Inside Dublin’s Housing Crisis

Old diesel

So here's what happens with the lease Passat....

1) Michelle has a job which requires her to drive on business around the country.

2) her company decide their policy is to lease a car. Michelle gets one of these lease cars as her company car.

3) a budget per month is set - Michelle is given some criteria on make etc. Within the budget Michelle can add extras/spec colour.

4) the leasing company orders the car - and this results in VW making a car based purely on someone who will never own the car doing a deal with leasing company.

5) the car arrives and is part of the additional supply of Passats the market.

A proper professional leasing company orders the car from a big company who make the car.

Now if we were to run lease cars like we do housing.

1) Michelle would be totally restricted to whatever cars are available to lease from random people on daft.ie. Her company VW could be a 1991 Jetta 1.6 diesel.

2) Michelle could end up changing cars after a year because a 3 year lease is meaningless and random done dealer wants to sell the random Jetta.

3) when Michelle looks online she sees simultaneously that she can have a new Passat euro 6 to BUY at less a month then the random Jetta but the random done deal leasing guys are complaining that it costs too much to build a Passat euro 6. The Euro 6 Passat comes with too much emissions stuff and airbags "you just don't need".

The Student

Old diesel wrote: »

The houses won't disappear though - so the question to be addressed is what is the best policy to address how these homes will get used.

How many of them should be owner occupied????.

How many should ideally come back to rental market - and who should be buying them for that purpose.

Part of the challenge with the current rental supply is that it's in the hands of random people whose decisions are random in the context of a bigger picture.

You wouldnt be able to run a company with 170 k people if all 170 k wanted to do their own thing and make totally random decisions.

But we want to rebuild housing like that.

It's not very workable.

The system will likely need to evolve from the traditional model.

People talk of the backstop in Brexit terms.

Housing almost feels like it needs backstop solutions with a supply chain cranked up to identify the housing needs of the country and to deliver the housing with some always taken up by a backstop housing company.

Such a company which could be state backed would take on supply that comes into the housing market both new and 2nd hand so people have homes to move into.

The reality is that a tenant can't create supply in housing. But the exact same Tenant can have a company Passat for their work ordered up to a spec from the VW factory even on a lease car they will never actually own.

Housing needs some of that thinking imo.

While properties will not disappear bed spaces will.

It never ceases to amaze me that this simple concept is completely missed by so many.

If the Govt/State wants to control housing then build its own. If people want a social contract for housing then work away get the State to build etc. Why is it the private sectors responsibility to provide the social contract people want from the State.

Unless we grasp the nettle that is anti social behavior/non payment of rent and its associated consequences (or lack thereof) then this issue is going to get worse.

A State backed housing company will never work unless the above issues are tackled.

A tenant can supply housing in the property market as with any business model is if there is demand then supply will follow. However due to the constant interference by the Govt and its anti (small) landlord stance supply will only occur from institutional investors on a build to rent model.

The "home for life" mentality of social housing is changing, no longer will people be granted a house for life with the build to rent model. Tenants will be charged market rent for the property and if they can't afford it they will have to move.

I actually feel sorry for people looking for accommodation either to rent or to purchase. Yet all I see in the media is the portrait of the small landlord as a "greedy landlord" (not realizing these landlords are just like every other working person trying to just survive).

If people are so annoyed with the housing situation then direct their anger/frustration at the Govt. Get them to increase supply while at the same time being far to the small landlord. Otherwise if this does not happen supply will further constrict and tenants will be left at the mercy of the institutional investors.

"Be careful what you wish for, sometimes its not what you expected it to be"

LotharIngum

Old diesel wrote: »

So here's what happens with the lease Passat....

1) Michelle has a job which requires her to drive on business around the country.

2) her company decide their policy is to lease a car. Michelle gets one of these lease cars as her company car.

3) a budget per month is set - Michelle is given some criteria on make etc. Within the budget Michelle can add extras/spec colour.

4) the leasing company orders the car - and this results in VW making a car based purely on someone who will never own the car doing a deal with leasing company.

5) the car arrives and is part of the additional supply of Passats the market.

A proper professional leasing company orders the car from a big company who make the car.

Now if we were to run lease cars like we do housing.

1) Michelle would be totally restricted to whatever cars are available to lease from random people on daft.ie. Her company VW could be a 1991 Jetta 1.6 diesel.

