Thursday, 4 March 2021
Land Development Agency Bill 2021: Second Stage (Resumed)
To resume from where I left off in my contribution on the previous day, I would like to note some of the points made in a recent Irish Examinerarticle by Rory Hearne entitled "Homeownership will remain a pipe dream for Generation Rent". His article articulated many of the points that many of us in the Opposition have put forward against this inadequate Bill. He states that the Land Development Agency, LDA, is being tasked to pursue two conflicting objectives - becoming a developer of public land while purporting to be increasing availability of affordable homes.It is clear that the Bill will make the LDA the Trojan Horse that the Government wants to siphon off any remaining public land.
Section 22 of the Bill provides for the disclosure of interests of board members, staff of the agency or subsidiary designated activity company staff. Will the Minister of State indicate if that will include a register of properties? Will the register be looking at whether anyone involved in the LDA is a landlord? Surely it will be difficult for him to fill a board and staffing complement without any of the Government’s landlord friends.
This is a class issue. The housing and homelessness crisis is a direct result of Fianna Fáil and Fine Gael policies over decades. It was a case of profits for the few rather than homes for the many. That has been the one objective of Government policy, probably since the late 1970s or early 1980s, and every Government since that time has participated in it.
Part 8 of the Bill will provide for compulsory purchase orders. The compulsory purchase practice is out there already but local authorities will not use it, and they will not use it for housing purposes either. They should be available but the Minister of State is going to give them to the LDA, which will use them for its developer friends.
If the tone of this speech sounds fed up, it is because I am fed up. I am truly fed up with the inaction of this Government and previous Governments, their neoliberal policies, their commodification of housing and their financialisation of a human right. While Donegal may not be experiencing the worst of the housing crisis, it is still an issue in that county. People are living in overcrowded accommodation and waiting years for homes. We know that people in domestic violence refuges and in direct provision centres are not included in official homeless figures but these would add to Donegal’s overall need for public and affordable housing. Our rents may be among the lowest in the country but so is our income. Disposable income is lowest in Donegal and highest in Dublin so comparatively rent can still be unaffordable for many.
There is a serious issue in Donegal now where people who were in the process of purchasing a home and may have received a loan offer are now off work and in receipt of a Covid payment. Their original loan offers will expire within three or six months and will require updated income details. That will cause many house sales to fall through. People who are purchasing their homes through the council incremental purchase scheme have offers valid for 12 months but because of the crisis that 12 months is not long enough. Credit unions, banks, etc. will not even look at their applications for a loan without current payslips and will not take into account details of income prior to lockdowns. That is fair enough. It has been outlined many times in the House that it is about ability to pay and therefore the banks have to act responsibly but the councils should act responsibly as well because it takes a very long time to get approval for the council purchase scheme. The approval should continue past the 12 months duration. That small step would ensure people can purchase a home.
This Bill should be about empowering local authorities and empowering communities. It should not be about empowering developers and the private sector but, unfortunately, that is what this Government leans towards.
I want to thank the Minister of State, Deputy Darragh O'Brien, for his efforts in the Department. His leadership in working together with the Ministers of State, Deputy Malcolm Noonan, who is present, and Deputy Peter Burke, is a good example of the cross-party co-operation, respect and hard work that is at the heart of this Government. The Department has an ambitious work programme for the next few years in the areas of marine planning and development for offshore wind, electoral reform, protecting our natural and built heritage and reforming local government. I wish the Minister and the Ministers of State well in that regard.
One of the most important tasks facing the Department is the provision of new housing. Scaling up our housing ambition is incredibly urgent and there are no simple solutions but looking at how we manage and develop public land is a very good start.
I believe my own city of Limerick shows both what a huge opportunity this Bill offers but also perhaps a cautionary tale from the past. In terms of the opportunity, unfortunately, Limerick has been the victim of bad planning over the past few decades. The city has expanded further and further out into its hinterland while the city centre has been hollowed out. I wish I could say that we have learned from our mistakes but unfortunately the local authority is planning further expansion at the periphery of the city.
Planning issues in Limerick are primarily an issue for those of us in Limerick but my point is that the bad planning practices have left a great deal of vacant land in the city centre, much of it publicly owned. The LDA will have a mandate to identify publicly owned land and there is much of it in Limerick, which is either fully vacant or inappropriately used, for example as surface car parks. The LDA has already identified the lands around Colbert Station for high-density, high-quality, transport-oriented development and I look forward to it bringing its expertise to the rest of the city.
The cautionary tale involves an agency that in some ways was the predecessor of the LDA, namely, the National Building Agency. For some years the National Building Agency was the de facto housing department of Limerick Corporation, performing virtually all of the building of publicly owned houses in the city.
Limerick was suffering from a housing crisis at the time, with people living in slums and tenements in the city. In our haste, unfortunately, we built hundreds of houses on the outskirts of the city, many of which had to be knocked down a few decades later. The reason was that we sought to build houses but did not realise we needed to build communities too. One critical aspect of a thriving community is that it has a social mix. We learned in Limerick that building only public housing on public land was a mistake. While I respect my Dublin colleagues who are deeply concerned about affordability in Dublin, and while the Minister has the power to revise the proportion of public housing upwards, which is probably appropriate for Dublin, the provision of a minimum of 50% affordable housing is an appropriate proportion for Limerick, where we want to create mixed communities close to the city centre to revitalise our city.
I welcome the Bill and the openness of the Minister, Deputy O'Brien, to improving it. This is necessary legislation for the improvement of our villages, towns and cities throughout the country.
This legislation allows for public land to be used for unaffordable private market housing. This is coupled with a failure to prioritise the delivery of public and genuinely affordable homes. The Bill is deeply undemocratic and once again takes decision-making away from councillors and the local community. I recently saw a photo from 1974 of a housing protest on City Quay. The community was protesting that not enough homes and too many office blocks were being built. Decades later the same protests are being held and the same issues are still there. Inner-city communities are still being forgotten about. Big vulture funds and high-tech companies are still being facilitated at the expense of long-time residents. We need genuinely affordable homes for the residents living in inner-city communities such as Ringsend, Pearse Street, Ross Road and Kevin Street. This Bill links affordability to the market rate. That would be great if the market rate was relatively normal, but in some areas, such as the ones I have just mentioned, the market rate means homes are only accessible to the highly paid and the very wealthy. There is a two-bedroom house in Ringsend advertised in The Irish Timesproperty pages for €475,000. There is no way ordinary working families can afford that. What use will the Government's definition of "affordability" be to someone living in Rutland Grove or Harold's Cross? Any linking with the market means that anyone living in Dublin 2, Dublin 4, Dublin 6 or Dublin 8 will not be able to afford a home in the community in which they grew up. This Bill will not give residents in these communities access to affordable homes or public housing. Ordinary workers will continue to compete with Google and Facebook and so many other high-tech companies and big vulture funds. These tech companies have significant property portfolios, and this pushes up the cost of homes. What chance have ordinary workers in competing with these big multinationals? People now refer to Ringsend, the Docklands and Pearse Street as "Googletown". I can tell the House as a representative of these communities that it is not "Googletown"; it is our town. It is Ringsend and the maritime traditions. It is Pearse Street and the docker tradition. Google and all these big high-tech companies have cast a shadow on the local neighbouring communities and need to start throwing some light on them by investing in education, employment and housing. That will not happen overnight, but these companies' engagement needs to be broader and deeper than it has been so far.
The sector happiest with the Bill will be the developers, who will get a hold of private land and will not need to work with representatives in an area they want to develop. The Bill does not mention public housing at a time when housing is increasingly unaffordable, when housing such as Glover's Court, which is not too far from here, is effectively uninhabitable and when homes across the city are swamped with rats and suffer from bad housing maintenance. We cannot afford to give away our land to private developers for private developments. Capital Dock, which is a stone's throw from Pearse Street, has 190 apartments, of which 90 are empty. This is happening in so many developments across the city, the reason being that the vulture funds that own them are keeping them empty so the rents are artificially high. It should also be noted that the Capital Dock development in the south inner city and many like it, particularly in Ringsend and the Pearse Street area, are not getting the 10% social housing requirements delivered in their communities. It is being allocated in other communities further out. Therefore, not only is housing unaffordable; the community is being pulled apart and moved out of the city because of the failure by Government to ensure that the 10% public housing requirement is delivered locally within the community.
This Bill will not serve the communities that elected me.
