Housing Market Is A Complex Machine But There Are Solutions

The housing crisis and how we are dealing with it has become one of the most politically charged issues in the country. 

Rebuilding Ireland, which has recently published its second year progress report, has come under criticism from opposition politicians and experts who say the figures don't make sense.

But what are some of the solutions being put forward by the private sector to help build more homes faster? There is no one-size-fits-all solution, and there are different problems in rural Ireland and urban Dublin. But all is not lost.

When looking for solutions you have to realise that the housing market is a "complex machine with a substantial number of moving parts and some of these parts are not moving," Anthony Neville Homes Managing Director Anthony Neville said.

There is "no silver bullet", Neville said, that will magically cure the housing crisis because we have two markets faced with different problems. 

In the rural market prices have not yet recovered to pre-crash levels, which means the margins for housebuilders are too low to justify much development. 

In addition to this, Neville said 36% of house prices go back to the State in the form of PRSI, VAT, Irish Water and other tariffs, which makes it less attractive for people to build outside of Dublin. 

In the Dublin market prices have recovered and "there are profits to be made," but it comes with a different set of problems including the length of time a development can be with the planning board after it has already been with the council for a number of months, Neville said.

"I am all for proper planning and no one wants to repeat the mistakes made in the past but the fact that someone from Letterkenny can object to a development in Dundrum is stone-wall crazy. A development can be held up to six months with the board after it's already been with the council for four months."

Neville acknowledges a number of innovative building techniques which help speed up the building process such as pre-cast concrete and timber frames but he warns these techniques come at a premium, something which the rural market cannot sustain.

"We use timber frame for about 90% of our builds because we've made a decision that it is the best thing for us as a business."

Urbeo Residential Director of Housing Aidan Culhane believes one way to tackle the crisis is a "more affordable rental tenure for people who don't need traditional social housing but who still struggle in the market".

This would alleviate the pressure on social housing and make the long-term rental market or BTR sector more attractive to developers and investors.

D.I.T. housing lecturer Lorcan Sirr identified the fact that where houses are being built, they are the wrong type.

"All the houses being built right now are for the top 20% of earners," he said. "The way to change that is to use state lands."

One of the biggest drivers of new house prices, according to Sirr, is the cost of land.

"The state has enough land itself to build 40,000 houses," he said. "In Dublin alone, there is room for 20,000 houses. If we used state land it would subtract the cost of the site away from the selling price of the house.

"But another problem we have is that we have a government that is unwilling to tax people to pay for social housing," he added.