17th October 2014 (Quotes with consent of IAOSB)
12,000 social + affordable houses at no cost to taxpayer?
Let’s look at social housing and the new building control regulations.
We know all the headline issues, the costs and legal issues in the new regulations that has forced over 800 to 1000 self-builders this year alone to indefinitely postpone or abandon planned home builds.
In parallel we see new Minister Alan Kelly pledging to build up to 1,000 new homes for social housing next year. Including rentals and leased properties this will rise 10,000 in 3 years. A welcome development but also costly at €2.5 billion to the taxpayer.
However there may be another far more cost effective way to achieve the same result. Self-building.
Self Build is a political problem
Acknowledged as a major political headache, one unintended consequence of S.I.9 is the banning of self-building since implementation in March 2014. The Irish Association of Self Builders (IAOSB) have protested vigorously on this issue nationally.
As a result three County Councils have voted formally requested the Minister Alan Kelly to revoke S.I.9. They are Sligo, Wicklow and more recently Wexford. More are expected to follow suit.
To put the issue in a more personal context we looked at the example Amanda Gallagher and her family. In radio interviews and written pieces she noted her planned family home was to be built using direct labour. Her electrician husband Raymond would manage the project on a site given to them by her father-in-law in Sligo, a site on the family farm.
Amanda and her family are currently tenants in Local Authority Housing and have indefinitely postponed their build, citing the increased costs under S.I.9 as the main reason. Estimates from her Architect suggest the extra-over cost now to build her house using a main contractor are almost double (we have separately tabled a conservative cost estimated for S.I.9 for a typical house at between €20,000 to €40,000- see below).
There are a number of people in a similar situation, electing to put in the hard graft of managing their own house build in stages. Self build means removing developer’s profit and a main contractor’s management costs thereby reducing the cost of home ownership. Frequently self-builds are of a higher standard than speculative housing.
This is a difficult personal situation to be in, to have plans ready to go only to be confronted by poorly-worded and vague legislation that imply there may be legal completion problems later on.
However there is one other observation that may have been lost in the personal story here.
Is self-build the practical solution to social housing?
Housing supply in Amanda’s situation is a bit like money velocity in the economy.
If Amanda and Raymond built their own house, their current council house would become available to others. At no cost to the state. If they were renting it would be another rental unit becoming available, adding to supply and reducing rental costs. If they were living with family and on a housing list, they would be one less name on the list.
In Amanda’s situation her self-build completed is equal to two social/rental houses. At no cost to the taxpayer.
So if S.I.9 was either revoked or amended to facilitate self-building, the 800- 1000 self-build houses abandoned this year could translate to 1600- 2000 social/ affordable units. Every year. At no cost to the taxpayer.
Imagine if the government released details of support schemes (like those in the U.K.) for prospective self-builders, persons currently in local authority housing to build on state-owned sites and build their own houses in a more economic fashion?
So, immediately Minister Kelly could create 12,000 social/ affordable houses by 2020. At no cost to the taxpayer. One stroke of the pen- revoke S.I.9.
Could it be that easy?
To read more of Amanda’s commentary visit her blog here.
Other posts of interest: