Renting is becoming the norm in Dublin for families with younger primary school age children, something we haven’t seen since at least the early 1970s.
There might have been a sense in the immediate bounce-back after the crash that ‘generation rent’ was a temporary phenomenon, and that conditions would swing back over time – it hasn’t happened.
The reality is that hundreds of thousands of people across all but the highest income levels face the prospect of remaining renters into the long term, in a rental market in no way structured to cope with their numbers or to meet their needs.
A market in which 12-month leases are the norm offers nothing to families with children, who face the bleak prospect of trying to retain a toe-hold close to schools and social routines in a market characterised by rent rises and churn.
A stable home life, owned or rented, is the bedrock of social cohesion. If it can’t be had, many people will abandon cities altogether – with big implications for the skills pool modern economies depend on. Longer term, a generation that rents through its best earning years is unlikely to ever save enough to provide for old age.
We already face a pensions crisis. Today, very few retired Irish people have the stress of market-rate rents hanging over them, because they paid off mortgages while they worked, helped by the fact accommodation costs for buyers go down over time, while costs for renters go up. That hugely successful savings scheme stops as we flip from being home owners to renters.
Billions of euro are pouring into the so-called build-to-rent (BTR) sector because investors see that change happening.
Rents are high, helped by the slowness of the State’s response to housing shortages, but even if that eased off, the structure of the market is making ownership harder.
Even where houses are for sale the prices – including land, labour and materials – make them a stretch for all but higher earners.
Don’t blame the investors. Without them, the housing crisis would be even worse. If new rental blocks weren’t being built the affluent professionals paying €2,000 to €3,000 a month for modern apartments would instead be scrapping it out with lower-paid workers in a smaller pool of rentals.
From the 1960s, home ownership had been a realistic aspiration for anyone with a reasonably good job, boosted by policies, grants, mortgage interest relief and a liberal approach to planning.
After the crash came a shift: scrapping incentives like mortgage interest relief and bringing in measures such as the mortgage caps, tighter planning regulation and tax incentives to encourage investors.
Beginning in Dublin, ownership is slipping out of reach but the private rental market is too unstable to sustain quality of life and social housing is too scarce to close the gap.
Most worrying, there’s nothing in the State response to indicate anyone in authority is ready to even begin to deal with that reality.