Sins of the Father (4 page)

The Irish Times
printed an editorial in July 1948 entitled ‘White Collar Dwellings’. It welcomed the news that Dublin Corporation was extending the issuing of loans to builders and potential owner-occupiers under the Small Dwellings Acquisition Act:

Faced by the exigent need to make some provision for those who are not rich enough to pay for the type of homestead that seemed to be within reach ten years ago, or poor enough to qualify for the tenancy of a Corporation cottage, Ministers, as we believe, are justified in their decision to extend to the fullest possible measure of assistance to those who are able and willing to contribute towards the solution of their own problem of housing.
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The formation of the first Inter-Party government in February of that year saw the return of Cumann na nGaedheal (now renamed Fine Gael) to power for the first time in sixteen years and the resetting of owner-occupancy as a cornerstone of housing policy.

The policy was not to restrict house prices in order to accommodate affordability, but to use government money to chase after rising prices. ‘Even the most modest type of dwelling for the average wage-earner and his family is likely to cost something not far short of £2,000,’ wrote
The Irish Times
in its July editorial, ‘a figure which represented the pre-war cost of modern villa residences for comparatively wealthy people.’ Yet, instead of embracing the logical conclusion – that as free-market speculators and private builders cannot provide affordable housing, it’s probably best not to leave such a fundamental societal need in the hands of those who cannot provide it – the government began to once again subsidise private builders with public money in order to make housing purchases ‘affordable’ for the middle classes.

Two years previously,
The Irish Times
criticised the policy of rehousing ‘thousands of families … at the public expense’ while there were ‘hundreds of citizens’ who could buy their own homes ‘if only they can buy them on reasonable terms, and thus can do without State or local bounty’.
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The fact that these ‘reasonable citizens’ needed as much State assistance to buy their homes as the thousands of families who needed State assistance to rent their homes, was conveniently ignored not only by
The Irish Times
but by a government which saw subsidised private ownership and private construction for the middle class as acts of citizenship, and subsidised rents for the working class as ‘a public expense’. This idea of ownership as citizenship, and rent as scrounging, would eventually shed the language of class which enveloped it during this period, but none of the class dynamics from which it gained its energy and direction.

The first Inter-Party government allocated £580,000 to private building in its 1948 Housing Act, and by 30 June 1949 the Department for Local Government had approved 6,292 grants. The majority of these grants – 4,247 – were for housing in rural areas. The Department’s Minister and Labour TD Michael Keyes told the Dáil that:

… private enterprise could make a very valuable contribution to the solution of the housing problem. And it was, therefore, desirable that any uncertainty as to future policy in the matter of grants should be removed, so as to allow full scope to persons intending to plan for the building and reconstruction of houses within the next two or three years.
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He was speaking on the occasion of the Dáil debate on the Housing (Amendment) Bill, 1949, which proposed to triple the amount of government spending on private house construction from £580,000 to £1,750,000, and to allow grants for the building of new houses for letting and the reconstruction of existing housing in rural areas. Private landlords would now receive public money in order to provide private rented accommodation.

The private ownership of a house was often put forward as a panacea for all of society’s ills. Not only would the promotion of home ownership save the local authorities money in the long run, it would also bring stability and good sense to a family. In 1952, the Labour Party senator, James Tunney, told a meeting of Dublin County Council (of which he was chairman) that ‘I am a firm believer in private ownership, because it makes for better citizens, and there is no greater barrier against communism.’
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He went on to say that ‘where all the necessary conditions regarding repair have been complied with, the tenants should be compelled to purchase, unless they could show very good reason for not doing so’. The Educational Building Society (EBS) stated at its annual general meeting in 1956 that it was carrying out ‘important social work’ in ‘promoting a property-owning people’.
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The social arguments for owner-occupancy were raised once again in 1957, by the Bishop of Cork, the Most Revd Dr Cornelius Lucey. ‘The man of property is ever against revolutionary change,’ said Dr Lucey at a Confirmation ceremony at Monkstown, County Cork. ‘Consequently a factor of the first importance in combating emigration and preventing social unrest, unemployment marches, and so on, is the widest possible diffusion of ownership.’
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Dr Lucey raised these points as he believed that ‘ownership [of property] is neither valued nor favoured among us, as it should be’.