Many speakers in previous days and today have spoken about the Land Development Agency and the fact that it is not fit for purpose. We know its job is to manage State lands. We talk about what has happened to date, with 60% of properties produced through the agency being unaffordable. This means we are not delivering for the people for whom we need to deliver. I do not see any solutions in the Bill. I see constraints in respect of freedom of information requests, which shows there is an element of hiding what is going on, and that is frightening people. We had a debate yesterday on the shared equity scheme and I do not need to repeat what was said about that. We have commentators from the ESRI, groups of Fine Gael councillors and people within Departments who do not see that the scheme will do anything but supply a greater level of finance to developers. It will not deliver for our people. The history of schemes such as this is that they just up prices and leave people financially constrained and in serious difficulty later and that is just unacceptable.
My colleague, Deputy Andrews, has spoken about this as another scenario in which we are talking about the long-term erosion we have seen of the powers of local authorities in being able to deliver for the people who live within those local authority areas. This Bill is just a further compounding of that. The compulsory purchase facility in the Bill relates more to ransom strips. There has been comment here on compulsory purchase orders of particular properties. Louth County Council has been excellent at times in doing this, particularly finding properties that had fallen to rack and ruin and putting them back in play at knock-down prices, which is beneficial both to the people who get the houses and to the finances of Louth County Council and of the State. We need to see more of that happening. It is as simple as that. I have said it and Sinn Féin has explicitly said it: we do not see this whole suite of solutions being offered to us as delivering for the people. What people need - everybody says it, from the Opposition to the Government - is cost-rental houses, council houses and affordable mortgages. We want delivery of all that. No matter what the Minister, Deputy O'Brien, says, we have no difficulty giving normal people, regular people, the ability to buy and own their own houses and the opportunity not to be completely screwed over with the extortionate rents they have to pay in places such as Dundalk. The Government is just putting pressures on families that are already in incredible difficulty and was doing so long before this pandemic.
I will digress and request a little liberty in respect of the questions I wish to put to the Minister of State, Deputy Noonan. I ask for somebody from his office to return to me on these very important issues. Usually I would attempt to come back in for the ministerial sum-up but I have to be at another event. That is unavoidable, so I will give my apologies for that now. Louth County Council has a huge number of land banks that were bought at very expensive prices. I know that the Minister, Deputy O'Brien, has dealt with the council in this regard. The council bought these land banks under instruction from the Government back at the height of the boom.
I know that Louth County Council has met with the Minister and applications will be going in for housing developments that could deal with some of this. However, the entire problem must be dealt with. I do not want to hear anything about the local property tax and an increase there because that would barely wash-----
That would barely deal with the cost that Louth County Council is facing.
The other issue is that we are dealing with a maintenance budget that has been absolutely hammered. It is the case that no transfers, or very few, where people need them from a medical perspective, are happening in the likes of Louth County Council. Nothing is happening in relation to proper maintenance works. That is not down to Louth County Council and its employees. It is just that the finances are not there. What Louth County Council has been promised, and what we need information on, is a retrofit scheme for local authorities, which would deal with some of the issues as basic as windows and doors. We also need information from the Department on urban and regional development funding for Bridge Street and St. Nicholas Quarter in Dundalk. As important is the work on the Drogheda Port access route that would impact greatly future housing development. Deputy Munster and others have spoken about it. It must happen as quickly as possible.
I welcome the opportunity to speak on this Bill. The origins of the State agency are to be found in the national planning framework, NPF, published in February 2018. Buried in this 182-page document was a commitment to create a national development and regeneration agency. Its focus was to ensure the best use of public lands, including working with local authorities to drive the renewal of strategic areas. It was a noble cause, but what we have instead, is a vehicle for delivering public land into private hands.
In September 2018, to great fanfare, the then Taoiseach, Deputy Varadkar, launched the Land Development Agency, LDA. It promised to deliver 150,000 homes over 20 years. One single sentence in the seven-page brochure, distributed at the launch event, jumped out at me, that is, that just 10% of the homes built on public land were to be social housing, while only afford a 30% would be affordable. In the middle of the greatest social and affordable housing crisis in modern times, Fine Gael is proposing to sell 60% of LDA homes to open market prices. That is incredible.
This Bill proposes to establish the LDA as a designated activity company - a commercial operation owned by the Ministers for Housing, Local Government and Heritage, and Public Expenditure and Reform. This allows the LDA to be classed as being off the Government balance sheet. Its borrowings will not add to Government debt, and its spending will not be included in the Government's annual accounts. While initial capital of €1.25 million from the Strategic Investment Fund is promised, the overwhelming majority of the €45 billion that will be required to deliver 150,000 homes over 20 years will be privately financed. This Bill will result in the average delivery of a paltry 750 social houses a year, and a hardly groundbreaking 2,250 affordable homes annually. However, the financial model to be used in delivery of these homes will price them well out of reach of working class people. We are in a housing crisis. It is shocking.
I am also worried that the Bill is completely silent on the issue of climate change, which, given the scale of the carbon emissions involved in delivering 150,000 homes, is bizarre, to say the least. While in opposition, the Minister for Housing, Local Government and Heritage was highly critical of the Government's proposal to create the LDA during Oireachtas housing committee hearings. He described it as a "Del Boy" model. It is yet another U-turn by Fianna Fáil. I appeal to the Green Party Deputies in particular to stop selling their souls for power and to the end this discharging of Government, which proposes privatisation as the solution to all our problems. We have seen how the commodification of housing, through the housing assistance payment, HAP, system has failed to put a dent in housing waiting lists. Every reply I receive on the issue of housing from Kildare County Council states that it is currently dealing with applications dating back to 2008 and 2009, and that it is up to everyone else to join the HAP lottery, where there are no properties within the county limits. It should be noted that Kildare County Council is one of the better local authorities. A 12-year wait for a house is not acceptable. In fact, it is an absolute disgrace.
The purpose of this Bill is to establish the LDA under primary legislation, which, as we know, has been established as an interim entity since September 2018. The LDA is tasked with managing public lands and delivering social rental and affordable homes. However, on examination, as they say, the devil is in the detail.
There are several serious anomalies with the Bill before us today. I am also most concerned about the impact that this Bill will have on hardworking families on low and middle incomes, who are relying on and trusting us to use our public lands to provide good quality and affordable public housing, without high-risk debt. The references to social housing in this Bill are minimal, and there is a real fear that an empowered entity such as the LDA will not deliver for those most in need. This is not good enough.
There were 661 calls to the homeless services and support unit in Wexford in 2020, with well over 2,000 people who qualify for social housing support at the last count. Unfortunately, I do not think that this Bill will adequately address the needs of these people. There are many references to affordable housing in this legislation, but the definition is meaningless. Affordable housing is defined as any property rented or sold below the prevailing market price in the local area. This is a concern. I will use the example of buying a property in my own county of Wexford. According to the Central Statistics Office, at the end of 2020, the average house price in Gorey was €235,708. In 2019, that figure was €222,000. That amounts to an increase of more than €13,000 or 6.1% in a single year. This increase in the market value goes to prove the point that I have made many times. People are being priced out of Dublin and the commuter belt, and are coming to settle in the north of Wexford in particular. Not only does this have profound implications for transport, education, health and infrastructure, but it also results in the overheating of house prices. If the Government's big idea of affordability is only set by the market price, then as the prices rise, so too will the definition of affordability. This leaves behind hardworking families on lower and middle incomes, who have been continually failed by the Government, which has favoured the private sector over the public sector for years.
I am also concerned that local councillors will have their powers eroded and stripped away by this Bill. It is a mistake to ignore the wealth of local knowledge of councillors. It is also a step away from knowing what type of developments and infrastructure are needed locally, which is vitally important to rural Ireland. It also takes away the best public consultation mechanism that we have and involvement in land development. The ESRI stated that the best way to fund the purchase of land for social housing is through the local authorities, and local authorities are best placed to assess demand for affordable housing. Public land belongs to the public, and it should have the opportunity to take part in the democratic process of what happens to that land.
This Bill will cause major trouble down the line. It appears that the Freedom of Information Act and the powers of the Lobby Registration Act will not apply to legal LDA subsidiary entities, also known as designated activity companies. Therefore, I am deeply concerned about the negative impact that this Bill will have on the low and middle income families of Wexford and Ireland. This awful developer-ridden system must never be allowed to resurface again. For those reasons, I believe that this significant change must be made to this Bill before it progresses any further.
I welcome the opportunity to speak on this Bill. I want to thank the Minister for taking the time to address some of the points that have been made on, what I hope can be, game-changing legislation for the betterment of all in our society. Indeed, his predecessor, and my former ministerial colleague, Deputy Eoghan Murphy, provided many Cabinet updates on the Bill’s composition throughout the last Government, so I am pleased to finally see it has reached publication stage.
I am sure that the Deputies will agree that the Bill opens up a new chapter in the Government’s aim of providing affordable homes to current and future generations, as well as representing concrete action by delivering many much-needed housing units that will go a long way to tackling the current housing crisis in our State. Indeed, we are used to reading and hearing about units during these debates, when it is just as important to remember that for every unit that is provided, another family can look forward to owning their own home.
