Let’s look at the housing shortage through the lens of planning permission objections. We rarely think about the impact on house prices of individuals or groups of individuals opposing planning permission.
Each objection may be legitimate but, in the aggregate, planning objections have a knock-on effect on the availability and cost of housing. Indeed, the trade-off between individual rights and the collective good, so evident when planning restrictions are sought via objections, goes to the very heart of macroeconomics.
One of the most important laws of macroeconomics is the “paradox of aggregation”: what is good for the individual is not always good for the collective. For example, if the Government announces a tax break for first-time buyers, it feels good to the individual first-time buyer.
However, it will only confer an advantage on the individual if she and only she gets that tax break. If everyone gets it, the unique advantage will be cancelled out and maybe even reversed by the aggregate rise in starter-home prices, driven by the tax break.
Interestingly, when we think an advantage is conferred on us, we rarely consider how this plays out through the society and the economy. If, for example, you buy a posh car, it confers status only as long as few others buy a similar one. In fact, such a purchase throws down the gauntlet for others to match us or go one better.
Such is the nature of the modern economy. It really works like a crowd in a football match. When one lad stands to get a better view, he forces everyone behind him to do likewise, and in no time the entire stadium is standing when we had all paid to sit.
Individual advantage
The economy works in the same way, as individual advantage is quickly eliminated, and the cost is borne by someone else.
Now consider the aggregate effect of either individual or organised community opposition to planning applications. We have a housing crisis and one of the reasons for this is that we can’t build enough homes quickly enough across all income brackets. As a result, the housing shortage puts pressure on the housing market, from the rental sector to the upper echelons of the market.
As a result, more accommodation is needed, and quickly. As land is a resource, it is only productive if it is being used. In a housing crisis, its most productive use is for accommodation. And in urban and suburban areas with the best transport links, the best schools, the best public infrastructure, roads, shops and other amenities, housing development should be more intensive.
The value of property in these areas is not generated by the individual owners, but by the collective public investment in such places. The same goes for urban areas where generations of communal investment underpin individual property values. When people oppose denser/higher housing development in the city, what they are actually trying to do is privatise public investment in their existing property values.
Likewise out in the suburbs, opposition to planning applications can be good for the individual but bad for the collective because it limits the amount of land that should/could be used for accommodation. So what is good for the individual is not good for the greater community.
In Ireland, as house prices have increased relentlessly, the premium in living in good areas has risen in tandem. Not surprisingly, people who are fortunate to have done well in the process move to “lock in” those gains by preventing others moving in and availing of the same amenities – be it access to schools, a public space or a sea view.
This leads to a syndrome which is often termed “bananaism”. “Banana” in this context stands for “Build Absolutely Nothing Anywhere Near Anything”. Welcome to the Banana Republic, a place where time stands still, advantage is enshrined and the collective is secondary to the individual.
Slowing progress
All over Ireland, Bananaism is evident and it is slowing progress because it is limiting zones of development. For example, in Dublin, within the M50 where we should be building, 47 per cent of the total space is grass – either parks or back gardens. The Banana Republicans want to keep it that way; the rest need it to be developed to reduce house prices, reduce rents and make better and fairer use of public investment.
Now let’s add an extra local political spice to our dish.
Ireland’s PR electoral system means that few seats are absolutely safe and where they are, political parties’ vote management implies that no votes are wasted. This also means that a dedicated residents’ association, deep in the Banana Republic, can wield enormous power by threatening to vote against a politician who doesn’t side with them in their efforts to block development.
This leads to politicians who bemoan the lack of housing supply in the country and fulminate against rising rents, lining up with local residents who want to stop the very development that will create more housing supply – which is the solution to the problem.
We term this form of politics “nimtoo”. “Nimtoo” stands for “Not In My Term Of Office”. So politicians might support more housing as a national conceptual objective but not on their turf, or in their term of office.
It is not hard to see how the system seizes up under the twin forces of Banana and Nimtoo, reducing the available footprint or height for development, forcing people further out of our cities, amplifying commuting times and driving up house prices and rents.
Sometimes when we are looking for reasons for the housing crisis, looking in the mirror mightn’t be a bad place to start.
More or less what I’ve been saying for years.
Including this. https://hughsheehy.wordpress.com/2018/05/13/housing-a-shared-guilt/
The Irish electorate likes expensive housing. It makes them feel good. And the social and economic consequences be damned.
