Ciarán Lynch (Cork South Central, Labour) | Oireachtas source

I commend Sinn Féin on bringing forward this motion. It is an important issue. It is necessary that the House debates it and I acknowledge that Sinn Féin, in bringing this motion before the House, allows Members to address it.

However, three issues struck me regarding the Sinn Féin motion. The first is that there is no mention of homelessness, which is unfortunate considering the importance of the issue and that the Minister of State, Deputy O'Sullivan's Department has been robust in this area in protecting the homelessness budget to date. In my city sanction was given for the development of two new homeless units by the Simon Community and Fellowship House.

The two aspects in the Sinn Féin motion that I want to address is the bank veto and NAMA properties. If the banking veto did not exist in the insolvency legislation, would it be robust enough to stand up to a constitutional challenge because loans tied to secure debts have property rights attached, and if there was no veto would we be in a position where we would have been able to have passed that legislation? Another aspect of the veto that is not being acknowledged is that when the banks engage with a personal insolvency arrangement and do not use that veto it ties in all the unsecured lending of the borrower, namely, a credit card debt, a car debt, a credit union debt and other debts. What we are doing in the legislation is ensuring that when somebody gets a write-down on their mortgage, which may be done on a case by case basis, unsecured debt is also being reduced and regarded in the totality of the situation because it is ridiculous to deal with somebody's mortgage and not examine the other debt exposure they have.

The other aspect is the matter of NAMA on which the motion takes a simplistic approach. The difficulty with NAMA properties is that in many instances they are not located in areas where there is housing demand. What we need to see coming before the House, and which I have debated here with the Minister of State, Deputy O'Sullivan, is the proposal of NAMA looking at rent to buy programmes. If there are houses in estates throughout the country that are purchasable, we should be targeting those houses towards home ownership because despite the housing crisis, Ireland will continue to be a home purchasing nation into the future. In fact, half the residential properties in the country are mortgage free if one considers the broader context.

There is a frustration on both sides of the House with regard to this problem. I reflect that frustration considering that when the previous Administration published the preliminary Cooney report and subsequently the full Cooney report on both occasions did not debate the issue in this House. It was only debated here because of a Labour Party Private Members' motion I tabled at the time, and during that period we had two to three wasted years where nothing of substance in terms of legislation was passed. We would be two years ahead of the game by now if the insolvency legislation had been designed and we had come into government with insolvency legislation in place. Regretfully, that did not happen and the new Government had the job of doing it and because of that there has been a delay. We would all share that frustration.

There is a message that the banks need to receive. Professor Honohan referred to this last week when spoke of the those in the Central Bank tearing their hair out at the lack of action. I am not too worried about the hair on Professor Honohan's head, I am more worried the roof people have over their heads. There are two messages that need to be sent to the banks and this is something about which Sinn Féin Members and other Members need to be mindful. The housing crisis is not a single category problem. There are three categories of people who are in that difficulty. There are people in short-term distress who need some level of forbearance, people in medium to long-term distress who need a more complicated type of forbearance and a third category where forbearance is compounding their difficulty and making matters worse. It is for that third category that the insolvency legislation was designed; it was not designed for the first two categories. It is disingenuous of Members to be confusing insolvency with forbearance. What is at the centre of this difficulty is that the banks are still in denial with regard to property values. I would be very much of the belief that current property values are realistic values. House properties at this time are not undervalued. However, the belief systems of the banks with regard to current values will determine how they will engage with mortgage to rent schemes, split mortgages and other resolution methods.

What we want in the broadest terms to resolve this problem is a normalised housing residential market, one in which people can afford to buy an home and one in which debt is dealt with at a meaningful level. Ultimately, we have introduced measures such as the house price property tax database and the Central Bank has brought in more prudent lending practices and both of those measures have led us towards having a more normalised housing market. This issue must be considered in terms of creating a normalised housing market.

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