I have been a public representative for almost seven years at this stage. There has not been one week since my first election when I have not received an email from a constituent, reaching out in the hope that something can be done to provide them, their families, a loved one or, indeed, a relative with a house at the earliest possible opportunity. We all entered the political arena to create, shape and implement real and meaningful change for our constituents.
This Bill gives us the opportunity to achieve just that.
Despite what many Members in this House may suggest, there is no quick-fix solution to solving the housing crisis that has unapologetically wreaked havoc on thousands of families over the past decade and beyond. Indeed, it is fair to say that no political party has got it right on housing in recent years, whether in power or in opposition. It may disappoint the Opposition to learn that sound bites have never and will never build houses. I will be happy to look back and reflect with pride that I was part of a Government that was proactive rather than opposing many housing developments. For members of some political parties in this House, that opposition seems to be part of their job description as public representatives.
The latest Sinn Féin-pedalled plan for Oscar Traynor Road, which has gained much attention in recent weeks, could set the development of hundreds of houses back an extra five years. In direct contrast to the Government, Sinn Féin seems to be in no great rush to solve the crisis that is before us. Its members cannot supply housing to their constituents if they continue to block supply. Any reasonable person sees through this cruel tactic of Sinn Féin of prolonging the housing crisis through its actions while continually pushing blame on the Government. After all, what good is it to Sinn Féin if the Government actually tries to solve the problems that have been raised on doorsteps across the country over the past number of years? I hope, with the agreement of voters in Dublin Rathdown, to be a Member of this House for many years to come. I hope that the passing of this Bill will enable my two children to acquire their own home whenever the time comes for them to leave our family home. I will have played my part in government in making it that bit easier for future generations to own their own home, which is what any parent wants for his or her children.
One of the many projects that the Land Development Agency wishes to develop is the site of the Central Mental Hospital in Dundrum, which is in the heart of my constituency of Dublin Rathdown. The hospital is due to be relocated to a new complex in Portrane in north County Dublin, an area with which the Minister is very familiar. The relocation date is not yet known and will be determined by the Minster for Health, as provided for under the Central Mental Hospital (Relocation) Act 2020, which was passed by the Oireachtas and signed by Uachtarán na hÉireann in December 2020. The relocation will leave an entirely empty shell for the LDA to work with as it plans for an ambitious housing development that could provide up to 1,300 units.
As I pointed out to the Minister in recent correspondence with him, the LDA has just concluded the latest stage of its Dundrum Central public engagement process within the community. Before Christmas, local residents who live within a 1 km radius of the site were invited to participate in a survey on the aims of the development, which sought information on how they wish to engage with the LDA. I welcome the fact that 80% of survey respondents believe the project "presents an opportunity for this currently inaccessible site to positively contribute to the wider community". I agree with that view. I also acknowledge the efforts of the LDA, while faced with the many difficulties that the Covid crisis has presented to everyone, to facilitate two recent public webinars and a virtual consultation room on the project.
I have received hundreds of emails about this proposed development and I would honestly struggle to count on one hand the number of correspondents who oppose the idea of developing the site. However, I ask the Minister to note the trend that is emerging from all the residents associations, including those in Annaville Park, the Dundrum Road, Highfield-Westbrook, Frankfort Park, Mulvey Park, Taney, Clonskeagh, Roebuck and Rosemount, that there are sky-high levels of disappointment among their members with the lack of meaningful engagement they have had to date with the LDA. The existing community has no intention of blocking this ambitious new housing development. All residents are asking for is the opportunity to work collaboratively with the LDA to ensure that the outcome of the proposed development is a safe and sensible integrated community that benefits both existing and new communities. I am sure the Minister will agree that this is a very fair and reasonable request.
I welcome the provision in section 73 of the Bill for housing developments to include a 50% baseline requirement for affordable housing units. This is something on which the LDA has not been fully clear in respect of the Dundrum Central project. I hope that further clarity can be provided in its master plan for the development, which I understand will be published early in the second quarter of this year.
I want to raise the provisions in section 56 relating to local authority lands. I hope the Minister, as a former councillor like me, will be able to provide some clarity in this regard. I am sure he can understand why there is concern from many elected county councillors in regard to this section. I have received some queries about it from councillors in my own party. Its inclusion presupposes that the LDA is better placed than a local authority to determine the best use of land owned by that authority. It also presupposes that councils, in the current environment, will continue to be opposed to the disposal of lands to the LDA. In fact, as I outlined, an overwhelming majority of public representatives, residents and councillors in the immediate vicinity of the Dundrum Central project are in favour of developing the site. Perhaps the Minister can examine whether this provision is entirely necessary.
I have also been informed of concerns regarding section 49(1)(a), which seems to interfere significantly with how democratically elected councillors can represent their area and appears to legally bind them to co-operate with the agency. If the Minister is to introduce these provisions, justification or clarity, at the very least, must be afforded to the 949 individuals in whom the Irish electorate place their trust to represent them in their respective localities.
On a separate matter, I find it incredible that the word "community" is used only once in a Bill that aims to enable the sustainable development of new and regenerated communities that are well-served by schools, public transport and public amenities. I am a strong believer in ensuring that local infrastructure is developed and improved as much as it can be alongside large-scale housing projects. This comes back to my earlier point of ensuring the LDA engages with local residents, no matter what the project is, in order that every development that comes through under the provisions of this Bill works for as many people as possible. I would be grateful if the Minister could explore suitable options to ensure that this becomes a reality rather than a box-ticking exercise, which I hope can be avoided. I am sure he will agree that the LDA cannot be a champion of community if it does not engage with existing communities.
I respectfully ask the Minister to ensure that his officials bring my correspondence and that of the local residents associations to his attention. A number of letters were issued to his office last week. I hope he will take on board the points that have been raised and address them through the progression of this legislation, which is long overdue. I look forward to seeing the development of the Central Mental Hospital in the near future. It is an exciting opportunity for the local area and I know many residents share the same eagerness to ensure their future neighbours can be part of a wider community that works for all who live in the Dundrum area.
The problems with the Land Development Agency have been clear for some time. The main problem is that this Government, like the last Government, seems to think that the best route to deliver public housing is to bypass those institutions that are best at delivering it.
For far too long, local authorities have been starved of funding to build social housing or to get it built but they have also been constricted in the development of a proper affordable rental scheme or affordable purchase scheme. All three types of housing will not by themselves address the housing problems but, if approached properly, they will put a huge dent in the problems we have been plagued with because of Government inaction or wrong action in recent years.
There are huge housing waiting lists for people who want and are entitled to social housing in this State. That problem has not been properly addressed despite the fact that the State owns huge tracts of land throughout the jurisdiction. My constituency, Dublin South-Central, is an example of where the State has both failed and delivered well. People will know Crumlin, Drimnagh and Bluebell, which mainly have social housing that was built in the 1930s, 1940s, 1950s and afterwards. The area has the greatest concentration of social housing in Ireland. In the south-west inner city, particularly Dublin 8, there are major complexes of social housing in the form of flats. I will return to this in a while. The model showed how social housing can work. It also showed how affordable housing can work because there were schemes in the area run by local authorities, but also by co-operative movements, to build houses at an affordable rate. Many of them were for people who could not get onto the social housing list or were not entitled to be on it because of the income threshold. Their incomes were over the threshold to make them eligible for social housing but they could not afford a home because of the mortgages required at the time. That is very true again in this generation. Large numbers of people have incomes above the social housing threshold. They are workers on low to medium incomes but they could never afford a home in this city. They would have to move quite far away from the city to afford a home that they could call their own. They could not afford the rent either because the rent in this city is now at a level equivalent to mortgage repayments for a home whose purchase price is from €400,000 to €500,000. A whole cohort of society is being squeezed out because the State has never taken on board fully its needs, including its need for affordable housing.
The people who can deliver the housing are those who have delivered housing for us over the years, namely the local authorities. However, the local authorities have been hamstrung by the Department of Housing, Local Government and Heritage year after year and by Governments that have not funded their building programmes or attempts to move towards the building of affordable homes at the same time as social housing. Dublin City Council has major tracts of land. It has land banks, although not on the same scale as the State. There are State lands in my constituency that are large enough for tens of thousands of homes. Some of this land is already earmarked for development by the local authority. It has put forward plans that involve affordable housing, affordable rental and social housing but we still have not seen the State moving.