In 1962, a UN team of housing experts, including Charles Abrams, came to Ireland to compile a report on urban renewal. They were suitably impressed with the government’s initiatives, and wrote that Ireland was undertaking ‘one of the largest slum-clearance and public-housing programs in the world in terms of population, has emptied many of the central slum areas of Dublin, and is now proceeding with renewal legislation designed to replace slums with non-residential as well as residential land uses.’
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One year later, the Minister for Local Government, Neil Blaney, announced his ‘home for every family’ housing policy. He amended legislation so that allocation for local authority housing ‘would not be determined by whether a person was by definition an agricultural labourer of a person of the working classes, but primarily by his need for housing’.
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‘This,’ he said, ‘would unequivocally admit to eligibility for the benefit of State and local authority facilities all persons in need of housing, including old people, small farmers, widows and other special categories whose needs had not been adequately served under existing legislation.’ Whether it was Blaney’s intention or not, his Housing Bill of 1963 added to the view that local authority housing should be the housing of last resort.

In February 1966, the Fine Gael TD Mark Clinton put forward a motion during Private Members’ Time in the Dáil, ‘urging the government to facilitate the provision of tenant-purchase schemes for Corporation tenants in Dublin, Cork, and other municipalities’.
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Mr Clinton said that such a move would show that ‘The government was alive to the interests of citizens who wished to better themselves’. This idea was given its fullest expression in the Fianna Fáil government’s Housing Act of 1966, which allowed local authority tenants in urban areas to purchase their houses. It took as its model the 1936 Labourers’ Act, under which almost 80 per cent of the 86,931 labourers’ cottages had been sold to tenants in the twenty-eight years since its inception. During the same period, 6,393 urban dwellings had been sold to tenants.
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This figure dramatically increased over the next twenty-five years.

In 1971 there were 112,320 local authority rental housing units in the State, which amounted to 15.9 per cent of the total households. By 1981 this figure had dropped to 111,739, and now constituted 12.4 per cent of total households. Yet, there were 64,170 new local authority units completed between 1971 and 1980. The State was selling its public housing stock to its tenants quicker than it could build it. The amount of households in urban areas in 1981 that either owned their property or were buying their house from a local authority was 65.6 per cent. In 1961 that figure was 37.9 per cent. The tenant-purchase scheme had been heavily utilised, and resulted in ‘waves of heavy selling of local authority housing.’
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Purchase prices for local authority housing were typically extremely favourable to tenants. The tenant-purchase scheme implemented by Dublin Corporation in the late 1980s, for example, entitled discounts on the market value of housing of up to 60 per cent. The consequence for Irish social housing was that by the early 1990s, of the 330,000 dwellings built by local authorities over the previous century, some 220,000 had been sold to tenants, which amounted to one in four of the homes in private ownership in Ireland by that time. They were thus a major contributor to the overall tenure revolution and in particular were the dominant means of access to home ownership for the urban and working classes.

Home ownership reached its peak in the early 1990s, with 74.5 per cent of all households in urban areas, and 81 per cent of all households nationwide, listed as owner-occupied or occupied free of rent.
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What had been paid for collectively, had been sold off individually. The
de facto
privatisation of Irish housing meant that the need for a house was now replaced by the need for a mortgage. The banks, building societies and mortgage brokers were the unchallenged gatekeepers to securing a home.

