Mick Wallace (Wexford, Independent) | Oireachtas source

Deputies are in broad agreement that the need for the Government to build State housing again has not been greater in our lifetime, even if it was greater in the 1940s, 1950s and 1960s. The financial challenges that have arisen in recent years have prompted the Central Bank to intervene in the market to ensure the days when people were lured into buying property for which repayments could have become unsustainable are not repeated. While it is correct to intervene in this way, the flipside of the coin is that at least half of the younger generation will not be able to get on the house ownership ladder. This may not be the end of the world but it would be the end of the world for young people if there were no alternatives available to them. This means the State will have to build houses. The Government's reliance on the private and rental sectors to provide housing does not stack up, will not work and will lead to serious problems.

Rent levels in cities will go up before they go down. Leaving a large chunk of the population at the mercy of the rental market is not a sustainable approach. One could ask where we should go from here but it would be preferable not to start from where we are. The Government must persuade our European partners to adopt a more flexible approach to the current rules on borrowing. European Union rules preclude the State from borrowing, at less than 2%, the money it needs to build social housing. These rules must change to allow the Government to borrow to invest in infrastructure without these loans going on the books. In the event that the Government decided to build social housing but was prevented from accessing cheap money, the alternative would be to engage in public private partnerships or PPPs. Public private partnerships are not a good approach because they place the State in the hands of investors who make a killing through the high interest rates they charge. They are another form of vulture capitalism and similar to the vulture funds that pay peanuts to the National Asset Management Agency for assets which they either flip or hold and rent out, thereby driving up rents. Public private partnerships have cost the State astronomical sums. It beggars belief that the State can borrow money for infrastructure investment at a rate of approximately 1.7% but is being prevented from doing so on the basis that it would break the rules on the debt to GDP ratio. This does not make sense.

Continuing to depend on the rental market and refusing to build social housing which the State would own and make available to people who need it is not the way forward. The State will eventually have to build social housing again.

Relying on the rental market and rent supplement is not even good economics. If rent goes up, the rent supplement has to go up, and what we have then is the State subsidising the rental sector. We need to think more about the long term and less about the short term. Long-term thinking encourages real investment for the long term. Relying on the private rental market to provide the necessary housing for those who cannot get on the ownership ladder is short-termism, not long-termism. Obviously, the fact that the political process works from one election to the next is a big factor. This has a dramatic impact on how we deal with climate change also. I see it now having an impact on the housing crisis in that we are not prepared to make the decisions required to bring long-term sustainability into the housing market.

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