Cian O'Callaghan (Dublin Bay North, Social Democrats) | Oireachtas source

It is notable that the Minister for Housing, Local Government and Heritage has left the Chamber for the rest of the debate on the Land Development Agency Bill. I would not say that except that a few weeks ago during questions and answers with the Minister for Housing, Local Government and Heritage, he created a scene when one of the Opposition spokespeople left. He seemed to think this was an incredible slight against him and against our Chamber. It is ironic that he has left and will not hear directly the issues of concern that I want to raise. I know a Minister of State is present, but to be fair to him, his responsibilities relate to heritage and biodiversity, and he does not have responsibility for housing. Therefore, I believe it is appropriate to raise that matter.

We need a strong Land Development Agency. We need strong active land management and we need strong compulsory purchase order powers for that Land Development Agency to ensure we can build a good and consistent supply of affordable and social homes. Unfortunately, this Bill fails to do this. Once again, the Bill fails to provide the kinds of safeguards we need to ensure public lands will not end up in the hands of private developers. In addition, there are no safeguards to ensure homes built on what are now public lands will not be sold off to international investment funds and real estate investment trusts, REITs.

If the Minister is sincere in the comments he made at the start of the debate, and I have no reason to think he is not, he has the opportunity to bring forward amendments to this Bill, to change it, bring in safeguards and close down avenues for privatising public land, the selling of land and sales to international investment funds. He can do that. It is within his gift to address the concerns we have raised. He said in his opening statement that this is not a back door to privatisation but he failed to give any meaningful assurances on that or any details of substance. There needs to be actual action to close down those avenues in this Bill and to stop that happening.

The Minister said that this is a different Bill from the Bill drafted by Fine Gael in 2019. If it is a different Bill, why did we not get pre-legislative scrutiny on it? He cannot have this both ways. Either it is the same Bill and we do not need pre-legislative scrutiny or it is a different Bill, in which case why have we been denied pre-legislative scrutiny? The Minister cannot have it both ways.

I welcome the Minister's statement that lands owned by Dublin City Council will be public lands, and if acquired by the LDA or if there is LDA involvement, 100% affordable and social homes will be the outcome. That is a very welcome commitment. However, why is what is what is good enough for Dublin City Council not good enough for people in other areas of Dublin or, indeed, other areas of the country? If the Minister feels there is a need for flexibility, why does he not set the baseline as 100% affordable and social homes with some element of flexibility or adjustment from that baseline? Why set the baseline at just 50% affordable homes?

Housing that is affordable to buy or rent remains beyond reach for many families. During the election campaign this time last year, the Minister, Deputy O'Brien, promised 50,000 direct build social homes and 50,000 direct build affordable homes. Where are those homes? We have been told by the Minister that we are only going to see 530 direct build affordable or cost rental homes this year. That is just a 1% delivery of what he promised he would do in government. Instead of getting those direct builds, there is an over-reliance on private developers, which build homes at costs that are simply out of reach for most people. New homes provided by private developers are sold at about twice the build cost, with land, professional fees, levies, taxes and developers' margins and profits accounting for the rest of the costs. Construction costs in Ireland are significantly higher than in other countries such as France and Germany. In the Netherlands, for example, construction costs are 18% lower than in Ireland. A key factor in home delivery in countries like the Netherlands is how they bank land and ensure that land is brought into the equation at low and affordable costs. The model of relying solely on private developers and speculative development is a broken one. It does not work and it is abundantly clear that we need a change in direction.

We need to ask two key questions about this Bill. First, who is writing housing policy in Ireland? Second, who is benefiting from it? In the shared equity loan proposal being put forward by the Government, as well as the previous Government's legislation around co-living and strategic housing developments, we have seen quite clearly the heavy influence from the construction industry and developers in how housing policy is written. On the shared equity loan the Government is bringing in, a senior Government official recently stated, "The property industry want an equity scheme because it will increase prices". Likewise, the ESRI has also critiqued the shared equity scheme. In a report on de-democratising the Irish planning system, academics Dr. Mick Lennon of UCD and Dr. Richard Waldron of Queen's University Belfast claimed that lobbyists for the development industry played a key role in the creation of our strategic housing developments and housing policies. With this Bill, we should be delivering affordable housing by cutting out developers' fees, profits and margins. We should be tackling land costs and ending land speculation. We should build housing that is affordable to buy or rent on public land and we should end the transfer of public land to private developers. All those things could be done if the Government and the Minister wished to do them.

