Only one solution to the housing crisis

5th November 1999

Isn’t it strange that the most obvious answer to the housing crisis is the one least talked about. That is the compulsory purchase of land by the Government to provide housing.

This measure along with a target price of starter homes in the region of £70,000 would put the cat among the property pigeons.

Land for housing in west Dublin is fetching £400,000 per acre. This price is for sites large enough to build big estates – smaller sites in other areas of the city can achieve far greater amounts.

At current housing densities of ten houses per acre this works out at £40,000 per house before a block gets laid. This is an absolutely outrageous rip-off of young people.

What have landowners contributed to society to justify that level of profit? Why should 10 young couples live in penury for 20 years so that one person can enjoy £400,000 for having ownership of one single acre? We are reverting to feudalism here.

The God of private property, of which it is said stands in the way of the type of policy I have outlined above, is supposedly enshrined in our constitution.

The constitution does guarantee citizens the right to private property (Article 43.1). But in the next paragraph (43.2) it says that this right “ought, in civil society, to be regulated by the principles of social justice.” And then it says that the state “may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.”

Apparently the common good demands that people taking home less than £2,000 a month should pay £700-£800 of it so that a landowner can live in the lap of luxury.

It is said that the Supreme Court is sensitive to the rights of private property. This is because the millionaire landowners, property developers and speculators are the only citizens who can afford to take a case to the Supreme Court.

The Government’s proposal to take 20% of development land for affordable housing is a welcome step. But it is baffling why more robust measures are not taken to ensure that cheap housing is built.

Why, for example, can a local council zone land from green belt to development land and at the stroke of a pen up its value a hundred-fold but it can’t zone land for social housing or starter homes?

Why doesn’t the Government set a target value for starter homes? Such a policy would have the immediate effect of killing inflation in the housing market which is being fuelled by a mixture of speculation and desperation. Many economists have pointed out that the asset price bubble is the greatest danger to the economy.

Reducing the price of houses would hurt some people who bought homes over the past four years but it would benefit a great many more over the next 20 to 30 years.

The Bacon report ruled out a reduction in house prices. This should be ignored and already some people, including a senior executive with the EBS, are saying that the asking prices are simply way out of reach of young people.

It might appear that I am waging a war on private property. On the contrary, I believe that people should own the most private of their property – the house they live in.

The situation we have have at the moment is that a couple of dozen property owners, a handful of estate agents and a few developers are holding the rest of us to ransom.

Lets have some policies in pursuit of the constitutional ‘common good’ and the right of everyone to a little private property.

© Niall Gormley