“Open The Door Today” Proposed Housing / Homeless Policy
The government response to the housing and homeless crisis is gathering pace. However it will come too slowly for many, especially for the families who are sending children to school, and for the people who, despite living in emergency accommodation, are still managing to hold down jobs.
We are also, as a country, suffering significant economic cost. The decision not to allow Dublin to host the office of the European Banking Regulator was almost certainly influenced by our housing shortage.
Of greater concern to us all, many people who are new to homelessness are suffering the traumatic effects of the privations they are experiencing. These include people whose lives and careers would ordinarily steer them well clear of any such risks. There is a strong likelihood that some of these people will never recover their personal and social stability, and instead will be dependent long term on the state for their survival as they struggle to live with any dignity after this ordeal.
While the medium and long term construction plans get underway, there is an interim solution: legislate to allow the imposition of compulsory letting orders on dwellings. There is much to recommend this policy:
- It is likely to save lives.
- It will sharply reduce the state’s spending on emergency accommodation.
- After an initial modest outlay, compulsory letting orders will earn long term revenue for the state through additional tax paid on rental income.
- It is constitutionally safe, since it actually bolsters the rights of property owners by adding value to their assets through generation of rental income at market rates.
- It is sustainable.
- It is quick.
- It is simple to effect.
- It would be politically very popular.
- From a political party’s point of view, it is a dream policy and a success waiting to happen. In the world of real politik, it is a win on every front because every party gains.
On the downside, it has apparently not been tried before by any European government. That means that it carries risks because there are no examples of unintended consequences that can be learned from. Then again, no other European country has ever had the coincidental circumstances of tens of thousands of empty, completed dwellings while thousands of people are homeless.
Recognising who the homeless are
In decreasing order of urgency, the following categories of homeless are suggested.
- The rough sleepers. Based on December 2017 estimates by the Simon Community, it is likely that there are between 300 and 600 on any given night. There is a lot of movement in and out of this group. While new people continue to become homeless overnight, state and voluntary support services are working hard to find emergency shelter for them. In this group can be included people sleeping in tents, doorways, abandoned buildings, cars, and any other temporary space people find themselves to protect them from the elements. A very small number of this group are long term homeless, living with addictions or enduring mental health challenges, and are well known to the homeless service providers. The majority are people who, until recently, lived conventional lives in relatively dignified circumstances. These are the most vulnerable and need to be protected as a matter of extreme urgency.
- People who are sofa surfing. This is an invisible cohort of people who stay temporarily with friends, work colleagues and extended family members. Because of the precarious and short term nature of their accommodation they are highly at risk of becoming rough sleepers. There are no official figures showing the extent of this, and from a methodological point of view, they would be difficult to count. However, a self-registration system would be simple to establish, to gain some measure of the phenomenon. Anecdotal evidence suggests that sofa surfers number in the thousands. It places strains on hosts and surfers alike, as it leads frequently to over-crowded living space, and the temporary nature of the arrangement requires surfers to move on frequently, to avoid losing the support of the friends and extended family who give them a temporary place to stay. If the this policy proposal were implemented, it would eliminate the need for large scale sofa surfing, as more rental properties would go on the market quite quickly, and with the greater supply, rental prices would fall to more affordable values.
- People living in emergency accommodation. The August figures were over 5,000 adults and over 3,000 children, which included over 1,400 families. Even though these are safe compared with rough sleeping, and do not carry the pressures of sofa surfing, no matter how good the physical fabric of hotels, family hubs, or hostels, these temporary solutions will never be home to the residents staying there. Feelings of personal security, privacy, your own defensible space, are essential to wellbeing and hope for the future. Also, they are ruinously expensive at a time when the state is desperately short of money. It could be argued that this cohort alone justifies this policy proposal. Even if many of these families and individuals had to get HAP support, this would be a lot more affordable to the state at a time of critically short state finances. It is reasonable to assume that moving people on from emergency accommodation to conventional low cost housing would create more than sufficient space to accommodate all rough sleepers. Implementing a policy of compulsory letting orders would make this possible within weeks.
- People living in cramped, over-crowded and dangerous private rented accommodation. No matter what regulations are established to stop unscrupulous landlords, the victims are not likely to come forward when they know that the alternatives are even less sustainable. The best way of raising standards is by harnessing market forces, increasing the supply of high quality accommodation so that landlords are forced to improve their standards if they are to compete for market share. It is self-evident that the proposal below would have the desired impact.
