2021: The end of neoliberal housing in Ireland?
The Week in Housing 17/12/21
Irish housing policy is no longer neoliberal. This is the premise of an academic article I am finalizing at the moment. I hope to submit it soon, but since it will likely not be published for at least 18 months, I want to use my last Newsletter of 2021 to summarize the argument. It’s a fitting topic to finish up the year on, as my argument is that 2021 has been a year in which the nature and extent of housing policy reform is such that it can no longer be considered neoliberal. Instead, inspired by recent work by Justin Kadi, Lisa Vollmer and Samuel Stein, we can conceptualize Irish housing policy as ‘post-neoliberal’. In what follows, I focus on the PRS, but I think the argument holds for Irish housing policy in general.
But first let’s back up; if we want to analyze whether neoliberalism is ending, we need to define what it is. The concept is notoriously tricky and some of the academic literature on this is ludicrously vague, even by academic standards. But most authors agree on the following:
· Neoliberalism relates to the extension of ‘market rule’ over most, if not all, areas of social life. Market rule means the logics, processes and practices associated with the market, especially the price mechanism as a regulator of supply and demand; private investment as the principal way to provide resources; and competition.
· Neoliberalism isn’t about the state withdrawing to allow the market to flourish, laissez-faire style. Instead, it is about active state involvement in supporting, extending and promoting market rule. Classic examples include privatization, or the extension of market competition to areas such as third level education or rail networks.
· Neoliberalism is not a total, homogeneous political economic system. Instead, we should speak of neoliberalization as a process of piecemeal, ad hoc change that takes place in specific contexts and, therefore, tends to reflect local political contexts. On this basis, the ‘end of neoliberalism’ is not likely to come about via a ‘big bang’ transformation, but rather by piecemeal, ad hoc changes.
Irish housing policy has be seen as a poster child for neoliberalism, as argued in this edited volume from Andrew MacLaran and Sinead Kelly, and in recent books by Eoin O’Broin and Rory Hearne. The 1980s and 1990s saw retrenchment of social housing; the extension of PRS subsidies; the elimination of many homeowner supports, such as local authority mortgages; the abolition of rent controls; the deregulation of the banking sector; and aggressive tax incentives to promote development.
So, if that is what neoliberal housing policy looks like, what would post-neoliberalism involve? Our focus, I argue, should be on how policy is moving away from, constraining or undermining ‘market rule’. For the purpose of analyzing the potential post-neoliberalization of the Irish PRS, I understand market rule in terms of the core market features of prices, competition and investment. However, market rule relates to more than voluntary transactions via market mechanisms. It also involves social relationships. Policy regimes produce social relationships of housing, and neoliberal regimes extend marketized social relationships. In the case of PRS housing, the relevant social relationship is that between landlord and tenant, and a marketized version of this relationship is one that empowers property rights and exchange value over the right to home and use value.
So let’s look briefly at four key areas of PRS policy to analyze what is happening:
Rent regulation: we’ve had no fewer than three forms of rent regulation introduced since 2015, each one progressively stronger. On each occasion they have been introduced as temporary measures, but the reality is they are now entrenched in the Irish PRS. The latest restrictions mean Ireland has some of the strongest rent regulations in Europe, and most likely in the world. Deregulated market rents, a cornerstone of neoliberalism, are essentially gone.
Tenancy protections and enforcement: we all know tenancy protections remain weak. However, since 2016 there have been a plethora of reforms, all of which have tended to undermine the market based social relationship between landlord and tenant. Tenancies have been lengthened and are now effectively indefinite, the process of serving notice has been reformed, with landlords required to sign affidavits and notify the RTB, for example. The nature of enforcement has also changed – the RTB has gained additional powers, allowing it to pursue non-compliant landlords, which represents a qualitative change in how the regulation of the PRS is framed. Security of tenure is still a way off, but the direction of travel is certainly away from the prioritization of property rights and exchange value.
