
An answer to Ireland's housing crisis is right behind us
Ireland has a
housing crisis
. We have far too many people and not enough homes for them. We can't seem to build quickly enough in the right areas at the right price. All the while, rising rent and house prices are prompting tens of thousands of young educated Irish people to
emigrate
.
As argued here
last month
, our immigration policy is giving out too many work visas relative to the economy's ability to house these new migrants. There is too little supply and too much demand. The solution must include a reduction in
immigration
rates and a simultaneous increase in home building.
In the short term, all bottlenecks to building should be removed while the number of people coming into the country needs to be capped, which means identifying a number for sustainable migration and sticking to it for a specific time period.
READ MORE
Facing a crisis resolutely is often described as the 'Dunkirk strategy', where you achieve your goals however you can, galvanising all your resources. At Dunkirk, rather than waiting for navy frigates to evacuate the stranded British army, the war cabinet commandeered every boat possible – fishing boats, yachts, pleasure boats, the lot. The objective in the crisis was: do whatever necessary.
One housing-related idea under discussion is the notion that Irish people should be allowed (or even encouraged) to build small homes in their back gardens for the family to alleviate the pressure on the rental market. As long as the homes are within a specific size and meet some specific guidelines, families should be allowed to do what they want, right?
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We need to confront the reality that the housing shortage can't be solved
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This seems pretty sensible and, while it is hardly a universal solution, as an incremental move it's a start. The back gardens of many homes are potentially an amazing resource. In place of Nimbyism, living in the garden could be the start of a Yimbyism movement: yes in my back yard.
Although some have voiced opposition, the international evidence is overwhelmingly positive. Allowing people to build in their back garden creates reasonably priced homes in the right areas. In North America, removing planning barriers in recent years has unleashed huge growth in small garden homes. For example, in three years Seattle tripled its permits to build what they call secondary dwelling units. In California, permits surged by 15,334 per cent. In Vancouver today, roughly 35 per cent of single-family lots host a laneway or secondary suite. These are families taking the housing crisis into their own hands and building in their gardens. Why would you stop them?
In the Irish context, how big might this garden housing opportunity be?
The Dublin City Council area contains about 3,305 hectares of private gardens. To give you a sense of how big this is, consider 8,262 Croke Parks. Now you get the picture. These are already residential-zoned, serviced plots located in prime, established urban areas. By contrast, empty brownfield sites are scarce in Ireland because even though dereliction is rife, there simply isn't enough derelict land to meet targets. If we want to avoid more sprawl and longer commutes, new greenfield development should be curtailed.
Ireland's national policy is already aiming for 40 per cent of new housing to be built in existing urban areas. Gardens are already inside the cities. Ireland has hundreds of thousands of square metres of ready-to-go residential land in gardens.
A think tank called
Progress Ireland
has run some of the numbers to see how many small homes could be built in existing gardens. Obviously gardens without back lanes or side entrances aren't suitable, and they must be big enough to accommodate a basic studio or one-bedroom modular home. On top of these physical constraints, to be viable building in the garden must be cheaper than renting locally. The report concludes that, across the country, about 18 per cent of existing gardens are suitable. That's about 348,000 viable sites.
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Rise in young people's mental health difficulties partly due to housing insecurity, says charity
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In a crisis, surely it is worth green-lighting such an opportunity. At the very least, planning restrictions should be eased so that neighbours can't object on the basis of density or views or whatever Nimby nonsense is invented as grounds for objections.
A serious problem for Ireland is that our population isn't dense enough. We have only 73 people per square kilometre, compared with 279 in the UK. Four times the density means that public infrastructure might be as much as four times more effective. The more we build outwards, the worse our infrastructure will be and the more it will cost.
Speaking of cost, a basic two-bedroom log cabin for a garden is estimated to run about €30,000–€42,000, making it an attractive solution for intergenerational living or as a 'starter' home for a young person on family land. Contrast this with the cost of a two-bed apartment in Ireland or a similar starter home on a new estate. This sort of microdevelopment needs to be part of an overall housing plan. It can't hurt.
I understand many people will regard commandeering back gardens as a gimmick, putting people in a glorified shed or cabin rather than fixing the housing problem permanently. I get it. But anything that reduces pressure on the rental market must be considered for the short term. Having sons and daughters living in their own place beside their parents, or vice versa, might also have dramatic family positives (although it might also have the opposite effect in some cases).
The aim is to reduce the acute pressure. Many younger people might love to live, for a while at least, in the place where they grew up, with a modicum of independence and their own front door. Why should the State, which has failed to provide proper housing, object to this stopgap?
Last year Ireland built only 33,500 houses, a pathetic number. Even if we were to build 50,000 a year, which would be quite an achievement, we are a long way from bringing supply and demand into alignment. On the demand side, migration must be reduced if we are to have any hope of stabilising prices. On the supply side, a Dunkirk emergency strategy must be accepted, however unpalatable to some.