Other effects of housing shortage
These numbers do not include adult children and even entire families who have moved into a former family home with ageing parents. While it is to be assumed that in many cases this is harmonious, it is not difficult to anticipate difficulties and family conflicts in others.
Neither do these categories include working people who are struggling to pay very high rents, and the difficulties faced by professionals who want to move to Ireland to work in our growing economy. This problem has grown so acute that one high profile multi-national company has announced plans to buy homes for its employees. It should come as no surprise if others decide to do the same. This is no solution however. The requirement to buy homes for employees will almost certainly act as a disincentive to companies wishing to expand here, which means lost opportunities for the Irish economy. Also, the purchase of homes will reduce further the amount of housing stock available for the rest of the population, as people move to Ireland to take up the new employment opportunities.
A related and important issue is the difficulty experienced by the HSE in employing nurses to fill thousands of vacant posts across the health system. Despite aggressive advertising aimed at attracting Irish nurses back home from other countries, there is a very poor response, with many citing the difficulty finding a place to live, and the high percentage of their salaries that would be lost to high rents. The proposal below would solve the first of these issues within weeks, and the second over months as landlords will no longer be able to charge such high rents as supply increases.
There are not enough homes available to rent or buy. The homes are there, and to spare, but they are not being rented out or put up for sale.
Simple economics dictates that this pushes the price of accommodation upwards, putting pressure on everybody except the landlords.
Meanwhile we have the absurd situation where 17% of people living in emergency accommodation are actually working. People earning an income have not been part of Ireland’s homeless population in modern times.
The government could solve the crisis in a few weeks, with modest spending that they would get back in growing tax receipts on rental income.
The proposal below will bring the worst of the crisis under control, allowing time for orderly development of well planned, properly constructed communities to cater for the needs of our growing population, and returning migrant workers who should be allowed to contribute to the recovery and growth of our economy.
Take an inventory of the dwellings in every part of the country that are currently empty, classifying them by the amount of time they have been empty, their state of repair, and their status regarding ownership.
Taking dwellings that have been empty for six months or longer, and that are fit for habitation with the least spending, place an order on their owners requiring them to make them habitable and put them up for rent.
If the owners do not have the capacity to rent them, or do not want the trouble of doing so, place the dwellings in the care of local auctioneers or estate management companies who are willing to manage the properties responsibly, bring them up to and maintain them at acceptable standards, rent them out, collect the rent, and make the payments less costs and their own fees to the owners. If necessary, there can be a repayable grant system for making the homes habitable.
If the owners cannot be identified, or the ownership is disputed, place an order on the owners in absentia, and have them rented as above, and hold the rent (less costs and fees) in trust, to be given to the owner when ownership is established.
The Attorney General earlier this year opined that it was constitutionally safe to legislate to allow compulsory purchase orders to address the accommodation crisis. He based that opinion on Article 43 2 2° which gives the State the power to pass a law that reconciles the right to private property with the needs of the common good.
However, the scale of investment required to meet the accommodation needs of the most vulnerable cohorts, and the additional time required to make properties habitable, makes this option unattractive if not unworkable. Two further risks are present: the possibility that a constitutional challenge will halt the entire programme of property purchase; and the fact that a fortune in expensive borrowed capital would be tied up in property that it does not want to own when the crisis is over.
It is less constitutionally perilous to commandeer the use of private property for the purposes of letting. This is because the owner benefits from the transaction while the state trespasses less completely on his or her constitutional right to own property. For this reason, the option of legislating for compulsory letting orders is a more attractive one
Even with the lesser threat of a compulsory letting order, this measure would cause a lot of fuss among some property owners. But we live in desperate times, and unprecedented measures are needed.
And, it is not only the homeless who will benefit. The country will:
- The multi-million Euro emergency accommodation bills paid by the government will be replaced by the much cheaper cost of rent supplement, for those who need it.
- Vital public services such as hospitals will find it easier to attract staff to move back to Ireland, where less of their salaries will go on the lower rental rates.
- Economic development will be supported as companies will be confident about being able to attract more staff to live and work here.
- Wage claims by civil and public servants will ease because the cost of living in rented accommodation will be lower.
- People will find it easier to save for a deposit to buy their own homes.
- The legislation should be simple to get passed through the legislature, as it would have strong public backing.
- The large cohort of additional people who are able to pay their own rent will add significantly to state revenue as landlords’ income is taxed at the marginal rate.