Why aren't more houses being built to deal with the shortage?

athtrasna

Mod note

And all of this is TOTALLY off topic. Back on track please.

RayCun

me_right_one wrote: »

Simple answer - snobbery. There are thousands and thousands of empty houses in every village around the country, and more motorways than ever before. Certain people dont want to live in the country because its "a whole hour" away from dublin, and apparently it stinks. Suit yourselves in your rip-off shoeboxes then.

People don't want to spend half their lives in their cars. That's not snobbery, it's common sense.

There have actually been studies conducted on this sort of thing. The size of your house is something you get used to. Live in a big house, live in a small house, after a while you stop noticing, it's just your house. But you never get used to a long commute.

Wanderer78

Bob Z wrote:

Ok this is a daft question but. .why is there a shortage of houses and a lack of houses being built at the same time?

Free market economics!

riclad

THE Free market does not always work, and it needs the the government to
provide an infrastructure and social housing for people who cant afford to spend 100k plus on a house.There s a small no of houses being built
but only a fraction of the amount thats needed .

Wanderer78

riclad wrote: »

THE Free market does not always work, and it needs the the government to
provide an infrastructure and social housing for people who cant afford to spend 100k plus on a house.There s a small no of houses being built
but only a fraction of the amount thats needed .

rarely, if ever works in relation to housing. debunked economic theory

Cuddlesworth

ED E wrote: »

I'm in IT so I'll take HP as an example. HP cleaved themselves in half and left the Biz/CSR/Sales stuff in Dublin and Engineering in Galway. Now HP would be fine employer I'm sure but I and many like me will never apply to them. Just don't want to live in Galway. Thats Galway, try a smaller county town and you'll have empty desks throughout your building.

Same happens in the US, SF is stupid money but it persists because thats what people want. I'm sure Salt Lake City is much cheaper, but its not relevant.

Just as a FYI, in HP Galway is now too expensive and hiring is focused in Poland now. And SF staff are getting canned outside of sales and VIP's with zero new hires, as the wage expectations are too high.

jimmycrackcorm

riclad wrote:

THE Free market does not always work, and it needs the the government to provide an infrastructure and social housing for people who cant afford to spend 100k plus on a house.There s a small no of houses being built but only a fraction of the amount thats needed .

That's true and I've said it before that one of the problems contributing to the lack of supply for private housing to meet demand has been the imposition of a social cost on private buyers through the the imposition of the requirement for builders to provide 20% or even any less percentage, for social housing.

This has been a disgrace in placing this cost squarely only on those who buy in a development.

Lumen

I've no expertise in the economics of housebuilding, but it seems like property developers are shouldering all of the supply-side risk arising from variable future prices and therefore demanding enormous margins to compensate. Spread the risk and reduce the margins.

For instance, there's a massive lag between purchasing land and selling the houses due in part to delays arising from the adversarial nature of our planning system, and in that time gap prices could go anywhere. Wouldn't it make more sense for landowners to be equity partners who get paid when the houses sell?

Chuchote

The councils should be building, not developers - historically, council houses were always built to much higher standards than private.

Yourself isit

Geuze wrote: »

3-beds semi, 110 sqm

Here are the summary costs

Construction costs = 129,674

Other costs:
Financial Contributions and Local Authority Bonds (see notes on costing) €15,500
Part V Contribution to Local Authority €5,000
Showhouse/ Advertising & Marketing / Sales & legal Fees €8,000
Consultant Design Fees (excludes additional supervision) €6,200
Site & Building Finance €7,000

Margin of Risk: Amount to cover profit / sales variables (15%) = 25,706

House costs = 197k

This excludes 13.5% VAT and land costs.

129,000 on construction costs - can that be broken down? How long does it take to build?

And why include the margin of risk at a maximum? It also seems to include profit.

The reason I am sceptical is because many European countries produce much cheaper housing.

Idioteque

^^^^ The costs are broken down in the report he linked to earlier.

What I'd be skeptical about is that the report was requested and produced on behalf of the CIF/IHBA so I'm sure there's some fat in some of the numbers and it's also from 2012. Still though, would be interesting to see an wholly independent report on the actual costs in 2016/2017 and factoring in savings when building more than 1 unit at a time.

