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Focus Ireland: Eh, perhaps Government has been too hard on…. Landlords?

Genuine question: See if you can think of one single policy in housing adopted by an Irish Government since 2011 which has made the housing situation in Ireland, in terms of supply and demand, better. Over the past decade, the story has been relentlessly one-directional: Demand for housing has consistently and relentlessly outpaced the supply of housing.

Government has done much to encourage demand. Regular readers will, perhaps, immediately jump to “immigration” here, but leave that aside. The first-time buyer grants, for example, do what, if not to encourage demand and drive up prices? If you give buyers a leg up against other buyers, then generally, the final price will increase. It’s the same story in the rental market, with HAP payments and all the other supports, which amount to a larger amount of money chasing a smaller amount of supply, and lead, according to the most basic economic law, to higher prices.

At the same time, Government has done almost everything in its power to discourage supply. In the building market, Government has introduced restriction after restriction on planning, and construction. It banned bedsits. It mandated all sorts of new insulation standards, driving up costs. It has made the planning process so absurd that it is now legal for me, who lives in Tipperary, to object to a housing proposal in Donegal on whatever grounds I might choose, though the project does not impact me at all. Just last week, Government decided to add 10% to the cost of concrete blocks. In the rental market, you can no longer count, on your fingers, the number of changes made to landlord-tenant relationships which favour the tenant, and restrict the rights of the landlord.

When you persistently discourage the supply of something, while, at the same time, relentlessly subsidising demand for it, the price will go up, and the amount of the something on the market will reduce. That is not some kind of hokey-kokey bit of voodoo theory, but something even the simplest of us can understand instinctively. So there were two things from Sister Stanislaus Kennedy, one of Ireland’s secular housing saints, yesterday, which were notable:

Tax incentives should be used to stop the “great exodus” of landlords from the private rental market, which is a key cause of rising homelessness, the founder of the Focus Ireland charity, Sr Stanislaus Kennedy, has aid.

She said there should be a temporary eviction ban and an expert group should be established to quickly determine measures to encourage private landlords to stay in the market for a fixed period.

The first thing to note is that we’ve now reached the point where even the most doctrinaire lefty of organisations, Focus Ireland, recognises that driving landlords from the housing market is probably, just possibly, an error. The second thing is, naturally, that she followed that statement up by calling for an eviction ban, which, as I’ve written before, amounts to Government legalising theft, since it will no longer be mandatory to pay your rent.

The great irony about eviction bans, of course, is that aside from driving yet further landlords and prospective landlords from the market, they are effectively a boon to elite tenants and a cruel knock to unproven tenants: Put yourself in the position of a landlord, operating in an environment with an eviction ban – You have two tenants before you. One works for a multinational, has references from his bank and employer, and, if he fails to pay, you can at least embarrass him by writing to the providers of those references. The other is a single mum on HAP. Which one are you betting on?

Eviction bans will not only drive landlords from the markets, because of the risk of bankruptcy. It will also make those brave souls, or multinational pension funds, who choose to remain landlords, more prone to the kind of discrimination that nobody can prove took place. So naturally, the left in Ireland is universally for one, and Richard Boyd Barrett has made it his latest crusade.

This, really, is the weakness of democracy: “We should ban evictions” is an easy, emotionally satisfying, position to take, defending as it does the poor struggling single mum against the cruel Scrooge landlord who wants the last penny from her purse. By contrast, it takes a few hundred words to explain to people that the end result will just be that the poor struggling single mum won’t be able to find a Scrooge to take her on in the first place. You can’t legislate away human nature, by, by God, Richard Boyd-Barrett is going to keep trying.

Perhaps, and here’s a thought, we should not keep doing, in Ireland, what’s not working. We should be making it easier to build, and easier to be a landlord, not harder. We should be abolishing many of the laws from the last decade, not building more laws on top of them. Sr. Stan was right in part, but her latest proposal shows just how much part of the problem she, and people like her, really are.

 

 

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