At the beginning of September the coalition government published its long-awaited final, final, final housing strategy, “Housing for All,” to solve the deepening housing crisis.
Thousands are on local authority housing lists, and tens of thousands are trapped in rising rents which are completely unsustainable from the renter’s point of view, though not from the position of landlords, both domestic and international corporate investors.
There is no commitment or strategy to enforce rent reductions or controls. Priority will continue to be given to the private provision of shelter for working people. It is the Government’s responsibility to provide the best conditions for making profits (accumulation of capital); it is the Government’s responsibility to produce the best regulatory conditions for the process of harvesting the maximum by those who invest in order to accumulate more.
Speculation in property is now a major source of profits globally for finance capital. The push to accumulate more and more profits is driving the housing crisis not only in Ireland but throughout Europe and in the United States.
The “Housing for All” strategy paper clearly emphasises the protection of private and corporate investors, to make sure there is no disruption in that sector, to incentivise the private speculative investors to provide shelter for rent.
This policy is for sustaining private and corporate investment. This, in turn, can only be done by ensuring that rents grow, that investors are guaranteed a return (profit) year after year, to make sure it’s attractive to invest in the Irish “housing market.”
Over the last three years the number of tenancies in the 26 Counties has dropped, from 313,000 to 298,000, resulting from the supply of new properties not matching rental properties withdrawn from the “market.”
“Housing for All” has laid out a strategy for an annual increase of 6,500 “new private rental homes” up to 2030. Even the suggested 2,000 per year up to 2030 at cost-rental rents will not increase supply: they are only working to reduce the HAP-subsidised private tenancies and so appear to be “doing something.”
Cost-rental will not reduce rents, nor is it designed to. Cost-rental will not be in competition with nor challenge the private rental market. It will not affect private rents, and will not be allowed to affect either private or institutional investors.
International research shows that profits for investors in the Irish housing “market” (rents as a percentage of the purchase price) are nearly twice as high by international comparison. Evidence shows Ireland to have the highest rental profits in the EU, based on apartment size (120 sq. metres). Ireland has the eighth-highest rental profits in the world, with an average rental return of 6.6 per cent.
Throughout the EU a similar trend is growing in relation to the private rental sector. The EU Commission has developed a strategy of opening up housing to greater speculation. Ideologically they are opposed to rent controls, as they see it as interference in the “market.”
The institutional investors and larger private landlords are the benchmark and provide the “muscle” for small local landlords, who benefit from this strategy. It is they who set the rental benchmark. Current rent restriction do not apply to new lettings. The institutional investor—the vulture and cuckoo funds—are the rental benchmark as (a) they have the capital to invest and to secure properties to rent at any price and (b) this provides a shield for small parasitic local landlords to secure higher rents.
The vulture and cuckoo funds have the capacity to secure high rents and to sustain them against any possible downward pressure. This allows smaller landlords a shield to keep rents only going upwards. They allow the institutional investors to do the heavy lifting.
It’s clear that this government will not do anything to upset the institutional investors, because they have based their whole housing strategy on encouraging even more private investors to build and provide people’s shelter for rent. This means that rents can only go one way, and that is up. It is built in to the government strategy.
The solution lies in a full-scale public house building programme. Only public housing at affordable rents, based on people’s ability to pay, can challenge the private and corporate landlord class.
Universally available public housing will bring about reduced rents all round, reduce property prices, and force private and corporate investors out, with a significant number of their properties becoming vacant.
Universal public housing at rents commensurate with people’s ability to pay is the one way to break the landlords’ grip, to end the power and control of speculators and private corporate builders.
In a society organised and structured around the creation of ever-increasing profits out of people’s basic needs, housing is merely the latest vehicle for capital accumulation.
The last word to James Connolly: “Yes, friends, governments in capitalist society are but committees of the rich to manage the affairs of the capitalist class.”