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Is home ownership becoming a vanishing possibility?

One issue that is seldom out up front and central in the housing debate is the extent to which the traditional aspiration to own one’s home is becoming increasingly less achievable for a growing number of people.

As someone whose childhood was spent in what is now bizarrely described by some as a “settled working class estate,” it was almost the universal case that my parents and our neighbours who were generally employed as bus drivers, factory workers, barmen, various building related trades including self-employed chaps, and so forth, would come to own their own homes.

That was facilitated by state policy which provided relatively easy term mortgages and buy-outs from Dublin County Council. I don’t think there were any families who did not avail of this, and almost always with only one adult working in the household and sometimes surviving periodic bouts of unemployment without losing their home.

Home ownership is now below 68% – under 60% in urban areas – which compares to a peak of almost 80% in 1991. That 1991 was the year in which the highest number of people owned their own home is interesting in that for several years after that date the Irish state was in the midst of an unprecedented property boom. Far from boosting home ownership as happened with the 1960s and 70s construction expansion, the reverse happened.

 

So, while all the headline economic factors were positive; GNP rose by 58% between 1990 and 2000, wages rose and house completions  accelerated from 19,539 in 1988 to 88,419 in 2006, the proportion of households owning their own home fell quite dramatically. Then of course came the crash which has exacerbated all of the factors underlying that trend.

Now, not only are an increasing number of people, including those who would be considered to be relatively high and often double incomes, unable to buy their own homes, but a combination of demand and the increasing dominance of build to rent developments has meant that rents are high, and that the proportion of income required by working people to secure accommodation takes up an increasingly large part of their income.

The anxiety over housing – and it can be accurately described as such – is probably the key political issue. It is certainly the one driving the seemingly relentless polling strength of Sinn Féin. As if things had not been bad enough already, there is now the problem of how to compensate those whose homes are falling apart from the use of mica.

That has thrown another, completely unpredictable, element into an already fraught situation. Mica redress through compensation and renovation will place such an added demand on financial and physical resources to render the current pledges of the government and opposition on construction and the provision of homes pretty much meaningless.

There is also perhaps the beginnings, or at least the public manifestation, of what might be described as an existential crisis of the “middle class.” I place that in parentheses as it also includes people from the mysterious “settled working class” who, in regard to housing, share more or less the same aspirations of people from the leafier burgs.

In any event, the middle class is possibly now being redefined along similar lines to the United States where family composition, location, not being state dependent, and more likely to be from a family-owned home is a more accurate determinant of “class” than occupation. If there is a “working poor” then increasingly that is as likely to mean someone with a white collar job as an “unskilled” worker if the former is renting and less likely to ever own their own home.

The poverty determinant is of course related to how much of one’s income must be paid to have a roof over one’s head. So, in that respect a person on a lower income can be far better off if they are paying €600 per month on an old mortgage than if they are paying twice that sum – and maybe more than that – to rent.

This can also, of course, relate to age with particular pressures mounting on younger working people who find themselves pretty much outside of the property market. That is the subject of a series of videos made by Shane Fleming who is involved in real estate in Dublin.

Normally, and with no offence intended, you would not expect chaps whose business it is to sell and let property to be overly concerned with the societal impact of the housing market, but Mr Fleming has clearly put a lot of thought into this and would seem to have elicited a strong response

Attack on the Middle Class – You will OWN Nothing and be Happy | The Great Reset – Housing Market – YouTube

Among the points that he makes is that home ownership has traditionally been a means by which a family – he refers to them as middle-class, but it equally applies to the demographic cohort I refer to above I think – could not only have a secure home, but that home ownership was a means of creating wealth that could become part of providing for the family’s future.

Wealth not in the sense of opulence, but of security. A perfectly reasonable aspiration shared across almost all sectors of Irish society.

Fleming refers in this context to the apparent systemic shift towards long term rental which he places in the context of the “vision” incorporated in the so-called Great Reset or Build Back Better. These concepts are increasingly referred to by different state and other agencies including the World Economic Forum which, conspiracy theories aside, clearly acts a key strategic influence on those agencies through the high powered conventions held under its auspices

Curiously the bias towards rental is not only the driving force behind the rapidly expanding control of the housing market by various institutional capital funds, but also the ideological and political goal of the left.

Fleming encapsulates that aspirant home-owners are being squeezed out by both the build-to-rent developers and the state hoovering up any available rented accommodation under mandated “social housing” quotas – which will then be let to people on local authority waiting lists, but with the state making up the difference between the “social rent” and the market rent.

Of course, the left has been effectively cheerleading big capital and big finance for over 150 years, ever since Marx decided that the destruction of small property was a necessary prelude to the replacement of corporate monopoly by state monopoly. While even most Marxists have never read Marx nor understood him, this tacit view also informs much of the “vision” of the non-Marxist left, including Sinn Féin.

Whatever the basis of the adage “You will own nothing, but you will be happy,” it does pretty much encapsulate the future with regard to housing if the current trends continue. Either the build-to-rent funds will come to dominate the market and make family home ownership an exception; or the state will increase the share of accommodation that has to be rented from the state.

Indeed, as we are witnessing at present the two are not incompatible. Left parties in Ireland and in other countries have proven themselves to be perfectly happy to work alongside the pension funds once they can meet “social housing” quotas. Nor do any of them put forward plausible proposals how the state might possibly replace private construction to meet the growing demand for housing, especially given their pro-migration policies.

So, as things stand the future appears only to promise an increasing trend towards the outcomes described by Shane Fleming and others. It is clear that the dominance of the corporate funds or the state, or perhaps even worse a combination of the two, is not conducive to a healthy sustainable community. The evidence exists elsewhere to prove that this is the case.

The evidence would also seem to exist in some of the central and eastern European countries, and in the democratic east Asian states, that a strategy to incentivise family home ownership mostly through the private market but with state incentives and guidelines can provide an alternative. The missing factor here is perhaps an absence of political will created by an abandonment of any foundational vision of what an independent Ireland might be.

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