Is Democracy causing a housing shortage ? Do we over value our individual rights ..and to live alone ….taking up empty space ..that has no function other than to be empty ….full of space ….lots of it….too much of it ….even enough to give away….trying to sleep in two beds ..maybe more for some….dwelling on old memories long gone….failing to move on…too feeble to walk around….wanting two Jacks …for what ?
Agree 100%. In a country with such a low population density, offering cheap housing should be an economic advantage versus our international competitors. Instead Dublin now has one of the highest costs of living in the world due to expensive housing. The tragedy is that property appreciation is the dominant method of wealth accumulation in Irish society and any attempts to change the dynamic are fiercely resisted through the planning system by property owners. In Irish society it is considered normal and acceptable to object to any development near one’s property. In the wealthier areas it is one of the… Read more »
Great article Daavid and very glad this issue is being addressed because the ‘not in my backyard’ cohort do not always see the wider impact when they block planning applications. Bouncing a housing issue down the road means it continues that way.
Is there a housing crisis? We hear it all the time but that is not the same thing as there being one. I doubt there is, any more than there is an “obesity” epidemic. I suspect there is nothing more than marriage breakdown, older children refusing to live with parental discipline, alcohol and drugs, and people pretending they are homeless to jump the queue. I have no sympathy for many of those living in the better areas because they are the brains behind our insane opinions and policies. In fact I suppose I hate them. Even so, I think the… Read more »
Hi, The article is nothing short of appalling. You state; “We have a housing crisis and one of the reasons for this is that we can’t build enough homes quickly enough across all income brackets” and; “Want to find the cause of the housing crisis? Look in the mirror”. Really? The lack of speed in construction and the citizens are the ones responsible for only 8659 units built in the first 11 months of 2017/; https://www.thejournal.ie/housing-report-3798102-Jan2018/ Nothing about structural impediments to the increase in supply like the 20% second time rule castrating the purchasing power of the punter below the… Read more »
Naw …. David ;
The Hidden State of the Irish State don’t value the citizens’ votes.
The Hidden State basically rigs the whole Election.
Relatively speaking ;
The Main-Stream Media is not very concerned about :
“homlessness”
nor let alone, “homelessness + rooflessness”
But,- they do some reportage & opinionating lest history judge them as complicit ;
And,- complicit is what they are Re ; “Homelessness” & also “Homelessness + Rooflessness”
Coming to a neighborhood near u S…O…O…N !
Henry Makow
?@HenryMakow
TWEET ;
Deception: NGO coaches migrants how to act like refugees to gain political asylum
https://twitter.com/HenryMakow/status/1062390920316887040
Home-Sharing
Foxrock, Dalkey, etc. Style ?
https://twitter.com/rooshv/status/1062390199689330690
Further to the deadly sin of Hypocrisy, which Christ so often highlighted, & which David anchors as his case against the above groups ;
https://pbs.twimg.com/card_img/1062420191110459392/Xh1sPPnj?format=jpg&name=600×314
https://twitter.com/HenryMakow/status/1062524877809373185
LOADS OF POLITICO WOMEN IN IRISH STATE JUST AS UP THEIR NECKS AS IS THIS FEMALE USA SENATOR ; And, Homelessness, & Homelessness + Homelessness, & Immigration, are ripe bases for scheming adult Male & Female sex abusers in Irish State to exploit. HEADING ; AZ’s Dem Senator ‘Fought To Protect Men Who Had Sex With Children’ > > November 13, 2018 Baxter Dmitry News, US 4 > > Democrat Kyrsten Sinema, Arizona’s newly elected first female Senator, fought to protect criminals who had sex with child prostitutes and later took tens of thousands of dollars from the founders of… Read more »
Will the “I-JUST-WANNA-STOP-THE-HURT-CLUB” & EU & HIDDEN STATE OF IRISH STATE PERFORM THIS ON THE GILDED FEW OF IRISH STATE ?
..
Legalman
@USlawreview
TWEET ;
IF Trump is ACTUALLY “fighting the deep state” as we are told, THEN why doesn’t HE or the White House ever QUESTION the very STRANGE things we are seeing in these California “fires”?
How do houses and CARS burn but the “fire” leaves trees untouched ?
Is this natural or DEW ?
.
