Housing Investment Shortfall Expected Despite Agent Warning State Dominates Rental Market

The government failed to spend €1B of the €4B pledged for social and affordable housing development projects last year.

New figures obtained in response to parliamentary queries by Sinn Féin housing spokesman Eoin Ó Broin and reported by The Irish Times showed the Department of Housing spent 75% of its allocation last year.

Capital expenditure on social housing, direct building and acquisitions came to nearly €1.7B in 2022, while government-backed loans to approved housing bodies, also for social and affordable housing projects, totalled €1.15B.

Various government housing initiatives accounted for a further €100M, including the recently introduced First Home scheme targeted at first-time buyers, while €51M was spent on housing projects by the Land Development Agency.

Combined, total spend on housing by the government came to €3B despite the fact that under its Housing for All strategy, launched in 2021, the government had committed to invest €20B in housing over the subsequent five years, including €4B in both 2022 and 2023.

A Department of Housing spokesman said 2022 saw the highest housing expenditure in a single year, with almost €3.5B invested, up 21% on 2021. That €3.5B figure refers to current and capital spending, and it put delays down to the impact of coronavirus restrictions on the construction sector, plus the challenges arising from the Russia-Ukraine War.

Ó Broin countered that Minister for Housing Darragh O’Brien had claimed that €4B of capital funding was spent last year and accused him of being “responsible for massive underspending in his affordable housing budgets”.

In a new report, property agent Hooke & MacDonald said that while the level and pace of investment in the private rented sector had slowed, government funding for housing continued to increase and the social and affordable sector had stepped in to take up €285M in sales, 72% of the approximately €400M in transactions in the final quarter of 2022.

“The increased investment in social and affordable housing is going to continue for the foreseeable future,” the report says. “In many cases there are limited options for developers other than to proceed with a sale to a government-supported purchaser.

“The strategy of only focusing on rental stock for the social and affordable sector is marginalising a large portion of the population, who don’t qualify for such supports. Without a balanced approach there is a risk of creating a challenging housing system, where there is a heavy burden on the State and taxpayers to provide and maintain housing into the future, especially in 20-30 years’ time, as stock ages and requires more maintenance and capital commitments.”