Peter Burke (Longford-Westmeath, Fine Gael) | Oireachtas source

I thank Deputy Cian O'Callaghan for bringing forward this Bill. I can confirm that the Government has agreed not to oppose it.

As we all know, due to Covid-19, the past 12 months have been very challenging for the housing sector, with delivery impacted by restrictions introduced to protect public health. However, despite the challenges brought about by the onset of Covid in 2020, construction proved resilient and the year finished with the completion of just over 20,000 new dwellings. A total of 7,827 new homes, including 5,000 new builds, were delivered in 2020, representing more than 70% of the target for the year.

Covid-19 will, unfortunately, have a much bigger impact on the housing supply in 2021, with most residential construction having been stopped for more than three months at the beginning of the year. There is no question but that in many local authorities, units that were expected to be ready for tenanting in 2021 are now, unfortunately, likely to be delayed until 2022. Every home not delivered in 2021 represents a household that does not come off the waiting list this year. It is essential, therefore, that we take every opportunity to maximise delivery so as to provide as many homes as we can. With that in mind, we must ensure that any changes to current housing policy are carefully considered in the context of their impact on the overall housing delivery.

The Part V housing supply provisions in the Planning and Development Act came into effect in November 2000 and contained a radical new approach to the supply of social and affordable housing in Ireland. While, originally, Part V required developers to ensure that 20% of land zoned for residential and other uses was reserved for social and affordable housing, in practice many developers availed of an option of making a cash payment in lieu to the local authority instead of building social and affordable housing. Part V was amended in 2015, following a review by the Housing Agency and public consultation. The overall requirement was reduced to up to 10% of units and the option of a cash payment was abolished. The Affordable Housing Bill 2021, which was approved for publication on Tuesday, provides for an extension of Part V to set those requirements at 20% in every local authority area, with a minimum 10% requirement for social homes and up to a further 10% requirement for affordable homes, where required. Where not required, the additional percentage may be used towards social housing.

Part V leasing has been an option for Part V delivery since 2015. The option allows for circumstances where a local authority does not have the capital available to purchase the housing units. This option has been used on a very limited basis and only 16 units were leased in 2020 under this mechanism. It is also important to note that there is no obligation on housing authorities to deliver Part V obligations through leasing. In fact, the advice, through circulars and ministerial guidelines, clearly states that the preference for housing authorities is to acquire units on-site in order to comply with the relevant Part V conditions. The decision on how Part V obligations are satisfied is one for the local authority, to be made in line with its own housing strategies.

The Part V lease option gives housing authorities flexibility in certain circumstances to lease a dwelling on a long-term basis, rather than to acquire it. There may be instances where it is more practical to enter into a leasing arrangement for Part V units, or where the overall objectives of a local authority housing strategy would be better served by doing so. This is particularly true where the transfer of other units within the functional area is not available as an alternative option. For instance, in the case of build-to-rent apartment developments, Part V options for the acquisition or transfer of completed units may not be practical, given the long-term rental nature of such developments. In other instances, the local authority may be in a position to secure the long-term lease of more units than the baseline Part V requirement, which could be significantly more than 10% of the units. In such circumstances, this will result in more units being available to the local authority for the purposes of social housing and the subject lands could, therefore, better satisfy the objectives of the overall housing strategy. Each individual local authority needs to assess this on a case-by-case basis, having regard to offers from a number of proposers, individual housing needs and provisions of the planning Acts. Most important, the Government is clearly shifting away from leasing towards direct build and has provided the financial framework to achieve it.

The effect of the Bill will be to repeal the amendments made to Part V in 2015 so that housing authorities and developers will no longer be permitted to enter into lease agreements to satisfy Part V obligations. I understand the motivation behind this Bill where the local authority or approved housing body does not own the house at the end of the Part V lease term. Acquisition of Part V units can involve significant capital expenditure and there is an opportunity cost associated with this expenditure. However, it remains the case that leasing should not be the priority option for housing authorities in securing Part V units and that, in most cases, the priority would be the acquisition of Part V units by either housing authorities or approved housing bodies.

The Government has committed to increasing the social housing stock by 50,000 social homes, with a strong emphasis on new-build units. In 2021, the total funding being made available for the delivery of housing programmes is €3.3 billion, the single largest housing budget ever with the most ambitious housing targets on record. This includes funding to deliver 12,750 social homes through build, acquisition and leasing. Subject to the impacts of the Covid shutdown of construction, a major component of this investment is a delivery of new build, with the overall target of 9,500 new social homes.

In respect of the market generally, the measures accommodated under the Affordable Housing Bill will, in the near term, improve market access for first-time buyers, stimulate and increase the number of new homes being developed and provide State-supported rental housing at a more affordable price. This includes the cost rental equity loan which provides funding to approved housing bodies to deliver homes for rent in 2021 at a minimum of 25% below market rent. The Bill also includes provision for an affordable purchase shared equity scheme, which will help alleviate housing affordability challenges for certain groups in the short term and stimulate supply by providing confidence in the viability of future private housing developments. These new policies, particularly as they relate to affordability, will reshape delivery of housing in Ireland and deliver on the Government's commitment that everybody should have access to good quality housing to purchase or rent at an affordable price, built to a high standard and offering a high quality of life.

Work by the Economic and Social Research Institute, ESRI, recently commissioned by the Department, estimated that we will need approximately 33,000 houses a year, across all tenures, to keep up with population growth and demand for housing. This summer, we will publish a new housing strategy, Housing for All, to set out our ambitions on how we can achieve these targets. The delivery of more affordable and social homes will be a key focus of the plan. It will also set out measures to address homelessness, both through the delivery of new homes and also the provision of supports that many homeless people need, particularly in the areas of mental health and addiction. Supporting our most vulnerable citizens will be a key objective of the plan and the main focus will be to deliver new build homes to reduce reliance on the private market and put local authorities back at the heart of our housing delivery.

I acknowledged earlier that there are some valid concerns about Part V leasing and I appreciate the spirit in which the Bill has been introduced. However, it is also my belief that it is essential that any change in current policy is carefully considered in terms of its implication for social housing delivery in the short to medium term. On that basis, the Government is not opposing the Bill at this stage, but will commit to examining the current policy in the context of the Government's Housing for All strategy, due to be published in July.

I thank all Members for their comments. I note some of the inaccuracies that have been put forward. One Deputy compared one of the biggest crises in our State to the ticket touting Bill, introduced by my colleague, former Deputy Noel Rock, in 2017. I do not know how that is considered to be rushed legislation in 2021. There was also reference to the historical fact of different taoisigh tightening their belts. The Deputy needs to look at the record in connection with that. We need to work together to solve this crisis by responding as a team into which everybody has an input. Using emotive language and calling people "arrogant" every day in this House will serve no purpose and not provide a solution to the housing crisis.

See this speech in context