Eoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

I move amendment No. 4:

To delete all words after "Dáil Éireann" and substitute the following:

“— notes that the Government, through its Rebuilding Ireland Action Plan for Housing and Homelessness, has prioritised measures to stimulate housing supply at more affordable prices and rents;

— acknowledges that the initial primary focus has been on delivering homes for households in the lowest income brackets, through the commitment of over €6 billion to deliver 50,000 new social housing homes by 2021, with a further 88,000 qualifying households being supported under other programmes, primarily the Housing Assistance Payment scheme;

— welcomes the progress made in 2017, when almost 26,000 households had their social housing needs met, nearly 5,000 ahead of target;

— notes that the Government has also implemented a suite of measures to reactivate residential construction activity more generally and support its capacity to deliver more affordable homes, through, inter alia:— fast-track planning reforms and more flexible planning guidelines;

— over €200 million investment in the Local Infrastructure Housing Activation Fund (LIHAF), supporting infrastructure to open up housing lands, with proportionate affordability dividends for house purchasers;

— bringing forward large-scale mixed-tenure housing projects, with social, affordable and private housing, on publicly-owned lands;

— the Help to Buy Scheme scheme to assist first-time buyers to meet their deposit requirements; and

— that all relevant activity indicators show significant upward trends in activity;— acknowledges the initiatives in Budget 2018 to remove obstacles to building more homes more quickly, by:— investing more in direct house-building by the State;

— removing the Capital Gains Tax incentive to hold on to residential land;

— escalating penalties for land hoarding; and

— providing a new, more affordable finance vehicle for builders through House Building Finance Ireland (HBFI);— welcomes the introduction of targeted and time-bound measures to limit excessive rent increases through Rent Pressure Zones, and to provide further protections and effective support services to both tenants and landlords; and

— commends the Government on the further range of housing affordability measures now being introduced including:— a new Rebuilding Ireland Home Loan, which will provide long-term, fixed-rate mortgages for first-time buyers;

— a new Affordable Purchase Scheme, which will see affordable homes built initially on State land, in co-operation with local authorities;

— the €25 million Serviced Sites Fund which will provide funding for local authorities to make low-cost serviced sites available for the delivery of affordable housing;

— the plans being developed by local authorities to deliver significant numbers of affordable homes through the publicly-owned land bank, with potential for more than 3,000 new affordable homes projected from existing sites as the first step towards the Government’s ambition for at least 10,000 affordable homes over the years ahead;

— the ambition to make cost rental a major part of the Irish housing system, learning from the pilot cost rental project currently being progressed in Dublin;

— a second LIHAF infrastructural investment fund which will be launched in the first half of 2018, to facilitate the opening up of more lands for early development and deliver additional homes at more affordable prices; and

— the finalisation of new ‘Build to Rent’ and ‘co-living’ planning guidelines to encourage development and investment in new forms of rental accommodation at more affordable rents.”

I thank Sinn Féin for putting down this motion and for the opportunity to discuss housing affordability. When I came to this office as Minister, I said clearly that housing affordability would be a key issue for me and for the Government. Much of the work in my Department is focused rightly on the provision of social housing for those in most pressing need. The Government is determined to increase the stock of social housing by 50,000 homes by 2021. Under Rebuilding Ireland - Action Plan for Housing and Homelessness some €6 billion in funding is securely ring-fenced to do this. Thus, when parties in the House claim that we are not investing in social housing, they are wrong. After our first 18 months of work we are ahead of target. However, Rebuilding Ireland - Action Plan for Housing and Homelessness is a five-year plan to fix our broken housing sector to bring us back to a steady state. Of course the progress we have made does not diminish the need for people struggling in our communities who are above the social housing thresholds but who cannot afford to rent or buy their own home to be supported by the State.

With tens of thousands of new homes planned to be built throughout the country in the coming years, we must ensure that they are affordable. There is a clear plan of action to achieve this. We have worked to remove costs and obstacles for builders to make projects viable in order that they can deliver more affordable homes. To achieve this, we have taken action by streamlining planning with a new fast-track process for large developments. There will be 10,000 homes under pre-consultation under that new process. A total of 5,000 are still under consideration and there have been decisions on 3,000 of these homes within the timelines agreed.

