Cian O'Callaghan (Dublin Bay North, Social Democrats) | Oireachtas source

To put the figure of €144,000 in context, last year an investment fund bought in Limerick city a number of apartments for less than €168,000 each. Despite the large subsidy the Government is giving to developers, these apartments will be sold at full market price. There will be no discount or affordability built in. According to analysis by Killian Woods in the Business Post, only the top 14% of households in terms of income will be able to afford these prices. What does it say about the Government that it is willing to spend €450 million guaranteeing the profits of developers to provide apartments for people on the highest incomes in Ireland? Whose side is this Government on? People across the country are struggling to heat their homes, put food on the table and pay rent and bills. What planet is the Government on that it thinks it is okay to use public money to fund a €450 million giveaway to developers? The only things guaranteed under this scheme are developers' profits. It is an outrageous use of public funds to subsidise these profits. It is a gross misuse of public money which could be better spent in many ways. It is another bailout for developers. Not only does the State bail out developers when property prices collapse, it now bails out developers when apartment prices have reached all-time highs. Is there another country in the world where the government does this? The Minister in his remarks may tell us what other country does this. I look forward to hearing about that.

That is a win-win for developers as, yet again, the Government gifts public funds and resources to private interests with complete disregard for public interest. It is an act of daylight robbery, taking from the people and giving to developers. How can the Government justify this? This is granting a developer's wish list. Not content with the reduction in apartment standards brought in to make construction apparently viable or with the even lower standards brought in for the build to rent schemes apparently to make apartment construction viable, the Government will give huge cash grants to make construction of apartments viable. How many times will the same lines be trotted out to justify making regressive changes that benefit developers? Each time we are told this will sort out the viability problem and each time the lobbyists come back demanding more. All the while, apartments have become less and less affordable for people. When will the Government learn?

I ask the Minister to answer three questions in his contribution. First, where did this idea for large subsidies for developers come from? Did the Minister dream it up or did developers and their lobbyists ask for it? We know it does not come from good practice in other countries. Other countries do not do this. This is an off-the-wall policy. When other countries invest in housing, they do so to ensure it is more affordable, not less affordable as this scheme will.

Second, why was no economic evaluation or analysis or regulatory assessment carried out to examine what effect the scheme and subsidies would have? Has any modelling been done on how this will affect land prices? Will that modelling be published, if it has been done? What will happen to the prices of these sites once the subsidies are secured? We will see some developers flip the sites once they have secured the subsidies. The scheme allows for that because the funding is attached to the company or proposer and developers of most of these sites set up companies which they can sell on and flip. The scheme allows for the sites to be flipped and for the companies holding the subsidies to be flipped, which will inflate land prices. This will have a knock-on effect on land prices, which will have a knock-on effect on the full market prices of apartments, pushing them up. Incredibly, at the housing committee last week the Minister conceded that he would not use tax incentives in this area because they are a bad idea. I agree with him on that but to conclude that tax incentives are not a good policy solution but cash subsidies are is an incredible leap.

Third, what level of profit for developers will be guaranteed under this scheme? Will the minimum 15% profit level that developers say is necessary for apartment construction to be viable be subsidised by the use of public funds? What controls exist in terms of the assessment process of applications to the scheme to ensure the subsidies will not be used to subsidise profits for developers? I could not find any. One of the reasons developers say a minimum 15% profit is necessary to the viability of the scheme is the high level of risk when it comes to construction and development of apartments. This scheme removes that risk for developers. In fact, if prices go down, the subsidies in the scheme will increase up to the threshold of €144,000. I do not know if the Minister has read his documents, but that is in them.

See this speech in context