Affordable Housing is easy to scam

Tim Robbins

Thought this might warrant a thread of its own rather than including it in the sticky.
IMO the criteria for affordable housing needs to be seriously examined.
If you run your own business or are self employed like a taxi driver you can pretend you earn way less than you do, go on as many holidays as you like and get an affordable house. I have heard of several people who have done this.

Also, I have heard of people who have quit their jobs, gone travelling with all their savings, come back take a cr*p jon, save for a 3 months and get affordable housing.

I'd see affordable housing as a mechanism for stopping people falling into the poverty trap not for people to stay in the luxury trap.

Furthermore, the macro economics are all wrong here. If people who are not near the poverty trap are eligible and getting grants to pay for a house they can't afford, well then it means it is easier for the market to maintain a price for property that is not a reflection of its value. Basically affordable housing makes it easier for developers to charge high prices and false prices that do not reflect real value but are a false value.

So the people who aren't getting affordable housing are loosing on two fronts
1. Their taxes supplement the affordable housing
2. Their own houses become over valued

Anything that aims to combat poverty is a brilliant idea and I fully support but I think the government has this one *rseways. I would like to see them have a much stricter criteria.

SarahMc

You don't have a very strong understanding of affordable housing. Affordable housing is not aimed at those living in poverty (social housing is).

Affordable housing is linked to salary, not savings (so the idea or going abroad to blow your savings in order to get an affordable house urban myth).

Affordable housing is not based on grants, and is not subsidised by the tax payer.

I have no idea what you are talking about when you say that affordable housing artifically inflates property values!

Victor

The price of house is set by affordability, nothing else.

Tim Robbins

Victor wrote: »

The price of house is set by affordability, nothing else.

Yes and the government contributing 40 - 80K increases affordability.

Consider the developer in Adamstown has 300 appartments for sale at 300K.
He can't sell them all so he has to drop his price to 280K and now his selling price reflects true market value of supply / demand.

Or, the government steps in, helps people pay the actual 300K. The developer gets 300K per appartment, makes more money.

Now the appartment has a value which does not reflect true supply / demand market value so the appartment has a false value.

KingKenny7

My point of view is this.......

There should not be affordable housing atall, no shared ownership, no nothing.
People can get council housing ie people that dont work, disabled etc etc.

The average person who works should be able to buy a house at 5-6 times their wages like they way it used to be. Not this needing to earn double the average wage. Its a joke, its the governments way of inflating the market, so the people who earn to much have to struggle to live. And the devolopers get more money from Bertie and the boys.

The sooner the better the market falls, all better for us all. And the fat cats will start to lose some of that over excess weight that we all know they have.

BC

Tim Robbins wrote: »

Yes and the government contributing 40 - 80K increases affordability.

Consider the developer in Adamstown has 300 appartments for sale at 300K.
He can't sell them all so he has to drop his price to 280K and now his selling price reflects true market value of supply / demand.

Or, the government steps in, helps people pay the actual 300K. The developer gets 300K per appartment, makes more money.

Now the appartment has a value which does not reflect true supply / demand market value so the appartment has a false value.

Or the builder could just keep selling the apts at 300 to people who can afford them. Affordable housing doesn't exist because builders can't sell houses which seems to be what you are saying here....

Tim Robbins

BC wrote: »

Or the builder could just keep selling the apts at 300 to people who can afford them. Affordable housing doesn't exist because builders can't sell houses which seems to be what you are saying here....

No that is not what I am saying.
I am saying affordable housing helps the developer charge more but most certainly does not exist to for that reason. Because of this, it's a very poor macro - economic policy.
The macro - economic policy should not help the developer make more money in any shape or form, or artificially inflate the market.

Mailman

BC wrote: »

Or the builder could just keep selling the apts at 300 to people who can afford them. Affordable housing doesn't exist because builders can't sell houses which seems to be what you are saying here....

