The housing crisis in Ireland has evolved into a housing emergency, even if the Government of the day has yet to declare it as such. Every day, the media reports on how the persistent shortage of affordable homes is leaving many people struggling to find suitable accommodation. A headline in the Irish Independent this week promises ‘Millions in new subsidies for builders in bid to cut cost of construction: Senior officials and ministers are locked in confidential talks aimed at developing measures that will make construction, especially of affordable and cost-rental housing, more attractive’. While no announcement has been made by the State, a new housing package to address the rising cost of construction and incentivise the development of affordable homes will be a welcome development in tackling this issue.
One of the key measures being considered is a subvention scheme to promote the construction of cost-rental housing that provides state-funded tenancies at significantly reduced market rates. This scheme would provide much-needed support to home builders, making it more financially viable for them to build homes that are affordable to rent. The Government is also apparently exploring measures to reduce the cost of construction itself, such as by promoting the use of modern construction methods and sustainable building practices. This would not only help to make building more affordable for developers but would also have wider benefits for the environment and society as a whole.
From our perspective, it is essential that the Government takes action to increase the supply of new homes in Ireland. Almost every housing-related problem can be traced back to lack of supply. Without adequate housing, individuals and families are forced to live in unsuitable or overcrowded conditions, with serious implications for their health and wellbeing. The lack of affordable housing also has wider economic consequences, making it difficult for businesses to attract and retain staff and limiting economic growth, as frequently cited by the IDA and other bodies tasked with growing Irelanmd’s economic activities.
By providing subsidies to home builders, the Government can help to stimulate the construction industry and increase the supply of new homes. This, in time, will help to bring down house prices and make it easier for people to find suitable accommodation. Of course, there are challenges to implementing such measures, such as rising building material prices and the need for skilled labour. However, by working closely with the construction industry and other stakeholders, the Government can find solutions to these challenges and ensure that the new housing package is a success for the entire nation.
Again, there has been no formal announcement as yet, however, at Lotus I.G., we are heartened that this conversation is taking place and we look forward to common sense prevailing across policymakers. The reality is that by providing subsidies to home builders and by honestly exploring measures to reduce the cost of construction – despite the political challenges – the Government can help to increase the supply of new homes in a meaningful way. Furthermore, it is important that these measures are implemented quickly and effectively, so that the benefits can be felt by all those who are struggling to find suitable accommodation.
Lotus Investment Group