AnalysisIssues

Housing 2022 reflections Overall housing target on track but crisis abounds

One year since the launch of Housing for All, government insists that it will exceed its target of 24,000 new homes delivered in 2022 on the way to delivering an average of 33,000 homes per annum up to and including 2030. However, several recent statistics illustrate that the housing crisis abounds.

Acknowledging the changed context in which Housing for All is being delivered – including the Russian invasion of Ukraine, the energy crisis, rising interest rates, and construction cost inflation – the Government’s analysis of its housing policy concedes: “These cost pressures make homes costlier and slower to build. Those who finance and build face greater risks than they did one year ago.”

Indeed, while new home completions were 33 per cent higher in the 12 months to Q3 2022 compared to 12 months prior and 11 per cent more homes were granted planning permission, housing commencements decreased by over 10 per cent. A total of 27,417 new homes were commenced between October 2021 and September 2022 compared with 30,519 units commenced between October 2020 and September 2021.

The 10.7 per cent reduction on the previous 12-month period suggests that commencements are slowing down amid economic uncertainty.

Similarly, CSO figures have recorded a third successive quarterly contraction in the residential building sector as per the seasonally adjusted volume of production index for the period between Q2 2022 and Q3 2022, down to 100.1 from 119.5 (a 16.2 per cent decrease). This translates into a 20.4 per cent contraction when compared with Q3 2021, down to 100.1 from 125.8.

Irrespective, the Government “remains determined to fully implement Housing for All”.

Priorities

Looking ahead to 2023, Housing for All: Action Plan Update and Q3 Progress Report identifies eight priority areas which comprise new and updated actions to address the headwinds facing the housing sector, and “to maintain the current momentum to deliver more homes”. These priority areas are:

1. Major reform of the planning system

2. Meeting the challenges of viability, affordability, and sustainability to close the delivery gap

3. Delivering social and affordable homes on state lands

4. Boosting construction productivity

5. Increasing construction sector capacity

6. Bringing vibrancy to our towns and villages

7. Improving the rental market

8. Planning the required number of homes

Remarking on the key areas of focus in 2023, Minister for Housing, Local Government and Heritage Darragh O’Brien TD asserted: “Housing for All has delivered on a number of measures to make homes more affordable, protect renters, tackle vacancy, and bridge the delivery gap between the cost of construction and market price. But we recognise we must do more to address external challenges and maintain the current momentum to deliver more homes. The updated Action Plan contains new and updated actions to ensure we deliver on the ambition and targets in Housing for All.”

“Housing for All has delivered on a number of measures to make homes more affordable, protect renters, tackle vacancy, and bridge the delivery gap between the cost of construction and market price.”
Minister for Housing, Local Government and Heritage, Darragh O’Brien TD

Delivery

Ultimately, the Government aims to deliver an average of 33,000 homes per annum (comprising an average of 10,000 social housing units, 4,000 affordable purchase homes, 2,000 cost rental homes, and 17,000 private rental and purchase homes) up to and including 2030.

Overall, by the end of 2030, Housing for All is intended to deliver 300,000 homes, which includes 90,000 social homes, 36,000 affordable purchase homes, 18,000 cost rental homes, and 156,000 homes for private rental and purchase.

Projected new build housing output for 2022 is 24,600, including 9,000 social homes, 4,100 affordable and cost rental homes, and 11,500 private rental and private ownership homes. Figures in the Housing for All: Action Plan Update and Q3 Progress Report – the first annual update of the government’s housing plan for Ireland to 2030 – indicate that:

• a total of 20,807 new homes were completed during Q1 (5,645), Q2 (7,618), and Q3 (7,544) of 2022 (more than any year since 2011);

• 7,544 homes were completed in Q3 2022 (an increase of 62.5 per cent when compared with Q3 2021);

• between January and September 2022, construction had commenced on almost 21,000 new homes;

• 8,247 social homes were under construction at the time the report was published (with an additional 12,327 social homes at design and tender stage); and

• planning permission was granted for 19,837 homes in Q1 and Q2 2022 (an increase of 9.5 per cent for the comparative period in 2021).

