The recommendations in the Kenny Report from 1973 could have prevented, or at least mitigated our current housing and homelessness crisis. So why were those recommendations ignored? asks Peter McVerry.
A typical house in the greater Dublin area, costing €371,000, will have spent about €60,000 to buy the land on which it is built However, in some cases, depending on the location, land costs can reach €100,000 or even more per house, occasionally up to 50% of the cost of the house.
Agricultural land is currently valued at approximately €10,000 per acre (again it will vary somewhat depending on location, quality etc.) If you build five houses per acre, the land cost, using agricultural value, would be approximately €2,000 per house.
Many people have become millionaires without even getting out of bed.
Many people have become millionaires without even getting out of bed. They have watched the grass grow on their land waiting for it to be rezoned from agricultural to residential use. Five acres of land then increases in value from €50,000 to at least €1,500,000, sometimes substantially more. Those who purchase the houses which are built on that land are transferring vast sums of money, which they have probably worked hard to earn, to the original landowner who hasn’t had to work a day to earn it.
The 1973 Kenny Report
The Kenny Report was commissioned by the Government in 1973 to examine the increasing cost of land zoned for development. The majority report recommended that land to be purchased for development should be compulsorily purchased by the local authority at agricultural value (its current value) plus 25%. (A minority report was produced by the two representatives from the Department of Housing!) If implemented, our housing crisis today may not have occurred, or would at least be much less severe.
However, successive governments have refused to consider it seriously. Their argument was that it would be unconstitutional, an interference with the right to private property which is protected by the constitution – despite the fact that the report was chaired by a High Court judge, Mr Justice John Kenny, a constitutional lawyer himself! The politicians either knew better, or it was a useful excuse to avoid acting.
Property Rights in the Irish Constitution
The Constitution states that the exercise of property rights are to be regulated by the principles of social justice and the exigencies of the common good. A government that is serious about reducing the cost of housing and making it more affordable would have challenged the unconstitutionality argument all the way to the Supreme Court, which has in the past restricted the right to private property when the common good required it.
Most decision makers own, or are in the process of owning, their own home and may have little incentive to see the value of their home reduce substantially.
However, the value of a home is the biggest asset most homeowners possess, and they are happy to see the cost of housing increase. Most decision makers own, or are in the process of owning, their own home and may have little incentive to see the value of their home reduce substantially. A lot of land which could be used for housing is being hoarded by speculators who are waiting for its value to increase before drip feeding it on to the market. This again increases the cost of housing by reducing the land available on which to build. To use compulsory purchase orders would free up large tracts of land and lead to a bigger, cheaper and faster house-building programme.
Compulsory Purchase Orders for Land
We have regularly used compulsory purchase orders of land to build roads (sometimes even demolishing occupied houses) and this was not considered unconstitutional. Why such strong reluctance to use compulsory purchase orders to secure land to build houses? The real reason might be sought in the reports of several tribunals in recent decades which found collusion between politicians, landowners and developers, with brown paper envelopes being handed over in car parks to some politicians to secure rezoning of land. The development of our urban areas has been transferred from planners to market forces, sometimes corrupt ones.
Contemporary Relevance of Kenny Report
As we are in the midst of yet another housing and homelessness crisis – one which appears to already be back in bubble-mode – it is a good time to read the Kenny Report. In policy terms, 1973 was an age ago. But we had the answers to our contemporary questions back then. We hope that by sharing this searchable digital copy of the Report, we will help others concerned about housing to join us in calling on this Government to take the radical, but simple steps that can make a difference.