Housing Policy in Ireland: Informing a Sustainable Property Industry

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Through evidence-based research, Property Industry Ireland (PII) informs and influences property strategy in Ireland to create a sustainable property industry. The organization focuses on market supply, funding initiatives, construction, planning, and development. Key areas of action include addressing homelessness, accelerating social housing, building more homes, improving the rental sector, and utilizing existing stock. The housing policy also involves government intervention, fiscal measures, regulatory frameworks, and collaboration with various stakeholders.

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Housing Policy in Ireland David Duffy, Director Property Industry Ireland

Property Industry Ireland Through evidence-based research, we inform and influence property strategy in Ireland. Our mission is to create a sustainable property industry for the benefit of the people of Ireland. POLICY COMMITTEES: 1. Market Supply and Demand 2. Funding Initiatives 3. Construction and Technical Issues 4. Planning and Development

PII MEMBERSHIP COMPOSITION 100% Project Manager 90% Consulting Engineer Bank 80% Supplier 70% Contractor 60% Accountant 50% Planner 40% Architect Property Lawyer 30% Investment Manager/Asset Manager/Trust Developer 20% 10% Agent/Manager/Consultant 0%

OECD (2011) Housing policy is important Badly designed housing policies played an important role in triggering the recent economic and financial crisis Government intervention in the housing market Enhance peoples housing opportunities and ensure equitable access to housing Fiscal (taxes and subsidies), provision of social housing, rental allowances, regulation

Development finance Planning Mortgages Regulation Local Auth. Central Bank RTB Banks FTBS Movers Housing Agency NAMA Owner- occupiers Housing Policy Government Govt. as a consumer Policy: Govt. depts. Social Homelessness Rental market Infrastructure Investors Private Long term Short term Institutional Investors Builders

Action Plan for Housing and Homelessness Published July 2016 Five key areas: Address homelessness Accelerate social housing Build more homes Improve the rental sector Utilise existing stock Timelines given and responsible depts./agencies identified 21 Action points 24 Action points 12 Action points 13 Action points 14 Action points

Housing policy Now have a Minister for Housing Positive development Consultation between policy makers that impact on the housing market FTB Help-to-Buy Scheme discussed with CBI Housing Delivery Office Statistics and data very important Make policy on the basis of evidence Extra data welcome addition from CSO

Macro-prudential Measures Necessary but Duffy, Foley, McInerney and McQuinn (2016) find that over the longer term: House prices lower than they otherwise would have been This impacts on the viability of housing construction Lower levels of housing completions relative to baseline McQuinn and Cronin (2016) find that rents are higher for a given price level Policies have implications for the broader housing market

Budget 2017 FTB Help to Buy Scheme Aimed at new build homes Uncertainty about ability of FTB to realise demand has adversely affected supply Measure should alleviate this Supply will need to respond Other measures include: Extension of mortgage interest relief increase in mortgage interest deductibility for landlords increase in rent a room relief Living city initiative extended to landlords Home renovation scheme extension

Still a mis-match between prices and costs Need to understand the micro-detail of what contributes to costs: When bought land Length of planning process How is development being financed/source of finance The cost of finance 350000 300000 250000 200000 150000 100000 50000 0 Build cost excl.land Build cost incl. 50,000 for land Average house price

Housing Priorities need to continue to focus on: Ensuring a supply of quality, affordable housing Funding infrastructure to connect communities and unlock development potential Reforming planning to bring new viable housing to occupancy

PII perspective No single reform Need for ongoing engagement between all actors to understand the micro-detail of supply and demand Whole-of-government approach needed Consider how policies impact on all segments of the market Policy needs to consider the long run Results in better visibility of future risks