Professor P.J. Drudy:

I am delighted to have the opportunity to talk to the committee because I believe it can play a key role in changing matters. It is heartening to have a committee of this kind with members who have a broad spectrum of views and who are interested in housing. It gives me confidence for the future.

I was asked to make a submission on the private rented sector but I felt I needed to range a little broader because I see an important link between the three tenures, namely, owner-occupation, the private rented sector and social housing. For example, if we had a good private rented sector with regulated rents, good standards and security of tenure, then people would not be so desperate to get on this so-called “housing ladder”. Instead, they would be happy as Larry in the private rented sector with security of tenure, good standards and reasonable prices. Similarly, if we had more social housing, then there would not be such a desperate demand for private housing. I am not dismissing private housing but there is a clear link.

In table one, I show fairly clearly that we have almost exclusively commodified housing over the past 30 or 40 years where if one has money or can get access to it, one can buy a house; if one has sufficient money, one can rent a house; and if one does not have sufficient money, one does not get it. That is a real problem.

Under "non-market", I have put down 465 homes that have been built. I am not suggesting that it is the only housing provided because the local authorities are acquiring housing. If one talks about provision in a wider sense, the total would be something close to 8,000. However, I would suggest that acquiring houses is not necessarily a good idea because the State is in competition with lots of young people who want to buy. The State is participating in the escalation of prices. I would argue that it is really important that the State builds mores houses and a figure of 465 is quite shameful. There is no excuse for it that I can see. That is the first point I make. There is something radically wrong with the situation when the vulnerable, regardless of whether they have disabilities or are Travellers or ordinary people, have to live in cars or hotel rooms for weeks or months on end. I believe that for the first time in a very long time, this committee is a glimmer of hope for the likes of me.

In respect of buying a house, nothing has changed despite the crash. We have learned virtually nothing. I saw an interesting quote from Jeremy Grantham, an iconic investor, in today's edition of The Irish Times. He was asked what lessons had been learned from the global turndown in 2008. His answer was that we will learn an enormous amount in a very short time, a certain amount in the medium term and nothing in the long term. That is our position in this country. It seems that we have learned nothing from the 2008 crash because we have exactly the same problems now - escalating houses prices, escalating rents, bad standards and very few social housing units. These are the same problems I wrote about in 2005. The same three problems that were there ten years ago are with us today. I have a diagram showing that houses are overvalued. We can talk about the reasons later.

The private rented sector does not work and is not fit for purpose. Committee members will have read this morning that, on average, rents rose by 10%. This is completely out of line with inflationary tendencies. There is something wrong with that. I could discuss the case for regulation of the private rented sector in a few moments. Basically, the sector is unsatisfactory at the moment and it should not be because it could play a key role in helping us, as could all three sectors.

I have a set of recommendations. I hope I can persuade members that the key issue is that we need to change our philosophy and, as a result, our policies. If we do not do so, I promise members that we will be here in ten or 20 years time with the same problems. We must begin to look at housing as a home and a human right rather as a commodity and something for speculation and wealth creation. People say, "I am sitting on a gold mine". It is wrong. I own my own house, but it should not be the price it is now. I bought it for €40,000 in 1980 and it is now possibly worth between €500,000 and €700,000. Why should it be worth this amount? What did I do to deserve it? The answer is "Nothing". I did a bit of painting here and there but really there is no excuse for that sort of escalation in prices. Members can see from my diagram that it came down for a while but it has gone up again. I see that as wrong.

I refer to cost rental. I will stop in a moment but the Chairman can stop me any time he likes. A cost rental model is very important.

Social housing is critical but it is important to cater for a range of people who are finding it difficult, as well as those at the bottom of the tree who are on social welfare or whatever. Gardaí, teachers and nurses are struggling to buy and, therefore, I propose a cost-rental model where the State would build homes and rent them for the cost of the mortgage. The State would effectively regulate rents and the gardaí, teachers, nurses and so on who rent the homes would have security of tenure and standards would be good. It would be worthwhile to consider a cost-rental model. The NESC has agreed with me on this. I was on about this ten years ago - it is one way to travel. We must also cater for those in need of social housing, which is essential.

Providing 75,000 homes via the private rented sector is foolish and quite mad. Private landlords who want to make as much as possible in profit cannot be expected to provide for social needs. That is, therefore, the responsibility of the State. I will not go further as members will want to quiz me on my comments, put me down and so on.