Yes. I thank the Chairman and members for inviting us to attend. We have prepared an opening statement and have also submitted a body of material which we thought might be of assistance to the committee. I do not propose to read out the latter but it will be available to members for consideration during their deliberations.
We are very pleased to be here this afternoon to assist the committee in its examination of the issues facing us with regard to housing and homelessness. I am joined by Mr. John O'Connor, chief executive officer, and Mr. David Silke, our director, who will assist in answering any questions members may wish to pose.
The Housing Agency was founded in 2010 and our vision is to enable everyone to live in good-quality, affordable homes in sustainable communities. The agency provides a wide level of expert advice, support, research and training activities for local authorities, the Department of the Environment, Community and Local Government, approved housing bodies, the National Asset Management Agency, NAMA, and many other public and private sector organisations. Together with its research, the many activities in which it is involved provide the agency with a unique vantage point from which to be able to offer this committee advice and observations on current housing issues in Ireland and how to make progress towards improving the situation. We have taken what the committee has asked us to do very seriously. In the material submitted, we have specifically identified a series of issues and what we see as potential solutions for members to consider.
Housing in Ireland consists of many parts and successful policies and actions must be co-ordinated across all of those parts. If we have one message for this committee today, it is that there is no single solution that will work in isolation. All of the parts must be understood by all of the actors and all actions must take account of their effect on other parts. We urge the committee to ensure that decisions on priorities in terms of spending, sequence and action take account of the whole sector and to be aware of the potential for one to affect the other.
We must remind ourselves that a house is many things, ranging from deeply personal and emotional issues that surround the word "home", to practical considerations of a house as a financial asset that involves, for example, complex building and planning regulations.
We adhere to and promote the reality that shelter is a human right while at the same time one's address is often a social signal of one's status. We draw attention to the fact that the cost of housing is the single biggest factor that determines the consumer price index and, therefore, is the single biggest driver of wage inflation in Ireland. The house is also the biggest financial deal that most people ever make and our mortgage or rent repayment is probably our single biggest household payment every month. That means that nobody is neutral about housing.
We have a sector that is full of contradictions. For example, the couple who enjoy the increasing value of their home in a rising market will, at the same time, rue the fact that their children cannot afford their own new home. The Department of Finance is likely to gain revenue from increases in house prices and house building while the Department of Jobs, Enterprise and Innovation will view the same increase as lost international competitiveness. All these factors need to be part of the committee's considerations in trying to make plans for the future of our housing in Ireland.
To provide a background and to remind ourselves of the context, we need to bear in mind that we are looking at a wide and rapidly changing range of households and their needs in Ireland. The biggest single thing the agency says at every opportunity it gets is that we have to be very careful about not carrying over habits of thinking from the past out into the future. The future is going to be dramatically different. For example, many people are very surprised to learn that Irish national home ownership peaked 25 years ago at 80% and it has fallen every year since then. Now 70% of housing is owner-occupied and 30% is in rental. In Dublin, tenure is divided equally between ownership and rental. These trends are consistent with international trends. Ireland is becoming a normal European economy.
The rental housing consists of both private rental, one third of which receives State support, and social rental housing. These changes can be explained in part because we have gone through significant demographic changes in the past 40 years with a rapid reduction in household size. There is an average of only 2.7 people per household. The reality is that 75% - three quarters - of the housing requirement for the country is for households of three persons or fewer. All the recent publications of the agency ask people to draw attention to the dramatically different types of houses that will be needed into the future, not just the numbers.
It is critical that the work of the committee is based on the need of these new and emerging types of tenure and the types of house. We must avoid the bitter recent experience of other countries such as Spain and Germany where attempts to recover from housing crises were stymied by the realisation, which came too late, that they had built houses for sale when the new markets mainly wanted homes built to rent. We must not make that mistake.
Actions to increase supply must maintain a focus on providing the right types of accommodation while also making housing affordable to buy or to rent. We say to the committee and anybody who will listen that affordability is the real challenge. There is no point in us building houses for people concentrating on supply if house supplies cannot be afforded. That would be a tragedy.
The committee needs to be mindful that a third of the population will need to get some level of State support. To clarify, that does not mean a third of all housing in the future will be local authority housing. It is that a third of our housing will need some level of support and there are sliding scales of that requirement. It is a very nuanced field. We need to ensure the majority of households can afford housing from their own resources while also ensuring the State can provide the necessary supports for that third of the population that require them.
The committee invited the agency to identify how the obstacles that are impeding progress on housing can be surmounted as well as the specific actions that need to be taken to achieve urgent implementation of those measures. On that matter, the Housing Agency wishes to remind the committee of the need to ensure the right issues are addressed in the right priority; specifically, that the biggest priority is that because Ireland has no overall plan, priorities or focus for housing, there is a very real danger that attention will focus excessively on short-term issues at the expense of long-term progress.
More important, we advise that all sections of housing are deeply interconnected. For example, a crisis in market housing, even in Aylesbury Road, is quickly transferred into pressure on the private rental sector which, as we have heard this morning, increases pressure on social housing. Therefore, solutions to homelessness will only emerge when the workings of all housing is stabilised and improved. The big message for us all is that homelessness and rough sleeping are the symptoms. We need to address the deep causes that drive people into those circumstances.
Addressing the wrong priorities, in the wrong sequence, will condemn Ireland to an unending process of catch-up and, worse, to sowing the seeds of the next housing crisis. For instance, table one in my presentation shows the overall numbers of types of households in Ireland indicating that homelessness, which comprises people who are living in emergency accommodation or sleeping rough, accounts for some 3,400 households - a figure which is the subject of vigorous debate – while more than 200,000 households are in mortgage arrears. On top of that there are more than 200,000 homes lying vacant. These are big figures. We want to ensure the committee's priorities recognise that. These examples illustrate that while homelessness is indeed an acute problem, our priorities also need to be directed towards issues that affect nearly 500,000 households and 500,000 properties.
We have supplied the committee with material that sets out the agency’s opinions on a wide range of issues and how the problems might be overcome. We are here to answer questions about that. I ask that members look at the further table which illustrates what the Housing Agency does. The agency has only been in existence since 2010. In some ways we are a standing symptom of what is going on in Ireland in housing - that there is a huge amount of work taking place across a very wide range of issues of which many people are unaware. We have a wonderful chief executive in Mr. David Silke. The agency is involved in wide ranging issues such as repairs to homes affected by pyrite, dealing with agencies that have tranches of property being transferred, unfinished housing estates, supporting the introduction of the housing assistance payment, HAP, and keeping statistics and carrying out research. It is a huge field and covers a wide range of activities, which is the reason we are able to share with the committee the type of advice and opinions that may be of assistance to it. We have summarised in simple form our very high level description of what we see as being the obstacles, the solutions and the actions. We are not suggesting that the obstacles are not the ones that people are talking about but that it is the lack of an overall plan, the lack of priorities and the lack of focus that are the real issues. That is what we would like to discuss with the committee this afternoon.
