Paschal Donohoe (Dublin Central, Fine Gael)

This is the reason we have the residential zoned land tax, RZLT. It is a measure that is now being implemented. It is designed to deal with the issue the Deputy is referring to. If people have land that is zoned for residential land and the value of it goes up and the commencement of homes is not happening on it, they are now taxed on the increased value of that land. That is the reason we have it. This has not been an easy measure to implement. It has caused various challenges and difficulties. The very reason we have the RZLT is to deal with the issue he is describing. If somebody has land and the value of that land is going up but they are not choosing to go ahead and facilitate the commencement of homes on that land, land which is serviced by the State, that weakens the public good and we are now taxing that value. That is the way the Government and the State are aiming to deal with that issue.

There is some growing evidence that this tax, which, in fairness, this committee supported when I brought it in, is working in terms of the number of transactions we are now seeing involving the disposal of land that has planning permission on it but is not being used to deliver more homes. The Deputy made a point regarding the issue of the value of land going up and the social ill that is caused by the Government and the State servicing land and zoning it for housing, homes not being delivered and somebody benefiting from that. That is a big issue. That is why the RZLT is in place.

In relation to productivity, again I understand where the Deputy is coming from. We can directly influence the productivity within the homes that we are involved in building and supporting. There are various measures in place to do this. The homes that are being delivered in the largest housing project within my own constituency, O'Devaney Gardens, are being funded by the State. The use of technology in the delivery of those homes is amazing. I have seen with my own eyes homes that are constructed offsite being virtually erected off the North Circular Road and the difference that makes in the speed of the delivery of the homes. I can see the work that is happening there to do that at the moment. Yes, the private sector needs to play its role in the delivery of that and in increasing the productivity within it. It appears to me from the engagement I have had with the private sector on it that they are working to deliver that because it is in their own interests as well.

The only point I would push back to the Deputy on is in terms of the point he made earlier on. The various supports we have available to the private sector to deliver more homes, particularly on the spending end, which is where the vast majority of the supports are, are directly involved with the commencement and the delivery of more homes. I listed them all earlier on. I refer, for example, to the work that the LDA does, to the STAR programme, to croí cónaithe or to the different programmes overseen by the Department of the Minister, Deputy Browne. All of those supports are ultimately tied into a home being built and somebody living within that home. It is not the case that somebody can redirect the supports that are available to additional profitability. The homes have to be built.

On the issue of profitability, particularly with regard to the delivery of more apartments, a publication that was issued by the Department of housing last September indicated that the level of profit that is being delivered on a two-bedroom apartment, for example, in an urban or suburban environment is between 8.4% and 9%, which is significantly below some of the figures the Deputy quoted. The challenge we face is that with that level of profitability, we are still not seeing anywhere near enough apartments being built. I go back to the very reason I am making the case for this section today. Yes, it does increase the profitability that is available to those who are building apartments in the first place, but the aim of that, in turn, is to lead to more apartments being built in our city centres in particular. In the absence of that, we will not be able to get up to the 60,000 homes per year that we have to be building in the years ahead.