Ireland's housing market cannot be fixed without first making fundamental changes to the methods by which land is sold and developed, says a controversial new report by Ireland's policy think-tank, the National Economic and Social Council (NESC).
The report was published last night in light of concerns that the State is pursuing what it terms "exclusively market-led solutions" to the problem of affordable housing provision.
In particular it criticises the process of simply selling off State-owned sites to the highest bidder and without stipulations or controls attached to how it will be developed or or to what types of homes will be ultimately be built.
The report, 'Urban Development Land, Housing and Infrastructure: Fixing Ireland's Broken System', says the shortage of affordable homes is not caused by fallout from the boom nor the crash, but a fundamentally flawed system by which developers must compete to pay top dollar and then afterwards recoup this through the most profitable form of development possible - rather than the type of housing that is most needed.
"It is vital that the land be put in the hands of actors who will develop it in a timely and appropriate manner, rather than seeking to maximise State revenue by selling it outright, without regard to how the land will be developed. This would constitute a change from the approach adopted by many public bodies including Nama," it says.
Senior NESC economist Dr Larry O'Connell said in other countries where housing had been successfully held to affordable levels, such as Germany, Austria and Belgium, land use for both publicly and privately owned holdings was actively managed by the authorities in accordance with requirements, not the other way around.
He was critical of disposals such as last year's sell-off of land at Montrose by RTÉ on a "highest price only" basis.
"State bodies should have a responsibility in Ireland as they do in other countries, perhaps to partner with developers to provide the type of housing the state needs, while also deriving profit."
The report states that a more managed approach is required for disposal of both private and publicly owned sites for housing adding: "The focal point for competition is land acquisition and land hoarding, rather than quality of value for consumers.
"Overall the supply of land is uncertain, patchy and costly. This tends to make the housing system risky, unstable and unaffordable."
NESC points out that through the last 12 months sites controlled both by state bodies and Nama have been sold in numbers on a highest price basis, and ultimately for building homes that many assert are simply unaffordable.