Rory Hearne (Dublin North-West, Social Democrats)

I move: "That the Bill be now read a Second Time."

I am delighted to move this Bill. I will start by thanking Deputy Cian O'Callaghan and his parliamentary assistant, Jack Sweeney, and my own parliamentary assistant, Ellen O'Doherty, for their work on this Bill. It is a privilege to bring this Bill before the House on Second Stage; it is my first Bill before the Dáil. It is very apt that it is the Developer Profits Transparency Bill.

The issue that is to hand and why we are bringing forward this Bill is that house prices are completely out of control. We have seen house prices rise year after year. We have seen a double-digit increase in prices whereby house prices are now completely out of reach for most ordinary people in this country. What we are proposing in the Bill is something very straightforward. It is that developers and private builders who are building homes and receive a State subsidy, specifically in relation to the shared equity scheme, are required to publish profit and loss accounts. It is a very straightforward request, and a very straightforward piece of legislation. It is a very common-sense Bill because the State is giving significant funding to private builders, private developers and private investors, and when the State is using public money - taxpayers' money - we need to ensure there is absolute value for money achieved with that investment.

The context of this, of course, is that we have a huge debate ongoing about the viability of the delivery of housing and whether it is viable to build housing in this country for the private market and the private sector. We have seen the argument made by the various construction interests, developer interests and investor interests that there is this very significant viability gap. Figures have been put on it of between €100,000, €150,000 and €200,000 depending on how high the apartment development is going to go. However, if we are really honest here, there is no actual clarity about what the viability gap is because we have not seen the evidence even from those who are putting forward the claims. We have seen estimates depending on certain projects, but we have seen no real independent analysis of what this viability gap is. We can deconstruct the argument around viability even further when we question what viability means. If we are honest again, what viability means is profitability because the question that the developers in the private sector are asking is this: are they making sufficient profit to deliver housing? Then, we have to peel that back further and ask why we are making policy that uses public money essentially to increase the profits of the private market. This is the fundamental question. We are not necessarily achieving value for money, and we are certainly not achieving genuinely affordable housing.

What we are trying to do with this Bill is bring transparency. We are trying to bring transparency to the housing market, particularly where the State is playing a significant role in that market by subsidising development, contributing to the ability of people to buy a home and providing funds to developers who are building homes. While the Bill is restricted to the shared equity scheme, we are bringing it forward in the hope that this is extended further in time. Wherever public subsidies are going to the private sector, there should be transparency.

In this Bill, we are not arguing against private development or, in this instance, the role of State subsidies to the private sector. While we are opposed to that in principle, in this case, we are putting forward a very straightforward Bill that provides for transparency in the amount of profit private developers are making, where they are receiving a State subsidy in the shared equity scheme and that contribution is being made to the viability of their development.

The Government has said it is all in favour of transparency, for example, in the grocery sector and food. When it comes to the economy generally, or the cost-of-living crisis, the Government has supported the arguments around transparency and the need for it. Our simple question is: why do we not then have transparency in relation to the State contributing to and subsidising the building of homes by the private sector? It seems a very reasonable, common-sense request in the legislation that is being put forward.

The reason we think it is very important is the evidence shows that in the limited amount of information we get from developers, for example, the public accounts of the two large developers Cairn and Glenveagh, shows they are making hundreds of millions of profit every year. Hundreds of millions of profit is being made. If just two companies are making that much, how much is being made across this country in house sales? We know significant amounts of money must be added to the cost of housing by profit being taken out. Surely, we should know how much that is to make an assessment and to discuss as a society whether it is right that people trying to buy a home are being squeezed more and more, are being told the State has to put in more money and that people have to pay more money because it is not viable to build a home. In actual fact, what is happening is an increase. That money is going to increasing profits to shareholders, including those of the two companies I named, some of which are international. These profits are going to international wealth funds. The money the State is putting in to build homes is being channelled into international funds and not necessarily to delivering affordable housing. There is a real, fundamental problem in this approach to housing and its delivery.

The other reason we need transparency is there is an issue around what Dr. Lorcan Sirr again set out in The Irish Timestoday, which is regulatory capture and who is making our housing policy. It appears that developers and investor funds, and their lobbyists, are making our housing policy. They are the ones who are being listened to. I tried to dig into this. I put in a freedom of information request specifically relating to IRES REIT, the Irish real estate investment trust, which is now one of Ireland's biggest corporate landlords, on, for example, how many times it had met officials, or members of the Department of housing or the Government. The lobbying register states that this year, IRES REIT met an adviser in the Department of housing. Yet, the freedom of information request states there are no records of any such meeting. I would like the Minister, and his representative here today, to answer that question. How on the one hand is IRES REIT putting on the lobbying register that it is meeting advisers from the Department of housing and when I requested that under freedom of information, it comes back and states there are no records of any such meeting? It does not make sense to me because there are lots of records on the lobbying register of IRES REIT meeting officials. There are lots of records on the lobbying register of Pat Farrell, on behalf of Irish Institutional Property, meeting various Government Ministers and the Taoiseach. Why are we hiding? Why is the level of lobbying that is going on being hidden by this Government? That is why we need transparency.

People have a right to know who is making our housing policy and who is influencing it. That is the whole point. We are supposed to be moving away from a politics that was driven by developers. We know that corruption, which went back to Charlie Haughey and Bertie Ahern, resulted in crashing the economy. Now, we are seeing that lobbying and influence being hidden. What has happened is we see the changes to apartment sizes, the increase in rents, a tax break for developers, potentially, and huge amounts of public money being funnelled into the private market to investors and developer funds - for what? This is what we need to know. Is it going to more and more profits? I believe it is. Why are house prices so high? They are high because of the profit gouging going on within the private market.

This comes back to the fundamental problem in our approach to housing, which is we do not deliver it as a public good and a human right. The State outsourced it and handed it over to the private market, hence we are completely dependent on the private market to tell us what it costs to build a home. The State has not got a clue how much it is being overcharged and how much it is costing. We have this constant debate about a viability gap that is in actual fact a profitability claim and demand by developers and investor funds, which have us over a barrel and are essentially bankrolling the State and the public because we do not have our own State capacity to deliver housing. That is what we should have. At a minimum, we should have transparency. We should know how much profit is being made by State funding of private market homes. That will help us understand more how much of house prices are profits and how much are genuinely rising costs overall.

There is a fundamental problem and the Minister of State knows this. The housing market is completely out of whack. It is going to drive us into another crash. It is not sustainable. Who can afford these house prices? There is also what is being built in terms of rental. The Government will funnel more money into investor funds and allow them increase rents to market rents, so they build more build-to-rent property, but we do not need more build-to-rents. We need affordable homes that people can buy. That is what public money should be used for. We need transparency around that and the amount of lobbying and regulatory capture is going on. That is why we have brought this Bill forward.

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