Rent controls and unintended consequences


#23

I agree it’s arbitrary and unjustifiable. Particularly when other initiatives like increased LPT on empty houses are not even being looked at

Also a maximum wage should be brought in for property developers and all tradesmen in the building game. After all, there is a housing crisis and something must be done to keep families off the street. And they should stay off the interwebs and focus on building much needed houses for the most vulnerable.


#24

The government is doing its best - they did just raise the cost of labour in the construction industry 10% :unamused:


#25

Ultimately all of this dates back to NAMA and the refusal of the ‘free marketeers’ to accept the vagaries of the market cerca 2008/2009.

It has always been about defending the interests of late middle-aged, middle class Ireland to the detriment of broader society and the natural functioning of a standard, market-based economy.

There is no fix now…just an onward slow death march for those who are not asset-heavy…and continued expansion of waist lines for the generation of those between roughly 50 and 60 who are Ireland’s equivalent of what the Yanks label the ‘boomers’.

Its actually pretty disgusting to observe this phenomenon play itself out. In the midst of a housing and homeless crisis, a couple of years after the haemmoraging of another generation of young Irish people who have been/are being replaced (as tenants and cheap labour) with villagers from the hills of Pakistan and elsewhere, this generation of fat entitled prats wander around Dublin stuffing their faces and complaining that everything is too expensive…the lack of self awareness speaks of a deep deep stupidity…the sow that eats its own farrow…


#26

The most deprived in Irish society suffer relative proverty but remain some of the wealthiest people on the planet. It is amusing to hear those on the left navel gazing, bemoaning circumstances while complaining about foreign workers looking to improve their lot.


#27

What’s the left and who’s on it round these parts?

Bemoaning the dysfunctionality of rental and property markets that do exactly what they are designed to do…to the detriment of all bar those who acquired property pre tiger or at knock down prices during the crash… is hardly earth shatteringly insightful.

Or do you believe that the market for shelter, as it has operated over the past 20 years, serves the common good ? And pointing out the fact that importing large numbers of new market entrants, at a time when supply appears to be at an all time low, and that such an approach ]might not necessarily, again, be in the common good, is hardly revelatory.

While I appreciate that you may perceive such a state of affairs to be in your own self interest (a stance you share with the left lest you be under any illusions in that regard) I’m assuming that even you can see why some others may not share your enthusiasm ? Or is such a mental feat quite simply beyond your grasp?


#28

My mistake :slight_smile:

What’s your solution?


#29

Build more social houses, ideally upwards in urban areas.

Tax unused properties in urban areas…and introduce compulsory purchase orders for those who refuse to comply.

Abolish upward only rent reviews.

Manage inward migration so that its tailored to the needs and capacity of the economy and market for shelter.

Lower rates on businesses and seek to stamp out cartel type price gouging across industries with a view to cutting basic costs.

Legislate to row back on the level of insurance costs and potential liability claims that push the cost of doing business through the roof. Potentially establish a state run body charged with powers to award costs up to a certain agreed levels in specific claim hearings Ie limit the involvement of the courts and legal profession in such matters as much as possible. Currently, between rates, upward rents and insurance costs, only the wealthy can afford to do business in Ireland.

Off the top of my head…there’s gotta be shitloads more simple measures that could be introduced to make life better for the majority , as opposed to simply defending the interests of the cartels that run Ireland

Another, amend the licensing laws so that not just the wealthy can afford to run pubs or similar, thereby giving people the opportunity to create their own spaces as they do in most other countries …obviously any benefits to this would be tied into there existing a functioning property market in the first instance

Ensure that new builds meet certain guidelines with regard to size i.e. no new shitboxes where we have to sleep on the floor if we ever have visitors stay over

What else? There’s way more simple things that could be done if anybody 1) actually cared and 2) made an effort


#30

How on earth do you prove, to a standard that would stand up in a court of law, that a property is ‘unused’? You would first need a small army of bureaucrats knocking on doors on a regular basis to see if people answer. You would then need powers to forcibly enter dwellings that appear unoccupied to ensure that they actually are. You would then need another small army to trace down the owners to tax them. The whole idea is beyond impractical and probably unconstitutional.

This just pushes up the cost of housing! Some people are perfectly happy to live in 20sqm but the government will not let you build it!

Your proposed ‘solutions’ would just push up the cost of housing even more!


#31

Taxing a thing results in less of it.

Less of “unused housing” can be achieved in two ways: use it (good) or lose it (demolish or use as commercial, bad). So, unintended consequences.

Shifting the burden of taxation away from new builds and on to existing housing stock would be a better idea, as long as there is enough zoned land to provide capacity for building.

I’ve heard opinions expressed that the differential credit limits for FTBers have shifted demand away from existing housing stock on to new builds, although I haven’t been looking at the data myself.


#32

Seems like it would be pretty easy to keep a central address database, where every PPS number is registered to an address (eircode), and every property is owned by either an Irish individual (PPS number), company (company number) or overseas investor (do we already track these? Maybe need a new “investor ID”, or something, tied back to the passport of the beneficial owner(s)).

Would also make dealing with state agencies easier (everyone shares the same address record - only one thing to update when you move).

In terms of “unused”, if a residential property doesn’t have someone registered as living there (tenant or owner) then it’s a “property of interest”. Some people may maintain pied-a-terres, so you’d need a policy on that, but broadly speaking nothing I’ve described there is a particularly challenging thing to put in place. It all exists already, just spread over multiple departments.