2) Michelle could end up changing cars after a year because a 3 year lease is meaningless and random done dealer wants to sell the random Jetta.

3) when Michelle looks online she sees simultaneously that she can have a new Passat euro 6 to BUY at less a month then the random Jetta but the random done deal leasing guys are complaining that it costs too much to build a Passat euro 6. The Euro 6 Passat comes with too much emissions stuff and airbags "you just don't need".

Nobody going to be leasing the brand spanking new passat to Michelle when they are only allowed to charge the same amount for it as for the Jetta. :eek:

An_Toirpin

Old diesel wrote: »

The houses won't disappear though - so the question to be addressed is what is the best policy to address how these homes will get used.

How many of them should be owner occupied????.

How many should ideally come back to rental market - and who should be buying them for that purpose.

Part of the challenge with the current rental supply is that it's in the hands of random people whose decisions are random in the context of a bigger picture.

You wouldnt be able to run a company with 170 k people if all 170 k wanted to do their own thing and make totally random decisions.

But we want to rebuild housing like that.

It's not very workable.

The system will likely need to evolve from the traditional model.

People talk of the backstop in Brexit terms.

Housing almost feels like it needs backstop solutions with a supply chain cranked up to identify the housing needs of the country and to deliver the housing with some always taken up by a backstop housing company.

Such a company which could be state backed would take on supply that comes into the housing market both new and 2nd hand so people have homes to move into.

The reality is that a tenant can't create supply in housing. But the exact same Tenant can have a company Passat for their work ordered up to a spec from the VW factory even on a lease car they will never actually own.

Housing needs some of that thinking imo.

The more landlords the better. It allows competition and innovation. 170 k people trying to supply a demand is a strength.

Old diesel

Old diesel wrote: »

...............

Now if we were to run lease cars like we do housing................

John is on the scratch ............ needs to drive to visit his ma and ferry his 3 sprogs to school. John gets a Passat (new) for €20/week, the government pay the balance in the form of a car assistance scheme for folk who don't work.
John doesn't bother paying the €20/week and 18 months later the company get back a manky dirty Passat with bald tyres and a DPF warning light that needs thousands spent on it.

Wheeliebin30

The media is just as much to blame for peddling this homeless nonsense with tales everyday of poor Jacinta sleeping in her car blah blah.

Politicians are afraid to say anything in case the mob and Sinn Fein call for their resignation.

Instead we keep handing out free houses to anyone who rocks up homeless.

Yeah cause that won’t give all the wasters the idea to go homeless.

What a cluster****.

Old diesel

An_Toirpin wrote: »

The more landlords the better. It allows competition and innovation. 170 k people trying to supply a demand is a strength.

Charging 1600 Euro a month for some random property of random standard isn't innovation.

Wanting to charge 1600 a month because the guy next door gets that isn't what most associate with competition.

Innovation is when you actually try to do something new. For example a Passive house mIght stereotypically be a 400 k house in Dublin. But a guy in Wexford actually did 3 bed Passive house for 190 k.

All because he wanted to prove that Passive house could be done at a price normal house buyers on normal budgets could afford.

Competition would be if another builder looks at that 190 k Passive house and is inspired to improve his product.

The reason that Passive house would be 400 k in Dublin is because other things add 210 k to the price.

Land at silly money for example in Dublin vs Wexford.

True competition and innovation directly tackles the 210 k of unaccountable cost between the Wexford cost and the Dublin cost.

beauf

Old diesel wrote: »

....

Land at silly money for example in Dublin vs Wexford.

True competition and innovation directly tackles the 210 k of unaccountable cost between the Wexford cost and the Dublin cost.

I'm not sure why you keep saying its unaccountable?

Its due to the more desirable location. Which I know is obvious. But seem to be implying its some sort of intangible, when it really isn't. There is a cost to living in an undesirable location, usually transport costs, and commuting time.

LotharIngum

Old Diesel, between not understanding supply and demand in different locations and selling Passats for the price of Jettas, I think it would be unwise of you to apply for the job of solving the housing crisis

Old diesel

beauf wrote: »

I'm not sure why you keep saying its unaccountable?

Its due to the more desirable location. Which I know is obvious. But seem to be implying its some sort of intangible, when it really isn't. There is a cost to living in an undesirable location, usually transport costs, and commuting time.

