The Irish government received a letter in March from the UN rapporteur, Leilani Farha, stating that, “housing in Ireland is moderately unaffordable.” The UN was using this letter as a wakeup call to the Irish government and made some very serious allegations. One of the allegations that the letter made was, “house prices are now approaching levels last seen at the height of the property bubble.” This statement relives a terrible time in the history of Ireland. The Irish government responded by saying that average households only spend one-fifth of their income on housing costs but acknowledged some prominent issues that need to be improved.
A couple of the top problems stated in the letter related to land hoarding and equity landlords. First, land hoarding occurs when investors will purposefully sit on a property to increase demand and lower supply in the area before selling/renting. This is causing major problems for citizens that are struggling to keep up with the increasing prices. The other problem is landlords, “have openly discussed policies of introducing the highest rents possible in order to increase returns for shareholders.” The letter even specifically cited I-RES REIT for this issue because they are Ireland’s largest landlord.
The Irish government spent approximately three months before sending their 16-page response to the UN. The housing market is a sensitive subject in Ireland, and they wanted to make sure that a thorough and factual response was put in place. Initiatives that the government included in their response were help-to-buy scheme, vacant levy tax, and rent pressure zones. It was discerning for many people that the government failed to mention the record homeless numbers in Ireland and provided no solution for the 10,378 people and rising.
The UN addressed the rental market in Dublin by saying, “in Dublin a person with an average salary renting the average property now has to allocate 86.3% of their income on rent” and there is a “constant escalation of housing costs for tenants.” The Irish government contributed to this problem to the growing economy which is causing a strong demographic growth and driving up the rental market prices. The Irish government indicated that they have introduced rent pressure zones, which only allow for rental properties in that area to increase price by four percent annually among other restrictions.
Many countries are beginning to take notice into Ireland’s housing market, and it is time for the government to address the problems head on. The UN wrote a letter in the hopes that it would provide a more urgent approach to the issues from the government’s perspective.