Ireland’s inability to build enough affordable housing to live on has been a painful lesson for many.
The refugee crisis triggered by the war in Ukraine will now take these failures to a whole new level.
Imagine taking frightened and traumatized people fleeing a war all the way to Ireland to stay in big tents. But that looks likely, at least for a while.
The dysfunction of the housing market for many years will deeply affect a whole different group of people – victims of this terrible war.
Social and housing costs for refugees are expected to be around €1.7 billion this year, rising to €2.8 billion in 2023. That’s a sizeable but manageable bill. However, the greatest difficulties will come from the systemic problem in the housing market.
Housing Secretary Darragh O’Brien said during the week that we would need a further 35,000 new homes over the next five years to cope with the influx of refugees. This is on top of the estimated 35,000 a year we would need to build anyway.
O’Brien admitted that would be a challenge involving funding and possibly contingency planning. Financing is not the only problem with housing. Bitter experience has shown that there are many other underlying factors.
Inventing another 35,000 houses just looks like a general moving imaginary forces on a military planning map. At this stage it looks like fantasy.
Thousands of people have signed up to offer shelter to refugees. Others can get help finding a place to rent. But a mother and child refugee could not get government assistance (HAP) for a rented one-bedroom apartment because it is classified as overcrowding.
Households must (rightly) be screened before they can accept refugees. This will take a long time, leaving many of these unfortunate people in a hodgepodge of hotels, community halls or makeshift converted housing.
In view of the labor shortage, rising construction costs and major supply bottlenecks, the new construction targets seem unattainable.
The issue is not that one government does not provide the necessary financial resources, but that successive governments fail to introduce the right reforms at the right time and to appreciate the contribution that cheaper housing can make to a society.
Even look at the forest license processing debacle, which has led to domestic timber shortages and the need to import more expensive timber for the construction industry.
Not only will the financial impact be felt in housing and social services, but new fiscal pressures are coming to combat the effects of inflation, particularly rising energy and fuel costs.
Taoiseach Micheál Martin threw plenty of cold water at the Tánaiste’s proposal to help middle-income families by introducing a new tax rate of 30 percent. Speaking on RTÉ Radio One on Thursday, he said there will be pressure on the spending side of government books.
Martin intends to keep as much of the Treasury’s income as possible to fund new spending that will come along the way.
It’s only April, and the economic and fiscal projections for 2022 look very different than they did six weeks ago.
Seeking isolation from the energy crisis
While everyone is wondering how much insulation they should invest in to lower their rising energy bills, ESB employees continue to enjoy a 55 percent discount on their bills as an employee perk.
Businesses have every right to incentivize employees, but this seems excessive and excessive at a time when everyone is facing massive price hikes.
ESB employees have always been well paid and their trust owns 5 percent of the company. So if the ESB pays a dividend of 126 million euros to the state for 2021, around 6.6 million euros will flow into employee participation.
The ESOP has received approximately €63 million in dividends over the past decade. Well, that’s financial isolation.
Meanwhile, what is the difference between fuel shortages and “demand reduction strategies”? Quite a lot, according to Taoiseach Micheál Martin. He insisted he never used the words fuel shortage when addressing a private gathering of the Fianna Fáil party during the week.
Clarifying the position on the radio, he said: “I didn’t use that phrase at all. All I was saying was that energy security is something we need to focus on next winter and prepare for.”
Funnily enough, he didn’t say in the coming years, but in the “next winter period”.
Fuel is one thing. Energy is another. But both are related.
The boss of Europe’s largest diesel supplier believes there could be fuel shortages this winter.
The pressure on electricity, gas and diesel is growing. Demand reduction strategies are means of encouraging or even forcing households and businesses to use less energy.
Other countries are tackling the looming energy crisis in different ways. Germany and Austria, which depend on Russia for 50 percent and 80 percent of their gas imports respectively, have announced details of an emergency gas rationing plan.
For Germany, in a rationing situation, the focus will be on favoring household access to gas over industry.
Large industrial gas consumers are concerned and speak of the huge economic impact of such a move.
France has been working with an electricity price cap that only allows electricity prices to rise by 4 percent.
The country’s main energy utility, EDF, is 84 percent state-owned and does not have to pass on the higher costs.
During the week, EDF said the price cap would cost it 10.2 billion euros this year and another 16 billion euros would come from the need to produce less nuclear energy due to technical problems at plants.
The state has already injected €2.4 billion into the company this year, and there are questions as to whether it can sustain those losses.
Such steps are not considered here. But if the situation doesn’t improve, we need to hear about what plans the government has in store.
Where will Russian sanctions go after a peace deal with Ukraine
Surprise surprise! It turns out that half of the Irish-Russian SPVs have ties to sanctioned parties.
As we might have expected, Dublin has been used as a tremendous tax-efficient opportunity for oligarchs and corporations linked to the Russian government to raise or channel funds.
The number isn’t too surprising given the long history of wealthy Russians using Ireland as a place to send money.
It’s all perfectly legal, but in this sanctions environment, things got a lot messier.
If Vladimir Putin succeeds in taking Mariupol in Ukraine and then agrees to a peace deal, what will happen to Western sanctions against these individuals and companies?
Putin will likely try to build Western sanctions withdrawal into any peace deal.
It would be wrong to say that everything would return to normal, but we could see some sanctions being retained, some being dropped and others gradually and quietly slipping away.
https://www.independent.ie/opinion/comment/refugee-crisis-throws-new-spotlight-on-housing-woes-41510752.html The refugee crisis is throwing a new spotlight on the housing shortage