Oireachtas Joint and Select Committees

Thursday, 27 November 2014

Joint Oireachtas Committee on Finance, Public Expenditure and Reform

Mortgage Insurance Schemes: Discussion

1:15 pm

Dr. Ronan Lyons:

I try to bring this up and there are two reactions. The first is that one is completely determined by markets and that if one had no profits, then surely one would be able to build. Unfortunately, even if one had a zero cost of capital and one had some sort of co-operative scheme where nobody wanted a return, one would still not cover one's cost. The second is that one is just anti-regulation; one does not like regulation. That is not the point. Regulation brings benefits but it brings costs as well. It is understanding that certain regulations bring costs that are worth paying while certain ones do not.

I am not sure why a citizen in Copenhagen, Cologne or Cork can live in a 75 sq. m two-bedroom apartment but one cannot do so in Dublin. Somehow it is inhumane in Dublin but it is okay everywhere else. It is the same with north facing or east facing units. It seems like a small point but, as happens with some sites, the majority of the site is north facing and east facing, it can effectively make the site unviable. What we have is a certain set of preferences which have been caked into the minimum standard.

I appreciate averages in Dublin need to increase. The average size of units should go up. The fact that the minimum now is so far above everywhere else means that it is far above people's purchasing power. To be able to afford a two-bedroom apartment, one would need a gross income of €140,000. We need to get that cost right back down not by cutting corners but by redesigning how we make homes. That applies to social housing as well. We will not be able to afford social housing with the current system.

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