September 2016        

The privatisation of shelter

Eugene McCartan

There is hardly a city or town in the country that is not suffering from homelessness, rapid increases in rents, and growing numbers of those looking for public housing. Hardly a month passes when the growth in the numbers of homeless does not show an increase.
     The Dublin Region Homeless Executive has published figures that show there were 993 families, including 2,020 children, in emergency accommodation in the Dublin region. In July last year the number of homeless families in the region was 556.
     Dublin City Council and the DRHE confirmed that the cost of hotel accommodation for homeless families for the first six months of this year was more than €16 million—the highest half-yearly figure ever; earlier this year the minister for housing, Simon Coveney, said the annual expenditure on hotel accommodation was €46 million. Many of those given access to hotel rooms have no facilities for cooking or cleaning, just a bed to share.
     The chief executive of NAMA told the Housing and Homelessness Committee of the Oireachtas that since the beginning of 2014 the agency sold land that could provide up to 20,000 housing units; a twentieth of that has so far been supplied. While there are a number of outstanding issues concerning planning and the density of housing, he believes that owners and developers are waiting for a better return. He also claimed that developers were hoarding land, waiting for a better return—i.e. bigger profits.
     In addition to the growth in the numbers of homeless people, one of the factors contributing to the crisis is the growth in rents. While not confined to the Dublin area, it is certainly most pronounced there. The average rent nationally has risen by over a third since bottoming out in 2011 and has now surpassed its 2008 (“Celtic Tiger”) peak. Monthly rents are now almost 10 per cent higher than they were a year ago.
     At the same time there are 20 per cent fewer homes available to rent. To rent a single room in Dublin costs on average €588 per month—an increase of 16 per cent; in Cork a similar room to rent costs on average €344—an increase of 11 per cent. The national average monthly rent is now at its highest ever, at €1,037.
     The “Placefinders Service” established by the Dublin Region Homeless Executive to secure accommodation from private landlords has delivered little, despite the hype. It has also emerged that homeless people who avail of the housing assistance payment lose their priority position for social housing.
     *The crisis of getting shelter is part of the general crisis of capitalism.*
     As a result of the global crisis of over-production and the over-accumulation of capital, with few avenues for investment other than in bubbles, one of the areas for intense speculation throughout the capitalist world is property. We are now seeing a new bubble emerging, which may well be greater than the one that burst in 2008.
     According to a new study by the Central Bank of Ireland on property sales between 2000 and 2014, there has been a surge in the number of cash buyers since the boom.
     The volume of properties changing hands is now even greater than during the height of the so-called Celtic Tiger period. The Central Bank’s figures show that at the height of the boom in 2008 there were about 150,000 transactions, with cash buyers accounting for a quarter of these. (A cash buyer is defined as someone who makes a cash-only purchase of a residential property, without taking out a mortgage.) After the housing bubble burst, the volume of transactions fell to a low point of 21,000 in 2010. It is estimated that about 45,000 properties changed hands during 2014.
     However, the proportion of cash buyers has risen sharply. In 2010 they accounted for 25 per cent of property transactions; this increased to more than 60 per cent during early 2013, and the figures suggest that more than half the properties purchased during the last three months of 2014 were paid for with cash.
     While some of this can be accounted for by people “downsizing,” there is clear evidence of activity by institutional investors, such as the Real Estate Investment Trust, and international investors.
     The Central Bank report also refers to the opportunities presented by the wave of repossessions, stating that these vulture funds are responding to “the opportunities available for low-cost acquisitions (including purchases of property assets from receivers or by way of auctions).”
     Cash sales as a proportion of the total have risen steadily in recent years, with a growing number of acquisitions by speculative international asset management groups using “special-purpose vehicles” (SPVs) and off-the-shelf companies. Recent research has shown that of fourteen SPVs examined, seven had submitted accounts to the Companies Registration Office in Dublin. These seven companies managed between them €4.13 billion in assets and had €2.78 billion in income in the last year.
     The combined tax bill for these seven companies was €3,250. Even a low-paid worker pays more tax than these capitalists. Repayments to linked offshore companies—i.e. in tax havens—amounted to €149 million for the same period.
     The high number of cash buyers has contributed to the surge in house prices, with wealthy investors and funds and their increased purchasing power increasingly pricing ordinary buyers out of the market.
     So long as shelter is treated as a commodity, and available only if you can purchase it—if you have the capacity to sustain personal debt for thirty or forty years, or to pay extortionate rent—then you will stand in line.
     The state, while paying lip service to its responsibility to provide housing, is in fact aiding and abetting in the commodification of shelter. This withdrawal by the state is part of its project of privatising all the public services it was forced to develop, to allow new avenues for capital investment and speculation, to enrich speculators, whether national or international, and to help sustain the system itself.
     When this state was in a much weaker position in the 1930s, 40s, and 50s, tens of thousands of publicly owned houses and flats were built. Today this state is richer than ever before. The political pressure needs to be built for the building of public housing that cannot be sold on.
     There is simply only one solution to the housing crisis, and that is to remove the provision of shelter from the market.

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