Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I move amendment No. 2:

To delete all words after "Dáil Éireann" and substitute the following:

"notes that:

— a substantial increase in the supply of new homes is the only route to solving Ireland's housing crisis;

— delivering the target of an average of 33,000 homes per annum will require significant private investment alongside our unprecedented levels of public investment;

— the Government has provided the largest ever housing budget in the history of the State to support commitments and actions in Housing for All - a New Housing Plan for Ireland, with more than €20 billion in funding through the Exchequer, the Land Development Agency and the Housing Finance Agency until 2026, including increasing funding to local authorities and Approved Housing Bodies to provide new build social housing across the State;

— affordability challenges in the rental sector are due, in large part, to a lack of supply in the rental market;

— institutional investors are estimated to own less than 1 per cent of the total housing stock, or 7 per cent of all tenancies, and as such are very unlikely to occupy enough share of the market to have monopolistic or oligopolistic pricing power or indeed to cause distortionary effects; and

— the forward commitment model is driving real increases in supply, with sectoral reports noting that three-quarters of bulk-purchased units in 2021 were bought under forward commitment models and may not have been developed in the absence of such arrangements;

recognises that:

— given constraints in the domestic lending environment, without non-bank investment the situation in the rental market would be considerably more challenging;

— capital is particularly required at the development stage, where an estimated €10 billion of private capital will be required annually to ensure the provision of social, affordable and private homes;

— where institutional investment brings a profit, a fair share of taxation should be paid, and steps have been taken in recent Finance Acts to address issues identified with institutional investment regimes;

— Real Estate Investment Trust (REIT) companies are a common and internationally recognised form of collective investment in long-term rental assets, and the REIT regime requires annual distribution of profits for taxation at the level of the shareholder;

— the Irish Real Estate Fund regime is a set of additional measures imposed on funds investing in Irish property assets to ensure collection of tax on profits derived from Irish property; and

— the Government has also introduced both fiscal and regulatory measures to address certain activities by corporate investors that may be detrimental to the market, including through the introduction of the 10 per cent Stamp Duty rate on bulk purchasing of houses; and

acknowledges that:

— the Government's Housing for All - a New Housing Plan for Ireland strategy outlines the Government's plan to increase affordability and housing supply by targeting the delivery of, on average, 33,000 new homes per annum out to 2030;

— €4 billion was allocated towards housing in Budget 2022 and this includes €2.6 billion in capital funding, which will be used to deliver 9,200 social homes, the vast bulk of which will be new build;

— a key challenge to securing development finance is commercial viability, without which it may not be possible to attract sufficient funding;

— the Government is committed to improving supply of housing and affordability for first-time buyers and notes that the first affordable and Cost Rental homes are now beginning to come to the market, some at rates 40 per cent and 50 per cent lower than market rent;

— the Government has expanded the Part V planning requirements of the Planning and Development Act 2000, and increased the contribution required from 10 per cent to 20 per cent to include affordable and Cost Rental housing; and

— through Housing for All - a New Housing Plan for Ireland, the Government is implementing a multi-faceted approach to housing delivery that is working and will help significantly increase supply and improve affordability for families and individuals wishing to secure a home.

I will open my contribution by stating very clearly whose side I am on this evening in light of the allegations made by Sinn Féin. When I am in my constituency meeting constituents I, of course, experience first-hand the great concern they have regarding the rising cost of rent. I meet families who are worried as to whether they will ever be able to buy a home or to afford their rent in the future. These are issues and challenges that are affecting so many. I absolutely understand the affect this is having on their lives and in our society and the obligation and need on behalf of this Government to respond and to make a difference.

At the same time as I am meeting my constituents on the grave challenges they are confronting in their own lives, I see in my own constituency the huge housing project under way that is O'Devaney Gardens, which was opposed by Sinn Féin. It is currently under construction, with more homes to come on this site, providing a mix of different forms of homes in private and public ownership to meet the very needs of the people I meet in my constituency. That project that is happening.

In Dominick Street, I see the new apartments that are being built by Dublin City Council which will be available soon such that families can live in accommodation that they deserve and will be affordable to them. Elsewhere in my constituency, I note the scale of new apartments that are being built at the bottom of Carnlough Road in Cabra. These are new homes that are being built. I know that we need more homes to be built quickly but these are projects that are under way that will have families in them and thus will alleviate the grave challenges that so many are now confronting.

