Analysis: There are pointers to be had in how to provide secure, affordable and high-quality housing for a wide segment of society from countries like the Netherlands

The biggest thing that isn't understood or talked about in the housing debate is that we’re not going to "fix" the housing crisis, says Dr Michael Byrne, lecturer in political economy at the School of Social Policy, Social Work and Social Justice at UCD. "There’s a point where you wreck something to the point that it can't be fixed. That's what we've done to our housing system."

Property prices in Ireland have returned to their "Celtic Tiger" peak, increasing by 123% from their trough in early 2013. Recent figures also show that average rents have increased by more than 82% over the past 12 years, compared to the EU average of 18%. Ireland is facing considerable issues around affordability and security of housing. We have also hit a record number of people registered as homeless with more than 11,000 in emergency accommodation.

A report from the European Commission published in November raised concerns about affordability of housing in Ireland and said that houses were 'not undervalued’, instead the high prices are driven by undersupply. According to the CSO, construction in the residential building sector is down. Where can we look to for inspiration? We can start with our own history.

We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences

From RTÉ Radio 1's Morning Ireland, rents in Ireland up 82% in the last 12 years

A brief history of housing in Ireland

"Scholars of Irish housing would point out that in many European countries, the main focus of the welfare state in the 20th century was social insurance — unemployment systems, pensions, sick pay, disability pay — Ireland developed that stuff weakly and late. But we were in advance of other countries as far as housing went. So we didn't develop a very strong welfare state but we did develop a very strong housing system," Byrne explains.

A large investment in social housing "took place right throughout the 20th century and brought the proportion of households living in social housing in Ireland to a high point of almost 20% in the 1970s," he says. "Then the other, possibly more noteworthy aspect of it in the European context, was a major promotion of home ownership."

Two key things drove this, Byrne highlights: at a high point in the early 1980s, 30% of mortgages were provided by local authorities. The Tenant Purchase Scheme, which is about 100 years old as a policy, meant tenants could buy their social housing and thereby become homeowners. "Ireland introduced it long before other European countries did, but [tenant purchase] really took off after the Housing Act in the 1960s."

We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences

From RTÉ Archives, how 118,000 houses were built in Ireland between 1948 and 1962 (broadcast 13 July 1962)

As a consequence, homeownership rates in Ireland reached the giddy heights of 80% by the 1990s, "which was very high by international standards and particularly high when you consider that Ireland was relatively economically underdeveloped at the time," Byrne adds. "That's basically where we get our home ownership culture from."

But this also meant that our enviably high levels of social housing dwindled; social housing stock was sold to tenants, therefore privatised, and the stock wasn't replaced. "So we have an unusual history, in the sense that we have this European-level investment in social housing over the course of the 20th century but we've ended up with social housing stock that doesn't look like that."

When it comes to who’s gotten it right, Byrne cites Austria, the Netherlands and Denmark. How have they done it? A large proportion of the housing in their areas of high demand, like cities, is non-market housing, funded and maintained sustainably over the long-term. You also need a cross-party political consensus and a social consensus in order to make it stable over the long term. Of course, replicating a housing model that took a hundred years to develop and transplanting it into a different context isn’t easily done, he adds.

We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences

From RTÉ Archives, government examines how to control house prices (broadcast 1973)

Byrne says the Irish government "to a degree at least, has adopted this view with the new cost-rental policy and sector". "I think it's probably fair to say they're viewing it as more of a housing policy targeted at a specific cohort. Whereas in European countries like [Austria, Denmark, the Netherlands] it's more seen as something that's targeted at the entire population."

Having a non-market sector reduces demand for market housing and provides more affordable prices, Byrne says. But there's a "fundamental point" that is missed in the debate: "The main way that affordable housing helps meet the need of households and helps to ensure affordability and stability within the housing system, is not by charging affordable rents, it’s by ensuring adequate supply."

Private housing markets are "not very good at responding to the housing needs of the population". "So what Austria and Denmark and Netherlands can do is, because they have a large non-market segment, they can determine, in a stable way, that the supply of housing develops to meet the changing needs of the population and that has a big impact on affordability across the housing system."

We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences

From RTÉ Archives, an RTÉ News report broadcast on 20 June 2006 about soaring house prices

What can we learn from The Netherlands?

Despite gradual erosion of social housing provision, the Netherlands represents a "beacon of mass social housing provision" from an international perspective, says Dr Rowan Arundel, Assistant Professor in Geographic Information Science at the University of Amsterdam. "The Netherlands shows that a social housing sector does not need to simply be a safety-net of last resort for the lowest income households, but can provide secure, affordable and high-quality housing for a wide segment of society.

