Monday, July 06, 2015

Homes not Houses

A home, however modest, is one of the most fundamental needs of every human being. Yet considerable numbers of individuals and families in Ireland do not have access to this basic need. Almost 90,000 households were in “housing need” in 2013 – an increase of 60,000 since 1993. Access to a home, to buy or rent, depends almost entirely on ability to pay. Housing provided by private landlords is expensive, insecure and often sub-standard. Many individuals and families, unable to pay large rent increases, are being evicted. Many families, encouraged and facilitated by banks and building societies, unwisely took out excessive loans during the “boom”. They are now in mortgage arrears and in danger of repossession.

In 1975, local authorities provided almost 8,800 “non-market” homes for rent, representing one-third of total housing provision. By 2014, non-market provision represented only 515 homes. The ratio of new house prices to average earnings for the country as a whole is now 7:1 compared to about half that in 1994. Thirty years ago a mortgage could be obtained and a home purchased with one modest salary; today that is a rare. In Dublin the average house price is more than nine times average earnings. During the last year house prices in Dublin rose by 22 per cent, apartments by almost 30 per cent.

Since 1995, national house prices increased more than four times faster than the CPI (216 per cent and 52 per cent respectively). Homes are still significantly overvalued, or more accurately, overpriced. A high proportion of disposable income is therefore tied up repaying mortgage debt for an extended period and less disposable income.

Is this the kind of society we want? If we are serious about providing homes for all our people, we need to first ask ourselves – and answer – one key question. What is the main purpose of housing? Housing yet another market commodity to be traded like cars, racehorses or stocks and shares. This view of housing as a “commodity”, now predominant, is deeply flawed and is a central cause of housing crises. The primary objective of housing is to provide homes appropriate to need. Homes, like health and education, should be provided for all as a right, irrespective of ability to pay. Housing is still out of reach for many and the inequalities persist. It should not and need not be so.