Eoin Ó Broin (Dublin Mid West, Sinn Fein) | Oireachtas source

I am sharing time with Deputy Ellis.

I would like to join with the Minister, Deputy Eoghan Murphy, and Deputy Darragh O'Brien in expressing my deepest sympathy to the family, friends and colleagues of Simon Brooke, who passed away yesterday, and to offer condolences to his partner, Anna Heussaff, and his son, Conall. Simon was a well-known figure in housing policy circles, having worked for Focus Ireland and Clúid, and having taught at the school of social work and social policy in Trinity College Dublin. He worked as a housing policy consultant for many years, producing important research and publications for the Dublin Region Homeless Executive. A tireless champion for social justice in housing, Simon was a strong advocate of public housing as a means of meeting social and affordable housing need. Indeed, he was the first expert to make the case for cost rental accommodation in Ireland. He was generous with his time and expertise and will be sorely missed by all of us who knew and had the pleasure of working with him.

Sinn Féin will supporting Deputy Darragh O'Brien's Bill, albeit with a significant degree of hesitation. We share the Deputy's concern about the distorting impact of short-term institutional investors on our housing system and we look positively at all proposals that seek to assist first-time buyers. Having said that, I believe the Bill as it stands is deeply flawed and would need serious scrutiny and significant amendment on Committee Stage if it is to have any positive impact on those locked out of the option to own their own homes.

Before outlining those concerns, I will make a few general remarks on the issue of home ownership. Contrary to the views expressed by some, the preference for home ownership is not the result of some cultural attachment to property ownership in Ireland, it is the consequence of a century of bad Government policy. The under-provision of public housing, particularly for middle-income households, coupled with the weak regulation of the private rental sector, has meant that for the majority of people, long-term security of tenure can only be guaranteed by owner-occupation. Council housing is beyond the reach of the majority and a mixture of insecurity of tenure and rent in the private rental sector and weak pension provision has pushed people into home ownership. It was the failure of successive Fianna Fáil and Fine Gael Governments to provide a genuinely tenure-neutral housing system, in which public housing, private rental accommodation or home ownership could provide an equal measure of security, that has led the vast majority of people to prefer owning their own home.

Contrary to Deputy Darragh O’Brien's assertion, the decline of home ownership is not a recent phenomenon. It started during the 1990s when his party was in government. The toxic tax incentives that underpinned the property boom during the Celtic tiger, which included cuts to capital gains tax, cuts to stamp duty and section 23 tax reliefs, caused the first wave of institutional investment in residential housing. This priced out an ever-greater number of first-time buyers, as the growing number of landlords snapped up an increasing number of homes. Worse still, it pushed up house prices forcing tens of thousands of first-time buyers into excessive and, in some instances, unsustainable levels of debt.

Policies pursued by Fianna Fáil during the 1990s and 2000s saw home ownership decline from 79% in 1990 to 70% in 2011. The consequent growth of the private rental sector did not represent a choice but rather the reality of ever-greater unaffordability. As it was with Fianna Fáil, so it is now with Fine Gael, although instead of incentivising small-scale, semi-professional landlords, Fine Gael has shifted the incentives to large scale global equity investors.

I am not against all forms of institutional investment in our housing system. Long-term, low-yield investors, such as pension funds or the credit unions, could play a valuable role in stabilising our housing system. Unfortunately, the tax incentives for Irish collective asset management vehicles, ICAVs, and real estate investment trusts, REITs, introduced by then Minister for Finance, Deputy Noonan, have brought the wrong kind of investor into the market. Short-term, high-yield funds availing of incredibly generous tax breaks are driving up prices and pushing first-time buyers out of the market. If structured in certain ways, these funds can avoid tax on their rent roll and on capital gains when they flip the development. Moreover, in many cases their investors can avoid paying any dividend withholding tax whatsoever. Just as with Fianna Fáil’s tax breaks of the 1990s and 2000s, Fine Gael’s tax breaks are pushing up the price of renting and buying while crowding out first-time buyers. In turn, home ownership has continued to decline and was at 67% in 2016.

It is little wonder that Fianna Fáil said nothing about these so-called tax efficient property investment vehicles. In fact, under the confidence and supply agreement, Fianna Fáil has facilitated them in budget after budget. It is therefore a little bit rich of Deputy Darragh O’Brien to complain about the impact these funds are having on first-time buyers when his party was for so long complicit in the very tax laws that brought them into our housing system in the first instance.

If Fianna Fáil was really serious about ending the distorting role of vulture funds in our housing system, it would start with recommending reform of the tax code rather than the planning code.

See this speech in context