April 13, 2024

An entitled minority is giving others the thumbs up in Ireland’s housing crisis – The Irish Times

When people oppose development, when they demand the right to light or bring a judicial review to determine what the constitutionally acceptable height of a building should be, do they pause to consider the wider implications for the rest of society? Do they understand that they are involved in a selfish and highly costly act? Ireland has a major housing shortage that will only be resolved by building more homes. Anything that unjustifiably prevents this from happening imposes a huge cost on the rest of us. Unless the objection is based on a clear violation of zoning regulations, the objector, whether an individual or a residents’ association, is selfishly harming the community at large.

One of the most important lessons of macroeconomics is called the aggregation paradox: what is good for the individual is not always good for the community. A useful way to think about this is a sit-down show, where someone in front of you stands up to get a better view. This act sets the challenge for you to stand, so you do, and so does the person behind you, and so on. Eventually, the entire theater will be standing when everyone pays to sit.

Something similar happens when a person opposes development. This puts a limit on house building and before we know it, the price of all houses increases – and the cost of this is borne by society as a whole. It only takes a few opponents to exact a huge cost on many.

Nimbyism (not in my backyard) has enormous costs. In a country with an acute housing crisis, it constitutes anti-social behavior, underscoring a widespread “I’m fine, Jack culture”, where a small number of largely entitled people give both fingers to any notion of community or greater good. Last week, I focused on the idea of ​​the committed, responsible citizen, who is aware of the rights and responsibilities that come with living in something called society. Looking at the recent wave of objections to planning, it seems we have missed some of this.

In Ireland, the objection problem is endemic. For example, when the Government tries to accelerate planning for the construction of houses under the strategic housing development initiative, many of the projects end up in court. Of the 228 national schemes granted planning under the strategic housing development system, 16 have been halted due to a legal objection. These schemes contained plans for 4,151 individual housing units.

Furthermore, in recent months permission has been withdrawn for 671 rental apartments in Milltown Park, Sandford Road, Dublin; 493 homes in Temple Hill, Blackrock, Co Dublin; 255 homes in Killiney, Co Dublin; and plans to build 852 houses on the site of the former Central Psychiatric Hospital are being held up by just one opponent. And so it goes. You understood.

In practical terms, the mechanism through which Nimbyism – and a pervasive culture of objectionism, supported by orderly U-turn lawyers – serves to harm economically and reduce the purchasing power of workers is quite simple. Restrictive land use regulations, onerous construction requirements and the barrage of objections from “aggrieved” local residents serve to restrict the potential supply of housing – at a time when we need to build at least 60,000 homes a year.

Based on 2021 data, Ireland faces the highest housing costs in the entire EU. Our costs are now 94% above the block average, which reflects a significant deterioration over the last decade

Unfortunately, this is often most true in areas where housing is most needed: places close to urban centers, transport nodes and where there are jobs. The result in any market where supply is a) restricted and b) Largely outstripped by demand – due to demographics, migration and the fact that we settle later – there is inevitably upward pressure on prices.

The latest figures from the Housing Agency reveal who is paying more due to restrictions on supply, caused in part by our objection to default. As always, the most vulnerable are the hardest hit. By calculating how much of a person’s disposable income goes towards housing, we can see to what extent ordinary people’s purchasing power is further reduced by high rents and high house prices.

Those working in the private rental market are clearly the hardest hit, with 43.6 percent of these renters spending more than a quarter of their disposable income on housing. Among renters, there is a smaller subgroup – 13 percent of the total or about one in six – even harder hit, who dedicate two-fifths of their income to housing costs and 7.2 percent of all renters invest more than half of your income from housing.

It’s also worth noting that numbers in the private rental sector are likely to be inflated by house price bans and rising interest rates preventing potential first-time buyers from getting on the ladder. In other words, it is clear that workers are seeing housing costs consume a larger portion of their budget and restrict their purchasing power. Part of this upward pressure on prices is due to objectors and their rights.

The high housing costs in Ireland, faced by renters and buyers alike, will surprise no one (this column, along with many others, has documented it for years), but it is worth putting the crisis we face here in a wider European context . Based on 2021 data, Ireland faces the highest housing costs in the entire EU. Our costs are now 94 percent above the bloc average, reflecting a significant deterioration over the last decade. In 2010, our costs were a modest 17% above the EU average. Now they are almost double.

The solution to a very small number of homes is to build more homes, in the right locations and at the right prices. This means more construction, within planning guidelines and zoning regulations. When we put the dots together, we can see that a blatant objection has dramatic effects, not just in terms of prices, but also rents and delays. So the next time a neighbor tries to encourage you to object, delay or obstruct legitimate development, think twice. It’s not just you who will be affected by an objection, it’s an entire community that will carry your can.

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