One of the keys to ensuring the delivery of affordable homes is building up a sufficient pipeline of land that is suitable for development. There are some good examples in other European countries of how land is strategically managed. In Germany, the planning law freezes the value of land when the local municipality decides to designate an area for residential construction. The municipality then acquires the land, produces a master plan for development, puts in the necessary infrastructure and uses the uplift from selling plots of land to pay for this investment. There is almost no scope for individuals to profit from land speculation. In the Netherlands, local municipalities have played a similar role in assembling land for development, which includes powers to use compulsory purchase orders, CPOs, to build up strategic land banks. While they have these CPO powers, they often do not need to use them.

In contrast, in Ireland, when a local authority rezones land, the landowner makes a windfall profit from changing the land from agricultural to residential use, often increasing the value of the land tenfold or even a hundredfold. When the State invests in infrastructure to enable the delivery of homes on this land, the private landowner reaps the benefit of increased land values. All of these increases in land values are reflected in the final price of a home. This is why it is so important that this Bill should include compulsory purchase order powers. Such powers were recommended before I was born, and probably before the Minister was born as well, in the Kenny report in 1973. Yet, that system has still not been put in place and we do not have the strong CPO powers that are needed. Instead, the Bill envisages a much more limited role for the Land Development Agency, focused on assembling land banks from existing State agencies and local authorities.

The 2018 report on urban development land from the National Economic and Social Council, NESC, and its recent 2020 report on housing policy, are very strong on the need for CPO powers for the LDA. It is not just the NESC that has said this, incidentally. The programme for Government said so as well and committed to allocating proper CPO powers to the LDA. Yet, such powers are effectively missing. It will have powers around infrastructure and ransom strips but it is limited to that. The role of the agency is, therefore, going to be very limited. These powers are a key part of what we need in a strong and effective LDA to drive down the costs of housing and to make it much more affordable.

In recent times, local councillors have correctly insisted that public land should be used only for the delivery of homes that are genuinely affordable and should not be sold on to private developers. This Bill would strip councillors of the power to determine how land in the ownership of their local authority is best used and would allow the LDA to acquire council lands without the consent of local elected representatives, which is an attack on local democracy. We have one of the weakest forms of local democracy in the western world, and if this Bill passes unamended, it will weaken local democracy even further. To be fair, I do not think that is the intent of most Government Deputies or Ministers. Most of them would recognise that we need to strengthen local democracy. I ask them to reflect on that. Not only would the Bill do that, it would also allow the LDA to flip these lands on to a third party and on to private developers, subject only to ministerial sign-off. In many cases, these lands will then be developed through a company set up in partnership with the LDA and private developers. This, again, is going to push up the cost of homes.

The Association of Irish Local Government, which has members from across the political spectrum and all political parties, including Government parties, has said it has grave concerns about this Bill, particularly sections 49 and 56. Let us make no mistake. Local councillors are insisting that all their land that is suitable for housing should be used exclusively for social and affordable housing.

If this Bill is passed unamended, the Minister with responsibility for housing will have the power to override that and their lands can be acquired through the LDA. In this situation, part of that land can be used for full market price housing or sold. Critically, in terms of affordable housing and how that is defined, that is a key flaw and weakness in this Bill. We need housing that is set at a genuinely affordable rate and not at the definition of below full market rate, which is not a good enough definition and it will not work.

I will give an example of how affordable homes can be delivered. I have heard others say that the delivery of affordable homes at prices which people on average incomes can genuinely afford is pie in the sky. It can be done. I refer to Dun Emer in Lusk, where Fingal County Council in partnership with the Ó Cualann Cohousing Alliance is delivering homes ranging from €166,000 for a two-bedroom apartment to €258,000 for a three-bedroom semi-detached home, with monthly mortgage repayments of €698.57 for the apartment and €1,085 for the house. These are prices within the range of people on average incomes. Critically, these are homes that are being delivered on public land. Part of the reason this level of affordability is built into the scheme is that the development is on affordable land. It could not be done by private developers or at full land prices.

