Dr Dáithí Downey - Head of Housing Policy, Research & Development. Dublin City Council
Dr Dáithí Downey is a Dubliner with a mission - He is head of housing policy, research and development with Dublin City Council and he's leading the new Housing Observatory for Dublin - a research and planning initiative under Dublin City Council that aims to make Dublin an affordable and sustainable place to live in.
Dáithí has over 25 years experience in housing and homelessness policy and action and the Housing Observatory is collaborating with Maynooth University and the Ordnance Survey to ensure we adopt a more scientific and informed approach to planning.
Helen Shaw met with Dáithí Downey at his home in Rialto to discuss his perception of Dublin's housing today, the mission for the Housing Observatory and how the 'cost rental' model can help provide affordable housing in Ireland.
Dáithí Downey - Irish Times profile "Cost of housing is pushing people towards ‘pauperisation’" www.irishtimes.com/news/environmen…ation-1.3809688
In April 2019, Dr Downey, along with Dublin City Council, hosted an exhibition and series of seminars around the Vienna Housing Model and its lessons for Dublin - www.housingmodeldublin.ie/
Dublin Housing Observatory Mapping Viewer airomaps.geohive.ie/dho/
Check out the Housing Model Dublin website - an initiative from the Dublin Housing Observatory
http://www.housingmodeldublin.ie/about/dublin-housing-observatory/
You can also hear Dr Daithi Downey interview and Austria-based architect Mark Gilbert on Morning Ireland give date as part of the recent Vienna Housing Model exhibition and seminars hosted by Dublin City Council - Morning-ireland – In-the-midst-of-a-homelessness-crisis-should-we-be-heeding-example-from-a-viennese-housing-policy
Transcript: Dr Dáithí Downey - Head of Housing Policy, Dublin City Council
We need to get past the argument that the states form of housing, social housing is only available for the poorest and the most welfare dependent households. So it's a sign of its kind of a residual after effect. In fact, the bricks and mortar is a form of welfare dependency. You could argue - we need to get away from that and say, no, the state should be able to build quality, affordable housing that anybody who chooses to rent in it rents in it. Simple. As long as the economic rents required to afford development of the housing is met.
That's Dr Dáithí Downey, a Dubliner with a mission. He's leading the new Housing Observatory for Dublin, a research and planning initiative in Dublin City Council aimed at making Dublin City an affordable and sustainable place to live by connecting housing policy and planning to evidence based research. Sounds pretty obvious, but then so much of the information we need to have at hand to make a future focused city has often not been connected. And then again, the housing observatory, which launched last year, is doing all this work in the midst of a housing and homelessness crisis. I'm Helen Shaw and you're listening to This is Where We Live. A podcast series bringing together conversations and ideas about how we shape and create great places to live and exploring why cities like Dublin are facing the jewel challenge of rising private rents and low housing stock. Daithí's a man with over 25 years in housing and in its twin homelessness. He was director of the Dublin Region Homelessness Executive before this, and he has a very special focus and interest in social and affordable housing models like the new cost rental schemes where rental housing is provided by local authorities at cost rather than profit. It's that kind of scheme which is currently being piloted for St. Michael's estate in Insure.com. So to tease out some of these ideas, I sat down with Daithí at his own kitchen table in his home in Rialto. In talking about the housing observatory, Daithí you've this incredibly ambitious mission statement on it, which is about creating a city which is both sustainable and affordable to live in. Why does it come from and why is Dublin City Council doing this?
Well, the city council has a number of statutory functions, but it also has a mission statement of its own, which is to make the city a great place to live, to work, to learn. You could extend that out, to play, to visit, etc. In that then the one aspect of it that the observatory is mostly concerned with is the place to live. And how we live in a city is determined by whether we can afford our place of residence and indeed whether the way we're affording it is sustainable. And so sustainability has a number of dimensions to it. Obviously, there's income and your position in terms of relative affluence or poverty. But there are other important matches too, to do it as well, to do with ecology, to do with the inter-generational placemaking that arrives when you have affordable, stable housing.