Rent subsidies: rent subsidies, especially in the form of HAP, remain a central feature of the Irish PRS, with around a quarter of tenancies subsidized. This is a key example of the active state promoting and supporting the PRS as a market, i.e. neoliberalism. However, on closer inspection, the policy logic behind HAP appears to be changing. First, at the level of spending, the tendency for current spending to dominate capital spending (a hallmark of neoliberalism), has been reversed. Current spending accounted for 30% of Dept. of Housing spending in 2008, rose dramatically to 70% in 2014, but in more recent years has fallen back to 41% (see recent report). Second, at the level of discourse, Rebuilding Ireland included HAP as a major component of ‘social housing delivery’. It stated that HAP offers ‘many families stable and supported social housing’. More recently, however, Housing for All states:
Given the current supply challenges, it will be necessary to continue to provide social housing in parallel via the private rental market for now to ensure that those who are most vulnerable in society can access support immediately. As new-build supply of social housing ramps up, there will be a reduced reliance on the Housing Assistance Payment…
The emphasis here is on the role of HAP until the provision of more traditional social housing is increased, and thus suggests a ‘reduced reliance’ on rent subsidies in future. This represents a shift away form the classic neoliberal approach, where demand side subsidies are introduced to facilitate the reduction of capital spending on social housing investment.
Investment: This is the area which remains most clearly neoliberal as the current Government continues to argue that international capital and institutional investment is central to the future of the PRS, and to argue against regulation on that basis. However, even here there are signs of faltering. Specifically, we have had three significant policies to constrain institutional investment: (a) the Tyrellstown amendment (which sought to prevent mass evictions); (b) recent increases in stamp duty; and (c) planning guidelines to constrain institutional investment in the single-family dwelling segment. Notably, apartments remained exempt from the more recent regulations on the grounds that ‘we need continued investment from international capital to ensure supply in core urban and high density areas’, as Darragh O’Brien has said.
My analysis of the all of the above involves three fundamental points:
1. The PRS policy regime has undergone a qualitative change to the extent that it can no longer be conceptualized primarily in terms of the extension of market rule. This does not mean all policy issues are solved. It does not even mean that the change is necessarily positive. The point here is simply that it can no longer be meaningfully conceptualized as neoliberal.
2. If PRS policy is not based on neoliberalism, what is it based on? Here I introduce the concept of ‘emergency post-neoliberalism’, in which neoliberal policy orthodoxies are suspended in order to protect households from some of the most deleterious impacts of the housing crisis. Notably, especially in the case of the RPZ measures, market logics (in this case of prices) are ‘suspended’ temporarily, rather than replaced altogether. Nevertheless, as each year passes, and the crisis persists, measures initially introduced on an ‘emergency’ basis become entrenched, opening up the possibility that in future they become a longer term policy norm. On this basis, I introduce a periodization of Irish housing policy (see Table below).
3. However, the ‘post’ in post-neoliberalism is appropriate as PRS policy is still shaped by the neoliberal context and path dependency in important ways. Here, we can think about the tension between national regulatory and policy change, on the one hand, and transnational structures of political economy which establish a ‘neoliberal rule regime’, on the other. As argued above, we have many reforms designed to intervene at a national level in the PRS. But at the same time, policy makers make continual reference to the importance of supply, and consequently, international institutional investment, i.e. capital flows linking Irish real estate to global financial circuits. The transnational political economic context created during the period of neoliberalization (i.e. financial deregulation, 1980s-2008) and ‘austerity urbanism’ (i.e. deleveraging of distressed assets, 2008-2015), thus shape how capital flows into the Irish housing system, in ways which continue to shape and constrain policy action.
Many will argue that the changes introduced in recent years do not go far enough to address the housing crisis. That is certainly true. I am focusing here, however, on the underlying rationale of housing policy, not a normative evaluation of whether it is good or bad.
This will be the last issue of The Week in Housing in 2021. I am on leave in January so I won’t be back until February of next year. I started this Newsletter in April of this year. I initially started it because I was finding it very hard to keep up with all the developments in housing, so I wanted to create a kind of weekly, one-stop-shop that would cover the main developments in evidence and policy, and share events and literature. Over the year, however, I have also been able to develop analysis of what’s been happening, which has been very useful and enjoyable. Thanks to everyone who has subscribed or read The Week in Housing this year, and I hope you will stay with me in 2022!
Events
No events this week - it’s holiday season!
What I’m reading
I’m not recommending literature this week, but I would like to recommend a Christmas gift for anyone interesting in housing. Threshold’s Listening Library allows you to sign up and enjoy over 50 of Ireland's most treasured personalities reading poems, memoirs and some of their favourite stories, all while raising vital funds for Threshold. There’s a great collection here and I think it would make a really nice gift for anyone who likes audio books and stories, including bedtime stories for kids. Find out more here: https://listeninglibrary.threshold.ie/
Table 1: periodization of neoliberalism in Irish housing policy
