Interesting Article with some good stats
Leaving aside effects of inflation (which would obviously skew these figures upwards) that would equate to 30,000 or so properties being rented at 12K per year for 15 years.
Is that a lot? A little?
Try think of another area that enjoys such subsidies (that we are in many cases probably paying for again via tens of thousands of defaulted on BTL mortgages). Well I can’t think of one outright right now.
Divide that 5.5 billion among 1000 startups and maybe existing small to medium businesses… I’m not saying that money would be better spent considering how many fail but suddenly those startups have a) a lot of cash b) an employment environment where their prospective employees can find affordable and good value accommodation because a non productive sector of the economy is to being artificially propped up.
Ok might be a little simplistic but seriously, imagine a 36K a year susidy for 1000 startups lasting 15 years or front-loaded whichever way they choose… course you’d have to put in a clause so they dont’ sink it into property this being ireland.
It’s a lot when you consider that the State could build 50,000 units on it’s own land for the same budget and rent them out at just €2k per annum and still get a yield of 4% which would pay for maintenance and management costs forever.
Instead the money is gone, rents are inflated and there is nothing to show for it.
There’s lots to show for it: rte.ie/iu/pensions/
Put like that. this is pretty shocking.
I’ve never understood why Govts just decided to stop building housing themselves (Ireland is not the only one) and “incentivise” the private sector to do it instead… what is the thinking behind that?
could it be that the people behind the decision are themselves landlords
loads of land - check, Materials - check, Skills - check, strategies for dealing with urban density - check …Hmm but then my building and banking buddies wont get a big pay day …nah feck that keep them prices high …sure its only auld farts with their wealth tied up in a gaff that vote anyway
Singapore is not a paragon of socialism and yet 80% of the population live in state built HDB housing, with initial 100 year leases.
This from the article:
“Access to a home, to buy or rent, depends almost entirely on ability to pay.”
An untrue statement. There are probably hundreds of thousands living in “homes” who have little or no “ability to pay” (many with no intention of ever paying.) Yet they are being kept in their homes long-term by other taxpayers, through, rent supplement, heavily subsidised council housing, traveller accommodation, etc.
link for the 50000 dwelling price calcs please.
Where is the state going to find 5.5 billion ? they can’t even find 18 million for promised funds for homeless in DCC.
5.5 billion over 15 years is 366 million a year. If you want to dump all the Rent supplement crowd out on their ears and start building with that figure now it’ll be at least 15 years and you still won’t get what you need.
I do strongly think that the govt wasted a massive chance to do countercycle building but the private sector’s been there all the time too.
I wonder how much the state spends on maintain its social housing stock?
How does that figure compare to the landlord dole on a per unit basis?
€5.5 Billion/50000 units = €110k per unit.
Average unit, 100sq m @ €100/sq m, with €10k/unit for services
In order to achieve a simple yield of 4% the rent could be set as low as €2200 per annum.
€5.5 Billion x 4% = €220 million /50000 units = €2200 per annum rent.
Annual maintenance fund of 1.5% of value of property (€1.5k) and €700 per annum for management fees.
So what impact would €3k per annum rents have on the wider economy? What benefits would it create for consumer spending, investment, job creation, productivity?
Here’s an interesting link
This analysis of course ascribes zero (actual or opportunity) value to the land. Under this kind of genius mathematics, we could all have bungalows or 3 bed semi-Ds in the Phoenix Park.
SF don’t do economics, but if they did…
Is that your proposal? To build houses in the Phoenix Park?? ffs, that’s stupid.
Why not build them in the vast land banks around the cities that are held by private speculators and NAMA? We already own vast amounts of development land. Even at moderate densities of 20 units/acre it’s only 2500 acres that could be bought at agri prices of €25 million. There are vast landholdings around all the major towns and cities that could be used for housing.
Why are you mentioning SF? I have repeatedly said that I am not a member of any political party. I haven’t read enough of your contributions for you to have registered on my radar but from what little I seem to remember I have you pigeon-holed as an aggressive little dope with nothing interesting to contribute. Prove me wrong.