This idea would be that there should be robust figures. Data, yes, information about the population and also how we're using housing within the city. well, we we know that private rental is increasing within Dublin and obviously what data is available in the housing observatory is showing that mean. You're also showing us from that and from the launch figures of it that the average rental that you are pointing to at that point was just under fifteen hundred a month. And that's like a year ago. So from where we are now on the amount of information we're gathering. What can you tell us about the trends of housing in Dublin?
The challenge is to try and describe a city as complex as Dublin. One fell swoop. So you might return to this idea of a residential mosaic where there are lots of people living, but there is across that space of these spaces, these neighbourhoods, quite a number of differences. Nonetheless, there are some very, very established commonalities. So you can look at some spaces that are dominated by their tenure pattern, order, demography. In other words, you can look at some spaces which are mostly owner occupied housing estates with older people living in the very old, very residential area and older, by which I mean I don't mean to be in any way a just about this. But let's just make 55. Anybody over 55 is heading towards an older time rather than a younger time.
And in the kind of Fordist model that had been established, you know, by the time you were 55, you could reasonably have been at work and expected to be at work for maybe 30 years or maybe 20 years. But between those 20 and 30 years, you would have had the opportunity you would have expected to buy into a mortgage. And it certainly year 10, maybe 15 - the capital that, you know, is beginning to decline rapidly. So you have a reduced cost on the capital. Now, of course, interest rate regimes changed over a period of time and has an important impact on housing costs from that. But over that period of time, as you're into that later stage in life, beginning into that later stage in life, you should be previously had the expectation that you either have own own outright or you're very close to owning outright that property. What's interesting today is to look at that period and ask how that came about, because that's a rather unique period. That's not the norm. A lot of people think it is the norm. It's not the norm. If you look historically across how housing works, that period, post-war welfare, golden age of capitalism, which facilitated the entry into large scale homeownership, came at a very, very high cost. Some of which is stagnation in the economy, some of which is very reduced labour market mobility, and some of which is at the cost of older generations entering the same model of consumption.
So within that, because obviously there's a historical trend that we're witnessed that we have experienced in Dublin. Whether you look at the building of Marino from 20s, 30s or from Cabra or Crumlin, as you were mentioning, 60s, 70s and later of homeownership, both within the private and whatever what we want to term as social or public housing, because in a sense, most of those schemes, including Marino, were constructed on the basis that you you purchased. at the end, as my grandmother did in Marino. So so they do have purchase is embedded in our housing concept since really that period like 1920 when they began the clearing of the slums. There was a sense in which and then you look at sort of the idea of the council as being the landlord and making that decision, which is well documented by 70s. 80's to start to exit from being the landlord and actually allowing purchase in full scale of the social housing blocks. So in some ways, while you are the biggest landlord we have created consistently across this hundred years. Home ownership concept in Ireland and particularly in Dublin, that's been part of it. So I suppose what we have now is a growing private rental community. The pressure on rent, the pressure on housing, you get it. That supply and demand aspect in terms of houses, not there are not. And obviously then a post neo-Liberal economy where the finance deregulation aspects from the 80s onwards have created an environment where investors are very much part of the picture.
And I guess within that it's again trying to look at the nub of where we are at this moment, is that where do you see the impact of the housing observatory in the policy and decision making of the council as we move forward? Because it does kind of seem from what you're doing in the observatory and the scale of the data you're creating, it's not just about Dublin City Council. It is about a national resource that you're looking at as well beyond the local authority here in the city. So within this this pressure point that we're in, how do you see the impact of something like the observatory?
