When a government spends more resources on maintaining people in subpar conditions than it does to enhance their lives, it’s not viewed as a whimsical contradiction; rather, it underpins the root cause of a housing crisis. A case in point is Ireland, where in 1990, the state expenditure on temporary B&Bs for homeless individuals amounted to €600 for the entire year, sufficient for accommodating all homeless families, of which there were only five.
Remarkably, however, as the Irish economy prospered through the 90s, contributing to the emergence of the Celtic Tiger, a sharp contrast became evident. State spending on emergency lodgings for homeless families jumped from €600 to a staggering €6 million. The number of families requiring emergency accommodation also skyrocketed – from just five in 1990 to 1,202 in 1999.
This ironic increase in homelessness alongside wealth growth can be traced back to austerity policies pursued by Ireland in the late 1980s. These belt-tightening measures, championed by fiscally conservative individuals domestically and internationally, significantly diminished the amount of social housing. The output of local authority housing dipped by two-thirds towards the end of the 80s. Coupled with the disposal of existing social housing units, the total number of publicly available homes dropped by 15% between 1988 and 1996.
The lesson here is straightforward – austerity doesn’t work, particularly when linked to the availability of public housing. Not only does it impose a significant moral toll by leaving the most vulnerable members of society, especially children, in dire conditions, but it’s also financially unviable. Building public housing remains a superior strategy. It not only provides government with assets but also saves increasing outlays to private landlords for substandard and insecure accommodations.
Despite our lesson from the past, we repeatedly committed the same mistake. Back in 2011, the combined spending of all local councils on emergency residences for families without homes amounted to €73.5 million. Then, the Government halted the construction of social housing – a move met with applause from all rational individuals. The budget allocated to social housing was reduced by 60%, from €1.7 billion in 2008 to €680 million in 2014.
And the expected happened. The annual cost spent on emergency accommodation surged. By 2023, it hit €345 million – marking a rise of roughly 75%. This trend mirrored the escalating demand for emergency housing, with the current count being over 14,000, asylum seekers excluded.
These shocking statistics are just the most visible signs of an endemic social issue. But they underline the striking paradox of the Irish economic success story: the more affluent the state is, the more it spends just to provide homeless families with a bed for the evening.
Comparatively, in 1990, Ireland had about 1.1 million individuals employed and the state gained €12 billion in taxes. Now, we have 2.7 million employees and the state’s tax revenue is €87 billion. Nevertheless, during this period, the number of homeless children has escalated from few in 1990 to 1,262 in 1999, to 2,505 in 2016, to 3,873 in 2019, and now 4,206.
You could argue from a cynical perspective that the escalation of homelessness has been permitted, not despite the state’s increasing wealth, but because of it. Granted, the state’s expenditure has been rising, but it has also become more manageable. Pouring public funds into this issue is akin to a noble throwing pennies from her gold-plated coach at the poor – the difference being that the money is thrown, not at the renters but at their landlords.
For these individuals, it’s been a financial windfall. The State supplied an average of €14,000 to a private landlord to provide housing for a family in 2014. However, this figure had escalated to approximately €34,000 by 2022, marking a striking 143 per cent surge within just eight years.
Yet, such excessive expenditure does not attract widespread discussions about “fiscal responsibility”. Has the Irish Fiscal Advisory Council, the recognised financial guard dog, ever scrutinised this dreadfully wasteful use of taxpayers’ income to perpetuate homelessness?
A parallel narrative unfolds when considering the further costs of not constructing social housing. Gradually, the State has emerged as the chief revenue source for private landlords, as its subsidies for private tenants experience yearly growth. From 2018 to 2021 alone, the Housing Assistance Payment’s cost saw a jaw-dropping 80 per cent increase. Working in tandem with the similar Rental Accommodation Scheme, it accounted for a hefty €654 million hole in the State’s pocket in 2022.
However, it appears to go unnoticed. A report published in 2022 by the Comptroller and Auditor General indicated that the HAP Oversight Group, tasked with keeping an eye on the scheme, gathered only annually. On average, merely half the members were present during such meetings. To make it worse, “Neither of the two co-chairs – the secretaries general of the Department of Housing, Local Government and Heritage and the Department of Social Protection – have taken part in a group meeting since October 2018″.
[A university student’s rental encounter abroad: in the Netherlands, my landlord assured me that ‘I could stay indefinitely’]
The horrific personal toll it takes on parents and children is undeniable. However, this is a dreadfully misguided use of public funds as well. It has converted capital spending into current expenses. Now, the State, in an effort to rectify this fiasco, is being forced to pay double – it has to shoulder the cost of building social housing while simultaneously catering to the ever-increasing expenses tied to homelessness.
The lingering question is, would we make the same mistake again? Why wouldn’t we? We reduced the budget for social housing during the 1980s, dealt with the ramifications in the 1990s, failed to learn from it, and committed the same blunder in the 2010s. What could possibly indicate that, during another financial crisis, the budget for social housing wouldn’t get axed once again, and that rational individuals wouldn’t once again endorse this decision?