We have initiated a dedicated €200 million infrastructure fund under the local infrastructure housing activation fund, which is essentially paying the development levies upfront to get new land banks open more quickly and at more affordable prices. We have also developed new apartment guidelines to remove unnecessary costs. Such costs are significant for the building of apartments. As we announced earlier today, we have agreed the terms by which we will establish home building finance Ireland, a new State-funded bank to provide competitive loans for builders.

These actions and others have helped to resuscitate the residential construction industry and they are facilitating the construction of thousands of new homes at more affordable prices. By taking these steps to address underlying structural problems for the construction industry, the Government is also doing more on housing affordability. Specifically, as announced on 22 January, we are doing this in three ways: the Rebuilding Ireland home loan; and affordable purchase scheme; and an affordable rental scheme. The measures are targeted at households with low to moderate income with a maximum of €50,000 for a single applicant or €75,000 for joint applicants. With the new Rebuilding Ireland home loan, a person or couple can purchase a home while ensuring they can still keep their monthly repayments to one third of their net disposable income. The fixed rate is between 2% and 2.25% interest for 25 to 30 years. Thus, people will have absolute certainty of repayments over the lifetime of the loan. There is no risk of the mortgage rate rising and so no threat to their ability to afford repayments, giving them affordability and certainty as well as security.

In the greater Dublin area, Cork and Galway the maximum market value is €320,000. In the rest of the country it is €250,000. Up to the end of October of last year, two thirds, or over 5,300 homes, of the overall number of houses purchased by first-time buyers in the greater Dublin area, Cork and Galway were purchased for less than €320,000. Throughout the rest of the country, a little over 90%, or 3,380 homes, of the overall number of houses purchased by first-time buyers were purchased for less than €250,000.

Eligibility criteria apply for the Rebuilding Ireland home loan. An applicant must demonstrate that he or she is able to afford the loan repayments. There is already an extraordinary response to the new loan offering and the call centre has had to double its staff to deal with inquiries. While a mortgage and deposit are obviously crucial and the Government has made them far more accessible, they are no good to buyers if they cannot find a new home or cannot afford to buy. Therefore, the Government is also introducing new affordable purchase scheme. Under the new scheme, local authorities will oversee the delivery of affordable homes from their land bank. Importantly, the new scheme is based on the relevant provisions of the Housing (Miscellaneous Provisions) Act 2009, which will be commenced shortly. The 2009 Act emanated from a review of affordable housing schemes by the Affordable Homes Partnership in 2007. Once the legislative provisions are commenced, I will develop detailed regulations covering the operation of the scheme, including the full eligibility criteria. Elected members of each local authority will then have a key role in determining the order of priority for the sale of affordable homes to eligible households. The income limits are consistent with the new loan at €50,000 and €75,000. The maximum discount permissible under the Act is 40%. The eventual sales price will vary from site to site depending on costs, the discount given and other relevant factors. One key change to the new scheme will see local authorities taking a fully repayable equity share to the value of the discount given in all homes sold. The funds repaid will be recycled into the provision of more affordable housing in order that many more people can be assisted under the scheme.

In Dublin a three-bedroom home that is currently out of reach for many at €320,000 could be sold for €250,000 or less under the scheme depending on the site. The potential of the scheme to help is significant.

We have signalled our intent for some time and local authorities are supportive of the new scheme. Following the housing summit last week local authorities are now examining the potential for their respective affordable housing programmes. There is particular emphasis on Dublin, Galway and Cork where the greatest affordability gap arises. The overall scale of delivery and timescales will be informed by these responses.

I am keen to see our ambitious targets realised but we need to be pragmatic about the pace of delivery across local authorities. The review of the affordable scheme in 2007 found that previous Administrations set unrealistic targets based on the potential from land. The targets did not take a realistic account of the lead-in time that would be required to translate the identification of sites into new homes.

