Building Homes for People
Solidarity Housing, a policy of public home provision which would provide a permanent solution to the housing crisis is outlined by Gavin Mendel Gleason.
The housing crisis in the Republic of Ireland has once again reached extreme proportions. Rents have skyrocketed to their highest levels ever. Reports indicate that there is likely to be an increase of between 20%- 25% above mid 2016 prices by the end of 2018. There were nearly 7,000 homeless people in early 2017; this includes 1,205 families with 2,549 children, about 3,000 of whom are in Dublin.
The proportion of people in the private rental market is expanding, and vacancy rates are as low as 1.5%, meaning there are very few rental properties to choose from. At the same time property prices are steadily increasing in urban areas and mortgages are difficult to obtain except for the high earners.
In order to address these issues, the Workers’ Party has released a proposal for a state-led cost-rental housing programme. Entitled ‘Solidarity Housing’, the basic idea behind the proposal is to provide the option of social housing on a universal basis to the whole population, and not only the most needy.
A universal programme for social housing has numerous advantages. In periods of real housing crisis there are real “opportunities” for banks developers and speculators to make enormous amounts of money at the expense of the population. By treating housing as a public service, the State can ensure that homes are provided to people at low costs and people are not exploited for needing a roof over their head.
It also means that property prices are not as important to the population who, when they are homeowners, are in fear of being trapped by negative equity mortgages. This also avoids catastrophic crashes over land bubbles by taking housing out of financial speculation. Housing speculation was a major factor of the last financial bubble in the US as well as in Ireland.
When social housing is universal it creates mixed income communities, instead of ghettos for the poorest. This can give everyone the chance to live in a healthy community with good access to amenities.
Social housing provides among the best security of tenure of any type of housing. In contrast, it is very easy for tenants to be evicted from rental accommodation, while a house with a mortgage can be repossessed if income falls.
Further, the State is best placed to build housing for the population for a number of reasons. It can avail of State land, which drives prices of new units down significantly. A large scale coordinated programme would be able to respond to needs and plan for the long term, paying attention to facilities and amenities which are required for locations in addition to transport. Large scale projects also mean cheaper financing. Finally, without the need to make profits, costs per person in social housing will be only a fraction of current rental costs. Solidarity Housing projections estimate housing rents which are between a half and a third of current market prices in Dublin for people on the average industrial wage.
Solidarity Housing address all of these problems. It is universal, leading to mixed income communities, it is low cost and tracks income, and it is a permanent home which you cannot be evicted from and moving is only by choice. As with social housing in some other European countries, it should be possible to pass to your children, who would be able to keep the home paying a rent tied to their own income in the future. And most importantly, it is the most realistic approach to the housing crisis in both scale and financial viability.
Currently the state expects there to be an 80,000 housing unit shortfall by 2018. This means that obtaining sufficient supply will require a massive investment. Under the Solidarity Housing proposals, it is suggested that the state build 70,000 of that 80,000 housing unit shortfall.
In the 1920s, local government in Vienna in Austria began a programme of producing universal social housing which earned the city the moniker “Red Vienna”. Funded by a wealth tax and a builder tax, it resulted in the construction of a huge quantity of social housing. Today, fully 60% of Vienna’s homes are social housing and the city enjoys among the highest qualities of life in the EU. Ireland could follow that example and turn into a country which not only houses its citizens, but seeks to create high quality, livable, and permanent homes for everyone.
How does Solidarity Housing Work?
Solidarity Housing proposes a radical widening of public provision of housing to almost all who want it, with the dual purpose of increasing revenue streams to the state, whilst simultaneously providing secure housing which is affordable relative to income. It opens the benefits of public housing – secure tenancy, stable community, affordability – to the many new categories of households experiencing housing difficulties.
Under the proposed model, access to housing would be widened so that, in any given development, the state will rent 50% of homes to households who currently qualify for social housing and the rest to those who are not currently eligible for social housing. Rent for all households will be calculated as 15% of income up to €35,000 plus 30% of income above €35,000.
Overall, the amount of housing provided to low-income households would increase. The precise increase would vary but, for example, under the current Housing Land Initiative proposed by Dublin City Council, the quota of social housing is 30%. This would increase to 50% under Solidarity Housing. For many others, accessing Solidarity Housing will bring numerous advantages compared with either a mortgage or private rent. Greater affordability is a certainty, accompanied by the security of knowing that, should income decrease, so too would the household rent payable. The rents would look as follows: