Matt Shanahan (Waterford, Independent) | Oireachtas source

I am happy to take part in this debate, not only on affordable housing but on the crisis in housing. There is a crisis in terms of supply, affordability, sustainability, planning and the long-term economic effects of housing policy as it is operating at present. In terms of supply issues, other speakers have referred to the ability to develop land but I am not sure they understand the real difficulties in this regard. A commercial developer looking at a parcel of zoned land must first consider the scale of development that he or she will either be allowed or required to do. Developers must then consider what density of housing is being asked for and look at the financial viability of building something and trying to sell it on, probably two or three years after planning was originally sought. Beyond that, they have to think of the difficulties of going into banks to raise developer finance. The reason we have cuckoo and vulture funds in Ireland is that they are underpinning development finance. There is no doubt that they are outbidding housing bodies.

Another issue is the SHD provision in respect of planning developments of more than 100 units. In my city of Waterford, it has served us poorly. A major development there has been given planning permission but will not be built in its present configuration because it involves a large number of single apartments for which there is no market in the city. The developer will wait to see how the planning can be tweaked in future. We need to look at how planning is configured and what is required in terms of density. There are also major issues with Irish Water, service access and zoning and servicing sites.

Then there is the affordable issue. There is not a builder in the country now who can build houses for less than €200 per square foot. That is not taking account of site costs. It will cost a builder €250,000 to €260,000 to build a 1,300 sq. ft house, before adding the site cost and service access costs. Somebody buying that house will have to pay €200,000 at 4% over a 20-year mortgage and also pay up to €98,000 on top of the mortgage. There are very few of those homes available in the country. People are looking at 30-year mortgages or at affordable and other schemes. What the Minister has brought in may not be perfect but I welcome initiatives such as the help to buy scheme and the new affordable housing scheme. There is definitely room for the cost-rental model in Ireland. Under the affordable scheme, 20% of the house cost is payable at 0% for five years, which will be a help. However, we must look at people's ability to borrow the additional moneys required. They will still have to come up with 80% of the cost. People working in an SME for the average industrial wage - I am not talking about the public sector, including gardaí and nurses - are earning between €28,000 and €35,000. If such people are not partnered up, how are they to buy any apartment or house? They have no chance. Yet, at the same time, we have a large amount of vacant property in the State and nobody is talking about a housing model that would offer incentives to property owners to develop such property for the market.

I welcome the new provision to mandate that 10% of new housing schemes be affordable. As a councillor in Waterford, I asked for that many times. However, I reiterate the issue of purchaser sustainability. Planning issues are still to the fore and planning guidelines, as Deputy Verona Murphy outlined, are now very much in the mix. It appears that the Government, the planning authorities and the regulator are taking a very negative view of one-off housing in rural Ireland. That is a very retrograde step for the development and sustainability of communities. We cannot have minimum density requirements in the regions. We talk all the time in the House about the migration to Dublin. We need to get people out of Dublin and give them the opportunity to live in rural areas. We are not a densely populated country and we can afford to have people living rurally.

I will conclude by referring to a couple of initiatives I would like to see introduced. In terms of affordability, public land use is absolutely crucial. There must be a review of the purchasing index because we are paying far too much for materials in this country. I would like to see some type of public procurement system and probably a parcelling up of land zonings that would be given to smaller developers.

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