The problem with the 210 k is that it's part of the 400 k is too much money for a house cost.

Because the 210 k can't seemingly be touched - there is a call for housing regulations to be relaxed.

It's unacceptable to look at reducing the standard of housing without the 210 k been looked at.

The reason Hugh Brennan is able to deliver a house for 180 k A2 BER is because in his deal with DCC the 210 k is largely gone.

We can't demand that we cut building regs without looking at that extra 150 to 200 k cost that sits there that has nothing to do with eco rules like nZEB.

Cost to build the A rated house can be as low as 200 k.

It is reasonable I think to challenge why the full blame of a 350 k price goes to eco rules when 150 k sits there unquestioned.

Apart from anything else it means that even if you could get the cost of a prefab down to 50 k - that's still a 200 k prefab if sold under the current Dublin model to the buyer.

150 k unaccountable land cost, developer levy, developer margin and what have you.

It has implications way beyond whether I am an idiot or not for saying it.

The type of house we live in standards wise could rest on that 150 k.

Are we going for excellent quality homes with nZEB credentials, MVHR, passive or close to it houses.

Or are we going for so called cheap houses that are more expensive to heat, built with cost as the main priority because theres a 150 k cost to every house that has nothing to do with standards but cannot be questioned.

Idbatterim

Wheeliebin30 wrote: »

The media is just as much to blame for peddling this homeless nonsense with tales everyday of poor Jacinta sleeping in her car blah blah.

Politicians are afraid to say anything in case the mob and Sinn Fein call for their resignation.

Instead we keep handing out free houses to anyone who rocks up homeless.

Yeah cause that won’t give all the wasters the idea to go homeless.

What a cluster****.

I totally agree, but its the government that have created and maintain this farce. I called this ages ago, they will create a situation so bad, that doing what the "wasters" do, is the only logical choice. They are putting hard working people in impossible situations...

All these people with the housing provided by us taxpayers, they should be out working, their welfare payment can be the roof over their head, they can go out and work like the rest of us to pay for everything else! The country is a total banana republic! But like I said, the government have created this outrageous housing situation, they have created the welfare wonderland and entitlement society....

beauf

Old diesel wrote: »

The problem with the 210 k is that it's part of the 400 k is too much money for a house cost....

If people can't afford them why are there no expensive houses lying empty Dublin in large numbers.

Why are there cheaper houses lying empty outside of Dublin.

Wheeliebin30

Idbatterim wrote: »

I totally agree, but its the government that have created and maintain this farce. I called this ages ago, they will create a situation so bad, that doing what the "wasters" do, is the only logical choice. They are putting hard working people in impossible situations...

All these people with the housing provided by us taxpayers, they should be out working, their welfare payment can be the roof over their head, they can go out and work like the rest of us to pay for everything else! The country is a total banana republic! But like I said, the government have created this outrageous housing situation, they have created the welfare wonderland and entitlement society....

Which government?

We’re told FG attempt building social houses and don’t care about poor people.

So was if FFs fault when all the social houses were built?

The Student

Old diesel wrote: »

Charging 1600 Euro a month for some random property of random standard isn't innovation.

Wanting to charge 1600 a month because the guy next door gets that isn't what most associate with competition.

Innovation is when you actually try to do something new. For example a Passive house mIght stereotypically be a 400 k house in Dublin. But a guy in Wexford actually did 3 bed Passive house for 190 k.

All because he wanted to prove that Passive house could be done at a price normal house buyers on normal budgets could afford.

Competition would be if another builder looks at that 190 k Passive house and is inspired to improve his product.

The reason that Passive house would be 400 k in Dublin is because other things add 210 k to the price.

Land at silly money for example in Dublin vs Wexford.

True competition and innovation directly tackles the 210 k of unaccountable cost between the Wexford cost and the Dublin cost.

You do understand the idea of going into business. If property could be built at a lower cost than currently exists then surely property would be built to make a profit.

Property outside the cities is cheaper because land is cheaper. All costs associated with a property must be included in the price and this includes land, development levies etc.

Eric Cartman

The Student wrote: »

You do understand the idea of going into business. If property could be built at a lower cost than currently exists then surely property would be built to make a profit.

Property outside the cities is cheaper because land is cheaper. All costs associated with a property must be included in the price and this includes land, development levies etc.

