Mick Wallace (Wexford, Independent) | Oireachtas source

That is an organisation that I described about 15 years ago in the public domain as a glorified golf club. It does not represent the average builder. I would be afraid and fearful that the Government of the day is taking too much advice from it. Is it taking advice from the real estate investment trusts, REITs? Is it taking advice from NAMA, which would like to build 20,000 houses to sell at an average price of €330,000 to people who are not the ones in the most need at the moment? The majority of people in Ireland today who cannot get a house are unable to pay €330,000. Why in God's name would the State allow NAMA to supply housing at €330,000 a unit when local authorities, even in Dublin, say that they can supply local authority housing for €205,000 a unit? It is as low as €160,000 in places like Wexford. Why does the Government want NAMA to get its favourite developers to engage in supplying housing that is going to cost €330,000 each? This is an organisation that has hardly covered itself in glory in the last number of years. In fact, the sooner the commission of investigation commences in this House in the new year, the better.

We have reduced the standard for apartment sizes. We are now reducing planning restrictions. We brought in a first-time buyer's grant. We got the Central Bank to reduce the 20% mortgage deposit rate to 10%. The most obvious outcome of all of that is to enhance site values. What is the great thing about site values? It is that this Government, as with the Governments before it, encourages an owner to sit on a site by not taxing the owner. The owner does not pay tax on it. It is a wonderful idea. It is probably the biggest problem that we have in the supply of housing, and we are continuing with it. Now we are introducing all of these measures that are designed to be appetisers for the developer who might get involved when the price goes high enough.

I would like the Government to deal with the challenge that the architect Mr. Mel Reynolds identified on a building blog. He showed in a graph that, since 1975, the supply of housing in the private market is directly linked to the cost of it. Cost does not go down when the supply goes up. I ask the Government to look at the research he has done on that.

I note that Deputy Fergus O'Dowd is back in the Chamber and I want to pick up on a number of points he made. I completely agree that all landlords are not evil, no more than all builders or developers are evil. I also agree that it is mind-boggling that we have not addressed the big challenge of all of the empty units in the country. It is mind boggling that we have dared not go there. I do not understand it. However, I must pick Deputy O'Dowd up on his assertion that NAMA offered lots of units to local authorities. I have checked with a few authorities with which I would have a link and I assure him that what NAMA offered, more often than not, was problematic. Where were the units, how good were they, were they manageable? NAMA kept the good stuff for the vulture funds and offered the shite to the local authorities and that is the sad truth. I will not hold it against Deputy O'Dowd that we might disagree on this point.

I would like to briefly touch on what is called the endless treadmill of market inflation. The truth is that the market has never been able to provide good, affordable housing. That is the truth. The only way that can actually be made to happen is if we help people who want to buy houses to borrow too much money. That is what we have to do. It is not profitable for developers to build homes for people on low incomes. It is not profitable and it is never going to be profitable for developers or, in many cases, builders to construct homes that are affordable and good for people on low incomes. That is a fact of life. In the middle of the last century, successive Governments realised this. What did they do? Over 50% of housing was supplied through the State sector and those who could afford to do so bought homes from the private sector. That is fine. We will always have private housing and we should encourage it. We will always have developers and builders and we should encourage them but we should start by going back to basics. The local authorities and the State have an incredible amount of land on which to build. The State has access to incredibly cheap money. The State can start to provide social and affordable housing to a huge proportion of the people of Ireland at a very realistic price. That can be done. It is not impossible but, sadly, it does not seem to be where this Government wants to go. I do not understand why that is the case.

When we interfere with matters by facilitating people to buy homes they cannot afford, we are driving up prices and creating an uncontrollable housing market. That is what we seem to have here most of the time - an unregulated and uncontrollable market. I wish people would stop thinking that developers should be supplying them with housing at an affordable price. That is actually very unfair to developers. They have access to money and they seek to make money with that. That is what one does with money. One uses money to make money. That is what developers do and they cannot afford to be losing money on their investments. In fact, some of them are so tied up with shareholders and so forth that they are under enormous pressure to make serious amounts of money. That is no reason for the State to be dependent on them. If developers want to build in this country and are able to sell the units, away with them and good luck to them. If, however, the State is interested in supplying housing to the people of Ireland, then it must engage in the active supply of such housing itself. It cannot be depending on the private sector or the markets to do that job for it because it ends up being too expensive. It actually costs more in the long run.

I do not want to talk all night because the Acting Chairman is starting to doze off.

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