The focus of the upcoming general election’s housing debate is anticipated to be predominantly about home ownership. The freshly unveiled first phase of Sinn Féin’s housing strategy aims to finesse the party’s affordable housing notion, with a key component being that the State would maintain proprietorship of the land where such homes are constructed. This would impose certain limitations on the homeowner’s capacity to sell or rent out the property.
Adding to this the general disdain shown by Sinn Féin towards the government’s support programmes for buyers, such as ‘Help to Buy’ and ‘First Home Scheme’, clearly underlines what is expected to dominate the ensuing exchanges. An intriguing question is whether the party will decide to persevere with its past stance of eradicating these aids, or choose a more gradual elimination as supply augments.
In light of this, Sinn Féin has initiated the debate, attempting to redirect political interest towards this policy. They insist that sweeping changes are vital, asserting that comprehensive reform in home delivery methods should be at the heart of such progress. Parties such as Fine Gael and Fianna Fáil have condemned Sinn Féin for allegedly opposing or seeking to prohibit home ownership, as one dramatic headline from a recent Fine Gael press statement put it.
However, it’s essential to take a step back to understand the wider context. Obviously, irrespective of the ruling party, the government will commit considerable sums for housing, drawing both from direct exchequer contributions and State-guaranteed borrowings. A hefty portion of these funds will be allocated to affordable housing with additional spending on social housing and various related initiatives. In essence, irrespective of the governing power, the State is making a significant investment gamble on the housing market’s future trajectory.
One important question arises – can Sinn Féin’s housing policy really provide a resolution for a straining middle class consisting of young prospective home buyers? The potential necessity for an overarching housing body, an idea that is strongly resisted by Darragh O’Brien’s department, also adds to the complexity of this issue.
Sinn Féin’s plan for affordable housing has placed particular attention on a critical aspect of housing policy. It addresses those who are caught in the middle, those whose earnings are too high to be eligible for social housing but insufficient to vie in the private market. The party has vowed to provide 25,000 reasonable homes for households that earn below €90,000, with an additional 25,000 homes available for rent at a monthly rate of less than €1,000.
This directly targets one of the major issues in the housing crisis – the luxury of homeownership is beyond the reach of many, including those with respectable salaries, such as single-income couples, dual-income couples on average salaries, or single buyers.
The enormity of the social impact due to this unaffordability cannot be overstated. According to the Housing Commission, the latent demand for up to 250,000 new homes has resulted in many people being forced to continue living at home over recent years. From 2012 to 2022, the proportion of young Irish adults still living at home increased from 38 per cent to 59 per cent.
Various measures will need to be employed to make houses more affordable for these individuals, such as using state funding to make house supplies cheaper, offering financial aid to buyers to cover the deficit, or a mixture of both. Sinn Féin is concentrating on reducing supply costs using existing State land or purchasing new land for development.
The Housing Commission report postulates that households earning between €50,000-€100,000 are unable to purchase homes in Dublin.
In Sinn Féin’s proposal, the State would cover these land-associated expenses, thereby reducing the overall development cost of a housing unit by between 20 and 33 per cent. This is how they aim to offer homes priced between €250,000 and €300,000 to clients, which will only make up a segment of the new-build market.
The condition for buyers is that they would have permanent ownership of the home and could pass it onto their family, but they would not be able to lease it on the private market. If they choose to sell, it must be to another affordable buyer. Negotiations with banks are necessary to establish the terms under which they would offer mortgages to such buyers, and this will rely on securing the asset and the ability to sell it again.
Sinn Féin asserts that introducing restrictions on property sales and rentals is a logical trade-off to facilitate affordable housing. The party believes this would eventually build a reserve of cost-effective homes. Previously, allowing individuals to buy council homes contributed to a significant decrease in public housing.
Government officials might highlight these ownership dilemmas. However, their track record on affordable housing stands as a weak point. They could argue that constituents are likely to favour the typical pattern of purchasing a first home, make profit from reselling it, and ultimately witness the asset’s value augment over time. Even though this might resonate with some, there are those who might view this pathway as unattainable.
With elections approaching, the prospects of the disenfranchised generation become a focal point. Sinn Féin hopes its call for policy overhaul would resonate with this demographic, while Fine Gael and Fianna Fáil presume that the current measures by the government are effective. They would argue that Sinn Féin’s proposal undermines the fundamental idea of home ownership, aloing with the property ladder.
A significant number of votes are up for grabs among the budget-conscious middle class – young potential homeowners. According to the Housing Commission report, households with incomes between €50,000 and €100,000 seem unable to afford to buy property in Dublin. The necessary income benchmarks are even higher in certain boroughs of the city. Lower wage earners – those earning less than €50,000 – are likely to resort to social housing.
During the pre-housing crisis era, people in their mid to late twenties could hope to buy a “starter” home. However, currently, the average age for owning a first home has risen to 36. Presently, average wage earners are often priced out of the market.
Nonetheless, lurking behind these issues are more complex challenges pointed out by the Housing Commission, with many based on the planning process and the resulting delays and uncertainties, sector capacity, and the sluggish pace at which policy is implemented in Ireland. Regardless of preferred affordable housing plans, there is a minimal likelihood of it being implemented within a realistic timeframe, or of achieving the necessary surge in housing supply, unless these matters are also addressed.