Pauline Tully (Cavan-Monaghan, Sinn Fein) | Oireachtas source

A number of aspects of this Bill are commendable, but I am a little concerned about some other aspects of it, as I will outline. For example, the affordable dwelling purchase arrangement in Part 2 of the Bill seeks to facilitate the building of affordable housing on land owned by local authorities. However, no additional funding was made available in budget 2021 to pay for affordable purchase homes, and only 90 affordable purchase homes are to be delivered in 2021. That is nowhere near ambitious enough. Similarly, the funding that has been allocated for cost-rental dwellings, which Part 3 of the Bill attempts to deal with, is inadequate. Only €35 million has been allocated, which has delivered just over 400 cost-rental homes. We can compare this with the €75 million that has been allocated for the shared equity loan scheme, which was lobbied for by the property industry.

There is also a question about whether the rents under this scheme will be genuinely affordable. The first homes delivered under this scheme on Enniskerry Road in Dublin are to have rents of €1,200 per month for a two-bedroom apartment. That is well above the affordability level of the majority of people. The target rents for cost-rental homes in the capital should be between €700 and €900 per month and lower in other areas of the country. Currently, in my county of Cavan rents are more than €900 per month.

I am entirely opposed to Part 4 of the Bill which provides for the shared equity loan scheme. A similar scheme was introduced in Britain and it was severely criticised in a House of Commons report published in 2019. The report concluded that shared equity loans did not make homes more affordable, that 60% of those who availed of the loan did not need it and that as the loans were unregulated they put borrowers at significant risk. This was echoed by independent research conducted by the UK housing charity Shelter, which found that the shared equity loan scheme led to increased house prices, adding approximately £8,250 to the average price of a home. Why is the Minister attempting to introduce a scheme which has proven to be not only ineffective in delivering affordable homes but has actually had the opposite effect? I fear it has less to do with a desire to deliver affordable rental and purchase homes and more to do with the lobbying that the Minister received from the property industry. It has been shown that pro-developer schemes such as this have not worked.

Instead, we should divert the €75 million allocated to this scheme to local authorities and approved housing bodies to deliver affordable rental and purchase homes. House prices are simply too high, and increasing first-time buyers’ access to credit is not the solution. Working people need cheaper homes, not more debt. That is the type of developer-led housing policy which caused the property crash and recession in 2008.

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