Some of the most significant initiatives launched since Housing for All was published include:

• affordable purchase schemes such as the First Home Scheme and the Local Authority Home Loan, alongside an extension of the Help to Buy Scheme until the end of 2024;

• renter protections which include a cap on rent increases at 2 per cent or the Harmonised Consumer Index of Prices (whichever is lower) and a temporary ban on no-fault evictions during winter 2022/23;

• the implementation of cost rental tenures;

• the LDA’s Project Tosaigh aimed at accelerating housing delivery on sites with full planning permission;

• the Croí Cónaithe (Cities) Fund to mitigate the gap between construction cost and market price for apartments;

• a new Vacant Property Refurbishment Grant and Town Centre First policy to tackle vacancy; and

• a ready to build schemed funded by the Croí Cónaithe (Towns) Fund and enacted legislation for a Zoned Land Tax (commencing 2024).

Housing for All: Action Plan Update and Q3 Progress Report concludes that the housing crisis can only be resolved through the delivery of homes at scale and at speed. It does not seek to “amend the fundamental policy approach or targets in Housing for All” rather it has prioritised measures to catalyse the delivery of housing supply. Outstanding Housing for All actions which are directly or indirectly align with the supply of housing have been updated, while remaining outstanding actions will continue to be implemented.

CSO quarterly figures for New Dwelling Completions record that 7,544 new dwellings were completed in Q3 2022, an increase of 62.5 per cent when compared with Q3 2021. This brings the total new dwelling completions to 7,544 over the first three quarters of 2022. Apartment completions (2,445) increased by 153.4 per cent when compared with Q3 2022, while scheme dwellings (3,569) increased by 44.3 per cent and single dwellings (1,530) by 27.1 per cent.

“On Fine Gael and Fianna Fáil’s watch, the crisis has worsened year after year. They are incapable of solving it.”
Sinn Féin spokesperson on housing, Eoin Ó Broin TD

However, while 8,247 social homes were under construction at the time the report, as per available data (using the Social Housing Construction status reports for Q1 and Q2), just 616 new social homes were completed in Q1 2022, and 1,016 were completed in Q2 2022. An additional 23 local authority Part V units were also completed in Q1 2022, and 110 local authority Part V units and 28 Social Housing Current Expenditure Programme (SHCEP) Part V units were also completed in Q2 2022.

Intractability

Indeed, the Government’s narrative of timely housing delivery is being met with some scepticism. For instance, earlier in 2022, Irish Congress of Trade Unions’ Macdara Doyle, Coordinator of the Raise the Roof campaign determined: “Outside of government circles, there are few people who truly believe that the housing policy is working and that a resolution to the crisis is in sight.” Evidencing his claim, Doyle referenced the ESRI Future Trends in Housing Tenure and the Adequacy of Retirement Income report published in July 2022 which highlights a collapse in the rates of home ownership among people aged between 25 and 35 from 60 per cent to 27 per cent.

Likewise, in December 2022, Sinn Féin spokesperson on housing, Eoin Ó Broin TD indicated that the party would support a Solidarity/People Before Profit motion of no confidence in the Minister for Housing, Local Government and Heritage, and asserted: “On Fine Gael and Fianna Fáil’s watch, the crisis has worsened year after year. They are incapable of solving it.”

At the same time, as remarked upon by Banking and Payment Federation of Ireland (BPFI) in its Housing Market Monitor for Q3 2022 (published in December 2022), Eurostat data on rents and house prices released in October 2022 highlight that Ireland’s average rents have experienced the third highest increase in the EU (behind Estonia and Lithuania). While average rents in the EU increased by 18 per cent between 2010 and Q2 2022, average rents in the State have increased by 82.1 per cent.

The standardised average rent in new tenancies increased by 26 per cent to €1,412 in the period from Q2 2021 to Q1 2022 when compared with the period from Q2 2017 to Q1 2018. Simultaneously, house prices and apartment prices increased by 25 per cent and 22 per cent respectively by Q2 2022 when compared with Q2 2018.

Furthermore, in its monthly homelessness report for October 2022, the Department of Housing Local Government and Heritage revealed that a record-breaking 11,397 people, including 3,480 children, were in department funded emergency accommodation. While reflecting an increase of 422 people in just one month. This figure does not include those sleeping rough, those in hostels not funded by the State, those in Direct Provision, those in domestic violence refuges, and the hidden homeless.

Both sets of statistics, relating to spiralling rents and increased homelessness, are symptomatic of the intractability of the ongoing of the housing crisis. All eyes will be on the performance of government housing policy in 2023.

“Outside of government circles, there are few people who truly believe that the housing policy is working and that a resolution to the crisis is in sight.”
Raise the Roof campaign coordinator Macdara Doyle

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