Paul Sweeney: Last week the Irish state borrowed a load of money. The interest rate we will pay was minus 0.42% Yes, the lenders competed with each other to PAY the NTMA to take their money. The offer was 2.6 times oversubscribed.
We Have the Money
Yet when the nationalised banks, AIB etc. are sold off by the state, the money is all to be used to help repay the national debt. Why repay some of it when interest rates are negative?
The occupation of the ugly Apollo House in Tara Street owned by NAMA to provide beds for the homeless at Xmas really highlights the importance of the homeless and housing issue. Sadly, it is a repeat of the Dublin Housing Action Group work in the late 1960s.
Why has there been so little progress on the basic need of housing in almost 50 years? Because we went backwards politically. The state used to build lots of social housing and do so directly. Even in the poor and miserable 1930s.
Why Privatise much needed Housing?
This week the Irish Times informed us that Dublin City was trying privatise some of its public housing. In spite of discounts of a staggering 60% on the market price, there was little take up from the 11,000 tenants. This was Thatcherism in action… attempted Thatcherism, with little response, thankfully. Why is a public body with many progressives in its leadership privatising much needed public housing?
While the sale of public housing may be a contested activity, giving it away at 40% of the market value is very wrong, in my view. The drive to privatise everything, but especially housing is wrongheaded. In my view, dwellers of public housing should be allowed the opportunity to purchase, at market price, but with modest discounts for those with lower incomes.
Public Housing underpins the housing market
The other big factor - as highlighted here many times - is that the government and local authorities failed utterly to provide public housing in recent decades. The triumph of ideology ruled that the market will provide. It did not. And it won't.
Some people simply cannot afford to buy their homes. Indeed, all gain when the state provides housing to those most in need because it relieves an important pressure point from the market.
Cut out the Middleman
Finally, the provision of housing using acronyms like PPPs and the rest is whitewash. Giving a cut of public spending on social housing to private financiers to supposedly keep it off the state balance sheet is pure ideology. It is not VFM or value for money. It costs more. It is slower. It is unfair.
We need to start spending directly on well designed social housing immediately. The occupation of Apollo House highlights the paucity of thinking in the public interest on this vital issue and appears to be having some effect. Now its time for direct public capital spending on housing.
Paul Sweeney is Chair of the TASC Economists’ Network.