Ruth Coppinger (Dublin West, Socialist Party) | Oireachtas source

It is incredible that as we face the greatest housing emergency in the history of the State, the single useful measure that was introduced by the former, pro-development Fianna Fáil-Green Party regime is being amended by this Government. It is just unbelievable that the social and affordable housing quota is being reduced from 20% to 10%. When this change was originally thrown out into the ether, one of the reasons given was that affordable housing was no longer needed in a context where house prices were decreasing. Nothing could be further from the truth now, as house prices continue to rise relentlessly, particularly in cities. Any argument that affordable housing is not required no longer stands. The other reason given was that the change would remove impediments to developers in getting construction going. It would be a terrible drain on them, we were told, if they had to set aside 20% of any development for social and affordable housing.

As we know, the Part V provisions did not work particularly well in the past, producing only 15,114 units, or 3.5% of total dwellings built during one of the greatest building booms the country has seen. Developers found all sorts of way to avoid meeting their obligations. As we know, no social housing was built in places like Malahide or Castleknock. Instead, money was given in lieu to fund social housing on other sites. We had developers claiming people would not want to live in an estate if it included a component of social or affordable housing. As a result, the intended integration never happened. Be that as it may, the provisions did produce some housing. Why, then, is the Government seeking to reduce the quota at precisely the time when it could usefully be utilised?

The other justification given for this change is that cash payments or the money in lieu provision is being abolished. It will be a more stringent regime, we are assured, which will see more houses being built. There are several reasons that will not prove to be the case, one of the most obvious being that local authorities will still have to buy the units from the developers at normal market costs. The Bill provides that where houses are transferred to a planning authority, the price will be determined on the basis of the site cost of the houses and "the costs, including normal construction and development costs and profit on those costs, calculated at open market rates". That is simply incredible. Local authorities are not allowed to build houses themselves but must instead stump up greater costs to developers to provide them.

As a previous speaker said, one would think we were getting them for free. I have spoken to people at a high level in local authority housing and they told me they do not want this because it is too expensive. As they are starved of funds, they will not have money to buy large numbers of houses from developers and will have to go for the other option that has been introduced, that is, alternative arrangements, which I will discuss.

One of the claims made by the Minister of State and others is that is it cheaper for local authorities to go this route than to build houses. I have heard that argument in councils. How could it possibly be cheaper to provide housing through this scheme? There is no way that could be the case. Unlike Deputy Wallace, I do not think we should have to pay developers money to provide social housing. He referred to their site costs. One could argue that we should get the units free of charge on the basis that developers are being granted the very valuable resource of planning permission. The idea that local authorities have to pay private developers which are crawling their way out of NAMA or trying to get back into the market at this level is outrageous.

I refer to the alternative arrangements provided for in the Bill. They include entering into a rental accommodation availability agreement or a lease agreement with a planning authority in respect of those houses. We all know councils will not be able to buy houses given the current costs in Dublin, Cork and Galway, whatever about other locations. Such places are where the crisis is particularly acute, but things are bad everywhere. Councils will have to use taxpayers' money to put tenants into rented properties at a significant cost. What will the rental rates for such homes be? I assume the market rate will apply or developers would not engage. Will there be long-term leases? We again have the problem of people living in houses without security and from which they can be moved after five or ten years. I do not know what is envisaged.

This scheme is likely to have large-scale take-up and could even become the norm for councils that cannot afford to buy houses up-front or take on debt due to EU rules. It will mean councils paying rent to developers indefinitely, as is already happening under the NAMA social housing leasing initiative, without ever becoming owners of the property. It would link up quite nicely with the social housing 2020 strategy which wants to replace more and more local authority housing with long-term leases. The gist of this is that such arrangements will not be exceptional; they will be the norm.

It is disappointing that, yet again, we have to worship at the feet of developers and nothing proactive is being done to fund councils to build houses. I oppose any reduction in Part V from 20% to 10%.

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