The new government led by Fianna Fáil was rocked last month over coalition deal-making, but now faces a serious row over its house-building numbers.
Many analysts say that government policies are failing to ensure the delivery of adequate numbers of new homes, despite a booming economy that helps to generate unprecedented levels of public spending.
The latest controversy involves a blatant claim by the former housing minister, Fianna Fáil’s Darragh O’Brien. Just weeks before November’s election, O’Brien had told the Dáil that the government was on track to oversee the completion of up to 40,000 new homes for the year.
That claim appears to have been based on a single piece of research written several months earlier by a London-based banking analyst. The estimate had been questioned or ignored at the time. In the event, just over 30,000 new homes were built in 2024, fewer than in the previous year.
The appointment last month by taoiseach Micheál Martin of James Browne as the new housing minister has done little to inspire confidence. First elected to the Dáil in 2016, Browne on RTÉ Radio last week seemed to suggest that the London banker’s research was authoritative enough for a sovereign government to anchor its own housing projections.
Conflicting statements from Browne, Martin, and finance minister Paschal Donohoe over potential new tax incentives for developers have further undermined credibility. As in the north, builders and developers in the Republic have blamed housing delays on everything from inefficient planning and on water and electricity connections. But unlike the north, there is no shortage of public money to fix the problems.
Some experts say that the government possibly mulling more tax incentives for developers suggests its housing policies have been “captured” by interest groups in the industry, including bowing to financial players who provide finance for build-to-rent apartment schemes.
The housing crisis has been brewing for some time. As long ago as 2014 when the economy was coming out of the devastating financial crash, house prices in the capital were starting to soar because there were too few private, social, and affordable homes being built.
A senior economist talked at the time of a different type of property crisis. Many small house builders had gone under and during the bailout years capital spending on infrastructure budgets had been slashed.
The Irish News canvassed and assessed the views of experts on the Republic’s housing crisis.
Economic Jim Power said there is “a palpable sense of panic” in the government over its housing policies.
Conflicting comments over possible new tax incentives for private developers further point to “an incoherence” in housing policy, he says.
Citing Help-To-Buy and other schemes, Power says that government policy has been largely about stoking demand rather than helping to lay the grounds to boost housing output. “And there is going to be just one outcome,” he warns.
The Government has pinned everything on boosting supply but has no targets to ensure that homes are affordable, which in turn creates “ever more expensive houses”, according to Orla Hegarty, assistant professor of architecture at University College Dublin.
Developers can bank land sites and are driving a campaign over planning and lowering building standards, she says.
“I thought going back eight years that so much capacity in planning, capacity in Irish Water, capacity in the professions and capacity in the trades, and capacity in finance in the banks had been lost after the financial crash,” Hegarty said.
Government plans to lift rent-pressure zones will likely lead to an increase in rents, with the public purse left to deal with ever higher levels of homelessness, warns Lorcan Sirr at TU Dublin and the University of Galway.
Scrapping rent controls for so-called reference rents would be ill-advised because the complex data to make any new system work isn’t readily available, he warns.
Rent pressure zones do work in the short term but are likely to have unwelcome effects over time, says Kieran McQuinn, research professor at the ESRI.
He says implementing the Residential-Zoned Land Tax would help against hoarding land. Questions hover over serviced land and water and electricity connections, and planning “is clearly an issue”, he adds.
Ireland’s housing spend is the second highest in the eurozone, yet this spending is not reflected in the outcomes felt by many, warns Séamus Coffey, chairperson at budgetary watchdog the Irish Fiscal Advisory Council.
“There are many areas where Ireland can improve its infrastructure, including in health, transport, and energy. Ireland may not be stuck for resources right now. What we are stuck for is workers, with unemployment at record lows, and a strategy to deliver more effectively,” Coffey says.
Eamon Quinn is at eamon.quinnbiz@gmail.com