Eamon Ryan (Dublin Bay South, Green Party) | Oireachtas source

I move:

That Dáil Éireann:notes that:

— we are in the midst of a housing crisis which is undermining our society and threatens our economy;

— since 2010, rents in Dublin have increased by an average of 81%;

— there are 700 sites in public ownership around the country which have recently been identified by the Department of Housing, Planning and Local Government as having potential for housing development;

— the Government is overly dependent on the private sector for the provision of new housing supply, relying solely on increasing such supply will not address the affordability issue as developers will bid up the prices for available land, leading to further increases in house prices and rents;

— the provision of new social housing, using differential rents, will not on its own address the housing crisis, as it will not affect rent and property price rises in the private sector;

— providing a direct subsidy to existing private market rents similarly fails the test of helping reduce overall rents and would prove very expensive to the exchequer without the State ever acquiring any additional assets;

— EUROSTAT has recently indicated that approved housing bodies will not be able to avail of off-balance sheet financing for the provision of new homes;

— 1,000 new apartments are currently under construction in the docklands area of Dublin but most of those units are already sold to international corporations for the use of their staff;

— we must avoid the mistakes made in other international high-tech cities, where local people are frozen out of the housing market and public servants are unable to afford housing close to hospitals, schools and other social and public services;

— European countries with more stable, affordable and socially inclusive housing systems support large-scale provision of secure cost rental accommodation where rents reflect costs, not the maximum that the market will sustain;

— the case for a new more ‘unitary’ public housing model was set out in a report compiled by the National Economic and Social Council, entitled Social Housing at the Crossroads: Possibilities for Investment, Provision and Cost Rental, in June 2014, which proposed the widespread adoption of a cost rental housing model;

— a cost rental model of housing can reduce development cost by availing of low interest rate public finance, publicly owned land, economies of scale from large-scale development and the absence of profit margins to private developers;

— this model will enable national public housing sectors to remain off-balance sheet, which allows investment to continue through downturns in economic activity;

— cost rental housing schemes could be funded through a combination of the European Investment Bank and other European Union funding institutions, credit unions, pension funds, Home Building Finance Ireland which funds from the Ireland Strategic Investment Fund, the Housing Finance Agency, and Exchequer funding, as appropriate;

— this model will provide multi-annual funding commitments to facilitate forward planning;

— the Rebuilding Ireland Action Plan for Housing and Homelessness contains no targets, and no clear funding stream, for the delivery of cost rental housing; and

— only one small test site for new cost rental housing has been initiated and no other affordable rental scheme is being developed by the Government;

and calls on the Government to:

— define cost rental housing as publicly owned housing which is publicly provided on State-owned land where the rents are set on the basis of recovering the cost of the property over the lifetime of a long-term loan;

— introduce regulations to ensure that any long-term profits, after the repayment of such loans, are retained within the system and reinvested in housing supply;

— direct the new National Regeneration and Development Agency to work with the relevant State agencies to designate Cathal Brugha Barracks in Rathmines, Dublin 6, and Broadstone Garage in Dublin 7 as the first locations and plan for them to be the first of the major cost rental housing developments;

— plan for the construction of 3,000 new homes at these two locations;

— design each cost rental scheme to target those individuals who are currently spending more than one-third of their total income on their current rental accommodation;

— also allocate a percentage of new housing for people on the local authority housing lists and in those cases facilitate the use of a suitable State support - for example, housing assistance payment - to allow them pay the same rent as other tenants;

— involve disability communities, such as Nimble Spaces, in each development so that it promotes an arts-led participatory design process, meets the needs of many different citizens, enables active citizenship and participation, encourages social inclusion and positive relationships, and incorporates smart design that is good for people and the environment; and

— immediately identify other publicly-owned sites that would suit the provision of cost rental schemes led by local authorities, approved housing bodies and housing co-operatives.

I am very glad to introduce this motion on the promotion of a form of cost-rental housing for our country for consideration and, I hope, agreement by the Dáil . The need for a change in our housing system has never been clearer. There are hundreds and thousands of families living in acute homelessness, more often than not because they can no longer afford private rented accommodation. The single greatest cause of homelessness, particularly for young families, is their being forced out of the private rented market. It is a fact that the supply of rental accommodation in particular is drying up. Only some 3,000 properties are advertised on daft.ie, this being the most common accurate measure of supply. It is a fact that rent prices, despite the attempts to introduce rent restrictions, continue to rise. In certain instances in the Dublin area, there have been dramatic rent increases of over 81% in the past seven or eight years.

