The great Housing rip off

national | housing | opinion/analysis Friday May 20, 2005 11:56 by Gregor Kerr - WSM

Or when property becomes theft

The great Housing rip off
Whether we pay rent or a mortgage, the cost of keeping a roof over our heads takes up a huge proportion of our income - those of us who are 'lucky' enough to be in a position to do so. Everywhere we look - both in Dublin and other cities and also in small rural villages and towns - the skyline is dotted with cranes and houses and apartments seem to be springing up everywhere.

Yet the cost of buying a home - or even of renting one - is proving to be beyond the reach of many people. There are nearly 60,000 families on the housing waiting lists of local uthorities throughout the state. The Simon Community estimates that an additional 10,000 people experience homelessness every year.

The tax incentive' rip-off'
According to an article by journalist Maev-Ann Wren in 'The Village' (4th December 2004) up to 40,000 of the 80,000 homes built in 2004 were built as second homes - "either holiday homes, which are empty for most of the year, or houses and apartments, whose purchasers intend them to remain empty, since they are persuaded to buy by generous tax subsidies and their anticipation that an eventual sale will realise a speculative gain."

All of these second homes are being built by wealthy people availing of various government 'tax incentive schemes'. In other words, they are allowed to write off a proportion of the money they spend from their tax bill. The rest of us - those of us who can hardly afford one home, never mind two - suffer on the double. In the first place, huge amounts of money that could be spent on building local authority and social housing is foregone by the state (It is reckoned that one scheme alone - the Resort Relief Scheme - cost the exchequer approximately e317.4 million between 1995 and 2000). And secondly, the proliferation of second homes has the effect of driving up house prices for the rest of us.

The rezoning rip-off
From the evidence that has come out at the tribunals, everyone is now aware of the great rip-off that is involved in the rezoning of land. If someone owns a few acres of farming land and can persuade/lobby the local authority to rezone it residential, he/she stands to make an absolute killing, sometimes up to 12 or 13 times the previous value. And as the tribunals illustrate, there are plenty of corrupt politicians like Liam Lawlor or Ray Burke willing to be 'persuaded'. This rip-off profit eventually comes out of the pockets of the people attempting to buy or rent the houses or apartments built on the land.

The housing rip-off is one of the greatest scandals of the capitalist system, and a clear example of the fact that when profit rather than need is the deciding factor, those that have most will always be in a position to fleece the rest of us.

First published online on indymedia.ie