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

People locked out of home ownership deserve a better quality of debate and better evidence concerning the types of proposals being discussed than we have had so far today. The Minister's contribution was largely an attack on the Opposition and was mostly rhetoric. He accused the Opposition of being hysterical and of being engaged in Trump-style politics.

The main hysteria in the Chamber thus far today has been in the comments of the Minister. There was a lack of the evidence in defence of his scheme. Most of the time, he was attacking the Opposition.

When the Minister did get to defending his scheme, a key part of his comments was that it would boost supply. All the experts, from the Central Bank to the ESRI and the Department of Public Expenditure and Reform, have said the opposite. All the independent commentators, from David McWilliams to Cliff Taylor and Eoin O'Malley, across the political spectrum and in different publications, said this will increase demand. Where is the evidence that it will increase supply? Apart from the comments of the Minister and of those from the developer and property industry who are lobbying for the scheme, no one said it will increase supply. Where is the evidence for that? To be fair, if the Minister said the scheme would increase supply, would he please show some evidence of that? When officials from the Department of Housing, Local Government and Heritage appeared before the Oireachtas Joint Committee on Housing, Local Government and Heritage, I asked them to publish their independent analysis of the scheme and further evidence. No evidence, analysis or independent expertise in defence of the scheme has been published.

Before today, the main evidence referred to by the Minister, which was ditched from his comments in this debate, was a report from the UK National Audit Office on the UK scheme. It is not surprising, therefore, that the Opposition would refer to the UK scheme because until now that has been the main example used by the Minister to say why the scheme might work. The comments made by the National Audit Office to which the Minister referred found price inflation of only 1% caused by the UK equity scheme. That, however, contradicts other sources in the UK on the UK scheme that show a price premium of between 5% and 20% paid by people who bought new-build homes under the UK scheme, as opposed to people who did not. Furthermore, the report did not comment on price inflation when it referred to that 1%. In fact, it referred to a price premium, which is very different. The evidence shows that since April 2013, when the scheme was introduced in the UK, and December 2018, prices for new-build properties increased by 41%. While that cannot be put down solely to this scheme, given that there are a number of factors for those home price increases, it is a factor.

The other part of the Minister's defence of this was to say this is just €75 million, or 2.3% of the overall housing programme and budget. That has been a principal defence of the scheme but let us be truthful and clear. In terms of affordability measures, this will constitute about 17% of the budget in 2021, a very significant part of affordability measures. Moreover, this will be the second largest part of affordability measures this year if it goes ahead, surpassed only by expenditure on the help-to-buy scheme. In contrast, only €35 million will be invested in cost-rental this year. The Minister asked what the viable solutions are and stated he does not hear them coming from the Opposition. The viable solution is, as he has referred to many times, to take the €75 million from shared equity and put it into delivering affordable homes and increasing the supply of homes instead of the demand. That could be done, as the Minister has noted, by investing in schemes such as that in Dun Emer in Lusk, where genuinely affordable homes are being built by Fingal County Council in partnership with Ó Cualann at prices that people on average incomes can afford to buy. That is the way to go on this.

As for the increased demand that the scheme will cause, I ask the Minister to publish any evidence or independent expertise or analysis to show this will produce supply and not demand.

11 o’clock

Every group that has commented on this scheme, including the Economic and Social Research Institute, ESRI, the Central Bank and the Department of Public Expenditure and Reform, says that it will increase demand. Why on earth are we introducing a scheme that will increase demand in the current circumstances? Demand for homes is very high and there is pent-up demand arising from the, unfortunately necessary, closure of the construction sector, which will only increase. Furthermore, some households have increased levels of household savings and an improved ability to get a deposit together. There is increased demand so why, in those circumstances, is the Minister seeking to introduce additional measures in respect of demand rather than supply? How can he think that is a good idea or that it will somehow work?

This represents an unfortunate return to the bad old days of Fianna Fáil not heeding the warnings of experts and independent advice and instead implementing policies sought and lobbied for by developers and the property industry. It is incredible that we are back in that situation. There is total disregard for what economic commentators are saying and for basic economic principles which state that, instead of increasing demand, we should be increasing supply. This is unfortunately very much a return to the era of Bertie economics with regard to housing policy. People will look on aghast at the return to these kinds of Celtic tiger era policies being implemented when untold damage was done from Fianna Fáil's introduction of policy after policy to subsidise developers, mainly through tax breaks, the last time it was in government. These policies overheated housing prices and left thousands and thousands of families with unsustainable debt. We know of all the consequences of that.

With regard to this scheme, the Department of Public Expenditure and Reform has said: "Apart from the concerns we already voiced at [senior officials group] around the appropriateness of the shared equity scheme, which appears to us a demand-side measure which is unnecessary in a market like ours which is chronically undersupplied, it does not appear that the policy proposal has been sufficiently analysed." Again, I appeal to the Minister to publish his analysis of his proposal. Where is it? How could he bring forward a measure such as this without any proper analysis? The Minister has asked the ESRI to analyse other aspects of housing policy; why has he not asked it for analysis on this? If he has, why has he not published it?

The UK scheme that the Minister has, up until today, referenced quite heavily to defend his scheme has been critiqued by the Bank of England, the London School of Economics and the UK's National Audit Office. It has also been shown to have increased developers' profits very significantly. A study by Professor Geoff Meeks of the University of Cambridge found that, in the three years before the shared-equity scheme in the UK was introduced, the share price of leading developers increased in line with other share prices on the FTSE 350 index, while in the four years after the scheme was introduced, as share prices of companies on the FTSE 350 index rose by an average of 47%, the share prices of leading property developers rose by an average of a staggering 230%.

We need the Minister to scrap this scheme and instead to put the €75 million allocated to it into direct-build affordable homes to increase supply while not increasing house prices or developers' profits. If this money was put into the serviced sites fund, we could deliver approximately 1,500 direct-build affordable homes straight away. I ask the Minister to do so.

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