At the moment the key priority for the observatory is to evidence the housing strategy, decision making for the city council. So the city council has a housing strategy as part of its development plan. That strategy is based on data from the census period of 2011 and a number of other sources. The first thing we're doing is updating that data strategy, that data, so that we'll be able to say more accurately what we expect to see in terms of demography, migration, household formation, housing need emerging over the next period. And then we need to know where that is at. So it's not just how many people, but where. And it's not just when, it's how they express their housing need. So you've mentioned the private rented sector. There has been a decline in the rate of homeownership accelerating in Dublin, much more so than other local authority areas. A lot of that has to be understood as the continuation of a number of changes that begat from the late 90s, but certainly peaked through, the crash, the global financial crisis and the aftermath of that. But there is no doubt about it that the accessibility of homeownership as an affordable tenure has diminished and the price of homeownership and home purchase has risen to a point of exclusion of many, many more people than otherwise had experienced this form of persistent long term exclusion. So there was always an affordability issue. The affordability gap had been bridged through various policy interventions at times. Tenant purchase was one of those you've alluded to that other ones are the first time buyers grant mortgage mortgage interest. Tax relief was another major area. Section twenty three tax incentives for development was a near area that allowed certainly some acceleration of housing to come forward at a more affordable price. But it's arguable as to what that affordability means.
Sure. But again, I suppose I'm just trying to get an idea about when when we talk about the mission statement for the housing observatory has been about creating a city which has that ambition, about creating a city which is both sustainable and affordable. How do we get there?
Well, what we're trying to do is evidence the argument for a more sustainable housing system, which means having more than one choice, which means having the choice between tenures and within each of those tenures having choice again. So we're trying to convince using an evidenced arguments about the net benefits of what works elsewhere on a return to the broadly simple argument that public housing should be available on a general needs basis for anybody who chooses to occupy it. And if that was more the norm rather than less, it's quite likely that we'd have a more mature, more moderate development system around housing that we didn't have the same peaks and troughs, boom and bust cycles, and that the financing of this would be a much more stable, more long term investment cycle instead of five or seven years, which is what we see in the rapid urbanisation and rapid urbanism. Today, we'd be looking at 25 to 30, maybe even 30 to 50 year periods of investment, so that at a certain point we would know for certain that the city is always going to be built to a minimum here of this type of housing. This number of housing, this type in this area. That's the minimum. We always know that that will be the case.
Sort of what are the issues? Because, again, it's a city. It's a defined and limited space. It has defined and limited resources in terms of land. So this ambition of creating sustainable and affordable housing for all in the city. What are the issues around delivering that within the city? When you're mapping this out, because I think you just want to try and drill this down and make it as practical and understandable as possible for people. But how we we achieve that within Dublin City?
Well, there's a lot of issues, but things that congregate all of these issues into one major argument are finance, and that's probably it - Today, it's the key issue of how finance is driving transformation of housing away from being a social good into an asset, an asset that then commands a certain value to rent a certain revenue, which again can be used to financialized investment in this form of asset. And then the use of that asset is no longer as important as its exchange value. So.
So the commodification of the house itself as a capital asset.
Yes, but.But it's always been in owner occupation, a privatized, collateralised asset. But it would have come would other supporting phenomena such as security of employment, such as lifetime work. And it would have also come as part of a kind of generational settlement, a political economy, if you will.
When you say finance is the issue. So that's the thing you're you're saying you would point to first rather than land or planning or models in finance. And when we say finance, you're not talking about access to revenue for Dublin City Council. But you're talking, I think, about finance within the financial system and the amount of money that would be pumped into a property market.
Dublin's housing is part of an international circuit of capital which is pretty footloose and goes where it wants, as it wants, as it chooses to get the quickest possible return at the highest possible rate to make a profit. That's the nature of capital. But at the same time, the developmental regime that operates in any one space can either accelerate or reduce or moderate or divert some aspects of that profit making so that the profit making doesn't necessarily get extracted immediately to a third party somewhere else. But it could also allow for increased wages. It can allow for higher levels of investment and improvements in the quality in the built environment. I've no bones to pick, with where the money comes from, I'm more concerned with what the money is doing when it's here and how it's working. I think at the moment there's a there's an expropriation of value from people's pockets. Housing is far too expensive, whether it's to rent or to purchase. It doesn't have to be as expensive as that. But we have not yet cracked a development mechanism or development model that allows us to moderate the factors of production in the construction of housing, but also the terms upon which we exchange and use housing. So we are subject to a number of external forces as an open and traded economy, but we're not taking perhaps control is not the right word, but certainly not taking enough time to think through how better to improve the impact of ebbs and flows in international finance to the city.
