"Government ignored repeated warnings that €75m housing scheme would increase prices"

[Brendan Burgess]

Government ignored repeated warnings that €75m housing scheme would increase prices

Builders had lobbied for shared equity plan as it ‘would drive up house prices’, official said

www.irishtimes.com

While the scheme was being discussed last September, a senior official in the Department of Public Expenditure wrote to the Department of Housing warning: “Apart from the concerns we already voiced at SOG [senior officials group] around the appropriateness of the shared equity scheme, which appears to us a demand-side measure which is unnecessary in a market like ours which is chronically undersupplied, it does not appear that the policy proposal has been sufficiently analysed. Specifically in terms of addressing need. An effective affordable housing policy would deliver the right types of units in the right location at an appropriately affordable price.”


A few days later, in an internal Department of Public Expenditure exchange, another official warned: “[The Department of Finance] and [the Department of Housing] have spoken to banks and developers who apparently suggest that it will unlock supply. We think it will push up prices in a supply-constrained environment, most likely at a time when prices are starting to rise anyway.”

Later Robert Watt, the secretary-general of the Department of Public Expenditure, wrote to his counterpart in the Department of Housing, Graham Doyle, warning: “In the context of an affordable scheme, there is little evidence to suggest an absence of mortgage finance ... The property industry want an equity scheme because it will increase prices.”

 

[Protocol]

I am generally sympathetic to centre-right parties like FG, but these type of demand-side housing policies drive me away.

They are blatantly pre-landlord, pro-developer.

Surely there are more votes to be got in making houses more affordable??

 

[bunny_]

€75 million is nothing... 10,000 homeless or approx 4,000 houses for adults & children * €250,000 = €1 Billion minimum

Let's say they take a 30% equity in said €250,000 house = 300 million

And that's only dealing with the homeless not even 1st time buyers etc.

 

[NoRegretsCoyote]

This allows the politicians to look like they are "doing something" on the demand side, while leaving alone the supply side. Reform of the planning and development process is too hard astoo many applecarts need upsetting.

 

[Brendan Burgess]

I am generally sympathetic to centre-right parties like FG,

Hi Protocol

I heard a guy on the radio explaining in a very cool and clear fashion why this initiative is making it so much worse for home buyers. He was very persuasive and I was very impressed with him although I didn't recognise his voice. I thought it might be Ronan Lyons or one of those property guys.

Then the interviewer said "Eoin O'Broin of SF , thank you very much..."

It's a sad day when I am agreeing with the Shinners.

Brendan

 

[MrEarl]

It's a sad day when I am agreeing with the Shinners.

Brendan

Is it, or is it a sign that some of SF's younger generation, have a bit more substance to them?

I think it's more than fair to say that the approach taken by FG, when it comes to housing (both social, and for general requirements), has failed Ireland. What's worse, is that they don't appear even slightly interested in trying to improve on their previous failure, under this heading.

With the ability to borrow at negative interest rates, surely this is the time to finally borrow and invest in more housing? It will obviously be important to manage those properties properly, once built, but as a starting point we could house people, while also creating some employment, along the way.