Pretty much everything that is being sold as affordable housing in Dublin 15 is stuff the developers couldn't shift on the open market or on which strokes were done.
There were some purpose built developments which were released to affordable housing applicants about 5 years ago but since then it has been mostly private housing stock that developers couldn't shift on the open market. I would have recommended the affordable housing scheme to people back then, but not now.... It's just a racket.

Don't expect a three bed house through the scheme - if it is any good it'll go to someone in the know and if you do get offered one then inspect carefully because it is probably beside a warzone.

ionapaul

There will probably be a huge amount of social AND affordable housing coming onto the market over the next year, given the 100s of houses and apartments that are built / being built that cannot be sold on the open market - no demand at the prices asked. It will really draw out the house price crash I think, and be terrible for Ireland in the long run. The taxpayer will be bailing out the property developers, what a surprise...sure the donations that are handed over at the Galway Races are no-strings and solely given as selfless offerings to faciliate our glorious democratic system.

SimpleSam06

ionapaul wrote: »

The taxpayer will be bailing out the property developers, what a surprise...sure the donations that are handed over at the Galway Races are no-strings and solely given as selfless offerings to faciliate our glorious democratic system.

Oh its a real mess alright. I remember reading in the papers earlier this year how Galway Co Council ran out of money for buying houses at market price from specuvestors, leaving, and I quote you, "many unfortunate people struggling under double and triple mortgages". What the hell business did they have getting a loan from the bank if they were already struggling after only a few years? The council had to go to central government for assistance, and they got it too.

And the icing on the cake, income tax will be going up and the council is installing water meters outside houses in order to charge for water use. This despite the fact that they had millions sitting in the account for years to fix the water in Galway, and that a major employer was recently lost in the area. I guess money they can use for any purpose is more valuable to them.

When are people going to wake up?

Victor

SimpleSam06 wrote: »

income tax will be going up

Any evidence of this?

SimpleSam06 wrote: »

the council is installing water meters outside houses in order to charge for water use.

Those meters are essentially there as a water loss prevention measure. They might in the distant future be used for charging, but to date there is no suggestion of charging households for water.

SimpleSam06

Victor wrote: »

Any evidence of this?

It pretty much goes hand in hand with the property bubble situation. During the boom times, there were massive tax bonanzas from property changing hands. This money was used to greatly increase the size and the pay of the public service sector. Now all that money is gone.

Where is that money going to come from now? Remember, you can't just fire public servants. Who will pay for the idiocy of the leaders of this country?

We will, of course. We already are, with public money going to buy overpriced properties.

Victor wrote: »

Those meters are essentially there as a water loss prevention measure. They might in the distant future be used for charging, but to date there is no suggestion of charging households for water.

Ya rly. Its not like they are sticking a post in the gardens, they are lifting a section of cement in front of each house, installing something, and covering it over. Anyone going to that much effort is doing it for a reason, and a pretty immediate one.

Ste.phen

I'd be interested in purchasing one of your cool new water meters that doesn't require being placed on the water main

jdivision

Tim Robbins wrote: »

1. If you run your own business or are self employed like a taxi driver you can pretend you earn way less than you do, go on as many holidays as you like and get an affordable house. I have heard of several people who have done this.

2. Also, I have heard of people who have quit their jobs, gone travelling with all their savings, come back take a cr*p jon, save for a 3 months and get affordable housing.
.

1. Your accounts must still have been cleared by the Revenue, they mightn't have audited them but you still have to submit your end of year tax return
2. You have to be working for longer than three months in order to qualify for the scheme have a history of saving so that's nonsense

jdivision

Tim Robbins wrote: »

Yes and the government contributing 40 - 80K increases affordability.

.