So let's talk about cost rental, because what I'd really love to get out before we even talk about where it's happening is define cost rental for me.
Okay. Well, you can use an economic definition of it, which is very simply that the cost of the development and provision of the housing is paid for by the rent you raise. So very quickly, you think, well, how much will it cost? That's the crucial issue here. And if that's cost is sufficiently controlled, then the rent doesn't have to be sufficiently high to exclude greater numbers of households who find that rent unaffordable. Now, the two things about the the mechanisms of the cost rental development system is that it does take account of the statement I made earlier that capital is on strike. What I mean by that is that international finance demands a whole set of different guarantees before it moves into residential space. And it still hasn't done that in any sufficient quantum. Even though we've changed our planning system and accelerated it, even though we've introduced different forms of capital taxation, changed models and different forms of land development grant models and different forms of taxation that allows money to move in and out of our city, it's still not building huge amounts of housing. So a cost rental model says, well, instead of relying on footloose global financial ebbs and flows, whichever way you want to call them. There's lots of different names, but that's effectively what they are. We take the public coffers to state purse, if you will. And we involve it in the production of housing model, which is very sustainable, very stable and quite moderating in terms of how it allows prices and costs to work. But fundamentally,
let's get specific. So. St Michael's estate, because that is That is an example of what you're trying to do this because I'm just trying to paint a picture for anybody who's listening about how this could physically happen and what it might look like. So cost rental scheme at St Michael's estate not far from here.E Four hundred and seventy six houses or units, I should say, being built around there.
Well, if you include the established Thornton Hall, there will be potentially up to over 470 units on that site.
So with that now, because most people know a little bit of the background of St Michael's estate and some of the horrors of what happened with the McNamara public private that collapsed, the horrors of our recession, boom to crash where we are now, st, Michaels estate what would cost rental look like there for four for me or for anybody who might be looking to use it?
Well, it would look like a very well-designed, super attractive place to live in where you weren't allow to buy anything. That's the first thing
so you're going to build it as dublin city council.
Well, the council will enable its development or will directly develop it. But either way, a third party or a third party or development provider or a leasehold arrangement, a covenant set of covenant arrangements which ensure that the land remains in public ownership. It's use then is what's tradeable and on the basis of that.
And then my rent is set how?
well, let's say it costs a hundred euro to build one unit. Let's just make up a number and the state buys mortgage finance for that one hundred euro unit for thirty years at one percent, which is what it can do. Then it has to produce a rent to cover the mortgage costs. But we also put into that a maintenance cost value for a sinking fund in case anything terrible should happen.
Just keep it simple for me - what's going to come out of my bank account
much less than you will otherwise pay on the open market.
But say it actually costs you 350000 spilled that unit when it starts
the point of it, it is not going to cost us anything more than what we allow the subsidy to produce. we will not, however, allow the subsidy to become capitalised out as profit. OK. That's what of cost rental. Does it captures the maturation impact? Over the period of you living there, paying your rent to pay down his mortgage in the capital that is owed in that mortgage falls away. Now the owner of the property has a yield, And it can then reinvest that yield in housing services, housing plus training, housing, put employment, housing, plus care, or it can reinvest that money in further borrowing to build more.
Just giving us a picture on cost rental. I just want to give it practical arms, legs and pictures with this so people can understand it. So cost rental, I rent it. It's it's a not for profit rent I'm paying. So within that, how do I qualify for that? Because it's not based on my income. What rent I'm paying with with any scheme. It's basically a rent which is based on the cost of without a profit of the development. So how do I as an individual qualify to apply for the cost rental?
Anybody who wants to live there should be allowed to live there. There shouldn't be any pre-qualification, but unfortunately there will probably have to be as we start this process because it's a very scarce resource, there won't be much available that is in the cost rental category. So you'd probably look towards established long term criteria that are also used to identify people's eligibility to apply for affordable purchase schemes.
So like what?