People will be aware of the debacle of St. Michael's Estate. It was levelled, and rightly so, but it was supposed to have been rebuilt and regenerated. We are still waiting. There is still no sign of the full development of the affordable rental and social housing model that is to be used in the estate. The same is true of other tracts of land, such as that covered by the Cherry Orchard regeneration scheme, which was signed off in a local area plan not so long ago. Other tracts of land include the CIÉ works land, which was earmarked for a whole new town not so long ago, just before the collapse. That has not been resurrected. It is a huge tract of land that could very easily be used to deliver on the plans we are talking about. Why are we talking about setting up an agency with 50 or 60 staff rather than using existing staff in the local authorities and building up once again the capacity of local authorities to get developers on site and building as quickly as possible?
Another site very near to my door is in Bluebell. I am involved in a community council there. We have worked with Dublin City Council and also with Luas recently to determine how to use lands more effectively in the Bluebell area for social and affordable housing. I am referring to the use of State land that runs along the canal in the area to the betterment of the small community, which is going to be surrounded by private developments that will tower over it. We were told nearly from day one that if we do not use the LDA model, what we propose will not happen. The implication is that if the local community is not willing to come on board, its area will go back down the ladder of areas that the city council and Department are going to consider. We are being held to ransom in that area. In other areas, the same argument is being put forward.
The same is true of Dolphin House, for example. I am on the Dolphin House regeneration board, and I have been for many years. I have worked with colleagues from various parties and agencies on that but all of a sudden we are being told that we cannot go ahead with the continued regeneration of Dolphin House, some of which has been done spectacularly. What has happened to date is absolutely brilliant but all of a sudden the goalposts are shifting. For instance, we are now being told that there is no funding for a community centre or parkland as part of the development and that the only way to proceed is to use the private model. We would have to build according to a private, for-purchase model, not a model based on affordability. It would be private, with the rest of the scheme being affordable and social. I refer to private development on public land to pay for some of the development, particularly the community aspect.
The same is true of other estates and complexes that are being earmarked for redevelopment to bring them into the 21st century and to ensure people are living in fit accommodation. Each time a complex or the council raises the issue with the Department, it is told it is going to have to depend on the LDA as it is going to take charge. That will make everything dearer and ensure some of the affordable purchase schemes will be dearer because the agency will have to recoup its costs. There are major flaws associated with using the agency model rather than continuing with the local authority and addressing the pitfalls and obstacles that exist.
We are being told day in, day out that funding is not a problem internationally in that if governments seek bonds or loans to fund social projects, they are available, and that they can even get some of the funding at a rate of 0%. I appeal to the Minister not to go down the road of the LDA but to use instead the Department, working properly with local authorities, to ensure the delivery of the housing that is required for a new society. The objective should be to regenerate areas that already have problematic housing and to ensure the problems of the cohort who are being squeezed out because their income is above the threshold and who cannot afford a mortgage or to rent are addressed by ensuring the availability of affordable homes for rental and purchase.
In every city anywhere in Europe there are apartments for rent are affordable in the main, though there are examples of huge rents. That is not the case in Ireland. A person cannot get a forty-year lease in Ireland, in the main. It is a year lease here or there. We still have major problems with the approach of landlordism in Ireland and the private rental market.
The Land Development Agency will not address this and will add to the hikes in private rental and private purchase prices. It is not aimed at reducing the cost of rental to working families, those who need to be looked after and those who cannot afford to compete with the millionaires in our society or with the vulture funds and pension funds which are buying up many if not all of the houses on the market. There are whole areas in my constituency where the complaint is that young families who could normally afford to purchase a two-storey, two-bedroom house are competing not only against the State, which is trying to build up its social housing stock, but also against vulture and pension funds, which seem to think these are happy days and are going into the rental market because they can rent these properties on the housing assistance payment, HAP, at the high rate, tying in the local council for ten years to pay the rent so the State will subsidise private landlordism in this State continuously. That is what is happening.
The funding being directed towards private landlords, mainly of late through HAP and partly through the rent allowance, is scandalous and needs to stop. We need to make sure funding from the State subsidises affordable rental and purchases and does not line the pockets of institutions. These are foreign institutions, in many cases, including foreign banking institutions whose concept is to undermine our economy in many ways. It is driving up the price and making us compete with them, and there is no winner in this.
The only way to ensure we start to gain control over our public housing policy and public housing in general, by which I mean social and affordable housing, is by directing all of the State's money in that way rather than subsidising private entities. The Land Development Agency is one more step on that path. Why do we need to set up another agency? Not long ago, the State had a policy of getting rid of agencies and reducing the number of them. Rather than the Department taking responsibility for what is under its remit, it is setting up agencies at one remove so it is not directly responsible for policy or delivery. That is not just in this Department but others as well. Irish Water was set up to undermine local authorities, but it is also one step removed from the Department of the Environment, Climate and Communications. The State should be responsible for its own policies and delivery of same rather than setting up a one-step removed agency with staff, a CEO and the huge wages some at the top will be getting. The State should ensure the existing institutions and the staff in them implement the policy of delivering social and affordable housing.
I am not naive enough to expect Dublin City Council or any council will set up a building section within it which will have the wherewithal to build huge estates again. I am not even looking at this stage for the councils to go back to the way they should be doing it of having proper maintenance crews. Regrettably, over the years, in particular since the Fianna Fáil-Progressive Democrats Government, which cut funding and continually cut the number of people employed by the public sector, there has been a reduction in the number of maintenance staff in every council area and it seems to be policy to reduce the numbers employed. I am not naive enough to think we will go back to the way of having several hundred workers employed by Dublin City Council to build houses or apartment blocks. I am, at this stage, happy enough that councils would be the developers of any State lands within their area to deliver social and affordable housing. They can do that by getting building companies to tender for those works.
We have seen the debacle in terms of State tendering and procurement. That is an area where, perhaps, instead of setting of a land development agency, the State should concentrate on how it can deliver best practice and value for money in tendering. It is getting walked all over day-in, day-out by those putting in bids for different programmes and schemes offered to the private sector. The private sector knows how to win them over and hold them over a barrel. The children's hospital is one example of how the State got procurement wrong. There are good examples, such as the delivery of apartments in Dolphin House and the new schemes there. The contractor there worked with the community to ensure there were apprenticeships and other work available for local residents on that scheme. The end cost is still quite high in terms of delivery of the unit, and much work needs to be done to ensure the price the local authorities deliver houses on can be further reduced. However, it is substantially less than what private developers are indicating. Up to €50,000 and €60,000 per unit is the difference. The Land Development Agency thus far does not indicate that it will be able to deliver in terms of cost.
There are major problems with the Land Development Agency. It is the wrong way to go and the Bill before us has major shortcomings. It has not fully addressed the concerns raised when Fine Gael originally proposed this solution, at which time Fianna Fáil were very critical. Even Fianna Fáil's criticism and proposals have not been taken on board or properly reflected in this Bill. We do not need to go back to the drawing board because the solution is already there. It is a matter of properly funding local authorities to deliver the housing required in those areas, not just in Dublin but throughout the country.
I am due to speak with a colleague but I think we are running a little ahead of time so I will use as much of the time as I can. The Land Development Agency Bill and its partner Bill, the affordable housing Bill, are two of the most important pieces of legislation that will come before this Dáil.
I say that because they are the instruments which will allow the Government to deliver affordable housing to a society and an economy that has been starved of it for the best part of a decade. Not being able to afford or access a home has devastating consequences for society and crippling consequences for the economy. Getting housing right is crucial, therefore.
Within Fianna Fáil, we know that housing is important. We have a long track record of focusing on housing, delivering solutions and building homes. The Land Development Agency Bill was widely discussed by Fianna Fáil in advance of entering Government. We made criticisms of it and the Minister, Deputy Darragh O'Brien, who is now in office, outlined much of his concerns. One of the reasons Fianna Fáil sought the housing portfolio in this Government is so we could make the maximum possible impact on delivery of housing.
I will comment on the two Bills because they are very much partner Bills. Based in the LDA, they provide a suite of measures and a policy platform which will allow the State to deliver public housing on public land using an affordable housing and affordable rental scheme. That starts with the LDA, which will take public land owned by agencies such as the Defence Forces and the HSE and place on them a permanent affordability charge. I say "permanent" because, regardless of who owns that land into the future, the responsibility to deliver affordable housing will exist. It is possibly the largest devaluation of the cost of land in the history of the State. It will permanently reduce the cost of land owned by the State and put in place a permanent responsibility to deliver affordable housing. That is radical. In conjunction with the tools provided in the affordable housing Bill, both local authorities and the LDA have a really big challenge ahead. They now need to grab these tools and put proposals before councillors and communities which will deliver solutions to the housing crisis we have talked about for the best part of a decade.
