Property revolution
Pay older people to downsize and move - report Half of new apartments ‘must suit the elderly’ Land agency chief ’s radical rent-for-life plan 'Property tax very low compared to elsewhere’
THE Government is to begin paying older people to downsize and move into age-friendly neighbourhoods, a major new report reveals.
The unpublished report says older people living in social housing will be offered financial incentives before the end of the year, ahead of extending the scheme to private homeowners.
The Housing Options for Our Ageing Population Policy Statement says the Government wants to encourage older people to “right-size to appropriately sized units”.
It also says 50pc of all new apartments and 30pc of houses should be suitable for older people and those with mobility issues. The report comes as the recently appointed chair of the Land Development Agency (LDA), John Moran, says the new State body should focus on developing rental-only apartments in city centres.
In his first major interview since his appointment, Mr Moran, a former Department of Finance secretary general, says he wants the agency to develop State-owned apartment complexes where people can rent for their entire lives.
The rental model would allow a couple pay enough rent during their working lives to allow them to stay in the apartment until they pass away.
Mr Moran says the Government should encourage people to move away from three-bedroom semi-ds in rural and commuter belt towns by reducing property tax for city centre apartments.
“Little tweaks might actually make a big difference, not because they are big amounts of money but because they send a strong message that the State is supporting one form of living over another,” he says.
However, he also believes property tax is “very low” in Ireland when compared to other countries.
He says there should be a debate about the rights of people who are “lucky enough” to own houses in good areas which have seen their value rise due to government investment and those struggling to find accommodation or paying sky-rocketing rents.
“The reason the value has gone up is because the Government has intervened and put in a tramway, put in some services, make the area more desirable, done up the public area and this (property tax) is just a little bit of recovery that the State gets back for improving the quality of the neighbourhood, and, therefore, that is why property taxes in other jurisdictions are at much higher rates than in Ireland because they, in effect, reward good behaviour by local authorities,” he says.
Mr Moran wants to examine the country’s Compulsory Purchase Order (CPO) powers as it is currently “too easy for people to drag out a process”.
He says the Government should look at systems in other countries where the state has “a right of first refusal” to buy property in areas they want to redevelop.
He says the Government must “reverse the magnetic force of Dublin” by developing other cities to avoid sparking “social unrest” which has “caused divisions in society” in other countries.
Meanwhile, the housing report calls for significant capital investment in public and private housing developments for older people.
In the report, Minister for Older People, Jim Daly, said the Government is examining new housing models for the elderly which “fall between home care and full-time nursing home care”.
He added: “The objective is to ensure older people stay socially connected within their community and to provide essential care where needed.”
IONCE knew a man who lived in a fabulous house in south Dublin, the kind that would have no trouble gracing the front page of a property supplement.
He bought it in the good times when he was an important executive with a big company. But the company went to the wall and with it the job and, worse still, the pension scheme.
So, within a few years, this man was finding it hard to put together the price of a few pints with his mates. He was cash poor. But he still had the trophy home, so he was asset rich. And if logic had any say in the matter, that house would soon have gone on the market and he would have downsized and walked away with a sizeable cash amount to live on.
But that is not what happened. It didn’t matter to him that 80pc of the house was unused or that there were rooms he could hardly remember being in for ages. He had children, all grown up and moved to the other side of the world.
So the theory was that the house had to be held on to in case they ever came home, if only for a holiday visit.
And he had that other niggling thought someone in his position is often burdened with — wouldn’t it be great to be able to leave this suburban mansion in his will.
So he carried on his life of near penury. And then he died. And the children sold the house and divided up the money between them.
Too many people, usually ageing couples whose children are gone from the home, find themselves rattling around in houses that are bigger than they need to be.
They know the feeling of opening a door of what used to be someone’s bedroom, but is now largely surplus.
Of course, these days children who have emigrated do seem to be able to come home more regularly than in the past, and it can mean the world that the family are once again together under one roof, even if it’s only for a week or two.
But there is another argument against downsizing you will hear. And that is that, although to the outsider the home may appear too big for the occupants and a waste of a potential home for a new family with small children, that is not how the occupiers see it.
To them it is the dream home they worked hard all their life to afford, and which they have upgraded and decorated so that now, at last, it is just the way they always hoped it would be. And they would like to spend their remaining years enjoying it, if nobody minds, thank you very much.
And that is fine as far as it goes. Unfortunately, sometimes these decisions are out of our hands — like when your health deteriorates to the point where independent living becomes less and less viable.
Even then, if it is at all possible, living in your own home (which doesn’t have to be the one you now live in) is a better option than going into residential care.
That is certainly the view expressed in the forthcoming policy paper from the Departments
of Housing and Health, ‘Housing Options for Our Ageing Population’.
It makes perfect sense, if only because it obviously costs far less.
But it can only work if home healthcare is properly resourced, which it isn’t at present. And with the over-65s set to number 1.4 million (23pc of the population) by 2040, this report is timely and important, and though they engage in a bit of fancy wordplay — downsizing will now be called rightsizing, for example — most of what it recommends seems to makes sense.
They have identified a market among the elderly who would be willing to “rightsize” for 100,000 purpose-designed homes.
They quote the ‘Housing for Older People’ report of 2016 as showing that 15pc of over-65s would be willing to move to a different home in their community, and a further 15pc would choose to move to age-friendly accommodation if it were available.
There is even a novel suggestion to match older people with underoccupancy who wish to share their house with people who require housing, in exchange for providing practical support.
But mostly the trend is towards incentivising older people to move out of their bigger houses and into better located, smaller dwellings where their needs can be better catered for and, at the same time, the housing needs of the younger population are helped.
But just what form that incentivising would take is the crux of the matter. Already the old nesters feel under pressure every time they hear talk of downsizing. They look at carrots with the suspicion they could quickly turn to sticks.
Take the property tax, for instance. You could call that an incentive because the smaller the property you own, the less tax you pay. But it’s a penalty, one that follows you your whole life after your earning capacity has decreased or even disappeared and you are cash poorer, even if your house has a good value in theory. Still, at least there is some equity in the way it is applied and you could not say it is yet being used as a real disincentive to stay in your own home when you reach retirement.
But listen to the words of John Moran, chair of the Land Development Agency, who will have a big part to play in implementing the policies laid out in this latest report.
“You could decide that accommodation in an area which we consider to be desirable... higher density or an apartment as opposed to an individual house... might have a lower property tax than... a single house on its own (of the same value),” he said.
If you are over 65, read that again, and then ask yourself, does that sound like an incentive or something else?
And maybe you begin to think you might have let your guard down a little too soon.