Lumen

130k doesn't seem unreasonable for building a house given that a decent single storey extension costs 50k.

RayCun

The problem is not so much a shortage of 3 bed houses with big gardens (although they are in constant demand), it's a shortage of any type of housing in places where people want to live. The rental market for apartments is crazy too.
Houses in places where people don't want to live is not a solution, it's a recipe for more ghost estates.

(yeah, yeah, "beggars can't be choosers", but there is no point in putting people in a house where there are no jobs, putting people without cars in houses where you need a car to get anywhere, putting people with families in places with no facilities for families...)

Yourself isit

<deleted quote snipped>

Or maybe - build more houses where people want to work and live.

Those donegal bricklayers are presumably local to Donegal. That's where they want to live, where their kids are schooled.

It's not going to work for a Google employee from Germany - you can work in Dublin but if you want to live in a decent house be prepared to live in another part of the country with a 6 hour commute.

bleary

Why aren't developers building ?

Tons of reasons but planning decisions being held hostage seem to be one, this is one case where our transport minister Shane Ross opposed the building of approximately 100 additional bed spaces close to shops transport etc, the reasons given seem in the main to be related to the building ruining the views from the church and the park closeby and disturbing the suburban setting

http://mountmerrion.ie/an-bord-pleanala-rejects-union-cafe-appeal/

Then we had michael o flynn trying to build in a strategic development zone (sdz) in cherrywood while the council refused him planning for spurious grounds
http://www.irishtimes.com/business/commercial-property/o-flynn-wins-planning-challenge-on-south-dublin-housing-scheme-1.2751760

Finally we have large sites like O'Devaney gardens ,St Michael's left for the last ten years empty. All of these sites are owned by the council.

Possible solutions ,site tax , simplify planning? Possibly but most cause issues for councils.
A site tax for example would cause so many problems for councils.Councils own a lot of the vacant sites ,would they be exempted from the site tax to howls of developer rage?
Could a council possibly have to fund developers if they held up site development through delays in granting planning.

With public service doing nothing rarely results in more work for people so sometimes it is just the easiest option for staff.

me_right_one

RayCun wrote: »

People don't want to spend half their lives in their cars. That's not snobbery, it's common sense.

Too bad. You'll just have to stay in your overpriced cramped accommodation so.

RayCun wrote: »

The problem is not so much a shortage of 3 bed houses with big gardens (although they are in constant demand), it's a shortage of any type of housing in places where people want to live. The rental market for apartments is crazy too.
Houses in places where people don't want to live is not a solution, it's a recipe for more ghost estates.

(yeah, yeah, "beggars can't be choosers", but there is no point in putting people in a house where there are no jobs, putting people without cars in houses where you need a car to get anywhere, putting people with families in places with no facilities for families...)

Now you're talking sense! The answer is to scrap this dublin centric madness and actually put jobs where the houses are! The entirety of rural Ireland is being strangled due to dublin sapping all the resources.

Just one example, there are job-providing railway lines being closed down all over the country, to fund the nice-to-have-but-completely-unnecessary metro rail link to the airport. Why??? There are already more than enough buses and taxis into the "city" centre to meet this need, dublin is not the size of New-York! And the few extra tourists it might bring do not justify ending the economic viability of entire rural villages and the families they support, or the livlihoods of the dublin taxi men who make a living from airport runs. Its madness.

RayCun

me_right_one wrote: »

Now you're talking sense! The answer is to scrap this dublin centric madness and actually put jobs where the houses are!

You can't decide to put jobs somewhere.

Google is not going to set up in Portlaoise. There is a natural centralisation effect. Companies want to be based where they can hire people with the skills they need. Cities have more skilled people. Cities also have the infrastructure to go with it - easy access to ports and airports, better internet access, etc.

So accommodation should be built to allow access to those jobs - apartments in the city centre and on the best transport axes (LUAS and DART), and houses in satellite towns with good rail connections to the city.

RayCun

me_right_one wrote: »

Just one example, there are job-providing railway lines being closed down all over the country, to fund the nice-to-have-but-completely-unnecessary metro rail link to the airport.