Much of the LDA is framed in the context of state aid rules from European Union. The reason for that is because, in providing affordable housing, we are competing with other bodies or private entities which provide housing in the housing market. It is, therefore, a difficult job to negotiate the state aid rules. I believe the device used in the LDA, however, which effectively takes the commercial value of the land and applies an affordable housing charge on it, is an innovative way of ensuring that affordability is permanently attached to the land going forward. It is radical and important. The tools in the affordable housing Bill will ensure that what is built on the LDA lands will be affordable, State-led schemes.
The affordable rental scheme is particularly important in the affordable housing Bill. I want to see that cost rental model on much of the LDA lands. It is a new model that is unproven in the Irish market. I believe, however, it will provide security of tenure and affordable rental to a whole generation of people who want to secure that. This Bill provides land on which to develop that model of housing. This Bill also provides land on which we can once again build council-led affordable housing. We have seen done in the past and it will allow us to do that again. It will also allow us land to build social housing.
It is, therefore, a radical Bill and there are important measures in it. Within Fianna Fáil, however, and I have said before why it is important to us, there has been huge scrutiny of the Minister and of this Bill, because we want to get this right. We want to make sure there is no lack of ambition and that it is not just radical, but very radical.
We have, therefore, discussed a number of measures with the Minister. I thank him for his engagement with the Fianna Fáil Parliamentary Party and those backbenchers with whom he has discussed matters. Let me put on the record, therefore, a number of areas where I would like to see the Bill go forward. I believe there is opportunity on Committee Stage where, perhaps, we might be able to do that. I say it not to undermine the Bill but to seek to improve it.
I believe the median market price is language that defines affordability in this Bill. The details of the schemes will actually be set by ministerial regulation. I would, however, like to see that language around median market price reflect affordability more as a relationship with income rather than market value. I do not see how regulations will do that. It will be difficult over time to do it. It will be far better to base it on income limits and so on rather than to be constantly pegging to market value. I appreciate it may be influenced by the restrictions around state aid. My preference, however, is that we should be defining affordability around income rather than market value.
The language in the Bill around the commercial value of the land again goes back to the restrictions on state aid. In reality, the commercial value, which is applied on the initial valuation, followed by the permanent affordability charge, will effectively render much of the land value as nominal. Therefore, instead of talking about commercial value in the text of the legislation, we should talk about the affordable land value. That is the real value that will be paid and built into the cost model and the real value that will impact the final price that is paid on these lands. As I said, that is an innovative way of complying with state aid rules. We should, however, reflect the language in the Bill and talk about affordable land value.
The third area in which I believe the Bill could go further is the percentage of that affordability charge that is applied by the Minister. The Minister said in this House that the affordability charge in Dublin is likely to be 90%, with a 10% social housing obligation, which would bring it up to 100% affordability on the sites in the region. It effectively renders the land in Dublin that will fall under this Bill at a nominal land value. That is very welcome because it will ensure affordability in Dublin.
The percentage in the Bill needs to be defined further, however. I want that target to be as close to that 90% as possible. Any exceptions should actually be down from that 90% rather than up to 90%. There will be places in the country where the value or the affordability may be changed. I accept we may look at different ways of delivering housing in different communities with different markets. They should be the exception, however, rather than those sites in large cities where we need maximum affordability. I would like to see the percentage target in the Bill defined higher and for it to be the standard, with exceptions coming down rather than the other way around.
The final area I will come to is section 183. The Minister of State has heard me talk about the merits of this Bill and the affordable housing Bill. It is significant in terms of housing and a real lean into public housing and the State providing housing rather than a market-driven approach. Therefore, at the end of the Bill, we come along with what is effectively a stick from the Custom House which says that if councillors do not develop land, it will be taken from them. At least, that is what the narrative says. And yet, when one talks to the LDA, it says it has more than enough lands under the other Government agencies, which it will be responsible for developing without having to go near any local authority lands. Even in briefings with their law agents over recent weeks, local authority members in different councils do not believe there will be significant land grabs.
Why is that power in the Bill? I believe, in part, it results from a perception among officials in the Custom House that those responsible for delaying the delivery of housing are local authority councillors.
As one of those councillors who voted against schemes when they came before me, I want to explain why I did so. I did so because there were no affordable housing schemes and no cost rental schemes. I did so because the only option was to build large scale social housing without fixed-income or mixed-tenure units. I represented Ballymun for more than 15 years and Finglas for nearly the same time. I knew those strategies did not work. I was not going to propose voting for a repeat of them.
Local authority councillors are now being given the power under the affordable housing Bill to have cost rental, affordable council housing and social housing. The budgets will be there in the years to come. Once this legislation is bedded down, the Government has committed that the budgets will be there. I am not convinced that the section 183 amendment is necessary. My concern is that at official level, there is not the ambition to deliver housing. It is not at the councillor's level.
Sometimes there can be NIMBYism in Irish politics. Sometimes councillors can hide behind arguments in order to vote against housing because there are other people in their community who do not want that housing. We have to make sure that this cannot happen because we have to be ambitious. Removing the power from councillors goes too far. I would like to see tests put in place that where councillors want and have the ambition to develop lands, they can instruct the manager to use the tools in the affordable housing Bill and the lands will be developed by that local authority. The LDA has stated that it does not want the land and that it has enough to do. Councillors may want to build on this land and officials tell us that they too want to build on this land. That is where the focus should be. That is where we should put our efforts. An academic argument about possibly removing land from councillors distracts from the good work in this Bill.
The powers defined in the Local Government Act, sections 139 and 140, allow councillors to instruct the local authority manager. If councillors instruct the manager to develop land in their ownership for housing along the lines of the affordable housing Bill, then lands should never end up in the hands of the LDA without the approval of councillors. I would like to see amendments in that area.
I appreciate there needs to be an incentive to stop NIMBYism and councillors hiding behind it. My experience of local government is that local authority members are far more responsible than that. In many cases, they have the same ambition the Minister has to deliver housing. The officials, with whom they need to partner, can often be the restriction. I say that not as a criticism of them because the tools and the budgets just were not there previously. They are in place now, as well as the legislation. We have the affordable housing Bill with all the tools contained in it. We will have the LDA which will unlock plans and apply a permanent affordability charge. All of the mechanisms are on the table.
Now we come to delivery. Now we want to see the targets. Now we want to make sure that the agencies empowered by this legislation deliver for people. That will take time and may not happen in the next year or two. Will it happen in advance of the end of the lifetime of the Government? We will be judged by this. I do not believe we need to put short-term politics ahead of the right decisions, however. These are the right decisions. These are investments in public housing. The policies to provide public housing are too important. We must put them in place in this legislation, fund them in the budgets to come and make sure local authorities and the LDA deliver what we want. We must make sure a whole new generation of Irish people have access to housing in a way that they have not had over the past ten years.
I welcome the Land Development Agency Bill.
There is a great deal of cynical opposition to this Bill in the House, however. Sinn Féin's housing policy offers simplistic solutions. When those solutions do not emerge, it blames conspiracies or looks for people to blame, whether it be bankers or developers or whoever. The reality is that Sinn Féin's policy involves blocking rezoning, which is needed for supply. It involves blocking mixed developments, which the Dublin City Council put forward, for example, in my constituency in Santry, as well as freezing rents, which blocks supply in the rental market. It involves opposing shared equity, a scheme before the House to allow people on low incomes who are locked out of the housing market to aspire to home ownership. Sinn Féin even objects to developments in its own backyard.
That is a toxic mix. Sinn Féin attempts to squeeze supply, not increase it. It locks people on low to modest incomes out of home ownership and the aspiration to home ownership. It involves a return to a policy of segregated housing. In my constituency, as indeed in Deputy McAuliffe's, we have seen the consequences of purely segregated housing not delivering the sort of opportunities for families that we want to see. We have seen too much attitude to the housing issue from the left-wing parties stuck in a narrow lens of ideological thinking. As Einstein said, we will not solve problems by using the same thinking that got us into them. We need radical thinking.
The Government has been developing for some years exactly that radical thinking we need. For too long, we have relied exclusively on private developers to shape the sort of development we want. We have an aspiration now that by 2040 we will see a dramatically different type of development. We will see the growth of compact cities. The new cities will grow at 50% over the coming years, twice the speed of the growth in Dublin. That represents a massive shift in the way in which we develop. We want to see compact development that will meet our challenges with the climate crisis we all face. That needs State leadership. The LDA is the powerful tool that can deliver that State leadership. It is important that we welcome it. It can take on the hoarding of land. It can take on the exclusive remit of private developers who want to move to greenfield development and not to build in a sustainable fashion.
Now we have the vehicle that can change that and can assemble sites, particularly in those cities we need developed, to a master plan that fulfils the ambitions and the needs of society. It is important we give our endorsement and support to that area. It is interesting to see that on the LDA website, it has already identified 60,000 folios of publicly owned land which have the potential to be assessed for housing use. That has a significant potential to impact on the availability of land for development which has been a source of considerable strain and dysfunction over many years.