More than anything else, we need to debate this matter because it is clear that Fine Gael's housing policy is not working and needs to change. It is also clear that we should be using this opportunity as we recover and emerge from an economic crash caused mainly by the nature of the property market and banking and lending systems in recent years. The case for change is so clear, and we do not want to and cannot go back to the system that got us into such trouble. However, I am afraid to say we have been looking, in the two years since it was formed, for the Government to grasp this opportunity of doing things differently. However, it is not happening. Fine Gael seems happy to stick with the status quo, to rely on the market and to promote developers as the solution to the problem. This is both a terrible failing and a terrible mistake. I am very glad to see the Minister of State, Deputy English, for whom I have high regard, present. However, the absence of the Minister, Deputy Eoghan Murphy, speaks volumes about the importance Fine Gael attaches to this housing crisis. The Minister is no doubt attending a further meeting of the national emergency co-ordination group in the wake of the recent storm and snow but he could and should have taken time to attend this debate and outline some of his own views. In the constituency I share with the Minister, people are in acute difficulty all the time because of this housing crisis, not just because there is a storm or snow but also as a result of the fact that they cannot find a place to live and cannot afford the rental accommodation that applies. They deserve the respect of the Minister for Housing, Planning and Local Government and his attendance in the Dáil to address a motion on the subject of housing pure and simple.

I fear we are going back to the same form of housing supply model that got us into trouble and that we are in a numbers game. The Minister and the Government seem to be saying that if only they can get the numbers up the market will sort this out. That is a fatal mistake. The housing market is not a perfect market and never should be. It has different characteristics and different variables and will never work with a reliance on market-based solutions to deliver the housing needs for our people. However, this is what we see this Government doing, emphasising all the time a loosening of regulations, providing tax breaks, easing the planning system to try to get a construction and development industry working, then thinking that by building those numbers of houses we will find a way out of the problem. That will not work. It will only bring us back to the property market that got us into the trouble. It will only increase competition between developers and pump up construction and land prices, which, ultimately, will be shouldered by the Irish people, who must pay the higher rents and property prices we see returning. We must avoid that.

I welcome the fact that there are proposals in Rebuilding Ireland and elsewhere for the building of social housing. It has taken far too long for us to build up that capability, but a second message we have today, and the reason for this motion, is to recognise that while this social housing is urgently needed and very welcome, on its own it will not address or change the nature of our housing market. Part of the problem we had in our housing market was this very divided, dualist system, with one half a social housing model with very specific rules, differential rents and all sorts of inequities of its own and, on the other side, the private market. We believe, even if we do build a larger number of houses in the social housing market, which we do need, that this will not address the huge problem of affordability that is particularly occurring in the rental sector.

I have listened in recent weeks to such commentators as Ronan Lyons and Lorcan Sirr identify the fact that the private rented sector is the one in which the housing crisis is at its most acute. I do not believe either reliance on the market or social housing will tackle that problem. We need what the National Economic and Social Council, NESC, outlined in its 2014 report - which is almost four years old now - Social Housing at a Crossroads. We need to move towards a unitary system. NESC argued in that report with real cogent analysis and a good review of what is happening in other countries that the central response to the current housing crisis should be moved towards what is known as a cost-rental form of public housing. The need for this is clear because, particularly in the cities, where we have the highest pressure points in terms of the private rented market, there is, as I said, this incredible increase in rental costs, but we are also seeing a segregation occur. Dublin risks going the same route as San Francisco, another tech city that is similar to ours, whereby ghettoes or enclaves are created in cities in which whole sections of society are no longer able to afford to live. As evidence of this, I cite the fact that there are 1,000 apartments being built in the Dublin Docklands, but I am told that the vast majority of those are already committed and sold for use by people in the international companies which operate in the area. We cannot run a city or our housing market on this basis because we need accommodation for our nurses, doctors and teachers, people involved in care work and families who want to live in the city centre and grow up there and who have grown up there in the past. Therefore, we must provide a wider, balanced mix of housing and that is what cost-rental housing can do.

