Rory Hearne: Why we need a French-style State savings scheme to fund 75,000 homes
Under this Government, Ireland's locked-out generation continues to be denied the most basic need – a home of their own , writes Social Democrats TD Rory Hearne.
More storm clouds are gathering over our worsening housing crisis. The latest national Residential Property Price Index, published by the Central Statistics Office (CSO), showed that the median price of a home in Ireland is now €360,000 – more than seven times the average income. In Dublin, it's as high as €670,000.
It's a sobering thought when you consider that house prices are now 20% higher than at their Celtic Tiger peak, putting home ownership out of the reach of most earners. Rory Hearne. Pic: Colin Keegan/Collins Dublin
For the first time in our history, we are seeing young people forced to emigrate, not because of a scarcity of jobs, but due to their lack of hope of ever being able to buy a home of their own. In the past two years, there has been a 36% increase in the number of Irish citizens emigrating, with 70,000 people leaving our shores in 2024 – the same number as at the height of unemployment in 2010.
This is hardly surprising when more than half a million young adults are stuck living in their childhood bedrooms, desperately waiting for their independent lives to begin.
For those who just want a space of their own, the housing crisis is having a serious impact on their mental health, with many suffering from anxiety and depression as they put their hopes and dreams on hold.
Today's generation, locked out of home ownership, is a generation without hope. The Government's social contract with the young people of Ireland – where the plan is that you are supposed to get an education, work hard, pay your taxes, and save enough money to have a decent life and buy a home of your own – has been shattered into a million pieces.
There is stark generational inequality between older people who have owned a home for decades and the young adults of today, many of whom are holding back on making major life decisions, such as starting a family, because they have nowhere to live. Contrast this with the landlords and corporate investor funds that own multiple properties, most of which are prohibitively expensive to rent. Pic: Shutterstock
But despite the scale of the housing crisis, we have seen no emergency response coming from the Government.
Since the Celtic Tiger days, successive governments have treated housing as an investment commodity, relying too heavily on private developers and vulture funds instead of building social and affordable homes at the scale required. This has turned our young people into rental fodder for institutional investors.
Fianna Fáil and Fine Gael claim they are the parties of home ownership, yet their approach to housing has caused the largest collapse in the number of people buying a home since the foundation of the State.
Their policies serve institutional investors, large developers, property owners and banks. The Government is not concerned with making house prices affordable. Rising house prices and hiked-up rents are baked into these policies as they are deemed essential to 'incentivise' the market.
It is against this backdrop that the Government is proposing to remove rent caps, all in the hope of attracting investment from vulture funds. If this is allowed to happen, rents will further skyrocket, and thousands more people will be plunged into poverty and homelessness. Pic:We urgently need a new direction to solve the housing crisis. That is why the Social Democrats have put forward a new policy proposal to set up a State savings scheme that would help fund the accelerated delivery of affordable homes.
Under our plan, the Government would establish a Homes for Ireland Savings Account (HISA) to leverage the €160bn in Irish bank accounts for investment in affordable homes.
Similar to the Livret A model in France, this is an innovative way of offering an incentivised savings scheme for Irish savers, while opening up a new source of domestic private financing for home building in Ireland.
Funds raised through this savings scheme would be channelled through Home Building Finance Ireland (HBFI) and the Housing Finance Agency (HFA) to fund the building of affordable homes by SME builders, not-for-profit housing associations and local authorities.
It could help deliver 50,000 affordable-purchase and 25,000 cost-rental homes over the next five years. The scheme would also represent a win-win for savers, with favourable interest rates and no Dirt tax to be applied to these accounts.
This is the type of radical action required to offer hope to our locked-out generation.
This Government, like its predecessor, likes to claim it is doing everything it can to solve the housing crisis, but nothing could be further from the truth. It's time for a new approach.
This piece was written by Social Democrats TD for Dublin North-West Rory Hearne
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