Dáil debates

Wednesday, 27 November 2019

Planning and Development (Amendment) (First-Time Buyers) Bill 2019: Second Stage [Private Members]

 

3:20 pm

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

A lot of history was mentioned in the Chamber but we do not need to go back to the 1920s or 1930s. We can go back to very recent history and see the legacy of Fianna Fáil in the housing sector and how it destroyed it, outsourced the provision of social housing to the private sector and managed to destroy the private housing sector in its entirety. We are recoiling from that.

Earlier, Deputy Ó Broin asked that we might take a couple of moments in this debate to speak in memory of Simon Brooke, the chair of Clúid Housing Association, and I thank him for that suggestion. Simon Brooke and Clúid were a force for the delivery of homes and helping people in housing insecurity. He was a person who I thought was a leader who was interested in solutions and delivery. I know he will be very much missed by his wife and son and that staff in Clúid will feel a great loss today and into the coming weeks. On my behalf and that of the Department, which worked so well with him and Clúid over the past number of years, I extend my sympathies to all of the staff in Clúid as well as to Simon's family and friends.

I also believe in home ownership and I share the objective of increasing the supply of housing for first-time buyers but this will not be achieved by measures set out in this Bill. In fact, this Bill, if enacted, would only delay new homes for first-time buyers and others. To be kind to Deputy Darragh O'Brien, I feel something got badly lost in translation here in terms of what he has been saying publicly and what is actually contained in the Bill. I am surprised and concerned that Fianna Fáil would bring forward a Bill that would intentionally reduce the social housing obligation on the private sector and reduce the potential for other forms of social housing delivery. I am also surprised that after continuous criticism from Fianna Fáil about too much "red tape" in the system, it would seek to put in place additional obstacles to the delivery of housing as well as unverifiable restrictions on general housing supply. However, I am not surprised that this Bill is unworkable nor am I surprised that it betrays a fundamental misunderstanding of the dynamics of the housing sector. I am not surprised, although I am quite worried, that this Bill, if enacted, would actually do the opposite of what it purports to achieve. This Bill would deliver fewer homes to buy for first-time buyers and drive even greater institutional investment in build to rent. I will explain why. Under this Bill, the social housing obligation on the developer is taken away in build to rent developments so there would be less social housing from the private sector, no public gain from zoning and other development and no mixed tenure on these sites. While I support institutional investment in the build to rent sector to a degree, the removal of Part V would make such development the most profitable way to deliver a site. Fianna Fáil would do the exact opposite of what it claims it wants to do. It would supercharge institutional investment in build to rent to the detriment of all other delivery.

The zoning of land for first-time buyers would be an unworkable restriction on development. The proposal makes a very simple mistake in its assessment of the first-time buyer demographic. The approach assumes that first-time buyers constitute a homogenous group and that they seek only new homes. However, first-time buyers also gain access to housing in the second-hand market through older people downsizing or people moving to larger new homes as their family or income increases. Furthermore, not all first-time buyers are in the same income bracket so how would these homes be priced? The nature of their preferred home may depend on their income, length of time in the rented sector, household formation patterns and whether they are returned emigrants or migrants with capital to invest. Therefore, public policy to support first-time buyers must focus on the issue of affordability and housing typology rather than on the particular status as a first-time buyer or otherwise. This Bill, by contrast, is likely to restrict mobility within the market reducing choice and market access for first-time buyers and others. How are first-time buyers to afford these homes? Our first-time buyer measures are linked to prices and affordability, not zoning. Let us look at it another way. A builder builds 100 homes, of which 30 must be for first-time buyers under this Bill, so the builder builds 70 houses and 30 apartments to suit the new regulations. The 30 apartments can be sold only to first-time buyers but what if an elderly couple wants to downsize? What about someone who has previously owned a home but is now separated? Fianna Fáil should think of all the restrictions it is putting in place and the extra risk to the builder if the builder cannot dispose of all of the apartments to first-time buyers. What does one do if one wants to provide a mix throughout the site instead? What are the price points? How does one regulate this? Who would monitor these transactions? How would we ensure that they were to first-time buyers? Who would enforce these new regulations? Has any of this been discussed with industry? A basic examination would tell one that this is unworkable and would involve more red tape that would hinder the supply of new homes. This is the point I keep on making with regard to housing. It is complex. Fianna Fáil cannot just throw ideas from its friends down on paper and call it a Bill - one that, if enacted, would damage social housing supply and general supply and do nothing for first-time buyers and affordability.

