Seán Keyes 🖐️

🏠 Percentage of monthly income to rent 100 m² in the European Union.

The good news is that modern man CAN do better than this. 👍 Every one of these is new from London & Paris.

Interesting article For cost per unit reasons, I am quite pro mid-rise buildings But there is undoubtedly scope for very tall buildings in Ireland, for example in new TOD developments This map from the paper is fun, though it won't surprise anyone to see how Ireland fares in it

Rents dropping across the country…

If these ideas are wrong, we're wrong. I sometimes find myself talking past people. The topic at hand might be rent controls or housing funding models. But the discussion will fail because my interlocutor and I disagree on some foundational idea, four steps prior. We can’t fruitfully discuss funding models for housing because we don’t even agree on whether its desirable to build housing for profit. Progress Ireland’s newsletters often skip a lot of context. It’s assumed the reader understands what we want (cheaper, nicer, better located housing for ordinary people; world class Irish science and commerce). And it’s assumed the reader understands the pillars of our worldview. But the pillars matter, and we shouldn’t always skip them over. If they’re not right, the whole edifice tumbles. When it comes to housing, there are seven of them. We think policies that take these ideas into account have the greatest chance of success. Housing 1. Building more houses drives down house prices. How much? By somewhere between 1 and 2.5 per cent per 1 per cent increase in the housing stock, per most studies. This applies to any type of new housing construction — market rate housing as well as subsidised housing. 2. Building market rate housing makes all housing cheaper. Studies by Evan Mast in the US and Cristina Bratu in Finland find new market rate housing begins a chain reaction that lowers housing costs for the entire system, including low-income tenants. 3. Housing supply is constrained by the planning system. This is obviously true to some extent, because the purpose of planning law is to control building. But we believe the effect size is big. We think, for example, that exempting seomraí from planning would result in lots more seomraí than a world where they must first get planning permission. A US metric called the Wharton Residential Land Use Regulatory Index (WRLURI) hints at the impact of planning law on housing supply. It’s an independent measure of how restrictive planning rules are in individual US cities. The following scatterplot shows the relationship between house prices and the strictness of planning rules. Places with less restrictive planning rules build more housing and as a result, house prices are lower. 4. Ambiguity around planning rules reduces housing supply over and above the restrictiveness of the rules. Ireland’s planning regime is discretionary and ambiguous, which adds extra risk to construction and reduces supply. Ireland’s system is modelled on the UK. By contrast, planning law in the rest of the developed world tends to be more specific (housing must be X distance from path, y ratio of walls to doors, z distance from neighbour…). 5. Planning law is downstream of local politics, and any enduring solution needs to take locals into account. As the experience of New Zealand under PM Ardern showed, it’s possible to railroad people into looser planning rules. But the rules won’t endure if the public hates them. Ardern was thrown out and her reforms didn’t last. Lasting solutions take the views of locals into account because they effectively have a veto – whether we like it or not. 6. High construction costs are a big drag on Irish housing supply. Irish construction costs for apartments are about a third higher than those in European peer cities on a like for like basis. This is a separate problem from Irish planning law, and has similar effects on housing supply and prices. 7. Development can’t be directed around the country by government policy. This is the conceit at the heart of Ireland’s regional development policy. The policy intentionally limits growth in Dublin, as a means of encouraging growth in the West and South. We believe these efforts make Dublin poorer and more expensive with almost no compensatory benefit elsewhere. Housing policy reforms we are inspired by: Washington DC, Sydney, Minneapolis and Austin’s city-wide upzoning (aka increasing the number of homes permitted per plot) which reduced housing costs relative to peer cities; a flurry of pro housing bills introduced in California in 2022; Houston’s use of “opt-out” mechanisms to win broad support for city wide upzoning; the UK’s street plans scheme (through parliament but not yet finalised) which lets local areas decide on their own housing rules; the recent proliferation of accessory dwelling units across the USA; Israeli reforms that gave homeowners an incentive to favour more housing; Japan’s implementation of “laddered zoning” which allows housing to built on almost any type of zoned land; and New Zealand’s plans to incentivise local authorities to support more housing. Infrastructure The three legs of the stool of efficient infrastructure delivery are: lots of skilled contractors; a competent client; and clear, fair and speedy planning regulation. Our first policy is focused on the need for better state clients. We believe the state, as the owner of infrastructure projects, has an obligation to understand projects, manage partners and bear risks. We believe this role matters more in more complex projects. We believe a state that lacks this technical capacity won’t be able to deliver complex infrastructure quickly or cost efficiently. European governments’ projects are more often managed by in-house experts. In English speaking countries, the projects are usually managed by generalist civil servants. In the top seven or so European countries, complex infrastructure projects like metros cost 20-30 per cent those of English-speaking countries. Experts in metro construction costs attribute the difference, first and foremost, to a lack of client-side expertise in English-speaking countries. The next step of our infrastructure research will be focused on how to attract the best international partners to Irish projects. We believe a deep market for contractors will result in cheaper, faster projects. We believe the best way to attract partners is to de-risk infrastructure projects as much as possible. This can be done by for example, providing a clear and certain pipeline of projects; minimising planning risk; paying bid costs for major projects; breaking large contracts down into smaller ones. The following step will be focused on new funding models for infrastructure. We believe infrastructure construction should work hand-in-glove with property development. In the countries that are most proficient at building transport infrastructure — for example, Japan, Hong Kong, Australia and Denmark — profits from property development pay for infrastructure, in a virtuous cycle. Infrastructure policies we’re inspired by: the Metropolitano Milanese (MM), a state-owned company that built Milan’s world class metro system cheaply and now exports its skills around the world; the Sinema, an entity brought together to deliver Madrid’s metro and then dissolved; Australia’s Infrastructure Commission which developed a clear pipeline of work and made Australian financiers and P3s world leaders in infrastructure; Tokyo’s and Hong Kong’s development rights auctions which funded metro expansion; Crossrail’s itemised contracts to minimise and expedite change orders; Milan’s long term infrastructure planning agency which works hand in glove with the MM; Copenhagen’s cheap-and-cheerful metro design; Turin’s cut-and-cover metro construction method; the MTB in Hong Kong for whom operating a rail network is a loss leader for their retail and property development business. Innovation The goal of our innovation policy is for Irish companies to be as innovative and productive as the leading European countries. Say Denmark. This takes in everything from basic research at Irish universities to the details of taxation of equity options. We believe scientific research could be much more productive. New approaches to research promise to improve matters. The core idea is to “turn the scientific method on itself”. Just as researchers experiment in the lab, metascience involves studying science itself with trials and measurements. A US National Science Foundation pilot offering top scientists greater stability and flexibility has increased productivity. In New Zealand and Switzerland, lotteries have mitigated funding bias. Meanwhile, the UK is developing metrics for research novelty. This will ensure funding is allocated to genuinely groundbreaking work. We believe Ireland’s failure to cultivate world-class domestic technology and pharmaceutical firms is a blunder. There should be a conveyor belt of talent leaving multinationals, starting businesses, selling businesses, and funding the next generation of entrepreneurs. Bored mid-career engineers and scientists at multinationals are an untapped strategic asset. We need to make it worth their while to leave their stable careers and try big things.Innovation policies we’re inspired by: the Arc Institute, built from the ground up on metascience principles, the use of ARPAs to fund specific mission-based research; the US tax treatment of equity options; US bankruptcy laws; EU Inc (the proposal not the version that has emerged from the Commission) the use of open science principles; an EU common market for digital services, Denmark’s flexicurity laws.