As Conor Skehan steps down as Chair of the Housing Agency, he talks about what’s needed now in housing in Ireland, and how sometimes the best thing to do is nothing at all.
Conor Skehan is not a housing expert, which he says is why he was appointed as independent Chair of the Housing Agency. At the time of our interview, he was preparing to step down from the role after a five-year term: “I was offered a second term but turned it down. The Agency is much bigger now than when it was set up. The budget when I started was about €3m, and this year it will be €103m, which requires very different corporate governance skills”. The Housing Agency was set up in 2010 to work with and support local authorities, approved housing bodies, and the Department of Housing, Planning and Local Government in the delivery of housing and housing services. Despite the enormous challenges facing the country at the time of its establishment, and since, Conor feels the Agency is achieving its remit: “It’s hard to believe that five years ago, so many things that are now in everybody’s ordinary narrative were unusual. We were the first to talk about affordability, and I’m very pleased that that’s recognised as a big issue now”.
There is of course more that could be done: “There isn’t enough attention given to management of housing – everything from having a more professional rental sector to better management of vacancies and obsolescence. And we use any chance we have in public of saying to the Government that there’s far too much emphasis on building new houses and not enough on using what we have”.
“It’s hard to believe that five years ago, so many things that are now in everybody’s ordinary narrative were unusual. We were the first to talk about affordability, and I’m very pleased that that’s recognised as a big issue now”.
To illustrate this point, he quotes figures from the last Census stating that there are 198,000 vacant homes in Ireland. While some argue that this is an overestimation, it’s fair to say that even half that number could solve our housing supply problems for the next five years: “The Government is talking about giving €700m in loans through a new agency for financing housing. An annual rolling fund of €700m would restore 20,000 houses – one year’s national supply – at a fraction of the cost of building 20,000 new ones”.
The fact that between 20,000 and 30,000 of these homes are in Dublin also puts paid to the myth that these properties are all in post-crash ghost estates or rural areas. For the Agency, there’s a powerful case for keeping these houses in use: “Investing in existing housing means you’re recovering sunk costs that the Government has already spent on our behalf – on schools, garda stations, footpaths and lighting. If you really looked into the figures you’d probably end up paying people to reuse them because it saves so much public money”.
The Housing Agency has been involved in bringing vacant homes officers from the UK to Ireland to explain their approach to authorities here. These officers are employed by local authorities to bring vacant houses back into use. It’s not an easy process, and there’s no ‘magic bullet’, but the figures speak for themselves: “Britain has 23 million homes, and 200,000 are vacant – the same number as Ireland, a country of two million homes”.
The concept of housing as a social, public good is one that the Agency has worked to keep at the centre of the discussion: “The full title of our agency is The Housing and Sustainable Communities Agency. We never call them houses; we always call them homes. Of course value is a facet; housing is the only human right that is also an investment grade asset, as well as an entitlement, and a public good. All of these things are true, but the truth is a much bigger picture and that’s one of the things the Agency is meant to be about”.
Time to do nothing
The Government’s blueprint for solving the housing crisis, ‘Rebuilding Ireland’, was launched with great fanfare last year. Conor praises the plan’s inter-departmental focus, and its more holistic approach. He also welcomes Minister Eoghan Murphy’s recent statements to the effect that ‘Rebuilding Ireland 2’ will not materially change the original plan, feeling that what’s needed now is a period of clarity, with no further initiatives or big announcements: “Social scientists call housing a ‘wicked problem’ because of its complexity, so the very setting out of a framework like that is a huge achievement. We’ve reached the stage now where the best thing the Government can do is do nothing for two or three years and let house building begin. That is not to say that everything’s ok, or that stuff doesn’t need to be fixed – just don’t fix it now. What developers and purchasers need to know is that this is the deal on offer – good or bad as it may be”.
Social housing, however, remains an important remit of local authorities, and Conor would like to see the sector emulating other State bodies by adopting similar approaches to procurement: “We had two procurement agencies in Ireland: for motorways [the National Roads Authority] and for railways [the Rail Procurement Agency], and both did a fantastic job (they are now amalgamated into Transport Infrastructure Ireland). Motorway systems in Ireland now come in ahead of schedule and on budget. We should think about having national procurement of social housing. You would go on the international market and say we’re going to build, say, 5,000 houses every year for the next ten years, and have a public procurement process. Each individual site might have 30 or 300 or 3,000 houses on it, but you’ve bulk bought and you draw from a central depot of the key components. That’s where you get economies of scale”.
As someone who has gone on record to say that he is happy to rent and will never own property again, Conor feels that attitudes and policies on the rental sector need to catch up with the realities of how people live: “Irish home ownership peaked in 1991, and has been falling every year since, and that’s convergent with EU norms”. There are arguments to be made that home ownership is not necessarily the best thing for a society – it can reduce labour force mobility, making it difficult for people to move to where economic prospects are better. Conor also argues that renting facilitates far better utilisation of housing stock, as people are more likely to move as their needs and circumstances change. But the challenge is providing homes that facilitate this mobility, both in terms of suitability and affordability: “We need to foster a better environment to rent, which means more professional landlords who own hundreds or thousands of properties and manage them more professionally, and fewer small landlords”.
