Duncan Smith (Dublin Fingal, Labour) | Oireachtas source

It has increased by ten years. We all meet people who, since their early to mid-20s and through two recessions, have been painstakingly saving and operating in a fluctuating and regulatory environment to try to get on the market. They hope and pray that a house in a particular estate opens up, and when one does, there is the traditional bidding war between first-time buyers and other interested parties, but they do not know that there were three other houses that they did not even have a chance of getting and were swept away from them. I cannot speak about it enough. It needs to be resolved.

Through this Bill, the Minister is having a crack at providing an affordable housing scheme that will work. Our housing spokesperson, Senator Moynihan, has articulated through her many contributions in the Seanad that she has concerns about the calculation of affordability and the way it should be linked to income.

It is a fundamental flaw in how the Government is dealing with affordable housing in terms of setting prices for the houses and homes that will be delivered. Nothing is affordable unless income can cover not only housing but the bills and costs that come with living in Ireland, which we know are quite extensive, be they health, education or basic costs of living. Nothing is free in this country. Everything is paid for, and paid for by ordinary workers.

We need State investment in affordable housing at scale. There is no other way. We all agree on that, although there might be a couple of exceptions in this House. The flaw in the lack of a definition of "affordability" impacts on some of the credibility of this Affordable Housing Bill. The Labour Party still has concerns about the shared equity portion of the Bill and how it could serve to increase prices, despite all the voices in politics and beyond, including the ESRI and other agencies. The Minister has spoken quite vociferously to that and has staked a claim that it will not be debt-led and it will be an equity stake to bridge the gap between mortgage and price. However, this is a risk and a roll of the dice with this Bill. There is no other way of putting it. We know from other examples it has more or less always led to an increase in house prices.

As we know, the housing affordability crisis affects young people disproportionately. We have a whole locked-out generation, which is actually two generations considering the average age of a first-time house buyer. We could have a third generation added to that, the people who are currently doing junior certificates, transition years and all the rest. At this moment, unless Bills like this are proved to work, their post-college, post-apprenticeship or work futures are not looking too bright in terms of being able to afford to live. I have previously spoken in this House about the traditional social contract whereby someone who went out to work and was in work, whether as a Secretary General in the Civil Service, a captain of industry, delivering bread, driving a taxi or whatever it might be, would ultimately be able to afford to buy a house. If that person slipped below the threshold, the State was there with a local authority social housing scheme to make sure he or she was not going to fall through into the abyss. We are a stage where neither of those two options exist successfully at the moment. We do not have an affordable housing scheme or a supply of housing that meets the needs of young people and young workers and gives them hope. We do not have a local authority social housing scheme that is capturing people the way it needs to and the waiting lists remain too high. Some progress is being made but it is not enough.

As has been mentioned over the past few weeks, and as I stated at the start of my contribution, we need to kick investment funds out of the housing market. They are causing untold damage, not only with bulk purchases of new estates but, as I articulated quite clearly with my examples, their activity in the second-hand housing market, which is having a significant impact that is going unrecorded and will have an adverse effect on any of the calculations or legislation coming through as part of a suite of housing legislation. This Bill goes hand in hand with the LDA Bill and the Residential Tenancies (No. 2) Bill discussed last night, so there is an awful lot of housing legislation going through at the moment and much work being done in committees. If we are not capturing the fundamentals of what is wrong in the market at the moment with this legislation, and my concern is we are not, then we will have a severe problem.

The market-led approach, and it has been such since the mid-1990s, should have led to supply increasing and rents falling. As we know, that just has not happened. Deputy Ó Broin highlighted rent and house prices from 2011. House prices came down because of the crash. We do not want them to go back up, but they happened because of a distinct, massive economic shock. We need to be careful about where we are picking our figures from. If we can bring our calculations back to people's current incomes that is the best way of doing it, rather than selectively picking a moment in time. We could go back further and compare what our parents paid in mortgages or local authority rents, but that does not stand up.

We will get more detail on the Part V issue the Minister mentioned, but if we are moving back up to 20%, what are the level of opt-outs going to be? He can come back on this. The Labour Party shipped a lot of criticism when it opted for 10%, bringing it down from 20%, but the reason we did that in government was the opt-outs in the previous scheme were such that on some estates not even 1% was being delivered. One of the compromises we had to swallow, and "compromise" is a dirty word for many in politics but it is a fact of life, was that a flat 10% had to be delivered. If a flat 10% was delivered throughout the history of Part V, we would probably not have such a housing crisis. Under the previous regime, there were too many opt-outs, land swaps and cash deals done with local authorities to give them fields out in the middle of nowhere with no zoning whatsoever, where nothing could ever be built and local authorities cannot do anything with now. In terms of bringing it up to 20%, if it is hard, fixed, fast and will really deliver at that level, it is to be welcomed. I look forward to hearing from the Minister in his reply, and on Committee Stage, about what opt-outs there will be.

Delivery and supply are key. How these provisions interact with the LDA and wider Government policy is going to be the proof of this particular pudding. What we can see in the approach to cuckoo funds who are buying up properties that exist out there at the moment does not give us cause to be too excited. The lack of affordability being linked to income in the Bill is a real issue for the Labour Party as well. We supported this Bill in the Seanad and we will support it in the Dáil because there are measures in it that are good and need to be supported. I hope the Minister knows from our record that we will judge everything on its merits. We are happy to support what we believe in and happy to criticise, and argue strongly against, what we do not. This Bill is a mixture of provisions that will help and provisions that need to be improved on, such as the shared equity scheme, which we believe will bump up house prices even further. I thank the Minister for his contribution and look forward to hearing the rest of the debate remotely from my office.

See this speech in context