There is a massive institutional impediment to house building. The local authorities claim levies from house building, and are in the business of “maximizing” their share of the pie. In addition, the banks are doing their best to maximize the interest rate differential between their charged interest rate, and their borrowed interest rate. And of course the central state has no intention of rolling back the tax take from residential development. The local authorities are controlled by politicians who are in the process of accumulating votes, for the party/movement. And for that reason they need a hold on the populace.… Read more »
David is correct. Higher density residential development, higher building, and better application of resources can resolve the housing crisis in Dublin. It might also help if some state functions and business sectors were moved to other locations. We have the habit of piling too munch in one city. Having seen Oxford and Cambridge, as urban developments – would it not be a good idea, to move UCD to Kilkenny ? Or Waterford. Sure, there would be urban development afterwards in Kilkenny. In the case of Waterford, this is less of an issue. But it would produce a university city that… Read more »
There is also the “carbon-footprint” factor. No political party encapsulates the hypocrisy of Ireland’s environmental direction better than the Green party. In their surburban belts they are opposed to higher density development, and talking about cycle paths – while simultaneously pushing people further down the motorway. While at the same time, they are in favour of higher taxes on fuel, and motor transport, even though the residential pattern is hopelessly driving up the carbon footprint. In other words the Greens are creating that which they SUPERFICIALLY oppose. And the media give them a free pass. A complete free pass, incidentally.… Read more »
Why is it that people who live in a city, believe that they have a right to live like as if they were living in Connemara ?
Of course there is noise pollution on the Navan Road (M3/N3). If you do not want noise, traffic, or any of that…..try Cliftden, or Belmullet.
https://www.independent.ie/irish-news/news/it-will-be-like-living-on-the-m50-residents-set-to-lose-gardens-to-bus-lanes-struggle-to-see-beyond-the-negatives-37530419.html
Overall, the bus routes will reduce the traffic on the roads. And the pollution in Dublin. And journey times.
I think all the arguments are backwards. Dublin is not unique. So called shortage of housing is a myth and a problem all over the world. Central planning is the problem are there are few individual rights left to the property owner. Consider what can a property owner do without getting permission for some authority or other or being subjected to the opinions of a neighbour. It matters little whether one is in the wilderness or the urban center. Someone is telling you what you can or cannot do. A quick solution to the myth of housing shortage would be… Read more »
BONO ; “”Every time I clap my hands a child in Africa dies”
MALE IN THE AUDIENCE ; ” Well, stop clapping ur Hands so Bono !”
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Apropos of heavily influential Hypocrites rolling out the Social Construct ;
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viz.
>
BONO — BONO — BONO
of
U2
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I not a fan of Monologue Polemics ;
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BUT — BUT — BUT
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>
This Monologue Polemic about Arch-Hypocrite Paul – BONO – Hewson is very worthy of consideration by all on this Blog.
>
>
Ref.
Owen Benjamin
Published on Nov 7, 2018
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>
https://www.youtube.com/watch?v=x9dN1K0XrZI
HEADING ;
Giving Food To The Homeless Shouldn’t Be A Crime
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by Tyler Durden
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Sun, 11/11/2018 – 15:30
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Authored by Carey Wedler via The Foundation for Economic Education,
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INTRO ;
The Kansas City Health Department is under fire after employees bleached food intended for the homeless because the people supplying it did not have the proper permit…
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Government has long been characterized as inept. It’s easy to forget that sometimes it can be downright cruel.
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https://www.zerohedge.com/news/2018-11-11/giving-food-homeless-shouldnt-be-crime
Not impressed, I was in Poland recently where they have successful high rise flats. I was talking with one of the guys who grew up in them. They had soccer pitches, tennis courts, even forests beside the flats for the children.
In Dublin there’s nothing for children. We don’t even have a secondary school for boys in Inchicore. Now that David’s children are grown he wants us to sacrifice our back gardens for high rises. We don’t all have holiday homes in Croatia like David….
The cause of the housing crisis is simply the over use of debt. When I say overuse debt I mean that people have accumulated debt that they cannot, in the long run, afford. Because of excess debt it was essential that the interest rates decline or the economy in general would collapse. However this is just a deferment of the inevitable as the debt levels have continued to rise until the economy now suffers from debt suffocation. Any rise in interest rates will cause defaults and an economic decline. There is no longer in general room for an increase in… Read more »
David, Forgetting about our Fine Gael led government selling the country on the cheap to US Hedge/ Vulture funds that now are landlords (paying next to no tax) and charging exorbitant rents . Were these the same people who took over that iconic building (Clearys ? ) in O’Connell Street???? – You get my meaning and drift Dave.
Your article gave me a lot of inspiration, I hope you can explain your point of view in more detail, because I have some doubts, thank you.