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Irish Times
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‘They are proudly posting videos confessing. That's new': Israeli soldiers being pursued internationally over actions in Gaza
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Irish Times
2 hours ago
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Inheritance, relatives and blended families: what does it mean for tax-free thresholds?
Could you clarify a passing comment that you made in your article last week. You used the phrase 'by blood'. Are you drawing a distinction with uncle or aunt by marriage versus an uncle or aunt 'by blood'? In other words, are you saying that a child can inherit under Class B from their parent's sibling, but not the spouse of that sibling? Are you sure that is correct as I do not see any such distinction in Revenue guidance ? It also raises the question of who is 'the parent' in the case of a divorce and remarriage. Does the birth parent for Class A purposes cease to be a parent on remarriage or can the step-parent become one? Mr DL READ MORE I always wonder when I write 'by blood' whether it is clearly understood. As with many recurring items, I have set out clearly what that means at one point or another but often revert to the shorthand. And yes, it can be counterintuitive if, like me, you grew up in a family where aunts were regarded as aunts regardless of whether they were my parents' siblings or had married into the family – and similarly for uncles. But Revenue does make a distinction when it comes to inheritance. The three inheritance tax thresholds are very specifically delineated according to blood relationship between the person making the gift or leaving the inheritance in their will and the person receiving it. Category A, which offers the highest tax-free threshold – currently €400,000 – is generally referred to as covering gifts and inheritances from a parent to a child, but it is slightly wider than that. [ Inheritance tax: How to avoid leaving your loved ones with a hefty bill Opens in new window ] For instance, if it is the child that dies – as an adult or otherwise – and the parent who inherits from them, the parent will also benefit from the Category A threshold as long as they are inheriting outright – rather than, say, getting a life interest in a property. The threshold will also apply to a child – anyone under the age of 18 – where they are inheriting from their grandparent when their parent is dead. We'll come back to that Category A in a minute in relation to the second part of your query. Category B covers close blood relatives other than parents – or other scenarios covered by Category A. It is sometimes described as lineal relations – i.e. those in a direct line of descent or ancestry. Most commonly, that is seen as covering gifts and inheritance from a brother or sister, a grandparent and an uncle or aunt. And yes, it is only aunts or uncles related by blood – i.e. siblings of one or other parent. You're certainly right to query it. I used to think it covered everyone with that title but I did check with the Revenue commissioners and they did confirm that there had to be a blood relationship with the aunt or uncle for them to be covered under Category B. Category B will also cover life interest inheritance from a child to a parent or any inheritance from a child to an aunt, uncle or grandparent in the unfortunate circumstance of the child predeceasing the older relative. [ Will inheritance tax be cut again in the budget? Opens in new window ] Many people worry about what other people will pay in tax on an unexpected windfall (inheritance) after they are gone. Photograph: Getty Images There is a growing clamour – particularly from people who do not have children – for reform of this Category B. As it stands, the tax-free threshold under Category B is €40,000, just 10 per cent of the Category A threshold. An awful lot of people worry about what other people will pay in tax on an unexpected windfall (inheritance) after they are gone. Personally, I always find that odd but that's not to say it is not a thing. There is pressure either to raise this significantly or to find some other device to allow people without children nominate one or two beneficiaries who can avail of a higher threshold. It is something that has been examined in the Tax Strategy Papers published recently by the Department of Finance . These papers examine issues that might be addressed in the budget later this year or a budget further down the line. As is their wont, this review merely sets out options and, to the degree possible, their likely cost or benefit to the exchequer. Whether one approach should be favoured over another or whether any policy change should be pursued remains a political matter for decision by the Government . Finally, we have Category C which covers all other people benefiting from a gift or inheritance – sometimes called 'strangers in blood' where the current tax-free threshold is €20,000. [ I am due to inherit €30,000, is it worth my while to gift my husband half to avoid tax? Opens in new window ] The three inheritance tax thresholds are delineated according to blood relationship between the person leaving the inheritance in their will and the person receiving it. Photograph: Getty Images And you can see here why Revenue specifies that aunts and uncles in Category B must be blood relations, not relations by marriage. 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Yes, it does. A stepchild qualifies for Category A on inheritance or gift from their birth parents and from any step-parent. The same is true for a child formally adopted. But birth parents are not removed from the Category A equation. A child can still avail of Category A in relation to a birth parent, even after divorce and remarriage, or where the child has been adopted elsewhere, as can a child who has been fostered under the criteria mentioned above. The one difference between the three categories of child is that if an adopted child's birth parent dies without making a will, they are not entitled to anything under intestacy where a stepchild and a fostered child would be. Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to , with a contact phone number. This column is a reader service and is not intended to replace professional advice


Irish Times
2 hours ago
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