Oireachtas Joint and Select Committees

Thursday, 31 January 2019

Joint Oireachtas Committee on Housing, Planning and Local Government

Affordable Housing: Discussion

Photo of Mick BarryMick Barry (Cork North Central, Solidarity) | Oireachtas source

I will start with a quick observation and then ask a question of each group. At the start of November, the Ó Cualann Cohousing Alliance organised a conference which was addressed by Orla Hegarty from the UCD school of architecture. In the course of her remarks, she said:

I think we need to redefine what affordable housing is. I would have a concern that defining affordable housing as a product or a niche market or a scheme is not the way to look at this; we need to talk about affordability as the underpinning strategy for all housing policy.

That comment makes a great deal of sense. Is affordability defined according to income or to cost? It strikes me that the ESRI is trying to square the circle by saying it should be defined on the basis of cost but one needs to take into account whether someone can afford a certain basket of goods after paying out the rent or mortgage. Fundamentally, it has to be based either on income or cost. If housing policy is geared towards meeting the needs of people rather the profits of a minority, it must be based on income. The best policy would be to set rent at perhaps 15% for people on the lowest incomes, increasing to perhaps 25% for others. That means in reality that the provision of affordable housing is overwhelmingly the State's direct responsibility.

My first question is for the ESRI, which provided some interesting and useful statistics in its report. The 25% of the population with the lowest income are paying 40% of their income on rents or mortgages. How does that compare with other European countries? Is there any other European country where the percentage is as high? If the average is 40%, that implies that there are some who are paying slightly less than that in rent, while others are paying more than that. Something that I am increasingly coming across, especially among young workers in precarious jobs, is people paying more than 50% of their income on rent. Are the witnesses from the ESRI in a position to provide statistical evidence on how prevalent that is?

My second question is to the representatives of the Housing Agency. They mentioned the new affordable purchase scheme. We are waiting and wondering if they have any more detailed or concrete information about when we will see the colour of the Minister's money. Are the witnesses in a position to enlighten us about how the Minister will square this circle? We were told at budget time that this would the scheme would provide a 40% reduction in the purchase price for some buyers. With €310 million set aside for 6,000 affordable homes, the average discount would be slightly more than €50,000. A reduction in the market value of a home of €50,000 would not come near to a 40% discount. Even if there is a manoeuvre here or there to try to increase the discount, it is still not clear to me how that 40% reduction will be achieved on the basis of the funding that has been allocated for the scheme. If the witnesses are in a position to give any more information on that, it would be helpful. I know that may not be the case but I invite them comment on that.

My final question is more of a local question for the representatives of the Ó Cualann Cohousing Alliance. Their submission to the committee states:

In the case of Boherboy in Cork for example, we would need to add another €13,000 per unit to cover the cost of the site, and an average of €5,000 per unit to cover development levies.

There is considerable interest in the Boherboy scheme in Cork city and county and in the idea of being able to afford to buy a house in the scheme. There is perhaps a need for more public information about how it will operate. Will the witnesses provide greater details on the scheme?

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