You work in the area, you live in the area. You have family who live in the area. You have a particular connection to the area that you can demonstrate. So you need to take the time to ensure that maybe the intake for your cost rental is at least a mirror of the neighbourhood and the area in which it resides and allows for some diversity, too. So you don't want it only to be for people of the lowest income or the highest income or the youngest or the oldest. You're you're trying to get that mix of income, a mix of households.
And in the meantime, the people who are on the waiting list. They will have access to social housing?
the same housing,
but their will within the scheme in St Michael's, estate be what we would generally describe as social housing,
And this is where the challenge comes out. How do we set up two schemes against themselves or would you? Do we have a unitary approach?
You tell me.
Well, no, it's a series of discussions and questions that have to be posed. We'll produce the evidence either way that says, here's the pros and cons.
All I'm trying to do is put flesh on and on the bones of this idea of cost. Rental, because in some ways, when you see it described and you've seen this as well in schemes and including from, you know, councillors coming from left of centre. see cost rental as a denial. Of their rights, They see it as denial of social housing. And they see it as a denial of the right of the individual to own. And one of the things they will say, because there is in some ways so little sense of understanding of your vision, which is why I'm trying to unpack it. They see this as a way in which you create absolutely two classes. Those of us who can own a house. Yes. And those of us who never will.
Well, the market will arbitrage stuff for you anyhow. So it's not the role of the state to be the market. The role of the state is to address market failure in housing. And that's what a public contract model will do. And until people get mature enough to see that, then we'll just be chasing our tails. We're not going to make any difference whatsoever. We'll be setting people up to fail by concentrating them into low income, low rent, poor residential spaces where there's no employment, few services and very little chance, opportunity. Now, if that's what people are voting for and if that's the way the electoral system is going, then that's how it's going to be. However, society would pay a very high price for that failure and not high prices inter-generational. It's in terms of the transmission of poverty and transmission of poor health, poor employment, poor opportunities. Ultimately, that impacts on whether anybody will want to come and live and play and work and learn in Dublin whatsoever. So the cost rental argument is a very substantive, simple argument about bringing back the role of the state in providing public housing to the public on a general needs basis. Now, here's one for you. By next year, it's pretty much estimated we'll be spending the price of that new children's hospital every year on HAP -. OK, so what are we getting for that? We're not getting anything done. The use of the residential space, which is very important, of course, but we're not creating a public good and we're certainly not investing in new housing by doing that. If HAP was payable to a local authority or an approved housing body or a non-profit housing cooperative or anything under that had a limited profitability. In other words, it wasn't allowed hold massive amounts of equity based on its rents, but had to reinvest them, which is the Wheatley Group for example in Scotland. And how that works is very clever. If that was the case, then the HAP, the housing assistance payment becomes an integrated payment system that allows public or private landlords to be assured that their rent will be paid. That's mainly what the landlord is interested in. The rent is paid, then the services get delivered because they can't be afforded and maintained and the employment that comes with that is very particular. If the rent is paid, then the debt attached to new development is discharged. If the rent is paid, then the future investment in that form of housing becomes much more secure. And if that rent is paid and is assured over a period of time because of a state support system such as HAP, then the distance that you can invest over that period moves from just five or six years out to 25, 30 and 40 years. And so then you have a system that on the one side has control of the costs of development because subsidy is going towards the right forms of development costs in terms of land and infrastructure and making that that available for housing. And you're also seeing on the income side an assurance that persons who fall in and out of employment or whose incomes become irregular or who cannot afford for whatever reasons that society considers to be legitimate, such as the social welfare system, that that income is available as well to ensure that the rent is paid. There's two sides of the same coin and then they come together. You get an ability to finance your has a system over a long period and then you have that. Then you're looking at how you moderate housing costs in the society and then guess what happens? You start spending money on other things like lifestyle, health, education, training, whatever it might be, but are not being pauperized by these horribly high, irregularly high housing costs.