Home ownership is in decline and has been since 1991. Let us not kid ourselves. It is not because of what has been happening recently. It fell more under a Fianna Fáli Government than it did under a Fine Gael Government over the last period of time. Nothing in this Bill halts that trend and, as I said earlier, it is likely to make it worse. How should we address affordability? How are we addressing it? This Government is taking a multi-stranded approach to support home ownership for first-time buyers. A combination of investment, access to finance, fast-track planning and changes to apartment and heights guidance has resulted in significant increases in supply. It is expected that some 20,000 new homes will be completed this year, up from 18,000 last year. We have already reached that in terms of the 12-month rolling total. Social housing output next year will be the highest at any time this century, including any time during the boom years when Fianna Fáil was last in Government. We will build more social housing homes next year. Between this year and next year, 21,000 homes will be added to the stock of social housing. I see Deputy Darragh O'Brien laughing. It is probably because he does not understand the facts of the matter.

Affordable housing output will steadily increase with the commencement last year of the relevant provisions of Part 5 of the Housing (Miscellaneous Provisions) Act 2009 to provide a statutory basis for the delivery of affordable housing for purchase. The new Rebuilding Ireland home loan, which was introduced by this Government in February 2018, has seen a draw down of 1,253 loans with a further 979 loans awaiting draw down. Total scheme funding has reached €563 million. A total of €310 million will be made available from 2019 until 2021 under the serviced site fund, SSF. The SSF was established to provide key facilitating infrastructure on public lands to support the delivery of affordable homes to purchase or rent. At a maximum funding rate of €50,000 per affordable home, at least 6,200 homes will be facilitated in total for affordable purchase or cost rental. This is a shared ownership scheme with sites already underway in Cork. In Boherboy, the first of the 116 two-and three bedroom affordable homes will be sold next year at a discount of up to 40% on market rates. This project is supported by some €5 million from the SSF. Deputy Darragh O'Brien might tell his leader that we have this affordable purchase scheme and shared ownership scheme because last weekend, he seemed to know nothing about it and yet today Deputy Darragh O'Brien claimed Fianna Fáil delivered it. I am not sure what is happening when it comes to housing policy development in Fianna Fáil but this Bill tells us that it is not very much.

The local infrastructure housing activation fund, LIHAF, is another key element of the Rebuilding Ireland action plan. The objective of the fund is to provide public off-site infrastructure to relieve critical infrastructure blockages. This will enable the accelerated delivery of housing on key development sites in Dublin and in urban areas of high demand for housing. LIHAF supports the delivery of up to 20,000 homes, 40% of which will be delivered through an affordable or cost-reduced scheme. Cost reductions have been applied to 150 homes in County Kildare and another 336 in Adamstown in Dublin using LIHAF funding. By the end of 2020, almost 1,800 homes will be delivered under LIHAF with a cost reduction.

The Land Development Agency, LDA, which was established by the Government in support of Project Ireland 2040, is advancing a number of projects on State lands with a minimum requirement that 30% of the housing to be provided is affordable. If we look at the first four sites being progressed by the LDA, we can see that a minimum of 60% of that land will be for social and affordable housing so we are going above the targets we set ourselves with this newly created agency.

What does this mean on a practical basis? By the end of next year, some 2,000 affordable and cost-reduced homes will have been added to the housing stock supported by various affordability initiatives. Through these measures, we are seeing overall supply of housing increase. We are placing a particular emphasis on affordable housing. This is the way we address the needs of first-time buyers who currently face difficulty in getting affordable housing. There is enough flexibility within the current provisions of Part V to allow local authorities to zone land appropriately to meet their local housing need, taking account of both the current stock and new requirements.

To aid this process, following on from the national planning framework, my Department is producing development plan guidance for local authorities to ensure new plans are aligned with these objectives and new methodologies to support the evidence base for housing strategies, including a new tool being developed to assess housing demand and need based on work already advanced in Scotland in this area. By contrast, the provisions of this Bill are not grounded in any evidential base. The provisions will not assist in improving the viability of housing construction, increasing overall housing supply or improving affordability and access to housing for first-time buyers. The impact will be hugely disruptive to the building of new homes and, therefore, I cannot support this Bill.

I do not mean to be dismissive but Deputy Darragh O'Brien is the main Opposition party spokesperson on housing and this is a bad Bill. It is not good enough. The Deputy has been talking about this Bill for three months and it will do the complete opposite of what the Deputy claims it will do. That is a mistake. Rebuilding Ireland is working and producing results and only exists because of the support of the Deputy's party. Rebuilding Ireland is being supported by Fianna Fáil and it is time to be honest with the public about the support that Fianna Fáil is giving to our housing policies in this Chamber and in the Oireachtas committee.

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