It has to be low cost. Cost rental means the rent covers the cost of the accommodation and the loan. It has to cover the full costs for reasons I will set out and, over the long-term lifetime, this has to be fully paid off through the rent, so it is cost rental. There are advantages to this, the first of which is that it allows us the prospect of being able to do such lending off-balance-sheet. Although this may not be easy, we can and should be able to argue and get it through EUROSTAT and the European Commission, and they will recognise that in those circumstances the full cost of construction and the loan that covers that construction is paid for over the lifetime of the rental agreement. I believe we can do this, and the advantage would be that we could avail of financing through downturns as well as booms and balance our construction activity over a longer period of time.

This is a long-term policy decision and it will take many decades for the real benefit to accrue, with the maturation of those assets as they stay in public ownership then being able to help other construction activity to take place. A virtuous circle would start to develop. It would take several decades outside the political timescale we are all involved in, but sometimes, particularly in the area of housing, we have to think long term.

Another reason we should not just focus on social housing is that there is a fundamental problem with our existing model, whereby the Department of Housing, Planning and Local Government, in all its grandeur, hands out a wad of cash to a local authority and pays upfront for the full amount of the construction of that housing. This gives the Department great power and control over local government, but it does not make financial sense. All financial advisers will tell us that where we have such a long-term investment and potential return, it is far better to match it with a long-term loan rather than doing it all in cash, as is the historical way we have done it.

It has to be low cost but it is very much part of the market. This low cost, cost-rental housing has to influence the private market and has to interact with it if we are to move away from that divided dualist system towards a more unified system. It would be the great prize and benefit from this step if we were to take it. I believe it is possible in a variety of ways to keep the costs down. Critically, we could apply public financing, which we can get at very low interest rates at present. This is probably the best and most significant way in which we can deliver a cheaper option than the private sector.

The Minister's amendment states that the Government is in discussions with the European Investment Bank, EIB. It is about time. The EIB came before the Committee on Budgetary Oversight and publicly stated one of its biggest problems in this country is that no one is looking to borrow from it. It does not have sufficient counterparties. We should be going to the EIB in this area for cost-rental funds and looking for loans of hundreds of millions of euros to invest immediately in this long-term housing solution, such is the scale and nature of our crisis. There are other places we could look for such long-term low cost finance, including pension funds, credit unions and the State's investment fund. It is critical. The one advantage we have and the way we can bring the cost down is to make sure it is secure public lending financing where the interest rate is typically lower, which would affect the overall cost of the rent.

To keep costs down, this is targeted at State lands, be they with local authorities, State agencies or the State itself in whatever form. It is the 700 sites identified by the Department of Housing, Planning and Local Government as being potentially convertible for housing that we should use for the cost-rental model. We should, as the NESC report sets out, consider doing it in a way which helps keeps the cost down by setting the land price at a level that helps us to do so.

We need to do this at scale to bring down the costs. The test runs that are not even up and running in Dún Laoghaire, Lusk and Sandyford, to which the Government refers in its response to the motion, are too small. This will only work to really bring the cost down if we think at scale. If a builder - not developers because they would not be involved - local authority or approved housing body were able to build hundreds of units at a time, it would help bring down the costs and create new vibrant communities in the process. There are ways in which this can be done, but I see none of it happening.

Deputy Martin and I were involved briefly in the programme for Government negotiations, and I will be honest and say we were slightly aghast and removed ourselves. One of the main reasons was that the discussion we heard with regard to housing was all about the market. This was very out of date in terms of really getting the market humming here as a solution to this problem. Nothing I have seen since has changed my mind in this regard. We need to step up our game and start providing cost rental at scale. There is nothing in Rebuilding Ireland, the national planning framework or the new national capital plan. The Taoiseach briefly mentioned it just before the plan was launched, stating he would have a major announcement in the Dáil on cost rental on the day, but there was nothing about it. The Minister for Housing, Planning and Local Government has not turned up today to discuss this motion, which speaks volumes in its own right.

Cost-rental housing is for everyone. It should be open to the entire market, and the best example of the model we have seen is in Vienna, where as far back as the mid-1920s it addressed its housing crisis by going in this direction. That housing became the most sought after housing in Vienna, and it still is, and it has been a huge success. We are similar to Vienna. We are similar in size as a country to Austria. There is no reason we should not learn from that experience and apply the same model here. It has to be a model where it is opened up to a variety of people so it has the prize of bringing the whole market down because we have a lower cost solution that does not have developers' profits priced into the cost of rental and has those other low cost effects I mentioned.