The government is getting the affordable units in Adamstown at cost price and it then sells them on at cost price plus administration expenses to those eligible for affordable housing. It's not contributing 40k-80k at all.

patrickolee

jdivision wrote: »

1. Your accounts must still have been cleared by the Revenue, they mightn't have audited them but you still have to submit your end of year tax return
2. You have to be working for longer than three months in order to qualify for the scheme have a history of saving so that's nonsense

Hmmm, I know someone who is doing it... i.e. has his own company which is purposely paying him a small enough amount to qualify for affordable housing. Will let you know if he does or does not succeed. I suspect he will.

SkepticOne

jdivision wrote: »

The government is getting the affordable units in Adamstown at cost price and it then sells them on at cost price plus administration expenses to those eligible for affordable housing. It's not contributing 40k-80k at all.

How are those costs calculated? Why is an "affordable" house the same price now as market priced houses were a few years ago when the scheme was also in place?

I suspect that overvalued land is being included in these costs that are being passed on to the councils.

Victor

SkepticOne wrote: »

How are those costs calculated? Why is an "affordable" house the same price now as market priced houses were a few years ago when the scheme was also in place? I suspect that overvalued land is being included in these costs that are being passed on to the councils.

There is the issue of land, but that should be separate. However, construction inflation has often been 10% per year over the last 15 years.

SkepticOne

Victor wrote: »

There is the issue of land, but that should be separate. However, construction inflation has often been 10% per year over the last 15 years.

So how is land taken into account? How is it separate?

I can understand construction costs being 10% or more during the boom with shortages of labour and materials forcing up prices but I wonder how much of these boom time costs are still being passed on now that the boom is over.

With the amount of overbuilding over the last few years and the number of empty properties around, I would ask also why councils are bothering to cover the builders costs at all. They builders have overbuilt and cant sell properties. Why should they be bailed out by public funds?

I think I mentioned it before but what I can't understand is the silence of small investors who bought in the last couple of years and whose investment is being undermined by government policy.

Mailman

jdivision wrote: »

1. Your accounts must still have been cleared by the Revenue, they mightn't have audited them but you still have to submit your end of year tax return
2. You have to be working for longer than three months in order to qualify for the scheme have a history of saving so that's nonsense

I know of a taxi driver in affordable housing. His income is declared as not only low enough to qualify for affordable housing but also low enough to get mortgage supplement from the council too making his small mortgage payments 100 euro less than they would be otherwise.

SimpleSam06

SkepticOne wrote: »

With the amount of overbuilding over the last few years and the number of empty properties around, I would ask also why councils are bothering to cover the builders costs at all. They builders have overbuilt and cant sell properties. Why should they be bailed out by public funds?

• Housing prices have not yet dropped into the readily affordable range
• Builders and politicians usually go hand in hand, probably because one has lots of money and the other wants lots of money, while having access to vast amounts of public money they can't directly tap into

SkepticOne wrote: »

I think I mentioned it before but what I can't understand is the silence of small investors who bought in the last couple of years and whose investment is being undermined by government policy.

They probably don't realise whats going on yet, you've got negligible coverage of any of this in the media. Also if they were to raise their voices you have got lots of people who will shout them down as greedy specuvestors keeping poor families out of affordable homes for their own personal financial benefit. And of course the government buying their houses probably is the only chance they have left of turning any sort of profit on their "investment".

Tim Robbins

jdivision wrote: »

1. Your accounts must still have been cleared by the Revenue, they mightn't have audited them but you still have to submit your end of year tax return
2. You have to be working for longer than three months in order to qualify for the scheme have a history of saving so that's nonsense

You hardly call saving for 3 months, "saving."
Put it this way, the average person who has to save for a house saves for a lot longer than 3 months. In my own case it was 6 years. I would guess in most cases it's at least a year and a half.
Now, to qualify for affordable housing you only have to have evidence for some form of saving for 3 months. This means, you can travel all you want, lap it up and then keep it handy for just 3 months and it's fine.
An equitable system would require those seeking affordable housing to show evidence of saving for at least the average amount of time a person is saving for a house, I would suggest evidence of saving for at least a year and a half would be start.