Sinn Féin started with a target of 3,000 or 4,000 homes under the Government's affordable purchase scheme. I announced land and funding for an initial 3,000 homes with ambition for 10,000 homes under the scheme. I am hopeful that local authorities will be able to exceed this. To provide for areas and sites that need it, I am also allocating funding of €25 million during 2018 and 2019 for this targeted programme. This was announced in the budget for 2018 although other parties claimed nothing was announced in the budget for affordability. We also announced an increase in the second round of local infrastructure housing activation fund of €50 million to again provide affordable purchase scheme homes and affordable homes. Again, parties claim that nothing was done for affordability in the last budget when that is clearly not the case.

Local authorities will make low-cost serviced sites available to approved housing bodies or co-operative housing associations in specific areas. This approach has worked well in Ballymun and I am keen to see it delivered on a greater scale in other areas. This concept is not new to local authorities. My Department, working with Dublin City Council, has facilitated this approach for the affordable 20% of the O'Devaney Gardens development, which is advancing through procurement. Let us allow local authorities to do their work and we can set realistic targets with them rather than for them.

Reference was made to increasing the Part V requirement to 20%. I believe this would be premature. For one thing, Part V failed in the past when it failed to deliver social housing homes in new mixed tenure housing estates. The regime was changed in 2015 and planning authorities are prioritising the acquisition of social houses on sites when making Part V agreements. For now, delivering social housing under Part V will continue to be the focus. Furthermore, to impose such a condition on new sites and schemes at the time we are trying to remove additional costs and see more houses built could undermine these schemes resulting in no new housing and, crucially, no new social housing. We can do it another way with our own land and we will under the affordable purchase scheme.

Reference was made to Poolbeg strategic development zone. Of the 3,500 homes planned to be delivered on these lands, It is intended that 350 units, or 10%, will be delivered as social units under Part V. In addition, a further 550 units, or over 15%, would be delivered under a commercial agreement with the majority earmarked for affordable homes but with potential for additional social housing, particularly designed for older people. That is welcome. While the progression of the planning scheme is ultimately a matter for Dublin City Council, I am committed to working with the council to deliver these mixed tenure units in what is a key site for the sustainable development of Dublin city.

Against the background of the affordability pressures that exist in the rental market in Dublin and elsewhere, the Government is determined to make affordable or cost rental a major part of the Irish housing system. A pilot project is currently being progressed by Dún Laoghaire-Rathdown County Council in conjunction with the Housing Agency and an approved housing body.

I expect this pilot to go to the market later in the year in order to secure a development partner and the best value for the State and prospective renters. Building on the experience of the pilot, my Department will lead an expert group to provide advice on the most appropriate way forward in delivering a more sustainable sector. I am considering the terms of reference, formation and composition of the group with a view to establishing it in the coming weeks.

In parallel, discussions are ongoing with the European Investment Bank regarding its experience in developing and supporting cost rental and other affordable models that could also work in Ireland. In other parts of Europe, cost rental is a significant part of the rental market. We need to make it a significant part of our rental market but this cannot be achieved overnight.

The delivery of affordable housing will rely on the State developing the full potential of its significant residential landbank. The residential land management and development group will play a key role in driving delivery as speedily as possible. The group will work with local authorities in the development of the existing State residential landbank of 2,000 ha. It will also assess the requirements for local authorities to secure additional land for social and affordable housing.

The issue of land is also being considered in the context of the new national planning framework, NPF. The Government is considering the establishment of a new public development and renewal agency under the NPF to work with local authorities. It will need to have the power and capacity to either use public lands or buy lands in the right locations for future public and private housing provision that will be affordable for housing providers to develop and for people to buy or rent. As part of this broader consideration, the regime available to local authorities to secure new residential land is also being examined, taking account of the recent past when local authorities bought a significant amount of land for housing on which they incurred substantial debt. In this context, compulsory purchase orders are being considered as part of the Law Reform Commission's examination of compulsory purchase order legislation. The Kenny report will also be reviewed.

The residential construction sector is recovering and thousands of new homes are being built every year. In 2017, more than 17,500 new homes commenced construction, which is three times as many as in 2016. Significant efforts and resources are being invested in the construction of new social homes to help those who need our help most. Recognising the need to do more for those who are struggling with housing costs, the Government is bringing forward a set of measures that will make buying and renting a house much more affordable. These initiatives are important additional steps in building capacity and ambition in the housing system to create a more affordable and sustainable housing sector and ease the financial burden and uncertainty on many people.

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