Republican News · Thursday 22 June 2000

[An Phoblacht]

Housing fix will not hold

Ahern's amnesty for speculators


How many different ways are there to solve the housing crisis? The Dublin Government stood up last week and offered us their third attempt at the quick fix with the launch of the Bacon III report on housing.

There were some small positive steps. However, the overall theme was that the private builders and developers who are one of the root causes of the crisis will be the ones now given a free reign to build in a fast-track, red tape-free environment.

Perhaps it is worthwhile to recap quickly on what exactly are the causes of the housing crisis. House prices are increasing rapidly, having risen by over 90% in the last three years and by 22.2 % alone in the 12 months to last April. Home ownership is now out of the reach of thousands of Irish families. These families are either in private rented accommodation where rents have also increased hugely as landlords cash in or they are in some unsuitable arrangement, often living with parents or in small cramped apartments.

Most of these people fell back on local authorities, which have seen their waiting lists double over the past three years. Long waiting lists, especially in urban areas, have been a feature throughout the 1990s as Dublin Government cutbacks curtailed house-building programmes.

Exacerbating the problem are property developers and home builders, who have been building up huge land banks on which homes could be built. They drip the number of new houses onto the market to keep prices high. Finally, there is a huge increase in one- and two-member households and a substantial net immigration into the state.

So how did the Dublin Government's interpretation of Bacon III help solve anyone of these problems?

Well, the small positive first step was the abolition of stamp duty for all first time buyers on homes worth less than 150,000. This was a measure proposed by Sinn Féin last November.

When it came to taking on the speculators, the Dublin Government basically offered an amnesty. There will be a new 2% annual property tax on owners of residential investment properties who buy homes after June 15. So, if you already were a speculator, don't worry.

Don't worry also if you have a lucrative land bank because the new levy of 3,000 per house for developers who sit on land zoned for residential development only applies to land not yet designated in the new Strategic Development Zones (SDZs).

The SDZs are to be set up to fast track house building. This will mean substantial de-regulation of the planning process, with the government taking up much of the costs of providing the road, power, water and sewerage services needed to build housing developments. For example, 200 million is to be made available for road building.

A further 800 million is being set aside for social and affordable housing developments. This is welcome but it does not hide the fact that the Dublin Government are not prepared to take on the vested interests in the building sector who have helped create this housing crisis. Nor are they prepared to face up to their own failures in planning housing provision over the past 15 years.

Bertie Ahern promised more radical measures if his current proposals do not work out. One wonders how long it will take before he realises that Bacon III is not a solution to the housing crisis. It is a builders and developers charter. Fianna Fáil and the Progressive Democrats have effectively absolved the building community of their past excesses and given them a new blank sheet to begin all over again.

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