Oireachtas Joint and Select Committees

Tuesday, 16 February 2021

Joint Oireachtas Committee on Housing, Planning and Local Government

General Scheme of the Affordable Housing Bill 2020: Discussion (Resumed)

Dr. Conor O'Toole:

I thank the Deputy for her comments. As I mentioned earlier, in respect of the evidence we are putting forward today or, certainly, the research we are trying to draw on, we felt we had elements that could help with the Bill where that drew on our existing research. Where there are supply side elements in this, and this is a broad Bill, they are most welcome. Focusing on and understanding those supply side challenges are critically important. As we said on a number of occasions, any measures to increase the supply of housing are what we need so the range of measures in the Bill to do that are very welcome.

In respect of the eligibility criteria, learning from the UK scheme and the impact of any increase in supply on prices, as I mentioned, when we do this type of assessment ex ante, it is very difficult to say what exactly will happen to house prices given the range and multitude of factors that affect house prices. It is important at the start to think about the benefits and merits of schemes like this. It is also important to think about the risks. Outlining and considering these are as important as anything else. When a scheme like this takes place or the intervention occurs, one is able to say afterwards what happened if one has sufficient data and a good identification strategy to do that. I mentioned two things in my opening statement. The eligibility criteria, the targeting and the prioritisation are very important. Ensuring these households are unable to get the credit in the market - they have demonstrated that they have attempted to borrow on the market and that has been deemed to be insufficient for the housing purchase they would like to make - is a very important screening criterion for this scheme. That is critical.

In terms of the overall magnitude, naturally the UK is a very different market. The dynamics at play in the UK are very different and the context in Ireland is very different. The level of supply and balances is not the same here. The macroeconomic context and labour market shocks are different here, which matters for understanding how much of the various different pressures will pass through this scheme. It is not to say that what happened in the UK will exactly happen here. That is not the case. However, it involves thinking about what evidence we have in terms of the mechanisms and channels through which these type of interventions operate in terms of understanding the benefits to help facilitate home ownership for households that otherwise would be unable to able to avail of it-----

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