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The issue gripping Ireland right now isn’t just about Brexit

Edmund Heaphy
Finance and news reporter
A protest march in Dublin against homelessness and housing crisis in Ireland. Photo: Getty

While the Irish government is battling Brexit concerns over in Brussels, it’s also having to juggle a ballooning housing crisis back at home.

In recent weeks, swathes of protesters have transfixed the country’s capital city Dublin, by occupying vacant buildings, stopping traffic, and commanding attention on social media. But it’s not just activists that are causing a stir—the catalog of complainants has swelled to include those from Ireland’s business, political, and policy-making sectors.

On Tuesday, the country’s housing minister, Eoghan Murphy, faced a motion of no confidence in parliament over his handling of the crisis. Though Murphy was always going to survive the vote—something he dismissed as a “stunt” by the opposition Sinn Féin party—tensions have reached such an acrimonious pitch that a junior minister from his own party seemed on the precipice of withdrawing her support.

On 21 September, Michael Carey, the chair of Ireland’s Housing Agency, told a conference that the the scale of the Dublin housing crisis has limited the city’s ability to reap a Brexit dividend. Multinational companies deciding on a location for their post-Brexit headquarters in the European Union are turned off by a city with staggeringly high house prices and an extraordinarily weak supply that can’t keep up with rising demand.

Paddy Cosgrave, the CEO and co-founder of the Web Summit conference, joined street protests organised by the grassroots “Take Back the City” movement on 22 September, and told the national state broadcaster that the ruling Fine Gael party “may have underestimated the nature of this crisis.” After five years in Dublin, the Web Summit, which attracts more than 70,000 attendees each year, moved to Lisbon, Portugal in 2016, with Cosgrave citing Dublin’s weak infrastructure and “poor planning” as reasons for the move.

Meanwhile, a recent report by the American Chamber of Commerce in Ireland said that “housing is one of the most critical pressure points when looking at recruitment for expansion” in the country. It pointed to what it calls an “inability of supply to meet demand [that] has been particularly acute since the end of the recession in 2011.”

At the lower levels of the market, these problems have contributed to a worsening homelessness crisis. The latest figures indicate that, in July, there were a record 10,000 homeless people in Ireland, which has a population of just 4.8m people. In August, images of a woman and six of her children being forced to sleep in a Dublin police station—due to crowded emergency shelters—jolted the national consciousness.

At all levels, the Irish government has relied on the private sector to provide housing. It then provides low-income families with assistance to rent these homes, which will cost more than €500m (£450m) in 2018 alone.

The Irish government maintains that it is taking all the necessary steps to mitigate the crisis. Earlier in September, it announced the establishment of the €1.25bn Land Development Agency, promising that it would aid the building of 150,000 homes over the next 20 years by focusing on underused state land and by acquiring private land.

On Wednesday, as part of its four-year housing plan, Murphy launched a strategy for the country’s “Housing First” model—which allows homeless people to move directly into permanent accommodation—and pledged to build up to 1,000 homes for rough sleepers and those who access emergency shelters. A leading homelessness charity, the Peter McVerry Trust, said the move was “a game changer.”

Though the homelessness issue has at long last become a headline issue, it is warnings from businesses that are likely to stir the centre-right Fine Gael into action more than anything else. A key body that aims to bolster Ireland’s economic competitiveness warned in June that the crisis has the potential to “indirectly impact on enterprise costs and influence the competitiveness of Irish goods and services.” Almost 80% of senior hiring managers from large firms said that the city’s high housing costs were the single greatest handicap to living and working in Dublin.

There are signs that moves, such as mortgage lending restrictions introduced by the Irish Central Bank, are dampening house prices—but the issue is not going anywhere anytime soon.