Kieran O'Donnell (Limerick City, Fine Gael) | Oireachtas source

I am delighted to contribute to this debate. This is something I first brought up in the Dáil on 15 February of this year. I will speak in the context of what I know best, which is my own constituency of Limerick city and north Tipperary. I am conscious there is a Tipperary Deputy present. I refer to Newport, Ballinahinch and Birdhill, to be more precise, in Tipperary.

Constituents of mine were not qualifying for the local authority housing. They were above the income limit, in many cases only barely above. I had a look at the previous scheme. It had an increase of €5,000 and, at that time, the average industrial wage was €38,500. I looked at the average industrial wage today. At roughly €46,000, it is approximately a 20% increase.

I looked at the bands. There are bands 1, 2 and 3. Band 1 is the higher band. That was €35,000 and it has gone now to €40,000. Band 2, which relates to my constituency of Limerick city, is going from €30,000 to €35,000. Band 3, which is going from €25,000 to €30,000, would include Tipperary. I took it that the €5,000 was effectively a 20% increase on the €25,000 and I put that proposal directly. I was not aware of any report that was being completed or the details of that. For me, it was quite logical. The income limit for social housing should be based on the average industrial wage at a particular time.

I very much welcome the measure. That is the logic for me.

We have to look at the average industrial wage and benchmark social housing against it. It will make a huge difference to people in my constituency whereby they will qualify for the social housing list and the housing assistance payment. In the long term they will qualify for a local authority house in a number of years. This will give them security. Many of them have no possibility of getting a mortgage.

I have a fundamental principle that I hold to. Everyone should aspire to have their own home and be able to aspire, if they can afford it, to purchase a house. This is why we want to make it affordable. There are situations where the State must step in. This is done through the local authority housing lists. Many people in time end up purchasing by way of a tenant purchase scheme. This is a natural progressive way of doing it. I commend the Minister on introducing this. I feel very strongly about this. I deal with it every day in my constituency. This will involve 16,000 people nationwide. This will include a substantial portion of people in my constituency. I will be able to get them on the social housing list. The number on the list will increase but I do not have an issue with this. We have to look at what the realities are.

For the next cohort of people who are above the income limit of €35,000 in Limerick and €30,000 in Tipperary, we must get them to qualify to purchase their own home. There is a local authority affordable housing scheme. At present it has discounts of between 15% and 40%. If the discount is above 20%, people will not qualify for the help-to-buy scheme. I have made a proposal in the House, which is with the Department of Finance, that if the discount is above 20%, the loan-to-value ratio would not be based on the market value of the house but the discounted value of the house versus the mortgage. This would mean people would qualify for the help-to-buy scheme. Furthermore, it would give scope to the Government to provide grants larger than €75,000, which applies where the density is between 35 and 50 per hectare. If the density per hectare is below 35, the grant is €50,000, and if it is above 50, it is €100,000. This would provide scope for the Government to give a higher grant to the builder. We must make houses affordable so that people can buy them and make them viable for builders to build them. If the State has to step in and provide a higher grant and take an equity stake for that grant, so be it. This is how we will get affordable houses built.

I have made a calculation. If a house is worth €300,000 and there is a 40% discount, at four times' earnings, someone on a salary of €41,000 will qualify under the scheme. This would mean the State would take a 40% stake in the house and the individual would have 60% but they could purchase it back over time. It is about an amalgam of issues.

There are other issues we need to consider. As it stands at present, any land purchased prior to July 2021 is not required to have Part V affordable housing if planning permission is obtained prior to July 2026. I would like to see this changed. Every new estate built should automatically have 10% affordable housing. We pay the builders what they require financially to be able to build these houses. This is about money. I am very open. Local authorities can build. Developers and private builders have skill sets we cannot ignore. We must work with them to build. I want to see every private estate being built having 10% of houses available for affordable housing. As it stands at present, many do not because the land was purchased prior to July of last year. They are not required to provide affordable housing if planning permission is obtained before July 2026.

There are 70,000 houses and apartments with planning permission in the system. Not every one of these will be built or viable. We need to look at them and see which can be built, fast-track building them and work with the developers and owners of the sites. They do not require planning permission. This is another way to get houses built quickly.

We need to make people fully aware of all of the schemes such as Croí Cónaithe. In Limerick, the living city initiative is very important. I have got the scheme further revised so that the incentives available for people who will live in the city centre are now increased. It is all about affordability. It is all about catering for every area of society. The increase of €5,000 in the income limit reflects the realities. The benchmark is the average industrial wage. People on the average industrial wage cannot get a mortgage. They are paying very high rents. Now, at least, many of them will be under the limit. People might say it does not go far enough. It is about making certain we bring in something that caters for the realities.

We need to ensure everyone above the social housing income limits is able to purchase homes. If the State has to take equity stakes in these houses, I have no issue with that. If we have to work with builders and developers, I have no issue with that. It is all about controls. It is all very well to say the State can build everything. If local authorities are building houses, who will build them for them? It is builders. They will go out to tender. Those builders have to make a return. It is frustrating for me because people come to me with termination notices or because they want to purchase houses that are not available. It is all about supply. If we build houses, it will take pressure off the rental market with regard to demand.

We are building 28,000 units this year. These are very welcome. It will be a similar number next year. We should be looking to exceed this. Where are the areas we can do this? We can look at the 70,000 units that have planning permission to see which of them are viable and progress them. I expect not all of them will be progressed but a certain share of them will be. We can get these built.

Following this we need to look at the local authority affordable housing scheme to make sure people can qualify for the help-to-buy scheme where the discounts they receive are 20%. The rules on density should not be applied universally throughout the country. There are areas where very high density is not appropriate. There are also areas where it is. The blanket model does not work. The problem is we must think outside the box. We must build the type of units people want to purchase. What do people want? They want starter homes, terraced homes and, in the main, semi-detached houses. This is an area we need to push. We need apartments but not exclusively.

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