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

I thank all the Deputies for their contributions. I know the frustrations among many Deputies. As Deputy Pringle leaves, I note he mentioned Toronto as an example of somewhere we could take ideas from. Obviously, he has not researched the current state of play in Toronto and the housing crisis that is there. I point out also that there is absolutely no inbuilt snobbery whatsoever in the way this Government approaches this problem.

We are trying to provide solutions. We are doing our best, day in and day out, to come up with the best possible solutions to try to deliver as many homes as we can for all our citizens while protecting the most vulnerable. That is key.

We are keenly aware of all the housing affordability challenges facing people across Ireland but it is only by taking measures across all aspects of our housing system, including housing for purchase and rent, whether delivered privately or publicly, that we can we begin to improve affordability for our citizens across the board. The suite of measures we are proposing and implementing is designed to provide affordable housing for all our citizens.

This Affordable Housing Bill and the Land Development Agency Bill 2021 will work in tandem to give people the opportunity of affordable home ownership and long-term secure rental. These two landmark Bills are backed up by the largest housing budget in the history of the State and our most ambitious social housing targets on record.

I will now follow up on some specific issues raised during the debate.

Although perhaps attractive, the provision of one single and absolute indicator may not provide the most helpful response to the question of what is affordable. There is limited academic or international support for an affordability measure that concentrates on averages alone. This is because different groups can experience very different conditions. As all Members will be aware, the concept of "affordable" is different according to each household's unique position. Assessing affordability and the financial constraints on households is not best identified by rules of thumb or asking how much is too much, but rather by asking how much is too much for whom and in what circumstances.

What a number of Deputies do not seem to appreciate or acknowledge is there is no "one size fits all" approach in assessing affordability. Our proposal will assess and define affordability by household and will accommodate each eligible household’s particular family need and financial circumstances. To this end, I broadly confirm the intention is to provide that a household can apply to purchase a modest family home using the mortgage funding available to it. If the family cannot afford the home in question at its market value, the equity support being made available can bridge the gap between the mortgage funding and the price of the home.

All Deputies have agreed the development of a cost-rental sector is a welcome intervention. By this very definition, the rents charged must be structured to cover costs. The starting rents for cost-rental homes can and will be lowered by public subsidies to support development or acquisition. Given the high cost of housing, it is right that public land, infrastructure and construction grants and favourable financing terms are used to ensure that rents are not excessive for the target cohort of tenants. It is important that this Bill provides flexibility for the Minister to set certain eligibility and income parameters via regulations as opposed to placing them in primary legislation. This flexibility allows us to quickly respond to changes in the housing market.

A number of Deputies raised the point that the Bill does not guarantee that new homes will be subject to cost-rental regulations in perpetuity. The period of 40 years is an absolute minimum. If a provider wants to offer cost-rental housing independently, complying with the restrictions without any particular incentive or support, any such commitment to the sector will be welcomed. However, projects that receive public support will require long-term commitments. Where our local authorities and the Land Development Agency deliver cost-rental homes, I envisage their committing homes to the sector in perpetuity.

The initial delivery of cost-rental homes will be undertaken by public bodies and housing charities. The models employed for the first projects are entirely funded by State-backed debt and public subsidies. However, if we agree that cost rental must be delivered at real scale, there is a necessary limit to what the Exchequer can manage alone. This is not a peculiarity to our cost-rental proposals but a feature of all mature cost-rental systems. Limited equity returns may attract non-State investors with a long-term view like pension funds providing for the retirement of workers and investors with an emphasis on environmental, social and corporate governance. Limits on returns will be informed by the 3.5% to 5% equity return allowed in Austria’s limited profit housing associations, which is a good example of a mature cost-rental system.

As I have said, one of our key priorities is the completion and roll-out of the new affordable purchase shared equity scheme. By assisting in lowering the entry purchase price for households, this scheme will provide an equitable way of assisting people to afford their own home while also building a sustainable model that reflects the State’s support for homeowners. The scheme is a short-term, finance-limited measure that will boost housing supply and get first-time buyers into new homes by bridging the affordability gap faced by many. It will help bridge the gap between the first-time buyer's maximum mortgage and the price of the new home he or she wants.

Extensive engagement has already been undertaken with key stakeholders to ensure the optimum design of the scheme and significant feedback has been factored in. I am confident that the final design of the scheme can mitigate any potential inflationary risks. All homes will be delivered below the Central Statistics Office median price ceilings and in many cases significantly so. However, I recognise the concerns that have been raised and I confirm the scheme will be kept under evaluation and formally reviewed after one year of operation.

I am happy to confirm our intention to bring forward amendments to the Bill relating to Part V provisions, which will be an important way we encourage the development of more affordable homes. We will expand Part V to encompass affordable purchase and cost-rental homes in addition to its current important role in providing social homes. This commitment will not only add to the number of homes available in these areas but it will increase tenure options for people and will assist in providing a good tenure mix within our communities.

We believe that everybody should have access to good quality housing to purchase or rent at an affordable price and in sustainable communities. The provision of more affordable housing has a profound benefit socially and economically, and the State has a fundamental role in enabling the delivery of new homes and ensuring that best use is made of existing stock. Everybody in our society should be given the opportunity of home ownership, as has been the case for their parents and grandparents, and these measures support this aim.

I thank all the Deputies for the engagement on this Bill and I look forward to discussing amendments on Committee Stage soon.

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