David W Higgins: Smarter work-permits system could do more for housing than any highly paid tsar

Irish Independent

08-05-2025

The latest Sunday Independent/Ireland Thinks poll found 62pc of voters believe housing is the main issue the country faces. That's miles ahead of the one they ranked second-most pressing, immigration, on 28pc.
Separation between these issues has been a sacred cow in mainstream Irish politics. Successive housing ministers have placed their focus on supply and haven't suggested the crisis could be sooner solved if inward migration levels were lower. They would be mauled for allegedly causing division.
Time is running out for this argument, though. Real-estate analysis by Savills shows that between 2015 and 2023, population growth exceeded new-home delivery by almost four to one.
The 2022 census found the population had grown by 387,000 since 2016, with 220,000 due to net migration. Additional numbers since are likely to be significant, given the war in Ukraine and the increase in asylum-seekers.
The focus on housing supply isn't bearing the fruit it should. Targets have been missed, but we're still building much more than we did before. The demand side is now creeping into our consciousness. Instead of rejecting the discourse entirely, we should handle it maturely.
The story of migration to Ireland is a relatively recent one. The 2004 accession of eastern European countries brought the first significant wave. The crash led many of those arrivals to return home. The years since have seen a steady return to high immigration, but from outside the EU.
This is a perplexing feature of the Irish economy. Available jobs in a country of five million people don't attract sufficient interest from the half-a-billion people who live in the rest of Europe. Freedom of movement is guaranteed and wages are high. Still not enough.
So we turn to the system of employment permits. In 2016, just under 10,000 permits were issued. This rose gradually to more than 16,000 in 2019. The economy in those years was still fruitful. Unemployment was falling, wages were rising and the phrase 'cost of living' wasn't even in our vocabulary.
Leaving your family to work abroad is heartbreaking, yet allowing family reunification would mean even more housing demand
Emerging from the pandemic, there was a surge in the number of permits issued. In 2022, there were nearly 40,000. This dipped to around 30,000 in 2023 and went back to near 40,000 last year. The first three months of 2025 show no signs of easing.
The sectors using these permits are diverse, but two account for nearly half of the total – 12,500 permits for the health and social-work sectors and 6,800 for technology services. The former is defined by low wages, the latter by high wages.
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Translating permits into migrant numbers is a tricky business. Many permits include renewals for persons already resident here. A permit must then be followed by visa approval. This falls through for many reasons. There's also a backlog for both. Therefore, many permits don't add to migration.
The flipside is that many permit-holders are allowed to bring their spouse and dependent children. Chain migration can mean one permit translates to one whole household. Permits were issued to 4,461 people in 2023 for reasons of family reunification, the highest on record.
Not all permit-holders have this right, especially those on low wages. The case of healthcare assistants was recently highlighted outside Leinster House. Leaving your family to work abroad is heartbreaking, yet allowing family reunification would mean even more housing demand.
It shouldn't be beyond our imagination to make this system humane, but limit its impact on housing demand. A fair trade would be to allow wider reunification rights, but to issue fewer permits.
Policy seems set on a different path, however. In March, Enterprise Minister Peter Burke announced that the quota for home carers will increase by 1,000. Town planners were also added to the critical skills occupation list.
This follows a decision last December to defer planned increases in minimum salary levels for these permits. The planned increases would have set higher salaries across many sectors. They would have also made employers think again about hiring abroad. The mix of these decisions is only to facilitate higher inward migration, and thus higher housing demand.
All jobs seem good when you once oversaw an economy without them. The Department of Enterprise still has recent memories of the crash. It has contributed greatly to steering Ireland's economy back to full employment.
Higher wages are bad for business, so it goes. But we're also losing competitiveness because workers can't find housing
Yet Ireland's hot labour market needs taming. While some have suggested higher taxes as a remedy, the route of higher wages should be considered. The Government sets the minimum salaries for work permits, and these can act as a lever for labour demand.
You can already hear the word 'competitiveness' in reply. Higher wages are bad for business, so it goes. But we're also losing competitiveness because workers can't find housing. So there's a tension.
The move to higher salaries needn't be sudden. Implementing the already announced salaries would be a start. We can see from there how the affected sectors respond.
If the Department of Enterprise doesn't begin to consider the wider impact of its policies, it will be only a matter of time before the housing department starts to get vocal.
If I were Housing Minister James Browne, I would be asking why a decade of policy towards more housing supply has been eaten up by higher demand. That could mean more for his chances of success in the role than any housing tsar.