Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

The issue I raise is an area that seems to have been left behind in the Rebuilding Ireland plan. I have gone through the plan and the affordable sector appears to have been ignored. I believe it is an important area. The problem with the rental sector is quite simple: there are too many people who are renting. A huge number of people are locked out of the market who have the capacity to purchase a property.

I will put it into context. According to the Central Statistics Office the average industrial wage is €35,600 per annum. At €33,800 those people entered a higher rate of tax at 40%, but it is not just 40%. It is 40% plus the universal social charge, USC and pay related social insurance, PRSI. Consider the Central Bank's rules for borrowing from a financial institution. Three and a half times the salary allows for the borrowing of €124,600 to purchase a property. If two people are earning the average industrial wage it allows for borrowing something less than €250,000. Last year the Society of Chartered Surveyors Ireland issued a very good report which showed that the cost to build a house in greater Dublin is €330,000. The numbers are actually quite simple. Those people are locked out of the market unless they get a very large amount of money from somewhere or somebody else. Not everybody is in a position where their parents or grandparents are capable of helping, where they have an inheritance, or where they won the lotto. Until we do something to help those people, we are going to have serious problems with homelessness and with the rental sector. The problem is growing and getting worse.

In the past, the local authorities had an affordable housing scheme. The information I have received in replies to questions I have put to the Minister is that those schemes have effectively been closed down. They are not functioning now and have not functioned for a number of years. I can understand that this may have been the case during the period when it was cheaper to purchase a property than it was to build one. The issue now, however, is that as the market has recovered and house prices have increased, we have not re-enacted those schemes. The Ceann Comhairle was once a member of a local authority. These local authority schemes were prevalent in greater Dublin and in the major urban areas such as Cork, Limerick, Galway and less so in Waterford. I hold the strong view that the State must intervene. The State has intervened in the past. The Rebuilding Ireland programme is a €5.35 billion scheme for people who are not capable of getting a house and to help deal with homelessness.

However, the niche for people who are just above that in lower, moderate and average pay seem to have been forgotten about. This is an area we cannot just forget. There are too many people renting. If there is a small inducement, we can get them into their own houses; the affordable housing scheme needs to be revived.

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