I think the building materials industry, land owners and property developers are too hell bent on bringing back the really good times so arent willing to drop prices. Theyre all holding out for the government to turn around and say 'ok, screw the central bank limit' and they can go mad again.

The apetite for building actual affordable housing isnt there from anyone i volved in the building of houses.

LotharIngum

Eric Cartman wrote: »

I think the building materials industry, land owners and property developers are too hell bent on bringing back the really good times so arent willing to drop prices. Theyre all holding out for the government to turn around and say 'ok, screw the central bank limit' and they can go mad again.

The apetite for building actual affordable housing isnt there from anyone i volved in the building of houses.

I bet that relaxation if the lending rules is coming soon too.

LotharIngum

LotharIngum wrote: »

I bet that relaxation if the lending rules is coming soon too.

I really don't see that happening.

LotharIngum

Augeo wrote: »

I really don't see that happening.

It will happen. Its for sure.
It will start by splitting the lending rules into different locations. Different price ranges. Different rules.
First Dublin and the rest of the country will separate. Then Dublin lending rules will relax. Then County by county. Then split into price levels or amounts needed to buy.

Then they will be relaxed at different rates for all the levels.
No point having a ceiling if people cant get above the ceiling anymore.
At the moment its squashing different value properties into closer price ranges. That's not sustainable.

markpb

LotharIngum wrote: »

It will happen. Its for sure.

Don't forget that the lending rules were created by the Central Bank to protect the banks. They're not particularly bothered about the effect (if any) on house prices, just on making sure that the banks aren't over-exposed when the next recession happens. The Central Bank also report more to the ECB than to the Irish government so it would take a significant argument from someone in order for them to expose the banks to risk just to make it easier for people to pay more for houses.

LotharIngum wrote: »

No point having a ceiling if people cant get above the ceiling anymore. At the moment its squashing different value properties into closer price ranges. That's not sustainable.

You're ignoring the fact that loosing the lending rules is a bad thing. It will only push up house prices even further. I'm not sure what your last sentence means, maybe you can explain it?

LotharIngum

markpb wrote: »

Don't forget that the lending rules were created by the Central Bank to protect the banks. They're not particularly bothered about the effect (if any) on house prices, just on making sure that the banks aren't over-exposed when the next recession happens. The Central Bank also report more to the ECB than to the Irish government so it would take a significant argument from someone in order for them to expose the banks to risk just to make it easier for people to pay more for houses.



You're ignoring the fact that loosing the lending rules is a bad thing. It will only push up house prices even further. I'm not sure what your last sentence means, maybe you can explain it?

Well they will be bothered by it.
Unless they are allowed to kill a market stone dead. But I guess judging by what the govt have done to the rental market already with rent controls and RPZs they probably are willing to let the housing market die a death as long as they can blame it on the central bank when blame time comes.

markpb

LotharIngum wrote: »

Well they will be bothered by it. Unless they are allowed to kill a market stone dead.

If they loosen the lending restrictions, people can borrow more so the price of houses will rise. People will be no better off, they'll need to save more of deposit, have less equity, higher repayments and be at higher risk of losing their homes in a recession. Why do you think any of those things are good things?

The solution to high house prices is not to let people borrow more money, it's to reduce the cost of building and/or build more. Anything else is just disillusion.

The Student

LotharIngum wrote: »

It will happen. Its for sure.
It will start by splitting the lending rules into different locations. Different price ranges. Different rules.
First Dublin and the rest of the country will separate. Then Dublin lending rules will relax. Then County by county. Then split into price levels or amounts needed to buy.

Then they will be relaxed at different rates for all the levels.
No point having a ceiling if people cant get above the ceiling anymore.
At the moment its squashing different value properties into closer price ranges. That's not sustainable.

There are regional variations already. Wages are by and large higher in the cities then outside the cities so 3.5 times a city wage is more than 3.5 times an out of city wage.

LotharIngum

The Student wrote: »

There are regional variations already. Wages are by and large higher in the cities then outside the cities so 3.5 times a city wage is more than 3.5 times an out of city wage.

Fair point, but I think you know already that its not as simple as that.

ToBeFrank123

Time to end taxing of landlords. It turns a lot of landlords off, especially those trying to make a small profit.
Many just end up selling.

ToBeFrank123

beauf wrote: »

Better to create a job in Roscommon...

It would be great to see for a couple of years at least a bias against the cities when it comes to new jobs.