Why is a metro link unnecessary while a local railway line is necessary?

If a metro link will be heavily used, and a local line is barely used, it is better place to put resources.

endagibson

RayCun wrote: »

there is no point in putting people in a house where there are no jobs

I disagree with this point.

KyussBeeshop

There is no single answer to this question, because the problem is a combination of a large variety of different issues.

Long story short though, is that it is not possible for the private market alone, to provide enough houses - this means the only way to adequately supply housing, is for government to step in with a blitz of social housing construction.

Any measure less than that, is just papering over the issue rather than dealing with it properly.

There will never be enough houses being built, if government are not taking up the slack with social housing construction - as has historically been the case.

There was an excellent study released in the last week, looking back over Ireland's history of housing construction - particularly social housing construction - which backs this up very well:
http://www.irisheconomy.ie/index.php/2016/12/24/funding-social-housing-through-bust-boom-and-bust/

me_right_one

RayCun wrote: »

You can't decide to put jobs somewhere.

Google is not going to set up in Portlaoise. There is a natural centralisation effect. Companies want to be based where they can hire people with the skills they need. Cities have more skilled people. Cities also have the infrastructure to go with it - easy access to ports and airports, better internet access, etc.

So accommodation should be built to allow access to those jobs - apartments in the city centre and on the best transport axes (LUAS and DART), and houses in satellite towns with good rail connections to the city.

For a start, this crisis does not revolve around IT technicians.

Secondly, IT companies do not need the same big infrastructure as, say a shipping company. By their very nature, IT companies are in the business of controlling internet traffic remotely. Yes, they need amenities (restaurants, gyms, schools) for their workers, but Portlaosie can provide as good, if not better, amenities than dublin. Regarding internet access, do you not think it makes more sense to share some resources and get the internet up to scratch for the other 3 million of us, rather than spending 100 times as much on building more houses while others are empty?

Thirdly, the "skilled people" come from all over Ireland, not just dublin. In fact, most Guards I know who work in dublin are from the country. Same with lawyers, dentists, tradesmen, all necessary skills which are not location dependent. IT is not the only job in the world! It stands to reason seeing as the larger portion of the population is outside of dublin (3 million v 1 million).

Fourthly, IT companies can be incentivised to locate anywhere! It used to be done quite frequently, and successfully! Intel and HP are in Kildare, Ebay, Paypal, Xerox in Louth, Pfizer in Cork etc. This is a miniscule country, you can get to dublin from any part of it in an hour with the motorway system we have (more tar per acre than anywhere else in Europe).

You seem to to be fixated on FDI jobs, and the perception that they HAVE to be a stonesthrow from Templebar. That attitude is part of the problem feeding this crisis.

benjamin d

me_right_one wrote: »

Just one example, there are job-providing railway lines being closed down all over the country, to fund the nice-to-have-but-completely-unnecessary metro rail link to the airport. Why??? There are already more than enough buses and taxis into the "city" centre to meet this need, dublin is not the size of New-York! And the few extra tourists it might bring do not justify ending the economic viability of entire rural villages and the families they support, or the livlihoods of the dublin taxi men who make a living from airport runs. Its madness.

You're talking out of your hoop here, in fairness.
The rail link to the airport would be flat out and everyone knows it. Holding it back because of local politicians squealing about loss making, empty rural train services is ridiculous.

Stockholm is a city comparable in size to Dublin yet it has a successful underground system with over a hundred stations. That's where Dublin should be.

benjamin d

me_right_one wrote: »

Yes, they need amenities (restaurants, gyms, schools) for their workers, but Portlaosie can provide as good, if not better, amenities than Dublin.

The choices for highly skilled international workers are not between Portlaoise, Cork or Thurles etc. The choice is Dublin, London, Madrid, Paris and the likes - Dublin probably less so. No matter how many times you say it to yourself, rural Ireland is not attractive to modern high tech workers.

athtrasna

Mod note - Final Warning

This thread is going wildly off topic. It's on borrowed time. Please keep posts relevant to the OP.