Tim Robbins

patrickolee wrote: »

Hmmm, I know someone who is doing it... i.e. has his own company which is purposely paying him a small enough amount to qualify for affordable housing. Will let you know if he does or does not succeed. I suspect he will.

Yes I have a number of anecdotes of the same. The best was a taxi driver asking my Sister for finacial advice (she works in finance). He had got a house on affordable houinsg by pretendign his earnings were less than what they were. He then bought two appartments abroads and was asking her what the next thing he should do would his current lump of cash.

It's a pathetic system really.

SuzyS1972

There'll always be someone out there to exploit whatever systems are on operation. We could go on about the single mum on my parents road with 6 kids in a paid for by the social 4 bed lovely house who has her fella living with her - he's a tradesman - dripping in cash and they both have 07 cars and load of holidays ......

You have to have saved for 3 months to ** apply ** for the housing scheme
In reality most people seem to have to wait a year to a year and a half to get a house / apartment - all the while maintaining the savings.

It's not as easy as you make out.
My cousin on a decent wage recently bought an aparment and had to put down a 25K deposit to secure it under the scheme - hardly getting it for nothing and not exactly easy to save while you are paying rent and supporting 2 kids who's dad has died.

Affordable housing is not the same as social housing and is not for people who are falling into the poverty trap.

Put it this way - say for example I earn €35 K - a reasonably decent average wage - a quick tally there with AIB / EBS using those figures and I have been offered €185K max - therefore in order to afford a house of my own under those terms in Dublin, Louth / Meath I will have to save another at least €100K to buy one of the cheapest properties at €280-€290K

Not everyone wants to live in a social housing scheme that is 100% social housing with all it's anti social and crime problems - earning that salary a person wouldn't qualify anyway.

So the options are stay at home for the next 4 years and save €2K a month or try to get on the property ladder through the scheme ?

seahorse

SuzyS1972 wrote: »

There'll always be someone out there to exploit whatever systems are on operation. We could go on about the single mum on my parents road with 6 kids in a paid for by the social 4 bed lovely house who has her fella living with her - he's a tradesman - dripping in cash and they both have 07 cars and load of holidays ......

SuzyS1972, I know I'm getting off topic here, but why don't you just fukin report them? This kind of piss-taking really annoys me. I'm a single mother of one child and I was on lone parents allowance for five years. I was on it because I needed it while I went to PLC college and then university. I wasn't on lone parents for the laugh, let me assure you; there's no fun involved in raising a child on peanuts. What bothered me then was the attitudes I got from some people; honest to God, some people just treat you like scum. The more I see and hear of that sort of piss-taking though, the more I think it is responsible for creating the prejudiced attitude that persists towards lone parents. I think there's a general assumption that there are no genuine single mothers; just women who masquerade as them while they've all got well off boyfriends on the QT? That wasn't true in my case; and that's something else I can assure you.

There's no excuse for any single mother having six kids by the way; (not unless they're fukin sixtuplets) I had one child and got the IUD fitted and that was the end of that. The government shouldn't pay single mothers for the result of more than one pregnancy in my opinion; anyone can make one mistake, but you're supposed to learn from your mistakes, not be encouraged to keep on making them because everyone else is picking up the tab - and if people are aware of welfare scammers like the one mentioned above they ought to report them.

SuzyS1972

It has been done though not by me - I feel for you
I think that attitude is awful to be honest but yes I think there is a general misconception that single mums are on the take.

John Mason

I bought my house with the shared ownership scheme three years ago, i paid over the market value for the house (as far as i am concerned anyway).

My house has almost doubled in value since i bought it, due to the amount of work i have done.

i work two jobs to pay my mortgage. My main job is a well paid secure government job. i recently went to look for a mortgage to buy the council out and the banks wont give me a high enough mortgage to buy them out.

if it wasnt for the shared ownership scheme, i would never be able to afford to buy a house. my "mortgage" is higher then all my friends who have standard mortgages.

there will always be people who scam the system but not everyone is on the make