Census result shows homes crisis is likely to get worse
Our population is rising but builders aren’t meeting housing needs. A debate is needed on the State’s role, writes Dan O’Brien
LAST week’s census results showed that Ireland’s population was one of the fastest growing in the EU in the five years to 2016.
At a time when 11 of the bloc’s 28 countries experienced declines in their populations, including all the countries which experienced economic crises and bailouts, Ireland was clearly unusual. That Ireland’s population grew at more than three times the rate of the EU as a whole underscores how different it is from the demographic norm in Europe.
All this is somewhat surprising. The early years of that 2011-16 period were economically grim, and slumps in the past have led to much more net outward migration than has taken place in recent years. Given the unusually mobile nature of the Irish population historically and the depth of recession suffered over the past decade, one might have expected a bigger outflow of humanity.
That is exactly what the demographers at the CSO had expected. But when all the census forms were returned and the numbers crunched, the population turned out to be a lot higher than they had thought.
Was this because fewer people left or because more people came? That is not clear — as the census only counts people actually in the state on a given night, it can’t record those who have left. But as the composition of the population by nationality changed only a little over the five-year period as immigration fell, it looks as if emigration was also lower in this period than in previous periods of economic hard times.
Another limitation of census 2016 is what it tells us about more recent trends. Because a census is a snapshot taken every five years, it is hard to spot inflection points within the half decade period. That is important in this case because the period between the past two censuses was one of two halves economically: the country went from being in deep recession at the time of the 2011 census to strong growth by the time of last year’s national headcount.
But one question posed by the census helps get round that problem. It asks respondents where they were resident one year earlier. Replies to that question suggest that the numbers arriving are now rising sharply.
In April of last year, more than 82,000 respondents said that they had been living elsewhere a year earlier. As that number equates to almost half the increase in the total population over the full five years between the two censuses, it suggests that much of the population growth was concentrated in more recent years. It also suggests that population is growing at an accelerating pace, as fewer people leave and more are drawn in by a stronger economy.
That brings us to that perennially hot topic: housing. What was contained in the census gives little reason to be upbeat that homes will be built in sufficient numbers to meet demand anytime soon. But before looking at that bad news, there is a measurement issue that needs discussion.
Census 2016 fuelled the ongoing controversy over whether monthly statistics published by the Department of Housing, Planning Community and Local Government are overstating the number of new homes being built. The controversy centres on how newly built homes are counted, with the department’s figures based on the number of new connections to the electricity grid. As a number of commentators have pointed out, many homes that connect to the grid are reconnections, rather than first time connections and, as such, are not newly built.
The census shows as definitively as it is possible to be that the official statistics are not just slightly out when it comes to counting new builds, but that they are not even close. According to the census, the number of homes built in the five years to last April — 33,436 — was one third lower than the number the departmental figures suggest.
The department should now suspend publication of its figures. Any data series that is known to be unreliable but continues to be published undermines public faith in all statistics. In an era of “alternative facts” and falling trust levels, it is more important than ever that organisations — be they state or private — do not put information into the public domain that they know to be inaccurate.
Having got that out of the way, back to the (reliable) census data. What the figures show on housing is not good. When combined with the fast growing population, they point to a housing crisis that will, in all likelihood, get worse before it gets better.
The extent of market failure in the building and property sectors is striking. The number of private rented homes increased by just 4,000 in the five years to 2016. That amounts to an annual increase of a fraction of 1pc, and all happening at a time when the total population grew by almost 175,000.
The growth in local authority rentals was 10 times higher than the increase in privately rented homes. The growth in rentals by voluntary bodies was even higher, albeit from a much lower base. As of last year, one in 10 households in Ireland was renting from a local authority or a voluntary body.
Most of the discussion around social housing involves calls for more of it. Commentators often note — correctly — that construction of new social housing has been running at low levels for a long time. What is rarely, if ever, mentioned is that Ireland has the highest level of social housing for those on low incomes of any EU country. According to Eurostat data, 35pc of households with incomes of less than 60pc of national median income live in rental properties at below market rates. The EU-wide average is half that.
This is reflected in the cost to the exchequer. Again according to Eurostat, no EU government spends more of its total budget on housing than Ireland.
Why is Ireland such an outlier in publicly providing housing?
This is an under-discussed question but one that needs more debate, particularly in the context of the government’s plan to ramp up construction of social housing in the years ahead.
‘What is rarely, if ever, mentioned is that Ireland has the highest level of social housing for those on low incomes of any EU country’