Statements like this often excite fears of huge corporate landlords buying or building homes and charging exorbitant rents to an already stretched urban population. Conor feels that these fears are unfounded, based on a perception that all such developments are luxury offerings, or that the number of professional landlords in the market would be too small. Regulation is part of the solution, but so is a vision of a far more diverse sector: “There are two classes of landlord we don’t have in Ireland. One is dual developers, who develop units, then sell half and rent the other half as a long-term investment. Those people act and think very differently – a bulk landlord who’s in for the long haul wants long-term tenants, stability, and very gradual rent increases. We’re also missing what I would call ‘vocational housing providers’, where professional pension funds or trade unions build apartments to rent affordably to members”.
This is a concept that operates successfully in other countries, and for groups like the Gardaí, or teachers, Conor argues that this sort of secure, subsidised accommodation makes far more sense than paying people allowances to work in cities: “Once you think about those groups entering the market, the idea of this monopolistic landlord fades into unlikelihood”.
So what would Conor’s ideal rental accommodation consist of?
“The ideal is a city that has very large apartments, all the way down the spectrum to spaces where people have a bedroom and bathroom, and rent/share living space with others. My ideal apartment is not one apartment, but a whole range that you can browse through at different stages in your life and career”.
There’s no getting away from the fact that housing is an extremely emotional issue, particularly in Ireland. Conor acknowledges this but says we have to accept that landlords are very important parts of functioning urban societies: “In Dublin, almost a quarter of all private housing is rented, and if you add in that Dublin city has the biggest concentration of social housing in Ireland, probably well over a third of the population rent, and that will probably head towards about 50% in future. As cities grow, the closer you live to a city centre, the more likely you are to rent”.
In the week our interview took place, the SCSI published its report on apartment costs in Dublin, which found that they cost more to build than houses, and indeed that they cost more than the sale prices expected (for a detailed article on this report, see page 22). Conor welcomes the report as another important data-collecting initiative, and particularly one that directly addresses affordability: “The SCSI report is great to have. There’s no point providing new houses if people can’t afford to buy them, and one of the ways to address affordability is to find out why they’re costing what they’re costing”.
One of the main issues raised in the report is the fact that developers have difficulty obtaining finance without a guarantee of a 15% profit margin, and this, with a 5% contingency, adds 20% to the cost of an apartment before a sod is turned. Conor feels this needs to be looked at, and that the banks have questions to answer too: “On costs of finance, the report identifies that they have three-tier financing built in at 9%. What that tells you is that the risk has already been built into the finance costs, so for them to say we have to charge 15 or 20% because of the risk we’re taking doesn’t stack up”.
If you could only do one thing to address the housing crisis, what would it be?
“Move the focus from building to management. In the last five years we set out an ambition to have the agenda become more than just building, to focus on things like affordability, and that is happening”.
He wonders if the sector could learn from the office-building boom currently happening in Dublin: “We’re meeting the very demanding requirements of some of the biggest players in the world. We’re building to price, and we’re well able to do it with the same bricks, the same glass, the same steel, the same planning system”.
The report also shows that the scale of projects is inevitably affecting price: “The report was based on a survey of over 2,000 apartment units around the city, at 28 locations – the average was 77 units per development. You would only start to get proper economies of scale when you get into the hundreds of units and that’s another factor.
“It’s a very good, very forensic and very welcome report, but all of us need to learn to read reports like that with a slightly more questioning eye”.
“Irish home ownership peaked in 1991, and has been falling every year since, and that’s convergent with EU norms”.
Changing the narrative
With every day bringing stories of evictions, families forced into emergency accommodation, and indeed tragic deaths of rough sleepers on our streets, the emotional nature of housing and homelessness has rarely been more to the fore in Irish discourse. Conor has spoken about the fact that Ireland’s housing situation, and homeless numbers, are not out of step with other countries – that our ‘crisis’ is cyclical and will resolve if it is allowed to. The challenge then is to get that message out: “The narrative has to change – I say this stuff and get into trouble, but the Housing Agency’s brief is to be authoritative and independent, and that’s our job, to tell people what they need to hear, not what they want to hear.
“Homelessness is not caused by lack of accommodation – homelessness is caused by affordability problems. That’s a deeper question and a slower fix, but it’s a more steady fix”.
He praises the Housing Assistance Payment (HAP) scheme, which he says has very quietly and efficiently addressed huge issues by making a much wider range of properties available to prospective tenants in a manner that is also attractive to landlords. But, as ever, there is no one solution: “Homelessness happens. Ireland has one of the lowest rates of homelessness per capita in all of Europe. The fact that we are saying that 8,000 people is 8,000 too many is a sign of a compassionate country that’s trying to do something about it”. He is critical, though, of the failure thus far to address another elephant in the room: “There are more than 200,000 households with their mortgage in arrears or restructured. Each person in arrears is a homeless person waiting to happen. We need to spend money on that because 200,000 homes probably equals half a million people”.
Conor Skehan has founded consultancies in architecture, landscape architecture, planning and impact assessment. He is a senior lecturer at DIT Bolton Street (and a former head of the Department of Planning and Environment there).
Managing Editor, Think Media Ltd