The Reservoir Dubs Anchorman

Eric Cartman wrote: »

The issue with this "Central bank rules ruining things" argument is that 50% of purchases are by cash buyers at the moment.

Whatever we do, the central bank rules are actually a good thing, we shouldn't be looking for loopholes or tricks or extensions or exemptions to those. We should be figuring how to build houses profitably within those rules. The central bank rules are the only things keeping average income earners in with any sort of hope of getting a property and not crippling themselves into the ground.

the average industrial wage in Ireland is currently just over €35,000 , if we take that with the 3.5x + 1 (partner) rule for the CB and assume the partner is also on the average , we get 3.5x35,000 + 35000 = 157500 of a mortgage, which can be 90% of the property price, so we get €175,000.

So for a household of 2 people on the average industrial we have a guide of
17,500 deposit
157500 mortgage
175000 total property price.

so lets work on how do we build (profitably) a 3 bedroom semi (most popular house choice) for 175,000.

My best estimation is that taking out VAT and stamp duty for FTB's + a cut in regulations would certainly help.

175,000 to build a 3 bed semi is completely reasonable and doable with a nice profit built in for the builder. IF you were paying €25/30,000 for a site and not the ridiculous 90/100,000 being paid in Dublin.

RayCun

me_right_one wrote: »

For a start, this crisis does not revolve around IT technicians.

No, but you say "put the jobs in the country" and I say "jobs will go where there is already a concentration of people"

It isn't just IT workers.
Lawyers - the major courts are based in Dublin, and most of the criminal courts. The Law Society and the Kings Inns are based in Dublin. Why are they in Dublin? Because everything else is. If you moved the Central Criminal Court to Portlaoise it would be a farce, with everyone commuting from Dublin every day.
Doctors, nurses, dentists - they study in Dublin, and the major hospitals are in Dublin. Specialisation leads to better patient outcomes, it makes sense to put your specialists where the people are and where the best transport links are.
Skilled manufacturing workers - if a company is setting up and needs engineers, where do you go in Ireland to find the highest concentration of engineers? Hint - not Portlaoise.

me_right_one wrote: »

Secondly, IT companies do not need the same big infrastructure as, say a shipping company. By their very nature, IT companies are in the business of controlling internet traffic remotely.

Yeah, and for that they need the best internet access available.
And they want to hire people who would rather live in a city, or stay in the city they already live in, than up sticks to Ennis because it has an ISDN line.

me_right_one wrote: »

Thirdly, the "skilled people" come from all over Ireland, not just dublin. ...It stands to reason seeing as the larger portion of the population is outside of dublin (3 million v 1 million).

Concentration.
Having your potential employees already in one place rather than scattered over 20 counties is very important.
And the population of Dublin itself may only be 1 million, but there are a lot more in satellite towns.

me_right_one wrote: »

Fourthly, IT companies can be incentivised to locate anywhere! It used to be done quite frequently, and successfully! Intel and HP are in Kildare, Ebay, Paypal, Xerox in Louth, Pfizer in Cork etc. This is a miniscule country, you can get to dublin from any part of it in an hour with the motorway system we have (more tar per acre than anywhere else in Europe).

Even at 4 in the morning. 4/5 hours of the day it can take an hour to drive from one side of the city to the other, let alone go somewhere else.
And eBay is in Dublin, Paypal is in Dublin as well as Dundalk, Xerox is in Dublin, Intel and HP are well inside the Dublin commuter belt.


This is not a new phenomenon, and it is not limited to FDI jobs.
Go to any small town in Ireland, and what do you see? Most of the shops, pubs, churches, schools, everything else clustered into one small space. A concentration of houses in the same area. Because it makes sense for the shops to be near each other, so people going to one will go to the others too. A lot of people living where they can walk to all of these places.

Shelflife

It doesnt have to be a google or a HP or an Intel that need a large amount of Infrastructure to support them, Im talking about smaller set ups 5-20 jobs that could be encouraged to not set up in Dublin .

There may well be lots of people that wont want to live in rural areas but there are plenty that would gladly do so given a small bit of encouragement.

athtrasna

Thread closed pending mod review