With the right level of ambition, the LDA could transform housing delivery in Ireland, ensuring that much-needed homes are provided at affordable prices. This Bill will allow for privatisation through the back door and, therefore, will allow private developers to enrich themselves through the acquisition of public land. Members need not take my word for this. I ask them to listen to what Senator Michael McDowell had to say about it. Senator McDowell's politics are different from mine and that is why I am quoting him. He said: "All of the signs are that the Land Development Agency is mainly intended to facilitate the provision of existing publicly-owned land to private developers." These views are held across the political spectrum.

This Bill is about building full market price unaffordable homes on public land at a time of a national housing crisis. It specifically allows for this. Section 27 allows for an upper ceiling of €1.25 billion that may be borrowed by the Land Development Agency. This is in addition to the €1.25 billion capitalisation of the LDA, which equates to a maximum ceiling of €2.5 billion. This makes it impossible for the LDA to build up a strategic land bank pipeline of land and to build it out at the same time on the scale that is needed. This means there will have to be substantial private sector involvement and transfer of land to private developers. This will push up the cost of homes delivered. Section 29 specifies that funding can be made available to the agency from the Ireland Strategic Investment Fund, ISIF. As we all know, ISIF has a commercial mandate and will be seeking commercial returns on its investments. This, again, will push up the price of housing, making it less affordable.

A key weakness of this Bill is that it provides no protections against homes built on public land being sold to REITs and international investment funds. This will lead us into the absurd situation whereby we will be subsidising people on low incomes renting privately owned accommodation on public land on which only social and affordable homes should have been built. We will be subsidising their insecure renting through HAP and subsidising private developers and investment funds. It would be much better value for money to ensure in this Bill that only social and affordable homes can be built on public land. This would also be much better for the individuals and families involved who then would be able to avail of long-term, secure social housing and the peace of mind that comes with that rather than the constant worry and threat of eviction into homelessness.

Affordable homes delivered by private developers or the Land Development Agency acting with a commercial remit to maximise returns will result in these affordable homes being more expensive than they should be. We are likely to see affordable homes delivered, albeit at a discount from the full market price, but not at a level within reach for many people on average incomes. Make no mistake. The Land Development Agency will facilitate the privatisation of public land through the backdoor. This is being dressed up by the Minister as delivering affordable homes but it is an attempt to transfer public lands to developers, which will drive up the cost of homes built on public lands. We need to break from the failed policies of the past that locked thousands of people out of secure and affordable housing. It is telling that there are no protections in this Bill to stop REITs and institutional investors buying up to 40% of the homes built out on public lands.

If the Government is serious about delivering affordable housing on public land, it should commit to amending this Bill to prohibit the sale of public land acquired by the LDA to private developers, guarantee that 100% of homes built on land acquired by the LDA will be either affordable or social housing and prevent the sale of homes built on public lands to REITs and institutional investors. This Bill will ensure that developers continue to profit while families spend years living in box rooms. It will mean that international investors are facilitated while people are driven into homelessness when they cannot afford the rent. The deference to developers and international investors must stop. It is time that we put the housing needs of people first.

A little over a year ago, the Minister, Deputy Darragh O'Brien, in opposition said the following about his predecessor, Deputy Eoghan Murphy, and the current Tánaiste, Deputy Varadkar: "It's their wealthy friends they've prioritised to changing planning laws to have a situation where it's far more advantageous to have investor funds operating in this country." We now have a Bill brought forward by the Minister for Housing, Local Government and Heritage, which does not protect us against international investment funds acquiring and buying up homes built on public lands.

We need active land management, a Land Development Agency with strong, compulsory purchase powers and for affordable and social homes to be built on public lands. Instead, we have a Bill that will enable lands to be taken from public bodies and flipped to private developers, allow many of the homes built on public lands to be sold on to international investors and REITs and envisages 40% of homes built on public lands to be built at full market price, which will be out of reach and unaffordable for a generation locked into paying exorbitant rents.

This Bill, if passed without amendment, will have consequences. It will mean that we will not deliver affordable homes at the rates that we could. This will be a lost opportunity and it will mean more people being pushed into homelessness. We have a choice. I ask the Government to listen to our concerns and amend this Bill.

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