The rental market is out of control. That is a huge, huge issue.
iād counter it is, it prevents people from being able to save to purchase it encourages the wealthy to invest in a property rather than making it available for someone to forge a future.
Supply solves allā¦ in places like Dublin where there is no where to increase supply what does one do?
I donāt agree that we should restrict or reduce the private residential rental sector.
Completely wrong.
Iām not arguing the challenge that high rents poses and in tandem with the (hugely necessary) central bank regulations it makes getting on the property ladder very hard. Even ignoring the people being able to buy factor, rents which are very big and grow rapidly arenāt a good thing for society or for our economy.
However, I donāt think that institutional investment into the sector is all bad. There are lots of other countries which have huge institutional investment into private rental but they donāt have the issues that we have.
There is lots of places in Dublin to increase supply - I suspect our population density is very low compared to comparable cities. However it requires cracking the 1st of my 3 restraints from a previous post - planning. We need to have higher density and we need to build up. The gov have tried to accelerate this but there has been huge push-back from a variety of vested interests.
You think that handing over millions of euro in tax credits to funds which worsen conditions and have a negative impact on the market overall is the solution?
Original thinking, Iāll give you that. Oh wait, itās not, itās just FG policy that youāve swallowed whole.
Spell your thinking on this out in detail. Donāt use questions - outline your own thoughts. Then Iāll engage.
Encouraging private development isnt working either. The cost for the end result is out of the reach of the average house buyer due to a multitude of reasons.
this from 3 years ago gives a bit more detail:
but this part is the most relevant really
So on 2 fronts, existing houses are cheaper than building new ones and the cost of new ones are out of reach for buyers. And the situation is only worsening with construction inflation in the last 3 years since that report.
The biggest issue is the cost of building and the taxes and fees that are put on them which make them nonviable.
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so how should the planning issue be ācrackedā?
Iāve no idea - itās a massive issue though. You could argue that less input from local residents/politicians etc would be a good thing but it does create a democratic deficit. The hypocrisy from politicians (and citizens) across the spectrum on this has been breath-taking though imho.
I dont think planning is the big issue, but rather what @gman alluded to. Even if the homes are built the ppl who need them cant afford and they are then picked up by the wealthy again to use for rental itās a viscous circle
Cost of construction/construction capacity is definitely an issue in my view too.
Actually worth mentioning that the various standards required (for good reasons) in new builds increases the cost of them which has to be paid somehow.
Ok. The funds referred to in the article drive down standards and drive up prices. When the tax free profits they are making begin to slide eventually they get to sell on the buildings and avoid capital gains. The market is left with their legacy of shit units, āco-livingā spaces and shit overpriced student accommodation. The government handing them over millions and millions of euro is stupid and to be honest, obscene. These funds have demonstrably had a negative impact elsewhere, itās a frankly idiotic policy.
View the tax credits these funds are being handed as a cost to the exchequer, which it is, and ask is there any way for the government to better spend the money to address the issue? Affordable housing schemes would be a more positive use and would leave a legacy of good standard units and help to moderate price. There is no single measure but a rent freeze would not be a bad idea. A lot of work needs to be done on zoning and the perverse incentives to hoard sites. Unlocking land to build on will go a long way. Make it prohibitively expensive to own sites and not develop them where they are needed or to not refurbish dilapidated buildings. Fucking air BnB out of it would not go astray either.
Finally, skyscraper style buildings are not what Dublin needs to increase density. It needs four to max eight story buildings.
Iād agree with you there.
Cost of construction is rising, but there needs to be something government driven to reduce the soft costs which contribute to the final house price.
Building a ā¬330k house costs ā¬150,000. (2016 averages costs). VAT and Levies take up ā¬51,000 per house. And there is probably more on the land acquisition costs too that go back to the government. So they certainly have an influence to hand in reducing final costs to the house buyer by reducing levies and VAT. There also needs to be incentives for buyers being able to afford these and ways to make buying a house accessible to people. Rent to buy schemes, taxation means etc.
I agree 100% with you though that there is no straight forward or easy fix.
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Iām not sure that I agree that the funds drive down standards. If anything, most of the funds seem to focus on high-end type properties and when purchasing them from developers they seem to be better apartments than the general stock. Either way, any new builds have to adhere to standards and controls which while needing improvement are far better than the standards/controls that allowed some of the apartments built in Ireland in the 90ās/00ās
I think the co-living/student thing is only a small sub-sector of the market and may have some positive effects by freeing up other housing unit.
As regards pricing, they definitely charge as much as they can and are far more likely to increase prices every year than the average small landlord. However, theyāll only be able to charge what the market will pay which is back to my supply argument.
The tax credit argument is definitely worth debate. Tax incentive that were appropriate to attract attention and get investment might not be appropriate now. Some of the funds (and their Irish advisors) def pushed the rules too far as well. I donāt think that this is the cause of the housing problem though or by changing tax rules that you āfixā housing. It should be addressed but itās a red herring to the overall challenge.
I donāt really get the āaffordable housingā idea. Itās more of a political stunt than a sensible policy imho. It seems to me a focus of gov resources on subsidising a small few citizens. Iād prefer if that money was focused on schemes where the government owned and were rented out on a cost-plus basis. Thatās just a personal preference.
Why are the funds being given this sweet tax deal? Whatās the justification for it?
All new builds have to be built in accordance with the Building Regulations and be certified under BCAR. There are now also minimum standards for Rental Accommodation and Local Authorities must inspect private rentals to ensure adherence to same so Iām not really sure how they can go about driving down standards.
You donāt think āco-livingā or outrageously overpriced student accommodation is a diminution of standards?
Cities are shit .