Mick Wallace (Wexford, Independent) | Oireachtas source

Most people would agree that all is not well in how we go about supplying housing in Ireland. It did not start with the current Government because it has been like this for a long time. I am very much aware that much of this does not actually come under the remit of the current Minister for Finance, Deputy Michael Noonan. I do not know whether there is any merit in having a separate housing Department given that there are so many different strands to the issue. There probably is given that there are so many issues in which the Department is involved and so many others in which it is not involved.

The Minister began by saying this is very much a supply-side problem. There is a supply problem but there was no supply problem ten years ago and yet there was still a problem. There were plenty of units but they were not affordable. Surely affordability is at the heart of the problem associated with supply, whether one is trying to rent or buy a unit or whether one is just trying to get one from the State because one cannot afford either of the first two options. We have reached a stage at which, if one has a job, the proportion of one's take-home pay required to keep a roof over one's head is greater in Ireland than in most countries. It is a big problem that has not really been addressed. There are many dimensions to it.

On 15 January 2015, the Minister and I had a discussion on REITs. At that time, I was warning that this could distort the rental market in Dublin. The Minister replied that only two REITs had been established by then and that both were capitalised at approximately €400 million. I was told two REITs with a total investment of around €400 million will not distort any market or give anybody control. The Minister said, “The REIT system will raise standards and if something goes wrong I will move to correct it, but so far it is moving in the right direction as intended.” The Minister told us today that the figure has moved to approximately €2.2 billion and that it is rising and will continue to rise. People in Ireland did not have access to finance and the Minister is now eager to bring in foreign money so they will have money to purchase. Units were bought by REITs at fire-sale prices with powerful tax incentives built into the structure of the vehicle. The REITs now control a very important chunk of the rental market. It has led to circumstances that I have referred to a few times. Apartments I happen to have built in Dominick Street that were €900 per month three and a half years ago are now €1,500 per month. It has become very difficult to rent an apartment in Dublin city centre. Dominick Street is not Ballsbridge, by any means. Some people would still be afraid to walk up there at night-time. Does the Minister believe there will be a time at which brakes should be put on this? How far does it go?

I have heard the Minister speak about the idea, of which he is very fond, of professional landlords. That is all very well but if people cannot afford to rent from such landlords, it creates a bigger problem.

On NAMA and the 20,000 units, the Minister referred to the fear of state aid rules and developers who have appealed to Europe about the matter. The vast majority of people in Ireland who have a problem renting or buying a house could not possibly afford to pay €300,000 for a unit. The Minister says NAMA is obliged to make a commercial profit from its activities. Given that it owns the land, would it be possible for the State to put in place some sort of arrangement if NAMA cannot do so? Clearly, 20,000 is a large number of units. Surely a minimum of one third of these would have to be made available to those who cannot afford to pay €300,000. The land already belongs to the State and it does not cost more than €150,000 to build a 1,000 sq. ft. house. The average house in Dublin is under 1,000 sq. ft. in size. Is there some way for the State to engage in supplying at least one third of those units to people who cannot afford to pay €300,000?

The vacant site levy was mentioned. While it is under the remit of the Department of the Environment, Community and Local Government, there is a tax issue in respect of sites and land-banking which has never been dealt with by the State. Given that I am younger than him, the Minister is probably more familiar with the Kenny report, which was published in 1974, than I have ever been. Without a shadow of a doubt, the biggest single problem around the affordability of housing in Ireland is linked to land-banking. That is not changing. We have investment funds, including the likes of Hines and Kennedy Wilson, coming in and they have not only bought units but development land. Some ten or 15 years ago, 90% of the banked land in the greater Dublin area was controlled by 26 people. We now have foreign investors coming in and taking more or less the same control over that area. It is not rocket science to see that this will be problematic down the road. Is this going to be dealt with?

The issue of the powerful right to property overriding the rights of the individual in our Constitution is also problematic. For the life of me, I cannot understand why no Government has dealt with this matter. Does the Minister consider that there is a need to address that issue in the Constitution so that we have greater flexibility in the area and can stop the cancer of land-banking in this country?