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

I am sharing my time with Deputy Gould. A deceit is beginning to creep into a part of our debate on housing which suggests that the policy of the new Government is in some way different from that of its predecessor. In fact, when one looks at the evidence it is very clear that we are seeing more of the same. Budget 2021 was a clear example. There was just an extra €124 million for an additional 593 social houses above the existing Fine Gael commitments and a paltry €35 million extra for 390 extra cost-rental homes. No extra funding was provided for the serviced sites fund. The €50 million in pre-announced funding allocated for this year will only deliver 90 genuinely affordable homes for working people to purchase. The direct total spend on the direct delivery of affordable homes by the Government this year is only €85 million. That is in stark contrast to the total spend by the Government this year on initiatives that are essentially developer or landlord supports, which is in excess of €1 billion. This means that 11 times more is allocated to private sector-led initiatives than to the State, through its agencies, to directly deliver affordable homes for working people.

The Affordable Housing Bill 2020, with which the Oireachtas Joint Committee on Housing, Local Government and Heritage is currently dealing, is in a similar vein. Although some aspects, such as the serviced sites fund and cost-rental housing, are welcome, they are not the initiatives of this Government but initiatives which have had a long, slow and, at times, painful gestation. It is interesting that almost half of the money that will be spent this year on the mechanisms outlined in the Affordable Housing Bill 2020 are to be spent on private sector supports as against the direct delivery of genuine social and affordable homes. Just as those private sector-led initiatives failed under the last Government, so they will fail under this one. The Land Development Agency is filled with those problems. The Minister is right; as I have written on many occasions, his Bill includes substantial textual changes to the first Fine Gael general scheme.

The fundamental flaws which were identified in the Fine Gael predecessor Bill and which were outlined in the report of the Joint Oireachtas Committee on Housing, Planning and Local Government remain in this legislation.

It is not true for the Minister to say that somehow this is not undermining local authorities. That is exactly what it is doing. If we had a local authority-led approach to public housing delivery, we would not have a Land Development Agency. We would be funding, staffing and supporting those local authorities to deliver the social and affordable homes families want.

The Minister is correct that there will be sites that have 100% social and affordable housing and I will discuss one of those in a moment. I am not convinced, however, that we are not going to see large volumes of public land used for unaffordable open market priced homes. In fact, the core delivery mechanism of the Land Development Agency, once it moves beyond a small number of local authority-owned sites, will be joint ventures through subsidiary designated activity companies, DACs, with private equity investors and private developers. For them to be involved and to bring cash to the table, they are going to want the profit returns of unaffordable open market prices, such as we have seen, controversially, in O'Devaney Gardens and the deal, thankfully rejected by Dublin City councillors, on Oscar Traynor Road.

The core problem of the joint venture model is that it pushes up development costs and prices, affecting not only the open market priced homes but, crucially, the so-called affordable homes which I will come back to a moment.

This is the central flaw of the agency. I dispute the Minister’s contention that this Bill deals with the substantive concerns of the Joint Committee on Housing, Local Government and Heritage through pre-legislative scrutiny. A small number of these concerns have been dealt with but the majority have not. I am reminded of the description of the Land Development Agency by the now Minister for Housing, Planning and Local Government, when he was a member of the joint committee as the lead Opposition spokesperson, when he rightly criticised it as a "Del Boy" model and indicated his party would not be supporting it unless there was profound change. To mix my metaphors slightly, the Minister is increasingly looking like Arthur Daley, trying to sell a clapped-out second-hand Fine Gael car with a lick of paint but with the same dodgy engine.

Two examples are a case in point. Shanganagh Castle in the Dún Laoghaire-Rathdown County Council area is the first. In 2017, councillors from all parties in that local authority unanimously agreed for a public housing development on that land comprising 597 social, affordable rental and affordable purchase homes. The problem was that the Government at the time refused to fund it. The land, in fact, sat idle not because the councillors did not want it developed but because Government refused to support it. Only in 2020, as a result of Fine Gael pushing the Land Development Agency, was a planning application submitted, albeit by the council and not the LDA. Construction will commence this year, although, unfortunately, rents will be beyond the reach of many working people, which will be €1,000 for a one-bed unit and up to €1,300 for a three-bed unit. Single people and couples on modest incomes will still find that a struggle to pay. We still do not know what the house prices will be. The LDA cannot tell councillors in Dún Laoghaire-Rathdown County Council what the price will be and the tragedy of Shanganagh is that if the Government had funded it when the councillors unanimously agreed to move ahead, it would have proceeded and families would be living in homes today that would have been eminently more affordable than what is on the table.

In the same local authority area we have the former Dundrum Central Mental Hospital, now called Dundrum Central which has the potential for 1,300 homes. It is HSE land currently being managed, as far as I understand, by the Office of Public Works. Unless the Minister can confirm to us today, and if he does I will be very glad to hear it, I do not believe that this will be a 100% social and affordable housing development.

If one looks at the affordability definition in the Minister’s Bill, it has to be something lower than the median price at a particular location. What was the median price at the end of last year for a two-bedroom apartment in that specific location? It was €557,900. The Minister is correct, and I will talk about this in a moment, that the LDA will pay the market value, depending on what that is going to be on the site. The real issue, however, is that will be more than the existing use value before the LDA became involved. It is hard to see, let alone with the unaffordable open market priced homes, that if this site is developed, even with these affordable houses, how it will be made affordable.

