Dáil debates

Wednesday, 18 May 2022

Subsidies for Developers: Motion [Private Members]

 

11:52 am

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Social Democrats) | Oireachtas source

Affordability for the buyer and the State is the fundamental issue in our housing market, but one would not think it looking at the Government's housing policies. We are repeatedly told that supply is the answer. While this is undoubtedly part of the solution, it is not a silver bullet the Government would have us believe because so much of it is the wrong sort of supply, namely, unaffordable small rental units.

Housing is too expensive. That is the crux of this issue. Just ask anyone looking to rent or buy. The problem is that they do not have the ear of the Government. Developers do. Successive Ministers for Housing, Local Government and Heritage have bent over backwards to address developers' so-called viability concerns, and this Minister is no different. Last year, The Irish Timesreported that the CIF had made 61 representations to Government in the first ten months of the year. That absolutely beggars belief.

The Minister knows full well that this approach to housing policy, where developers, landowners and investment funds dictate housing policy, does not work because the only people who win are those calling the shots. This latest policy, namely, a direct subsidy for developers, represents a continuation of this deeply flawed approach to housing policy development, if one can even call it that in the absence of any cost-benefit analysis, independent cost evaluation or regulatory assessment. This just smacks of another proposal that was written on the back of an envelope and accepted by a Government that is all too willing to appease developers.

This insidious relationship between the Custom House and the sector has had a particularly profound effect on our planning laws, which are inextricably linked to housing, something that is not lost on the construction lobbyists. Since 2015, we have seen what was a reasonably decent planning framework being transformed into a developers' charter. These attacks on the planning system began when the then Minister, Deputy Alan Kelly, introduced mandatory section 20 guidelines. This paved the way for unrestricted building heights and slashed apartment standards. His successors, the Minister for Foreign Affairs, Deputy Simon Coveney, and the former Minister and Deputy, Eoin Murphy, oversaw the failed fast track SHD process and retrograde build to rent schemes with even lower building standards. We were told the changes were necessary to bridge the viability gap supposedly faced by developers. All they achieved was greater dysfunction in the market.

Now the Government is set to subsidise developers to the tune of €144,000 per apartment. When these apartments come to market, the Housing Agency estimates they will cost up to a whopping €450,000. How can the Minister of State honestly stand over this egregious use of taxpayers' money? These funds should be used to build affordable purchase and cost rental homes, not gifted to developers. The Minister, Deputy O'Brien, is utterly misguided if he believes for one second that the market can be relied upon to deliver affordable homes.

We already know that this dysfunctional market is yielding the wrong types of home, namely, unaffordable shoebox apartments. Analysis undertaken by KPMG for the city development plan shows that there was an increase demand for two and three person household accommodation and declining demand for single person households and one bed units. Yet, the Government is proposing a payday for the very people who are failing to meet this demand simply because studios and one bed are more profitable. What else should we expect from the Government?

Developers will always chase the maximum return on their investment. In so doing, the Government is locking a whole swathe of society out of homeownership and locking others into exorbitant mortgages and rents. It is time to abandon this sweetheart deal for developers and address the real problem, which is affordability for the buyer and the State.

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