Property pages…

 

Karl Deeter is back in the SBP property section. And he’s still concerned. It’s interesting because one could ascribe to Deeter a rather reactionary view of matters. Certainly reading his piece he draws a comparison between populations on the island in the 1800s and now – suggesting that despite our housing shortages we are still nowhere near where we were in the 1840s, with a population of about 8million on the island. True enough, we’re at a little over 6 million North and South. Whether such a comparison has any explanatory power at all is another matter entirely.

Anyhow he notes that economist Fred Harrison has demonstrated that in the UK housing cycles have happened time and again and he argues that ‘despite this, policies to prevent it don’t arise – mainly because they are not politically palatable. Now, I hear you say that one cannot really compare such cycles across such lengths of time due to changing political and socio-economic conditions – mass suffrage, consumerism, etc, etc. And I think you’re right.

But at root Deeter’s analysis is that these crises or cycles, or crises on foot of the cycles, are inevitable. And curiously despite the evidence of these cycles in the UK he takes us here in Ireland to task, for apparently…

We don’t do stick in Ireland, we only like carrots. The reason is that the biggest block of voters are the incumbent owners, a point I made in this column last week. 

If we increased property tax, but with a caveat that it soul go towards building social housing and local infrastructure we would have a very different society today. if we taxed every square inch o land, it would help to inhibit high land prices by creating a a painful carry cost. 

He suggests that ‘…farmers would cry murder… local authorities would be upset, religious orders, would naturally be bleating…’

And… ‘even if we made the decision to end this debacle tomorrow, it would still take years for the policy to kick in. And in a world of instant gratification and single electoral term thinking, along with opposition promise to ‘end it’ if you vote  for them, and the solution would be a dead duck.’

Now I’m a practical kind of a person and I loath political thinking (particularly on the left) where if we only ‘believe’ a little more, are more ‘optimistic’, all will be well. But… I also intensely dislike  the idea that something is impossible from the word go and not worth attempting, and in that respect his conservative, cautious, sceptical approach, seems to me to be a proscription for doing nothing. So, fundamentally his is a laissez-faire approach for all that he bemoans the fact that eventually ‘developers … will go ahead only on project with a high likelihood of success, and then, without known it they’ll all come to the conclusion that everything makes sense again. This will trigger the boom phase, when all of the lemmings go into hyper-supply mode. Cue a few glory years before it all keels over again. What comes after that? read the label on the green jersey. “Ireland: rinse and repeat”.

Of course, as an alternative we could just have significant state investment in building social housing and rent controls like many other European states – no? Or is that just crazy talk?