We also need to recognise that other changes must occur. We need to see rezoning, particularly within the M50 in Dublin and within developed areas where some lands have been assigned to uses that are no longer fit for purpose. Equally, as we introduce such rezoning, it is vital that it is done with new responsibilities on those who aspire to develop. It is important that in rezoning we introduce new powers, as well as the obligation to deliver mixed housing and ensuring the development of infrastructures at the same time as housing. All of these should be key elements when rezoning comes up to be considered.
Traditionally, we have allowed rezoning to be like a windfall lottery where people come up winning and get an outcome they pocket. That cannot be the way we proceed in the future. What is really important in the housing market is that we seek to align what the private sector and the public sector do to both serve the public interest. That has been a problem that has eluded us because the State's instruments up to this have not been sufficiently discerning to deliver that goal.
Here we have the start of a shift that can give the State the tools it needs to ensure that what private developers are doing - they will want a margin for whatever they do - is aligned to the public interest. By having the control of the land agency, by having the master planning and by having new conditionality around planning and rezoning, we can deliver that.
We also need some new thinking about compact living. From the report of experts in the field, the chartered surveyors, we have seen how the cost of compact development in high-rise accommodation on brownfield sites is becoming prohibitively expensive. Effectively, we are asking first-time buyers to carry the capital cost of changes that will bring significant social benefits to the country over the years ahead as we live in a more sustainable way. We are asking those first-time buyers entering the housing market to shoulder that entire cost. In the case of higher rise in the city areas, that is simply putting living in those areas out of the reach of those people. That is not a sustainable policy. If we want, as we need, to see more compact development and higher density development, particularly on brownfield sites, we need to develop the tools to ensure that can be done in a way that is affordable. In the evolution of the LDA, the shared equity scheme and the serviced sites initiative, we are seeing the tools that will start to see us deliver that affordability in a more effective way.
The new relationship that the Bill seeks to forge between the LDA, which will have access to the entire portfolio of public lands, and the local authorities, which traditionally have not been able to carry land banks because of the severe financial constraints under which they operate, opens up the possibility of shaping our development with more democratic input for the future. However, it is crucial that the LDA meets its potential. In the past week alone, we have read in the newspapers from senior officials in Dublin City Council, one of the foremost agencies for delivering housing, how dysfunctional the public procurement process has become and how it is preventing effective procurement by the city of housing at an affordable price. That is unacceptable. Indeed, with some knowledge of public procurement in the area of delivering green procurement, I know that the system of public procurement is simply not equipped to meet public objectives and needs to be overhauled. That cry from the heart from Dublin City Council should be heard loud and clear in the Custom House and indeed beyond, in the Department of Public Expenditure and Reform and other Departments which shape public procurement policy. We need more flexible tools of public procurement so that we can deliver to the public interest which is rapidly changing. Many of the instruments used in public procurement have not kept pace with the changing expectations of public policy.
We also read this week that Ernst & Young, having done a report on the capacity of public bodies to deliver the sort of projects that we need to see as part of the national development plan over the next decade, believes that many of those agencies do not have the capacity to deliver the scale of projects. That is a wake-up call that we have to develop that capability if we want to meet our national ambitions. If there is difficulty in State agencies and public bodies in delivering individual projects, there are far greater challenges ahead if we are to see the shift in the way our country develops in terms of regional balance. The cities that have been earmarked to grow by 50% will not organically grow by that rate. One will need to see very effective public planning and the execution of infrastructures and the assembly of plots of land for development in a compact and sustained way. One will need to see new expertise in those areas. It is a wake-up call for those who want to shape the national development plan, NDP, which is now under review. We need to look at the projects and where they stand in the pecking order but, even more importantly, we need to review our capacity to deliver those in a way that will meet the public interest, on time and on budget.
As we scrutinise the elements of the LDA, it is important that we ensure that its powers, budgets and capacities are adequate. I would like to hear how the figure of €2.5 billion has been decided by the Government as being half by way of equity from the Ireland Strategic Investment Fund, ISIF, and the remainder in borrowing capacity. What will that allow in terms of advance planning and the building of land banks for the future in five cities in which we need to see that development occur in a sustainable way? Will that be adequate or will we find that the LDA, like the local authorities, will struggle to build adequate land banks to ensure it can shape development in a timely way? Its capacity to build a land bank is not outlined in the Bill in any shape or form, and it is important that we know it has the capacity to build those land banks because development in these cities will not happen overnight. It will be a question of a decade or more of development and we will have to be anticipating that by building land banks to meet that need.
The LDA has adopted the National Asset Management Agency, NAMA, approach to compulsory purchase order. Normally, it should not have to rely upon compulsory purchase orders but as we go, we need to be satisfied that the NAMA powers that received state aid approval from Europe in respect of the acquisition of lands are fit for purpose as we develop the new mandate of the LDA, which is quite separate from the mandate that NAMA has had, and we need to ensure those powers and capabilities are fit for purpose.
There has been controversy about section 183. This is where the local authority, if it has decided that it will not use its land for housing, has to give the option to the LDA and does not have to get approval from local councillors. In reality, that will rarely, if ever, arise. I cannot imagine it would arise in Dublin City Council where it owns land that had been designated for housing but it decides that there are other purposes that would be better fulfilled. It will not be a frequent occurrence but if the local authority is selling its land in this way, the LDA is probably a good place for it to land. I am open to listen to both sides of the argument. I am sure the Minister has a reason for this and we ought to listen to those arguments.
The entire focus of the Government's strategy is to deliver affordability and supply to people who have been locked out. The sad fact is that anyone earning over €42,000, which is the limit for social housing, and right up to the limit of the Rebuilding Ireland home loan of €75,000, has been locked out. In reality, families in those income brackets can borrow probably no more than €200,000 for a home. Without the shared equity scheme, we would not be able to give them access to home purchase. The shared equity scheme is a very important element in the jigsaw because, as we drive supply from the LDA, as we introduce new Part V obligations on private developers to provide affordable homes and as we drive the site service fund, we also need an instrument that ensures people on the lower ranges of income can aspire to homeownership. The tragedy at present is that many ordinary workers, be they in manufacturing or construction, teaching, gardaí or nurses, are not able to purchase and this scheme is a really important scheme.
I also would point out that there has been massive overexaggeration of the potential that this scheme might have to fuel additional demand that would promote price rises.
The reality is that these families are now in the rental market and are often paying €20,000 or more for their home. What one is doing here is not creating new demand but moving that demand from the rental market to the house purchase market where they will be able to purchase under these schemes for probably €5,000 less. It is a win-win situation. One is unlocking the door for these families, allowing them to purchase at a lower price, and releasing some supply in the rental market which is very constrained.
It is also important to say that supply is responsive. The ESRI, in an extraordinary piece, decided that it would measure the impact of this scheme on demand, assuming that supply would not change. Of course, if one assumes that the supply will not change the only thing that can happen is for prices to go up. The reality is that supply does respond. In my area, in particular, I can see that there is a massive undersupply of starter homes. Developers are preferring to build more expensive homes for the trading-up market. We need to see a shift in that mix so that we see more starter homes being built which gives access to people who are on lower income.
This is a very targeted scheme unlike mortgage relief or the rent relief that is favoured by Sinn Féin. Those are broad-based reliefs which would push up price. This is very targeted at a particular segment of the market which is now locked out.
I commend the Minister on the work he is undertaking. We must have ambition in this area and I would hate to see the potential of these instruments constrained by a very conservative approach to building on land banks and shaping master plans for the future. It is really important that the Minister retains his ambition and ensures that the powers are in this Bill to realise it. I thank the House for the time to speak.
I thank the Deputy and call the next speaker on the Government side, Deputy Hourigan, who is sharing with Deputy Cathal Crowe. The final speaker before Leaders' Questions will be Deputy Bríd Smith.
Gabhaim buíochas leis an gCathaoirleach Gníomhach. The Green Party agrees with the principle of active land management, of utilising under-used sites and identifying private lands that could be of benefit to projects for renewal of particular areas or consolidation of public lands with off-cut lands or lands of that type.
The core principle of the Land Development Agency, LDA, should be to operate to support local authorities in providing housing and managing land and be based on the following principles. Public and affordable construction of public homes on State land to be the norm so that all procurement is on an affordable basis and is done directly by the public body, either the approved housing body, AHB, or the local authority without out-sourcing to private developers. All housing constructed on State land should be sustainable, climate resilient and based on the principles of community wealth building with social clauses included. The establishment of the LDA should be used to reverse the bonfire of building regulations and design standards we have witnessed since 2015, including the failed build-to-rent typology that has trapped so many housing assistance payment, HAP, tenants in substandard living. We should see this as an opportunity to require the implementation of the Safe as Houses report, including building control reform and the third party certification of building standards. We should include in the legislation a provision that the State retains control in the long term of any and all lands procured with State funding. The Land Development Agency must never find itself in a position as a permanent or temporary landlord to any tenant.