Governments are chasing their tail. First they ensure most new jobs are in the cities, then struggle to build the transport and housing infrastructure. It takes years for them to catch up and creates general misery for everyone.

How about build the transport infrastructure first such as high speed broadband rurally and then encourage movement of industry out from cities.

There's no reason why Facebook, Google, etc should be smack bang in Dublin city centre, other than as a "Cool" location to work in for their Execs. They should be based in Dublin but outside the M50.

AlmightyCushion

ToBeFrank123 wrote: »

It would be great to see for a couple of years at least a bias against the cities when it comes to new jobs.

Governments are chasing their tail. First they ensure most new jobs are in the cities, then struggle to build the transport and housing infrastructure. It takes years for them to catch up and creates general misery for everyone.

How about build the transport infrastructure first such as high speed broadband rurally and then encourage movement of industry out from cities.

There's no reason why Facebook, Google, etc should be smack bang in Dublin city centre, other than as a "Cool" location to work in for their Execs. They should be based in Dublin but outside the M50.

The government doesn't decide where jobs go, the companies opening or expanding do. The government can and does use incentives to get them to set up else where but companies can still set up where they want (mostly). There are plenty of small and large towns with high speed broadband. As for moving large employers to outside the M50 but still within Dublin, we can't force them to do that but even if we could it would be a stupid idea as it would just encourage more urban sprawl and would massively increase traffic congestion.

ToBeFrank123

AlmightyCushion wrote: »

The government doesn't decide where jobs go, the companies opening or expanding do. The government can and does use incentives to get them to set up else where but companies can still set up where they want (mostly). There are plenty of small and large towns with high speed broadband. As for moving large employers to outside the M50 but still within Dublin, we can't force them to do that but even if we could it would be a stupid idea as it would just encourage more urban sprawl and would massively increase traffic congestion.

Nope, it would encourage people not to commute from the suburbs to the city centre which is what is happening. You could then free up some of the city centre for more housing/apartments for those who work in the city centre. A win-win for everyone. This would relieve demand somewhat in the city and allow more supply. There's very little new housing supply coming on stream in Dublin city centre - its either social housing or else new office blocks.

Re companies deciding where they go, that's part of the problem. The governments always follow the command of the multinationals and to hell with the people trying to find accommodation. Its a major cause in recent years of the housing crisis. Thousands of new workers in Facebook, Google, etc competing for limited housing stock in Dublin.

markpb

ToBeFrank123 wrote: »

There's no reason why Facebook, Google, etc should be smack bang in Dublin city centre, other than as a "Cool" location to work in for their Execs. They should be based in Dublin but outside the M50.

What's wrong with them being in the city centre?

Eric Cartman

LotharIngum wrote: »

I bet that relaxation if the lending rules is coming soon too.

It wont and shouldnt, people have already been pulling tricks with exemptions and foreign lenders and borrowing excess from parents and family etc.. its literally the last thing holding any sanity in the market. I wouldnt be surprised if banks tried and for the last few years theyve been stocking up on A rated lending mortgages, if they just let in 15-20% sub prime it shouldnt hurt the ratios for them to ruin bonds etc.. but it really shouldnt happen.

We realistically need to find a way to reduce the value of resodentially zoned land and the profit materials providers and builders are expecting to make, not easy feats

AlmightyCushion

ToBeFrank123 wrote: »

Nope, it would encourage people not to commute from the suburbs to the city centre which is what is happening. You could then free up some of the city centre for more housing/apartments for those who work in the city centre. A win-win for everyone.

Instead it would encourage people to drive from all over the place to these large companies out in the back arse of nowhere. We need to densify inside the M50 and provide good proper public transport. This will allow people to travel within and around the city centre quickly and easily instead of driving everywhere and clogging up the roads and spending hours stuck in traffic.

ToBeFrank123 wrote: »

Re companies deciding where they go, that's part of the problem. the government always do the command of the multinationals and to hell with the people trying to find accommodation. Its a major cause in recent years of the housing crisis. Tens of thousands of new workers in Facebook, Google, etc competing for limited housing stock in Dublin.

No, it's not. If I was to set up a business tomorrow employing only a handful of people, I can do it in Dublin or Donegal. It's up to me. The government can incentivise me to set up in Donegal but if I want to set up in Dublin I can do that if I wish. Multi-nationals can do the exact same too.