The exact details of this would have to be worked out by the national regeneration and development agency, which I believe should have the task of leading this. It should target people on the social housing list, and if they cannot afford to cost rent, they should get a subsidy similar to what we give through the housing assistance payment, HAP, or the rental accommodation scheme, RAS, to the private sector. If we want to target those in the private rental market currently paying more than 30% of their income, which is the definition of unaffordable housing, as a way of trying to address that specific sector, which is the pinch point of the housing crisis, we should go further. We have included in the motion that we should look at designing communities that are really integrated where we bring disabled people in and ask how can we make them part of a community that works for them as well as for everyone else. We need to think of it as a cultural space and a part of a community and not just as housing units.

Our motion set two locations which we believe should be immediately targeted for the development and roll-out of this model. These are Cathal Brugha Barracks in Rathmines and Broadstone bus garage in Phibsborough. Other Members will ask why we have picked two Dublin sites. One of the reasons is that Dublin is where the rental crisis is at its most acute. The average rental costs in south Dublin city are 65% above what they are in Cork, 75% above what they are in Galway and 95% above what they are in Limerick. People in that area often live on the same wage as a teacher, nurse or garda or social welfare payment as someone in another city. We have a particular problem in Dublin that needs to be addressed.

The Labour Party has tabled an amendment, and I do not know whether it can adjust it at this late stage, but if there are alternative sites that people would argue we should consider, it would be a very welcome amendment and we could add them to the list. There are loads of places. We picked the two sites particularly because they are large and close to the centre. They are close to Luas lines, schools, shops, churches, swimming pools, libraries and all the services people need. It would be a real benefit for the State. They are in locations where people could walk to work and where there is a tradition of people renting and where, as I said, our crisis is most acute.

We have been in correspondence with various people from the Army who have asked us to hold on because it is showing disrespect to the armed services, but far from it. We have the highest regard for the Irish armed services and we believe they need the restoration of pay and conditions, which recognise the high regard they are held in by the people of the State. I do not believe this is happening under the current model. I do not believe it is happening given the number of people we have driving from around the country to do barracks duty in Dublin. We could do it in a better and more effective way for the Army, whereby we use McKee Barracks, Baldonnel, the Curragh and other resources, so we do not have soldiers moving around all the time and we base them and improve their conditions and resources.

The same applies in Broadstone. There was a very good report by Steers Davies Glieve in the transport expert review in November 2016.

It advised that it would not be possible to renovate it, which is badly needed, and that there might be real gains from the use of other sites, probably not in the centre, or to amalgamate it with other bus sites. This would allow a much better service for Bus Éireann.

Those sites, given their scale and position, are the best sites we can see for rolling out cost rental at scale in a way that changes the nature of the market and changes the public perception of housing policy. Maybe in his contribution the Minister of State, Deputy Damien English, will restore some faith that Government is really serious about cost rental. It says in the programme for Government that his Government is going to do it, but it has done nothing about it since. What is his solution? Will the Government resort to a form of affordable housing or affordable rental whereby it continues to subsidise the private rental market? This does not address the problem. It does not stop the ever-escalating rates, it actually drives them upwards. It costs a fortune. That approach to affordable rental accommodation cost us €535 million last year.

Will the Government go with affordable purchase as the only solution? I do not think that is appropriate and right. We need to start respecting people who rent. We need to give them a fair rent, a sense of security of tenure, a sense of community and a sense of being central to our housing strategy. I do not get that sense from Fine Gael. I think Fine Gael thinks buying property is the purpose of life and helping people do that is what a good housing policy is about. That is out of date. It is not serving us, it is expensive and it will cost us more in the long run.

I ask the Minister of State and other parties to use this occasion. I know we have a debate the week after next on affordable housing. We need to understand what this cost rental model is, because it is a fundamental piece in the jigsaw of developing an alternative housing market. It is not easy to understand because it is different from anything we have done before, but I believe it is the way forward for this country, this city and indeed each of the cities, particularly where the rental housing crisis is at its worst.

We very much appreciate the support, online and elsewhere, of Threshold, the Nevin Economic Research Institute, NERI, the housing association Respond!, Social Justice Ireland and others. Everyone with a keen interest and a keen eye on what is happening in the property sector is saying to us privately that cost-rental has to be a big part of the solution: everyone except, it seems, Fine Gael.

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