Beyond this tale of individual projects, the reality is that homes are being built in our country. While I know we need more homes to be built quickly, despite the impact of Covid on our country, more than 30,000 homes are being built. Over the past 12 months, more than 30,000 homes have been commenced and there are over 39,000 in the planning system. Behind every one of those figures is a house or an apartment that will become a home for a citizen, a worker or a family. This Government is determined to repeat that year on year to make a sustainable and real difference to the challenges that are behind this motion but are not served by it.

Let us look at the reality of the scale of institutional investment within our country. Currently, they account for 1% of the total housing stock and 7% of total tenancies, rising to, I accept, just under 15% within Dublin. That is the total amount of accommodation with which these funds are associated.

I referred to the delivery that is under way at the moment. Behind that is a Government commitment of €4 billion per year that this year alone will deliver well in excess of 6,000 to 7,000 new social homes for those who need them. Those homes will be available this year. The Government will also deliver the building of new homes for affordable rent and cost purchase. That is the reality of what is happening this year because the Government recognises the challenges faced by many. When Sinn Féin asks me whose side I am on, that is whose side I am on. That is why I want additional supply and more homes built in our country. The State needs to invest and has a role in supplying homes. Some €4 billion is being allocated for that this year. The Government is on the side of those who want homes they can afford to buy, rent and live in. We accept that we are doing this at a time when many are facing intense and difficult challenges but that is why we are responding with the scale of funding that is under way. It is why we have the Land Development Agency, which will play an active role. That is leading into the figures I shared with the House a moment ago. More than 20,000 homes have been built. More than 39,000 homes are at the planning permission stage. The building of more than 30,000 homes has commenced. I know many people want these homes delivered now. They want more of those homes available now at a cheaper price and a cheaper rent. In order to complete that journey and get to that point, we need homes to be built in our country year after year. That is what this Government is committed to doing.

It is not just the Government that has a role to play in this regard. According to analysis prepared by my Department, we need approximately €10 billion of private investment and private capital per year to get up to the 33,000 or 35,000 homes we need to deliver each year. That figure at the moment is approximately €6 billion per year. We have a gap at the moment of approximately €4 billion per year that needs to be filled to deliver new homes for the people I represent and who this Government is aiming to serve. That is the role that institutional investment can play in meeting that need in our country. As I said a moment ago, the scale of total accommodation they have is as I have shared with the House. At the heart of these investment funds is the role they can play for our country in allowing us to organise savings that are held elsewhere in the world to deliver more housing supply in our country. That is at the heart of what these investment funds and entities do. I heard members of Sinn Féin say again and again that investment funds play a role in buying up housing stock that is already built. I accept that when that happens, it is an issue. That is why we brought in a surcharge last year on the bulk purchase of homes. My contention to the Dáil this evening is that those funds play a critical role in providing supply of new homes, apartments and houses in our country. In their absence, supply would not be coming in. The supply would not be available in our country at the scale it is. That is the role these investors can play, accompanied by a Government that is spending €4 billion, with a capital budget that is at an all-time high, a strong and active State that is directly investing to build more homes through our local authorities. There is also a role for the private sector.

The Government is aiming to achieve new social housing this year. In 2022, we expect there will be more than 10,000 new social homes. That target exists beside the role of these funds in providing rental accommodation, in particular. In the absence of these funds operating in the way they are, it is our judgment and contention that the majority of those homes would not be built. That is the equation. More supply and more homes being built in our country will, over time, give us the best prospect we have. We will do that as quickly as we can and address the issues of affordability and the cost of rent. The State is also directly building homes through our local authorities.

The proposals that are being brought forward by Sinn Féin would lead to fewer homes being built and to higher rents and prices. That is what I believe this is a recipe for. When a Sinn Féin spokesperson and others make the point about their ambitions to deliver more social homes, the figures in that regard are stark. They claim they can build 20,000 social homes next year at a cost of €3 billion. That is a cost of €150,000 per home. Those are the maths. We know homes in our State cannot be delivered for €150,000 at the moment because of the very issues those Sinn Féin Deputies are raising about cost inflation and the pressures we and many others are facing around inflation for the materials that are needed to deliver those homes.

The case the Government and I are making is that we are playing an active role, building homes directly, creating the conditions for more private supply which, in turn, will create the environment in which we will be able to continue to make progress on the issues that renters and homeowners are raising regarding the cost of living, rent and owning a home. I am on their side, as is Deputy Durkan. Others from the Government benches who will speak on this motion are on their side. That is why we are putting forward this countermotion.

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