That is why I think this is the wrong approach. We have mechanisms to deliver public housing on public land. They have existed for a century and when they were funded, supported and staffed by Government, they did a good job. They are called councils and we should return to that model.

I will run through a number of key problematic aspects of the Bill. I will take issue with the Minister’s presentation of those, and we can take that discussion further. Part 4 of the Bill not only sets up the LDA as a designated activity company, DAC, but specifically allows for the creation of subsidiary DACs. These will be joint ventures, sometimes between different public agencies and the LDA. Others will be between equity investors and developers. They will not be subject to Freedom of Information Act, FOI, requests. The very final section of the Bill does not make reference to the subsidiary DACs and unless that is amended, it is a glaring omission. While they will be subject to the provisions of the Comptroller and Auditor General, it is not in the same way as with NAMA. These are look-back audits and investigations which do not provide adequate transparency or accountability in real-time. They will also not be subject in the same way that local authorities are to the public spending code or to the lobby register. I am so concerned about the lack of accountability and transparency that today I launched a transparency initiative called LDA-watch to provide greater public access to information about this project.

Section 53 deals with market value. The Minister is right that what will happen is that land will be sold at the market value for the use that it is going to be put to and if there is a percentage of social or affordable housing, that will affect the value. Likewise, if there is a percentage of open market, that will also affect the value. What the Minister did not tell Deputies is that this value will still be higher than the existing use value of that land which sits on the books of the existing State agency. The LDA will be paying more for that land than the value of the land on the books of the agency that is disposing of it. That will have an inflationary impact on the value of land, will push up development costs and will result in increased prices both on the so-called affordables as well as on the unaffordable open market prices. That is why Deputies in the Minister’s own party are deeply concerned by this.

Section 56, which is the stripping of section 183 powers from local councillors, is an appalling attack on democracy. We know what it is for. There will be occasions where central Government and the LDA will want access to certain local authority land but because councillors will be unhappy at the price to be paid to rent or buy in those developments, they will want the council to develop it. This is a mechanism of denying councillors the right to be able to say in respect of public land, such as Oscar Traynor Road, that not only must it be 100% public but that the affordable rental and purchase must be genuinely affordable for working people. This is removing a key power of local councillors and, I suspect, it is not just with an eye to the Oscar Traynor Road lands but also to the local authorities lands in Limerick and elsewhere.

On the section 59 compulsory purchase order, CPO, powers, the Minister is factually incorrect. When we had a presentation on the general scheme of the Bill from the Department officials when this was a Fine Gael Bill, we were told very clearly that there would be limited CPO powers for the non-commercial aspects of the LDA and that these would be ransom strip powers. All the agencies supporting active land management, from the National Economic and Social Council, NESC, and the Economic and Social Research Institute, ESRI, to the Housing Agency say that it must have full comprehensive CPO powers and it does not. It has the same limited powers NAMA had and that were in the original general scheme, which means it will not have the crucial active land management function intended in the first instance. It will also have no negotiating power when seeking to access land and will only be able to develop such land in partnership with the State agency itself.

The single biggest weakness in this Bill, and this is the responsibility of the Minister, Deputy Darragh O'Brien and Fianna Fáil because this is their inclusion in the Bill, is that for the first time in the history the State we have a definition of affordability. In fact, the word “affordable” is referred to in this Bill probably more than any other. The problem is that the definition is absolutely meaningless because, as the Minister said, the definition in section 76 is below the prevailing market price to buy or rent. To buy means below the median purchase price of a new home. That would mean a price of €460,000 in the Minister’s constituency last year, with the average rent in the Residential Tenancies Board, RTB, index of €1,800. If we pass this Bill, anything below that which is decided by the Minister will be legally defined as affordable. That is an absolute travesty.

We should not be linking our definitions of affordability to market prices, but to the ability of working people to pay a fair rent or a fair price to purchase. Section 77 of this Bill gives the LDA development agency status and the power to draft and submit proposals for strategic development zones, SDZs, subject to the approval of such designations by the Minister. There is a complete bypassing of the local authorities, however, which could choose to go to the board. Local authority-led strategic development zone processes are more democratic and transparent and produce a better result. That is not the outcome of anything in this proposal.

Before I hand over to Deputy Gould, I must say I always find it amusing when the Minister laments the decline in home ownership. Governments led by his party, particularly during the years of the Celtic tiger era, oversaw the most dramatic decline in home ownership because of the way in which our housing system was managed. That decline slowed somewhat but continued under governments led by Fine Gael. Nothing in this Bill convinces me that trend is going to be in any way reversed. Equally, I find it ironic when I hear the Minister talking about the housing crisis as if it is some force of nature and not something which he and his colleagues created when they were last in government and have tacitly supported through confidence and supply over the last four years.

The reality is that there is a better approach. Let us transform the LDA into a powerful and active land management agency with real CPO powers, a real budget and whole-of-Government support to use our public lands to the best strategic purpose. The LDA should not be involved in residential development, however. That aspect should be the responsibility of our local authorities, based on local need and local democratic decisions. If the Government wants to increase the supply of housing, it should not waste its time with the LDA. It should double capital investment in public housing on public land and deliver the 20,000 social and affordable homes promised in the election manifesto last year, but which it has since abandoned. In the context of Covid-19, the Government should focus on increasing the building of turnkey housing and ensuring developments like that on Oscar Traynor Road are fully public, social and affordable and led by our local authorities. They did that in the past and they can do it again in the future.

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