The Government will launch its housing plan tomorrow.
It will be the fourth in 12 years.
The first, called the Social Housing Strategy, was launched by then minister for the environment Alan Kelly in 2014 when the Labour Party was in coalition with Fine Gael.
That was followed by Rebuilding Ireland under the then minister for housing Simon Coveney in 2016 when Fine Gael was in government with Independents.
The most recent was Housing for All, which was launched by the last housing minister Darragh O’Brien, in 2021, under the Fine Gael and Fianna Fáil coalition.
One way to assess the plans is to compare housing targets with the number of new homes which were built.
The first plan did not include overall targets for the entire housing market.
The second, under Mr Coveney, set an aspiration to build 25,000 homes annually by the year 2020. That was missed by 5,000 both in 2020 and 2021.
Mr O’Brien’s Housing for All set targets for each year. It exceeded its ambitions for completions in 2022 and 2023.
But last year’s target was controversially missed.
High-profile government figures, including Mr O’Brien, had promised 40,000 homes in 2024 during the general election campaign, but just over 30,000 were built leading to accusations that some ministers had misled the electorate.
But the reality is that the housing targets were far lower than demand.
What is perhaps more instructive is to look back at new homes built annually.
Part of the problem was the aftermath of the property boom and credit bubble which saw an astonishing 88,000 homes built in 2007.
During the boom, the wrong type of homes were frequently built in the wrong places.
The property surge was partly driven by generous tax reliefs and a massive acceleration in lending by bankers who were on exorbitant bonuses and excessive salaries amid ineffective regulation.
When the inevitable crash came, the taxpayer bailed out the banks, property developers went bust, unemployment shot up, mortgage arrears spiked and house prices collapsed.
Ireland ran out of money as tax revenue melted away and the State had to be bailed out by the European Union and the International Monetary Fund.
Unsurprisingly, residential construction stalled.
Between 2011 and 2016, there were less than 10,000 new houses and apartments completed annually.
In 2012, 2013 and 2014, output was miniscule at about 5,000 homes every year.
Residential construction reached 20,000 between 2019 and 2020 before rising to about 30,000 where it remained.
While housing output was rising slowly, the population increased rapidly. That has been part of the problem, particularly in recent years.
Ireland exited the bailout EU IMF bailout in 2013.
After the crash, the economy quickly recovered. Between 2015 and 2019 domestic growth was about 4% annually until it contracted in 2020 due to the pandemic.
This was when the government needed to hit the accelerator on housing and failed to do so.
Speaking on the RTÉ Six One News former taoiseach Leo Varadkar said the then government was too cautious after the crash and Covid-19.
“If there’s regret, it would be excessive caution at certain points. In 2011-2012, we never thought the economy would bounce back so quickly from the crash.
“When the pandemic happened, we never thought that the economy would bounce back so quickly, and because of that there were big investment decisions and spending decisions that we could have made a year or two earlier that would put us in a better position today when it comes to things like housing, but unfortunately, that was the advice at the time and we took it,” Mr Varadkar said.
“It’s easy with hindsight to know these things we didn’t know at the time.”
As the economy picked up momentum, the jobs market expanded rapidly.
Since 2011 there has been a massive one million additional workers as employment has risen from 1.8m to 2.8m.
Job opportunities attract migrants both in the form of Irish people returning home and foreign nationals arriving.
That, and a natural increase in the population, has led to a surge in residents which resulted in more demand for housing.
The number of people in Ireland rose from 4.5m in 2011 to 5.4m last year, according to the Central Statistics Office.
The most recent census shows that the population rose by 8% between 2016 and 2022 at the same time, the number of new homes was up 5%.
That illustrates that housing has failed to keep up with population growth.
The State’s Housing Commission estimated the shortfall at about 250,000 homes.
That has resulted in higher rents, surging house prices and rising homelessness which has blighted the lives of thousands.
The crisis has been building up for years.
Regardless of this week’s glossy plans, the reality is it will take a very long time to fix.
Article Source – Once more with feeling: Here comes the latest housing plan
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