"Many visitors to major Dutch cities are often unaware that they are surrounded by substantial shares of social housing even across many more picturesque historical neighbourhoods of the city. The Dutch case challenges stereotypes in other countries that stigmatises social housing as low-quality, dreary or segregating," he says.

While figures show the Netherlands has the largest share of social housing among OECD countries, the gradual erosion of social housing provision has come "in the face of detrimental policies that have promoted some selling off, or conversion, and stymied new supply. This means that supply has not kept up with needs, resulting in very long waiting lists to enter social housing."

We need your consent to load this YouTube contentWe use YouTube to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences

From RTÉ Prime Time, Social Housing Explained

Large shares of social housing remain across the most expensive cities and provide affordable access to these areas for substantial shares of lower to middle income households, tempering the most intense forms of gentrification, he says. However, the limited income requirements for entry to social housing in the Netherlands have made it inaccessible to many who then face a very unaffordable market sector.

Arundel says it’s clear that the market has failed in providing widespread affordable, adequate and secure housing and has not "brought down prices" as promised by classical economists and developers, but has instead concentrated on the most expensive segments and has driven speculation booms.

Looking at the heydays of social housing expansion in the Netherlands provides a valuable lesson on how we might provide affordable housing, says Arundal. While there was some initial subsidisation in the form of cheaper loans and land provision, the Dutch social housing sector has been self-sufficient and has provided affordable housing for generations, showing that "investments in social housing – at scale and when protected from market vicissitudes – provide long-term, sustainable benefits."

We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences

From RTÉ Archives, with 49% of the Dutch population living in rented accommodation, there is pressure on both demand and supply (broadcast 15 January 2001)

"The Dutch case overall challenges other countries to not simply 'fiddle around the edges' in providing small-scale social housing projects, often touted as major achievements, but instead deliver a structural change that provides widespread non-market housing."

Arundel gives an example: "The municipality of Amsterdam enacted an affordability requirement that all new developments of more than 10 units should meet the ‘40-40-20’ criteria: 40% social housing, 40% affordable mid-segment, and only 20% free-market. While such levels would be unthinkable in many other countries, in the Amsterdam context, this regulation has also faced criticism as not going far enough with some political parties arguing for even higher shares of social and affordable housing."

Arundel says it’s now recognised in the Netherlands that a return to expansion, in one form or other, "is a necessary counter to the increasing disfunction of the market in providing affordable housing."

We need your consent to load this comcast-player contentWe use comcast-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences

From RTÉ Brainstorm, what's the impact of post codes on Dublin house prices?

Ireland isn't alone in experiencing housing difficulties. "Pretty much every big city in Europe is having more housing problems with affordability, in particular. Nobody really knows why that is," says Byrne. "But the most likely culprit, there isn’t evidence that shows this now, is that we've had more than ten years of ultra low interest rates and expansionary monetary policy." In short, low interest rates drive up house prices. This is changing. The European Central Bank raised interest rates for a fourth time in December.

"Ireland is a little bit different because our supply and demand imbalance is much more pronounced than other European countries. In fact, I think there's total consensus that in Ireland supply is woefully inadequate," he says. "We have what I call a lost decade of housing, 2010 to 2020. We've built up this massive, accumulated backlog of unmet housing need and demand in Ireland. So on the one hand supply is one of the principal drivers." But it also comes down to the make-up of our housing market.

"During that same period in which supply fell off the cliff, we also saw about a 10% decline the proportion of homeowners in Ireland and a 10% percent increase in the number of private renters. We went from a situation where we had 80% homeownership, about 11% social housing, about 9% private renting. To about 69% home ownership, 10% social housing and 20% private renting."

We need your consent to load this comcast-player contentWe use comcast-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences

From RTÉ Brainstorm, how did we deal with a housing crisis in the past?

So renting doubled and homeownership fell. "I think that had a big impact. That interacted with the supply issue in a way that was particularly damaging to people, especially tenants. The problem was that the private rental sector, which is the most poorly regulated, most unaffordable and most insecure tenure, exploded at the same time that supply collapsed."

Ultimately, responding to the housing crisis isn't just about "fixing" but about dealing with the consequences of what we've created, Byrne says. "When you talk about fixing the housing system, it kind of presupposes that there was a housing system that worked and something got broke and when we fix it, it’ll go back to that. But I think it's better to think that our housing system has changed into something we don't want and we're in a new context so we can't go backwards. So where do we want to get to, is the question. What is the type of housing system we want for the 21st century?"

Additional reporting by Michelle Hough and Alina Trabattoni for the European Broadcast Union's A European Perspective initiative.


The views expressed here are those of the author and do not represent or reflect the views of RTÉ