Dr. Larry O'Connell:

I will make an overarching remark to begin. The NESC has made it very clear in terms of international evidence that the market does not provide for more than 60-70% of people's housing needs anywhere. It is not just in Ireland. Every country finds itself having to intervene proactively in the market to cater for the housing needs of society. The recent NESC report makes it clear that such intervention cannot just be arm's length. It needs to be much more proactive in terms of engaging on the land issue. In the view of NESC, that is clearly required in the direction of policy.

On the issue of cost rental, I sometimes think of it as akin to talking about a start-up. We have a rental model that is a single type of provider. All of the market rental is provided by a profit-oriented business model. We are trying to encourage a new business model with cost rental. That will lead to a very disruptive change which will make the market more balanced in the end in that there will be competing providers making very different offerings. If a disruptive technology like that is being talked about, any start-up needs support, such as from Enterprise Ireland, to get off the ground. Once it gets off the ground, we have seen, as Deputy Eamon Ryan has pointed out and when the international economic model is looked at, that it can be sustainable. In the start-up phase, however, there are issues and difficulties that have to be resolved, and Deputy Coppinger referred to some of those, such as how the levels of rent would be set, how its connection with existing rental payment systems would be worked out, how the fact that rent may still not be affordable for people is dealt with, and other policy interventions may be required in such cases to make cost rental affordable. Those issues need to be worked out. I am not in a position in any way to comment on Government policy and I will not be an apologist for it but it is a fact that some of those issues have to be worked out and that modelling needs to take place. It is my understanding that such work is under way.

A certain amount can be done to model those exercises, look at the literature and work out what needs to be done. If progress is going to be made, however, and a recent NESC report is clear on this, then projects are the key to doing it. It is heartening for us to see that the policy system receptive to it now, and Mr. Cahill has been one of the people championing cost rental for many years, but it is fantastic to hear of a project coming from St. Michael's Estate and a group which is looking at this and saying it can see how this can work. To move forward on this will require many projects. That will work out some of the remaining issues and that is the key to working forward. We believe that there is an appetite now within the system for cost rental and that it is accepted. To resolve some of the issues, modelling will be required but in the end it will require projects to make progress.