The LDA should never be in the business of facilitating projects and removing risk in projects for private developers and private equity investors, which is not how public money or public effort should be employed. The LDA should not be entitled to sub-lease or transfer public lands other than in accordance with social housing, affordable purchase and cost-rental models that are mutually agreed. This Bill should provide for leasing from public bodies rather than land transfers, with a power to enter into development agreements with local authorities and State bodies that would be subject to minimum terms that would be scheduled in the Bill.
For this purpose, the primary housing models should be: social housing, that is, housing owned and provided by a local authority or AHBs for which the tenant pays a differential rent in accordance with the Housing Acts, on State lands and provided on the basis of cost plus a maximum of 5% developer profits; and affordable purchase housing which is defined as being provided on public lands with the benefit of a waiver of development levies and serviced site funding and is acquired by the buyer by a long-term lease with controls included for the community trust or the AHB or similar body that retains ownership of the land, financed and built on the basis of costs plus a maximum of 5% developer profits and subject to a right of first refusal to the local authority or AHB landlord of the home, with a clawback to repay the land value and State subsidy
I am outlining a very basic principle here that is absolutely vital to the operation of any body that would seek to undertake the work that is outlined in the LDA Bill and that is that there is no such thing as affordable housing and community affordable housing without first setting out a model for affordable construction and without agreeing or setting out some sort of a ceiling on developer profits. As instigated in other European countries, this Bill would become a gift to the profit margins of private landowners.
I would like to echo Deputy McAuliffe's previous sentiment in that there is much to like in this Bill and I hope that some of these issues can be addressed on Committee Stage.
As a member of the Committee of Public Accounts, I spend a good portion of my week reviewing the audited accounts of taxpayer-funded entities that have fallen short of standards of fiscal performance and-or governance. It is in that context I will say a brief word about the fact that the LDA is already fully operational under an establishment order but with very little oversight as to its proceedings, hiring policies or how it is operating right now. Even before this Bill proceeds through the Dail, the LDA can enter into contracts, acquire lands and negotiate land transfer with Departments, agencies and local authorities. The legislation we are now considering seems to allow the agency to form subsidiaries, acquire public land on the basis of first refusal and enable it to implement compulsory purchase orders.
At the moment the LDA has an interim board. I accept that this board may possibly be reformed on the passing of this Bill. Currently the board consists of 12 members, including five from the banking sector, four from Government Departments or local authorities and one academic in social policy. There are no specialists in community design, in environmental design or on the sustainable development of housing or communities. In fact, considering it is International Women’s Day on Monday it is fair to point out that there are more bankers on the board of the LDA than there are women. The LDA will have far-reaching and considerable powers. It already does and that activity concerns me. I do not look forward to the inevitable appearance of the LDA in front of the Committee of Public Accounts.
In 1963, Seán Lemass, a Fianna Fáil Taoiseach, presided in over the development of the Local Government Act which enshrined many of the housing and planning frameworks we still work with today. It has been a powerful Act in the development of housing in this country. It established our local authorities as the core body responsible for the provision of social and public housing. It is our local authority, local government and local democracy that should be providing housing for us. Under this legislation the legacy of this Government will be the dismantling, in a very real way, of that 1963 legislation. Local authorities will no longer be the foundational providers of public housing in the State. This legislation effectively locks in the failed and hugely discredited strategic housing development framework, bypassing democratic oversight and erasing local voices from planning decisions.
I urge that some of these points be considered on Committee Stage of this Bill.
I welcome the opportunity to speak on this Bill today. The Land Development Agency Bill is one of the transformative measures in bringing about accelerated social and affordable housing in this country. I am glad that it is my colleague, the Minister, Deputy Darragh O'Brien, who is leading the Department of Housing, Local Government and Heritage because Fianna Fáil over many decades has been known as a party that in good and in bad times delivered on housing and communities. When I think of all the local authority housing schemes in my constituency, most were built during times when Fianna Fáil was in government.
I am glad, therefore, that it is a Fianna Fáil Minister, Deputy Darragh O'Brien, who is heading the Department as a partner in a coalition government.
I see many positives in the Bill. I note the Land Development Agency is already working on nine sites throughout the country developing 4,000 homes. It is very important that many of these homes are affordable. Like many Members of the House, before I was elected to Dáil Eireann I was a county councillor. I was very involved in housing policy committees and in observing how all of this happens at grass roots level. Far too many people on our housing waiting lists do not necessarily need to be on a social housing list. Many of them have incomes, although they are low to medium incomes, and they should be on affordable housing lists. The drive now by the Government is to provide more affordable housing so that those who have low to medium incomes can go forward and end up owning homes in their own right and this is hugely important. It has been part of the Irish psyche for many years.
Some say we should live in high-rise apartments in city centres. I do not think that is fully sustainable for our country. It is good to see small villages and towns throughout Ireland sharing population bases. It brings vitality back to places. I have seen far too much rural decline in my constituency. We have a two tier Ireland with the east coast thriving and some parts of the west coast lagging behind. We also have two-tiered development in each county. In County Clare we see the middle column of the county driving on, accelerated and accentuated by the presence of Shannon Airport industrial hubs, but when we go further east or west of this we see rural decline week on week and month on month.
A key element of the Bill is that it will initially deal with land banks in towns with 10,000 or more people. There is a need for added scope for social and affordable housing to become a feature of our smaller villages to breathe life into them. Most rural Deputies can relate to the long-standing battles many of us have fought to retain a local schoolteacher or to keep a post office, shop, pub or bank open. This week, we have been speaking about Bank of Ireland announcing many closures of its branches. All of this is predicated on having a population base in a small village. We can only have a population base if there are houses and children playing on the streets and in playgrounds and going to school during the day and bringing vitality back. There is a need to go beyond towns with a population threshold of 10,000 and get this level of social and affordable housing build into smaller villages.
The Bill is in line with EU state aid rules, which is very important. The big brother of the European Union is always breathing down on us and this is fully compliant and can be easily funded by the Government and driven as a priority in the years to come.
I also welcome that the Bill empowers the Land Development Agency to use compulsory purchase orders to acquire ransom strips. These were a phenomenon of the early noughties whereby a developer would build 50 or 60 houses and put in a lovely concrete kerb with a 1 m or 2 m grass margin. To most people in the community it meant nothing and it was just a little grass strip at the end of a turning area in a housing estate. It was called a ransom strip because anyone who wanted to develop housing or bring services beyond that point would have to pay the developer or landowner an extortionate amount of money. I am glad that once and for all, although it is too late for some because it should have been done many years ago, there is now a compulsory purchase order mechanism to acquire these ransom strips at fair prices and not at extortionate or rip-off prices.
I have some small concerns about the Land Development Agency Bill and I will speak about these. A big issue in any community is a lack of information. We are dealing with an issue in my village at present. A large windmill has gone up and it is causing much offence in the community. When people do not have information on what is happening in their communities it can be quite upsetting and frustrating.
We have also seen with housing developments where social or affordable housing is planned in an area and residents who have already bought into that road and are paying sky high mortgages are not aware of it happening. Perhaps they were not made aware of it by the developer at the time or by the local authority. Information is vital at all stages. It concerns me somewhat that much of the Land Development Agency Bill measures will allow for a little bit of bypassing of the local elected councillors. This will remove a key section of the chain of command that was always there with regard to local authority housing. There is a need for stakeholder engagement whereby there is not just railroading through land banks in communities to develop housing and that there would be a little bit of stakeholder engagement. I am concerned about this.
State lands tend to be in very large tracts. Some communities have dozens or hundreds of acres, such as the Curragh, for example, where the State owns hundreds of acres. In my community in Meelick we have Knockalisheen. Way back in the 1940s and 1950s it was on land owned by the Department of Defence. It was an old rifle training range for Irish soldiers. In the 1950s or 1960s, and I ask the House to forgive me as I may have my decades mixed up, it became a centre for refugees fleeing the Hungarian revolution. Where I am getting to with all of this is that in recent years it has again been serving a role in providing for refugees. It is the site of one of the largest direct provision centres in the country and it is on State land.