By the end of the 1960s, there was an estimated housing need of 59,000 – with unfit houses of 35,000 and overcrowding of 24,000.
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The State would need to build 9,000 dwellings a year, with projections for the mid-1970s at 11,500 a year ‘to meet the loss of dwellings through obsolescence, etc., and to provide for increases in numbers of households’. It was reported that with increased prosperity, local authority housing was no longer a priority, and that the majority of housing would be produced by private builders and other agencies.

In the 1970s the State, having already secured the legislative framework to privatise urban local authority housing, now undertook to privatise house loans. It is during this decade that government strategy moves towards assisting families with mortgages, rather than assisting families with houses. It was a crucial development. The government was funding prices, and those prices were being set by builders and estate agents, often in collusion with building societies and banks. Ireland’s property market was soon dictated almost exclusively by speculation. It was not how much money people earned, but how much credit they could secure, which set the bar for prices. It led to the bizarre situation where Irish people were paying twice for the same house. The Irish taxpayer had to pay to fund the grants and exemptions to make private housing ‘affordable’; then, the same taxpayer had to go out and buy a mortgage for a house, the price of which had increased precisely because of the grants and incentives which the taxpayer was funding in the first place. Yet, by the start of the 1980s, this had become normal and ‘common sense’.

The idea of a house as a speculative product, not just for builders but for owner-occupiers, also gathered momentum throughout this decade. ‘One of the oldest ghosts in the residential market was laid this week by Mr Edmund Farrell, chairman of the Irish Permanent Building Society,’ wrote
The Irish Times
in February 1973, ‘when he revealed that the purchase of a new home is not necessarily the biggest single lifetime investment – simply because the average building society mortgage has itself a lifetime of only about ten years.’
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The article explained that:

The significance of this information is considerable, and it does much to explain the frenzy of activity both in the residential market and in the £150 million Irish building societies’ movement. If the average mortgage is ‘turned over’ once in a decade, the average man can buy not one, but two or three different homes in his working life.

What is emerging – trendwise, as the Americans put it – is a housing requirement that sensibly fluctuates with the homeowner’s personal needs. In the early stages of a man’s married life, for example, his space requirements are relatively small … later with an increased family, our subject can move to a three-bedroom house in a suburban estate, close to schools and probably to a shopping centre. As the family gets bigger, there can be yet another move, possibly to a four or even more bedroomed house, depending upon the finance that’s available. And finally, to complete the circle, as the children grow up and move away to start their own housing-cycle, the parents can sell the family home and buy a flat closer to town and its infrastructural centre …

And, most important point of all for the saver and investor in the housing market as it is and will be for the foreseeable future, a hefty profit is made by the seller at each point in the cycle.

The privatisation of housing cured not only social ills and moral fickleness, but, according to
The Irish Times
and the building societies, it also settled all your financial upsets and indigestions. In September 1973 the paper told its readers that property was the perfect ‘hedge against falling money values’.
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Property was moral-proof, future-proof, and inflation-proof.

The reality was that as the decade progressed, prices increased and mortgages of twenty-five and thirty years’ duration became the norm. A householder may change house, but rarely was it after having completed his payments on a ten-year mortgage. Not only that; this fantasy world of full employment and eternal growth – where people swap houses like shoes for slippers – never materialised. Indeed, within eighteen months of the
Irish Times
’ strident pronouncement of the dawn of the Four Property Stages of Man, the Irish economy was in recession.

At the start of 1974, in a statement which would become all too common thirty years later, the president of the Irish Auctioneers’ and Valuers’ Institute, Mr Anthony Morrissey, said that the drop in house sales was due to a lack of lending in the economy. Building societies and local authorities weren’t making loans available to house buyers, and this was leading to a downturn in the market. The solution was more credit. The government needed to act to save the construction industry. ‘Restrictions and preconditions on building society financing must have a negative effect on the property market and on the chances of achieving national housing targets,’ said Morrissey. ‘A more lasting solution must lie in the further assistance of the [building] societies by the government or by the provision of house finance at realistic levels and in large quantities by the government itself either directly or through some agency.’
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