing being built, their 'Alternative Budget 2019' shows they wouldn't even increase the funding for new builds by 2x.

Also they seem to have perception that if they fund enough for 20K houses in 2019 it will mean they'll actually get all those houses in 2019 whereas in reality even a private developer starting planning on a development now would be lucky to have it majority finished by mid-2020.

Hitman3000

Specialun wrote:

why dont they build social housing away from the city or business area’s. leave those area’s for the people that need to live there

So you assume everyone that needs social housing doesn't work? Why?

quadrifoglio verde

The biggest issue is we can't build social housing estates. Well we can but we may as well accept now that they'll become ghettos.

If you look at the housing list, you'll see that there's 37k on it in Dublin. The aim is to have 10% of all houses in every new built estate to be social and affordable housing.
So that's 370k houses that we'd need to build in order to house those 37k on the housing list in Dublin alone.
Providing of course that none of that 10% gets used for affordable housing.

We can't build that many houses in Dublin in the next five years. We don't have the infrastructure, we don't have the money, we don't have the skilled labour force to build them and we don't have the the 340k couple's needed to take out 300k plus mortgages either to purchase the other houses.

The other solution is to build like we did before. Large council housing estates to house our council housing list and accept that lots of these estates are going to become ghettos as we've seen happen previously.

ShaneC93

Franz Von Peppercorn wrote: »

You’re confusing the retail cost with the build cost. You are also confusing the cost to developers (including land purchases and fees) with what public developers could do at a fraction of the cost.

300K may actually be a lowball. While the cost for many social houses does be nearer €140K-€200K, especially outside of Dublin, some councils then overpaying for other property significantly drives up the average. Like the 54 social houses that DCC is building for a cost of €500,000 each..

Also in many areas the council ends up buying at a developer's cost rate because they cannot build any housing themselves so depend on the 10-15% of private developments they can buy at cost. Dublin Bay North is a good example of this, the biggest waitlist area in Dublin by near 200% yet the available building plots is severely limited and years of the councils selling their housing stock here at cut prices rather than taking the stock back when the tenant no longer requires it has really taken its toll.