This week, we have heard there is a plan to wind down direct provision, which is very welcome. I have grown up beside a direct provision centre and I know the families. I know that more than anything they yearn for some normality for their children and to be able to integrate into society. This is really good. However, also raises questions as to what will happen with the huge land bank in Knockalisheen in Meelick and other such land banks throughout the country. It is State owned and many of us in the community are concerned that a State land bank such as this could be used overnight for a colossal social or affordable housing development. People are probably saying that I am contradicting myself but I am not and there is a very simple reason for this. Just 100 m from Knockalisheen is Moyross, which is just over the border in Limerick. It is one of those large housing estates, and there are only a few in the country, where the Government has realised that putting hundreds of people in an area that has been economically disadvantaged, and piling social housing on top of social housing, does not necessarily work. It has been subject to a regeneration plan for the past ten or 12 years. We have seen how overdeveloped social housing is a bad thing and a regeneration plan is still playing out there.
Our concern is that just up the road from Moyross is a colossal State land bank, one of the largest in the midwest, where there could be another wave of social housing. It would be only repeating the mistakes of the past. Yes, we need social housing, we need a drive for affordable housing and we need to do everything in the Houses of the Oireachtas to ensure it sees the light of day but we should also not make the same mistakes that far too many made in the past by crowding social housing to the point that disadvantage becomes perennial and inescapable. Good communities are those that are smaller with proper amenities. It goes back to the whole point I have been making with regard to a community becoming sustainable once again with a school, a shop, a post office and a pub. This is what we need to get back to.
With regard to overloading social housing in one area, in many counties if people apply for social housing they get an application form that may have 18 or 19 locations where they can seek houses. It is imbalanced. In parts of rural Clare there is nowhere to get a social housing unit but in places such as Clonlara, Shannon or Ennis there is probably an overload of social housing, perpetuating disadvantage in some instances. The key to this is that it is sustainable and long term. I am not speaking about the little cottages at the roadside that local authorities built in the 1930s and 1940s. We moved on from them a long time ago. There is much logic to going to small villages that are suffering and struggling to survive and saying that developing two or three social housing units in those villages would breed essential new life back into them. We need to get to this model. Despite all the positives of the Bill, and do not get me wrong because I do not want to knock it, it concerns me that we are going on a trajectory of large multi-unit developments on large tracts of land and we could be turning our backs on the small villages where we could be breathing vitality.
All in all it is a good Bill. I hope the Minister and Minister of State will take on board the concerns I have. They are well rooted concerns that are based on my concerns for rural communities that continue to lag behind. In some instances in years to come there will be accusations of a lack of transparency because those who bought a house in an area did not know a new wave of development was coming behind them.
We all know the carnage it can create in a community when people do not have an awareness of things.
I hope the concerns I have expressed will be taken back by the Ministers to the Department. I am glad to have had to the opportunity to speak on the Bill.
I listened to the Minister's speech the last time we discussed the Bill. I congratulate him and his speechwriter as it was a very fine speech indeed, full of high-flying rhetoric, full of absolutely correct observations about the housing crisis and the importance of housing as a basic necessity of life. It stated:
...the State has to step up to the mark to provide affordable homes for purchase and rent using all the means at its disposal. A good home ... should be the launch pad for life's adventures and a refuge from its storms. The bricks and mortar of a solid home are the cornerstone of a good life.
...the central promise of democracy is that each generation will be better off than the last, the current housing crisis represents a fundamental threat. In an era where the waves of dangerous populism are hitting the shores of established democracies, we need to keep our democracy strong and vibrant.
These are very fine words indeed. The only problem, of course, is that this Bill and other Bills the Government is progressing do none of the things the Minister claims are needed to address the housing crisis. In fact, if we could build homes with the fine words of all the previous housing Ministers to sort out the crisis, we would have a surplus of homes in the State for the people who need them.
The Minister's words reminded me of another speech at the unveiling of a previous grand plan in 2014, where we were told by one of his predecessors that it is the right of every household to access secure, good quality housing at an affordable price and in sustainable communities, and that this strategy would put the State back at the centre of social housing provision. That was in 2014 and it was Deputy Alan Kelly, who was then the housing Minister. His plan did not work either. I could quote from the former Minister, Deputy Eoghan Murphy, and the Minister, Deputy Coveney. Their plans, their strategies and their grand press conferences did not work either.
The State is not stepping up. The State and the current Minister are actually doing the same as his predecessors. Far from the pragmatism the Minister claims, a pragmatism that is supposedly devoid of any ideology, this is, in essence, pure ideology masquerading as the answer to the housing crisis produced by that very ideology. If we take the Minister's pronouncements at face value, the purpose of this is to build social and affordable housing but it would be doing so in the most elaborate, complex and Byzantine way. This is the State stepping up to build homes for its citizens. In reality, this Bill, like other grand plans, is utterly reliant on developers, builders, financiers, estate agents, property gurus and those who have bequeathed us this crisis in the first place. It accepts that the market is an actual living thing, a natural occurrence, and it places its hope that this market can, with the right mix of coaxing, possibly some prayers and lots of incentives, actually provide people with the homes they need. This is not the State building homes. This, like many other acts, is the State facilitating developers to do the building they want to, if they decide it is worth their while and the profits accruing to them are sufficient.
The Minister told us some weeks ago that, perhaps, depending on what he thinks, or what his successor feels, or which way the wind is blowing on a particular day in a particular place, there may be more than 50% of social and affordable homes on any plot of land developed by the Land Development Agency. Might be, could be, or there might be less; it will depend on a number of factors, such as the Minister's particular humour on the day the decision is taken. No, it will not. It will depend on location, location, location and what the market value is. What will determine the market value? The Minister seems to think he might determine the market value. That would be news to everyone, including the market, and not least the developers and the financiers who have basically written Government housing policy over the past three decades.
The Minister seems to think if he declares something is affordable, then it is. It is as if he declares that a donkey is a unicorn, it is, but it still will not fly. The definition of affordable, whether that turns out to be to rent or to buy, is not linked to what people actually earn. It is not linked in any way to the Minister's gift under the regime envisaged in this Bill to declare something affordable based on what people actually earn. That is not what this Bill does. The Minister seems to believe that, like Humpty Dumpty in a Lewis Carroll yarn, “When I use a word...it means just what I choose it to mean - neither more nor less.” He can waffle on all he likes, he can be outraged at the ignorant Opposition who do not understand his beautiful Bill, but none of his outrage and none of his waffle will make a €400,000 two-bedroom apartment affordable for an ordinary citizen in this country. None of his outrage or evocation of the days of de Valera and social housing projects of the 1950s will turn a monthly rent of €1,200-plus into an affordable rent for ordinary people.
The Minister has denied that this Bill guts local democracy. It removes the last vestige of local councillors’ ability to have any say over land development in their area, and there is no doubt about that. I note that, hilariously, other Government Deputies tried to blame local councils for the failure to build or boost the stock of social homes. Aside from the fact that most of those local councils are run by Fianna Fáil and Fine Gael, one would think, listening to them, that the housing crisis only started last year. One would think that the inability and unwillingness of local authorities to build public housing was a decision of their own, not an actual belief and a project built into Government policy, with their reliance on the market on the one hand, and the crash and fallout from their reckless mates in the finance and development class on the other.
I have observations to make on the specifics of the Bill, if I have time.
I have some observations on the specifics of the Bill. At one point, it states we need to counteract undue segregation in housing between persons of different social backgrounds. On the one hand, to any outsider, it would seem a laudable objective. Who wants segregation? In reality, however, for more than two decades I have heard this time and again, and each time the purpose of anti-segregation policy is not talking about the need to ensure people on lower incomes, from the Travelling community or from ethnic minorities should be given access to housing in Ailesbury Road, for example, probably the most segregated area in the country, or in any of the upper middle-class strongholds. No, not at all. What they mean is that we cannot have too many lower income tenants in any area where it is possible to sell houses to higher income brackets and where developers can make a fortune. The safeguard against social segregation only applies in one direction. It is not Vico Road they mean; it is Ballymun Road. They are talking, in reality, about stigmatising social housing and painting it as a refuge of troubled tenants and antisocial issues.
There is a way of avoiding social segregation. When we built public housing in the 1950s and 1960s, it was used to house everybody – teachers, bus drivers, butchers, civil servants and all others who could not pay private rents or afford to buy. The segregation happened because of a deliberate housing policy. It was not an accident. We can reverse that by allowing ordinary workers on average incomes access to public housing by widening the income brackets beyond what they are at present.
This Bill will not do that and is not designed to do it. Instead, it aims to reinvent the wheel with elaborate, complex and unworkable policies to build a new model of cost rental. If cost rental is affordable, rent, of course, will depend on what the cost actually is, something the Minister cannot tell us. Cost rental will still be pegged in some way to the market, not to people's earnings. Differential rents set by local authorities, on the other hand, were truly cost rental and truly affordable. This Bill will not address that basic issue, and no amount of wishful thinking or rhetoric from the Minister can hide that.