Great. So what I've been trying to get at is this that the vision and what you what you're putting together here is a cost rental mapping, which is accessible. To not just add in again, it can sound very derogatory, but it was used by some of the other day that currently our approach to social housing is such a small net. It's the welfare class rather than any other environment within it. And we've created this very tiny then resource around it so that if you create affordable housing, you're looking at it being available to those who need housing, including single young people, people who might be elderly and widowed, but suddenly will not have a home made affordable housing based on this cost rental model, which would involve a massive, massive investment. And yes, and you're looking at the shift coming from the HAP payment, 1.7 billion.You mentioned the the correlation
The DEPAR estimate of. Where HAP will go in terms of expenditure
so 1.7 billion, which we currently handover to private landlords to meet our social and affordable housing needs. If that was shifted into actually creating secure tenure, this is where you would see it happening.
You can argue that either way, housing is expensive. It's expensive. When you do it well, it's even more expensive when you don't do it well. If you think of it that way. So the costs of meeting the crisis become very, very high. The costs of homelessness in the city are about 160 million this year. Okay. We're not creating new housing. We are buying some form of indeterminate period of shelter, some of which is excellent, some of which isn't. And it's not a place to aspire to any form of home making because de facto, it's emergency accommodation. We're buying space in the private rented sector at a high premium with no guarantees over security of tenure. That would be equivalent for the price that you'd pay if you're purchasing a car to hard purchase. You probably even have more rights there, but we're not yet prepared to say that those costs will be persistent and will accelerate over time until we do something about moderating the accessibility issue, not actually moderating the housing costs. People are facing an improving access. You can only improve access if it's there. So we have to get right back to basics. We have to be building a large, sustained new housing for quite some time, maybe 10 or 15 years before you see any major impacts on affordability, as affordability is determined by two major things. How much prices in your pocket and what's happening to the value of it? So if interest rates jump around a Brexit or Brexit or major external shocks, then the value of that euro changes and how much your purchasing power changes is determined by those external factors. But also then domestically, if you've got a job, if it pays you appropriately a living wage, then you can afford to live. But maybe if the rent gets out of whack and is no longer a living rent, you can't afford to live how you need to live. And you are facing a very indeterminate, very stressful and very, shall I say, costly period of your life. This dam has its own consequences later on. Over the longer term, it interrupts all of the other things that make a city like Dublin a great city to be in. You find places hollowed out by them, a certain demographics. You find other places where people are so shy, say, anxious or stressed or disciplined by the housing costs that they have to meet, that their ability to socialise and be and create and participate is reduced.
So when we look at this next period over 2019, 2020, what can be the triggers to actually change? What are some of the dynamics there? Well, we know if they don't change, it will actually get worse. All of the outcomes for society will be quite long term. And the consequences for cities in Ireland quite devastating.
Somewhat bleak. Yes. What's interesting about this is that it's become more and more apparent to people in Ireland that the generation rent the separation between certain age categories or demographics in terms of who has and who hasn't is evidently clearer. The normalcy attaches to the bank of Mum and dad and all the rest of that. But that intergenerational transfer of wealth doesn't persist and it's not available to everybody. So, you know, there needs to be a recognition that if we want to maintain the civility and urbanity of our city, we have to ensure that the people who grow up here, stay here, live here, come back here as they come and choose to do. But they don't have to be excluded or pushed out because of the economics of a rapid urbanisation. Following on from a very deep financialized gentrification of certain established neighbourhoods. You know, some of us are very fortunate to be very stable and affordably house and well-housed, but that is not the norm anymore. That's incredibly unfortunate position to have to say that this society has accelerated to a point where more and more people feel very, very much.
Even more poignantly - it's not the expectation
and it isn't the expectation. But what changes is that we have to change. Well, we have to reconsider the expectation of what it is to live well. And housing for all is an empty rhetorical phrase. If we're not prepared to put some significant, consistent, objectively identifiable decisions against what we know will work.
And that's Dr. Daithí Downey at Dublin City Council. And we've added some links to the podcast to find out more about the observatory's work, including that data mining map. We were talking about which the housing observatory has produced with Maynooth University and with the Ordnance Survey Office. Thanks for listening and you share the podcast with a lot more coming in the next month. But we need your support to get the story out there. So share on your own social media. If you find these ideas interesting and do write and review us on podcast platforms like i-Tunes, it really does help others find us. Talk to.