Over the past few weeks, the State has being urged to increase the supply of social housing as a matter of urgency. This plea is coming from industry bodies, from speakers at industry conferences, from workers within our overstretched approved housing bodies and, most recently, by the Economic and Social Research Institute (ESRI).
The latest ESRI study suggests that the State increases the supply of social and affordable housing in the short to medium term in order to counteract the likely impact of the Covid-19 pandemic on the supply of new homes over the longer term. This latest research warns that long-lasting impacts of the crisis may exacerbate the supply issues already present in the property market and lead to a sharp increase in prices when demand recovers.
Significantly, the study reveals that the employment sectors most damaged by the pandemic to date are the same employment sectors where there is a concentration of households who rent their homes and this is likely to add to affordability challenges.
Another worrisome threat to housing highlighted in the study is investment uncertainty, which could potentially reduce investment in housing, not to mention the impact of public health measures on construction productivity and how this is likely to impact on alternative development funding firms. So, in short, it is still much too early to assess the real or likely impacts of the pandemic on Ireland’s housing market; however, reduced numbers of house and apartment completions are inevitable and a recovery in demand will almost certainly outpace a recovery in supply. Any market imbalance or mismatch such as this will drive prices up and exacerbate Ireland’s housing affordability issues.
In order to tackle this impending crisis, industry groups from all sides are now calling on the State to step up and provide (or facilitate) the delivery of new social housing en-masse. But how? At the moment, the approved housing bodies are largely responsible for the increased social housing outputs over the past two to threes. Are they in a position to scale at the speed required? Professor Kieran McQuinn, co-author of the ESRI paper has the right idea when he surmises that “Ireland’s housing market has suffered from chronic supply shortages over the past number of years and the disruptions to activity which are associated with Covid-19 place further pressure on delivery in the private sector… Ultimately, facilitating cheaper, more efficient housing supply is the primary policy concern in the housing market over the medium term”.
This is where offsite construction and the use of other Modern Methods of Construction, or MMC, can become part of Ireland’s social housing solution. The use of MMC is increasing amongst UK social housing providers and the UK government has advocated for an ‘offsite first’ approach for all PPP projects. The Irish government has yet to make a bold commitment in this regard; perhaps now is the right time?
The Horizon Offsite team have been working on a number of essential and non-essential social housing sites this year and you can read more this here: https://horizonoffsite.ie/horizon-offsite-working-with-abm-to-deliver-social-housing-in-county-wicklow/
About Horizon Offsite
Horizon Offsite Ltd is one of Europe’s leading players in Offsite Construction (MMC/Modern Methods of Construction) providing a full accredited structural light gauge steel system to the domestic, Industrial, Commercial, Health and Educational market.