Bernard Durkan (Kildare North, Fine Gael)
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I welcome Dr. Lyons and thank him for his submission. I agree with some of his comments and strongly disagree with others, particularly the transfer of land from local authorities to approved housing bodies. I cannot see the logic in this and would like to see the reverse happen. Long before we had the kind of situation we have now, local authorities built a large number of houses and lent an equal amount of loans to enable people to buy affordable houses. That happened for many years and it worked extremely well. We did not have a housing crisis because they were able to meet their obligations and plan ahead and they knew what the requirements would be in the same way as we are supposed to know what school place requirements and health service requirements will be. In recent times, we have lost sight of it. One of the problems was that we shifted from the local authorities to what was effectively a privatised system that simply did not work and that is not working now.

Worse still is the legacy of the housing bubble, namely, the inflation of potential development property. This has not gone away. We have a social obligation to provide an access route to housing. We do not necessarily have an obligation to ensure that everyone makes a profit during the course of it. To what extent has Dr. Lyons studied the degree to which various properties were acquired during the bubble and turned over on numerous occasions before a sod was turned? It gave a new artificial value to potentially building property and more particularly, it was done at a time of very low interest rates, as is the case today. This made it much more attractive to people. We can list a number of prime housing sites in this city and adjoining counties where this happened. I am concerned about that because I do not want to see us go down the same road and be in an even worse situation.

Has Dr. Lyons quantified the employment potential of the building of housing because it is of considerable importance as well? He mentioned market-led demand. I would rephrase that. It is the housing requirement. It is almost a life-and-death issue. It is the requirement for a roof over the heads of many people in this country.

Dr. Lyons identified the control of costs. During Keynesian times, J. K. Galbraith identified the control of costs and rightly claimed that one could not introduce incentives into the marketplace to support and boost some parts of the economy without controlling costs because otherwise, it would lead to massive inflation.

I agree with that part but I have deep concerns about the other parts.

The degree to which the proportion of household income dedicated to paying the mortgage or the rent is increasing and the cause of that has been dealt with by Dr. Lyons. The rollover speculation to which I have referred previously is one of the causes of that problem.

I was commented on unfavourably when I referred, for instance, to people on a Dáil Member's salary being unable to pay a €400,000 or €500,000 mortgage today. That is correct and it is simple to work out. A person earning €100,000 a year takes home €50,000. The guideline used to be 2.5 times the income of the main earner, which works out at €250,000. There is no possibility in the current market of somebody buying a house with that repayment potential. That needs to be addressed. It is massively beyond the reach of the average house purchaser or renter. Renting was put forward as the answer to our prayers. That was wrong and did not work. More than 150 years ago, there was a war about the right to own one's home and the security associated with that. That issue is as alive today as it was when Michael Davitt and Parnell were involved.