Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

Somebody asked why the Government would want to reduce the requirement for developers to reduce from 20% to 10% the level of development given over to social and affordable housing. I found part of the answer in the latest document from the European Commission, the post-programme surveillance report. It comments on the shocking rise in rents and so on and states: "Policies should aim to increase supply more effectively through raising low private sector financing to developers and revising planning and development regulations." That is, essentially, what the Government is doing and what its strategy involves.

The Government opposes, on an ideological basis, large-scale public investment in the direct provision of local authority housing and has submitted itself to the diktat of the troika and the neoliberal ideologues in Europe. Therefore, public investment in the direct provision of local authority housing is not on because it is ideologically opposed to it and favours the privatisation of everything that moves. One is left with no option but to rely on the private sector to deliver social housing.

As a result of the scale of the crisis, the Government has to pay some lip-service to a return to local authority housing provision. However, as I said yesterday, when I rang the alarm bills about a document that came from the Department of the then Minister of State, Deputy O'Sullivan, in 2011, I got very little traction. I do not know why, but I suspect it was because media commentators could not get their heads around the idea in 2011 that a housing crisis would be coming down the line. We had just come out of an enormous and unprecedented housing boom, so it probably seemed inconceivable to people who did not understand what was happening in regard to social housing lists that we would face what is now a catastrophic crisis.

I, and one or two others, tried to ring the alarm bells when the document was released. The Government said it would no longer be involved in the construction of direct social housing, but would instead source it from the private sector. As a result of the crisis that ensued from a policy decision taken by the Government, a situation that was bad turned to disaster, about that there is no question. We are no longer building council housing and are instead relying completely on the private sector. We have since seen the results.

The homelessness rate is spiralling out of control. When I came into the Dáil, people were on the social housing lists for nine or ten years, which was outrageous. People would get on the list when their children were born and their children would be ten before they had secure housing. If one goes onto a housing list in Dún Laoghaire now - I know it is the same elsewhere - it will be 18 years before one gets a house. If ones goes on a housing list when one's child is born, he or she might have reached an age where he or she would be moving out and will have had no secure housing. The dramatic spike in the length of the housing lists happened because the Government made a bad situation a hell of a lot worse with a policy decision that was set out in clear and unambiguous terms in July 2011.

For that alone, this Government should be flung out of office. It was incompetence on a scale that is quite staggering. Now, having made that catastrophic mistake, it is continuing along the same line by saying that it cannot or will not deliver social housing, therefore it will get down on bended knees, with the encouragement of the troika, to again incentivise private developers to deliver it for us.

Surely it is obvious, after what happened during the last boom, that even if the private sector builds the record levels of social housing it did during the boom, which were mentioned earlier on, when 70,000, 80,000 and 90,000 houses a year were built, the housing crisis will worsen.

Every single year of the building boom the housing list got longer and the homelessness crisis got worse. If we wanted a textbook example of how the housing version of the trickle down just does not work, we have it in Ireland with the building boom. It just does not work, yet the Government wants to do it again. It wants to state it cannot, or will not, do this because the EU will not let it and it is submitting to it. In any event, it believes in the private sector anyway, even though we have the most clear evidence of the failure of this ideology and strategy in our very recent history but here we are doing it again, saying we must incentivise it. Then we have the troika. It is beyond belief these guys are pushing this stuff. I do not really care whether it is because the troika is pushing and the Government is submitting, or because they are all in cahoots in just believing in this stuff, but it is absolute madness.

We have said we agree with the levy, but the truth is that levy is small beer really. We agree with it, but it will not really address the issue in a very substantial way. If property prices rise at the level at which they are at present, even the levy will not hurt the developers who are land-banking because they are sitting on a rapidly accumulating asset.

The really substantial elements of the Bill are the reduction of the requirement for social and affordable housing from 20% to 10% and the issue of leasing. What will be the cumulative effect of this? To cut a long story short, the developers will not have to give 20% but will have to give 10%. However, they will not actually have to give the 10% because they can lease. They can discharge their obligation on social housing not by giving the housing to the local authority but by leasing it to the local authority and making a fortune on the rents they set, which will be controlled by a tiny oligarchy of huge owners of property.

The other interesting thing in the EU Commission document is the comment made about the scale of the real estate investment trust, REIT, business, which is now €1.8 billion, so these guys control 1% of GDP. The document states REITs have become an important channel through which foreign capital can enter the Irish property market. So far, REITs have primarily focused on purchasing or refurbishing existing properties. How true it is that they are just interested in making money. They do not give a damn about providing social housing or providing the supply the people desperately need. They are just interested in making money out of it, yet we are getting down on our knees trying to incentivise these people. It is total madness.

The points have been made, but we must ring the alarm bells. The people who said we are heading towards a disaster before the crash were told by one Taoiseach that they should go and commit suicide and that they were insane. It was only afterwards that it was said we should have listened a little more to these people whom Nyberg called contrarians. I can tell the Minister of State, and quite a few other people are saying it here, we are heading towards a disaster if the Government continues down this road. There needs to be a radical shift back towards the direct provision of local authority housing on a very large scale for obvious reasons for the people on the housing list but also for the sustainability and security of the economy as a whole. If we do not do this, we will pile up a massive problem.

I have raised this with the Fiscal Advisory Council and it acknowledged we have a point on this. I do not see how, when the troika wants to push so hard on the question that we must keep public spending down and we are not allowed to have public spending, that it does not see the Government will continue to spend more for years and years to come, in a way that will suck money out of the Exchequer, by trying to deal with the social housing problem in this way. It is just billions and billions of euro and it is set to expand every year, going into the pockets of property developers and landlords. As a proportion of the overall social housing stock, it will increase exponentially as a result of what Government is doing. It potentially could bankrupt the State, that is how bad it is, when these people control the rental and property market to the extent they now do. It could actually bankrupt the State. The Government will not introduce rent controls, so there will be no mechanisms to control these guys. We will be utterly at their mercy and the housing crisis and homelessness crisis will be out of control. We are doing our best to ring the alarm bells. It would appear the Government is immune to it, but sooner or later this crisis will blow up in a very big way in all of our faces unless we radically change tack.

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