#33

the reason the LPT worked (eventually) was because you couldn’t sell or bequeath it without sorting out the LPT first. Even Paul Murphy paid his despite saying he wouldn’t!

When there was different Stamp Duty rates for FTBers etc I don’t recall massive shenanigans because solicitors have to apply the correct rate.

A lot of cowboys evaded the NPPR for a while but found out that the late payment fines etc caused a lot of pain - unused houses (with the owners in Nursing Homes/moving for work etc) are generally sold eventually.

(it’s a pity the water charges weren’t tacked on to LPT at a flat rate [to start anyway] - that way those on group schemes etc would have avoided it and anyone with any cop on would appreciate the service the LA is providing]


#34

Surely its possible to determine whether properties are vacant or not over extended periods?..note I should have used that term ie “over extended periods”, perhaps between 3-5 years and within supposedly densely populated urban centres. We’re quite clearly way beyond the ideological here. Society has changed immeasurably over the past 25 years and the market for shelter and the legal provisions that govern it have not kept pace. The market mechanism as currently applied within the current legal framework is impeding on the ability of most people to live fulfilling lives. Technological advancement has meant that a simple app such as Air bnb (allied to cheap travel) can impact massively on the rental market…and thereby impede upon peoples ability to live what would once have been considered modest lifetsyles. I dont see how continuing in the current vein is in anybody’s interest…bar of course the minority who tend have closest proximity to the halls of power. Even most of the elderly people who were lucky in the timing of their purchase are ultimately looking at becoming more and more isolated from children etc as they head into old age… as a result of the same dysfunctionality.

If nationalisation in the form of NAMA can be deemed beneficial (for some) on the downside, why the hell cant something similar be deemed benefical (for the majority) on the upside? Id argue such a one-sided application of ideological gymnastics has the potential to destroy what was once termed the ‘social contract’, if its not already too late.

Theres a thread around here somewhere in which Coles set out revised costings for the contruction of social housing to which, if I recall correctly, nobody appeared to be in a position to rebut ie something in the region of a third of the currently quoted pricing levels. Beyond such basics, theres also the fact that practically everything on this island is so expensive because, primarliy, the cost of shelter is through the roof, thereby requiring (amongst other things) the drawdown of higher wages and the charging of higher prices by those who have to pay said shelter costs. Its chicken and egg…which again, leads back to NAMA and the fact that putting a floor under property prices was actually in nobody’s interests…bar the cartels that run the place…does anybody really believe that the housing and rental situation cannot be improved? Or that it can be improved without serious questions being asked of the system as it currently stands?

Edit - link here to the thread I referenced above

viewtopic.php?f=4&t=66568&start=30


#35

The problem is, what should a house cost?

If government intervened and built a loud of housing and allowed Nama to feed them to the market at a controlled rate in order to freeze/reduce prices, who decides what the price of a house should be. What about the people who have bought at a price higher than the new government decided price. That could have the unintended consequence of forcing the private sector to stop building to avoid a loss.

Imo, the source of the problem is credit - it seems more of a pump and dump central bank strategy and Ireland doesn’t have control over the ECB. So, if government had to intervene which I hope it doesn’t, they could apply a 1% (raise or reduce as appropriate) tax to new loans issued. It would tighten credit available - reducing asset prices. Perhaps this could be the mandate of the ICB to decide on the % rate.

Unfortunately it wouldn’t do anything for current rental prices.


#36

Pure fantasy. There are dozens of public sector databases with duplicates, missing data, errors, etc. Managing and correcting it would be a massive task involving individually going over millions of records.

There is also no canonical register of properties to link it to - note the recent debate over how many houses get completed.

Add to this gross migration flows of 4% of the population ever year and the fact that one in six households moves or gets re-formed.

It would need complex primary legislation and would never get past the civil liberties crew.

Such a project is not beyond the bounds of human ingenuity, many European countries have these systems, but have developed them over centuries. I think it would set you back €100m and take 5 years in the Irish context, with plenty of downside risk.


#37

theguardian.com/society/201 … h-revealed

This is an extreme example but Id suggest that its symptomatic of the direction in which our society is moving and Id further suggest that it leads nowhere pleasant.

Ultimately, what we’re witnessing is the erosion of a sense of common ownership of wider society thats not in anybodys interest and leads nowhere good ie the UK is a lot further along the road and in their case it has led to Brexit and onward to God knows where…

This is being achieved through a continued devotion to neo-liberal economic and social “theory” that facilitates the flow of both capital in the form of that belonging to wealthy persons such as those listed above, and the flow of people in the form of the hundreds of thousands currently seeking to cross the Meditteranean…and that leaves the provision of shelter to the vagaries of a “free” market that is anything but free, and within which asset values were maintained at artificially high levels not so long ago by the same tax-payers who are now being srewed on the upside (once again).

In the wake of 20 years of dysfunctionality, are we really just about to do it all over again?? Even at this late stage, surely it can be avoided?


#38

irishtimes.com/news/ireland … -1.3173942


#39

Toronto introduced a 2.5% rent cap in 2017 and the housing shortages that this measure was designed to deal with have gotten worse.

It seems to me that NO CAPITAL CITY ANYWHERE can cope with demand nowadays, Toronto Dublin London are all equally awful.

This indicates to me that a high proportion of job creation is in major centers only and that tier 2 cities are largely banjaxed, never mind rural areas and small towns.

I do not see the trend abating.


#40

Interesting article