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Why is this the situation with buying council housing?

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    #92
    gurramok
    Closed Accounts Posts: 13,992 ✭✭✭✭gurramok


    Victor wrote:
    I merely mentioned stamp duty as it is a transaction charge-type tax (as opposed to a value increase-type tax like VAT). Stamp duty discourages people from moving from one home to another, often leaving people in a property that is too big or too small for their needs.

    Very true for private transactions, my own mother is stuck in that situation! :)

    But is there any specific reason why the councils don't touch 2nd hand housing for affordable allocation?
    It just don't make sense offering only new build housing outside the established area hence leaving family social breakdown.


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    #93
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    gurramok wrote:
    But is there any specific reason why the councils don't touch 2nd hand housing for affordable allocation?
    It just don't make sense offering only new build housing outside the established area hence leaving family social breakdown.

    The reason is it would entail a council subsidising the sale price of the property and would be a net drain on their resources- whereas for new builds that subsidy is absorbed by the developer/those buying full price properties in the development.

    S.


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    #94
    gurramok
    Closed Accounts Posts: 13,992 ✭✭✭✭gurramok


    smccarrick wrote:
    The reason is it would entail a council subsidising the sale price of the property and would be a net drain on their resources- whereas for new builds that subsidy is absorbed by the developer/those buying full price properties in the development.

    S.
    Ah, that would make sense.
    I know that the council does buy 2nd hand housing off old people and then house them in new senior citizen complexes and in return the council gets a percentage of the sale price.

    But..why do the council for example allocate that 2nd hand house only to social housing where they only get a small rent rather than using it for affordable housing?(i know of this happening personally)

    Affordable applicants have more wealth than a social applicant hence wealth is exported from an area.
    It sounds in the above example that the poor are rehoused in poor areas rather than putting them in mixed areas for social cohesion, ludicrous.


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    #95
    jdivision
    Registered Users Posts: 4,260 ✭✭✭jdivision


    smccarrick wrote:
    whereas for new builds that subsidy is absorbed by the developer/those buying full price properties in the development.

    S.
    That's not true, the developer pays less for the land upfront to take into account the s&a measures.


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    #96
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    jdivision wrote:
    That's not true, the developer pays less for the land upfront to take into account the s&a measures.

    That may very well be the theory- but post introduction of these measures there has not been a reciprochal decrease in the prices paid to landowners (it has fallen slightly in some cases, in others its risen)- which would, by elimination, determine that those higher up the chain are bearing the brunt of the measure. There are of course exceptions (notably developments in Wicklow and Carlow)- where the land was factored into the price of the unit sale price and this was shown to have decreased- but those are exceptions.


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    #97
    Victor
    Registered Users Posts: 78,400 ✭✭✭✭Victor


    gurramok wrote:
    But..why do the council for example allocate that 2nd hand house only to social housing where they only get a small rent rather than using it for affordable housing?(i know of this happening personally)

    Affordable applicants have more wealth than a social applicant hence wealth is exported from an area. It sounds in the above example that the poor are rehoused in poor areas rather than putting them in mixed areas for social cohesion, ludicrous.
    Putting the (presumably less well off) social housing users into existing mature areas puts them at less risk of being (further) marginalised.


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    #98
    jdivision
    Registered Users Posts: 4,260 ✭✭✭jdivision


    smccarrick wrote:
    That may very well be the theory- but post introduction of these measures there has not been a reciprochal decrease in the prices paid to landowners (it has fallen slightly in some cases, in others its risen)- which would, by elimination, determine that those higher up the chain are bearing the brunt of the measure. There are of course exceptions (notably developments in Wicklow and Carlow)- where the land was factored into the price of the unit sale price and this was shown to have decreased- but those are exceptions.
    No, it happened in every case. Land values rose anyway because house prices were rising, so even though the 20 per cent s&a element was taken into account, land prices still rose. You only need to look at the premiums paid for land with no s&a housing obligations post the introduction of the measure to see the difference. It's the landowner who "suffered" in that they would have had a bit more for the land if they hadn't introduced the measure. However, the landowner benefits from the rezoning of land and also had CGT cut from 40 to 20 per cent so they're still in a great position.


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