Tuesday, 11 May 2021
Residential Property Market: Motion [Private Members]
That Dáil Éireann: notes that:
— the housing crisis continues to spiral out of control;
— residential property prices have increased by 3 per cent in the 12 months to February;
— residential property prices have increased by 88.5 per cent since early 2013;
— high rents and residential property prices are making it increasingly difficult for workers, families and struggling home buyers to purchase and own their own home;
— institutional investors holding rental property avail of significant tax advantages and exemptions granted to them by the Government;
— these institutional investors include Real Estate Investment Trusts (REITs), introduced by the Fine Gael-led Government in the Finance Act 2013, and Irish Real Estate Funds (IREFs);
— REITs and IREFs pay no corporation tax on income from their property rental businesses;
— REITs and IREFs pay no capital gains tax accruing on the disposal of assets of their property rental businesses;
— institutional investors, including REITs and IREFs:— enjoy tax advantages and exemptions that are distorting the housing market; and— institutional investors:
— are displacing workers, families and struggling home buyers in the residential property market;— have developed monopolistic and oligopolistic pricing power in local areas throughout the State, distorting rental and property markets to the detriment of workers, families and struggling home buyers; and— the displacement of workers, families and struggling first-time buyers, through the purchase of existing property in the residential market by institutional investors, has been taking place for several years;
— are pricing average and low-income earners out of purchasing or renting from the private market;
— Government policies have facilitated, incentivised and encouraged the displacement of struggling home buyers by institutional investors in the residential property market;
— recent purchases of residential property by institutional investors in Mullen Park, Maynooth and Bay Meadows, Dublin, that have displaced workers, families and struggling home buyers, are a direct consequence of these policies; and
— investment by these institutional investors in the residential property market reached €1.2 billion in 2020, and is expected to grow in this and subsequent years without immediate policy intervention; and
calls on the Government to:
— introduce legislation to end the tax advantages and exemptions granted by the Government to institutional investors, including REITs and IREFs, in the residential property market;
— introduce legislation to impose a stamp duty surcharge on the purchase of residential property by institutional investors including REITs and Irish Real Estate Funds;
— direct the Minister for Housing, Local Government and Heritage to bring forward, as a matter of urgency, measures to restrict the activity of institutional investors in the residential property market and their displacement of workers, families and struggling home buyers from the market; and
— further direct the Minister for Housing, Local Government and Heritage to consider, as a matter of urgency, amendments to the Planning and Development Act 2000, introducing tenure type and mix as a matter of consideration in all future planning applications and approvals.
Táim ag roinnt mo chuid ama. Molaim an rún seo ar son Theachtaí Dála Shinn Féin. Le rófhada anois, an polasaí a bhí ag an Rialtas seo agus an Rialtas roimhe ná cead agus spreagadh a thabhairt do chistí idirnáisiúnta theacht isteach anseo agus gnáthdhaoine a ghlasáil amach as an margadh. Feidhm an rúin atá os ár gcomhair ná deireadh a chur leis an scannal seo anois agus go deo.
In May 2020, one of the State's leading wealth advisory firms circulated a paper to potential investors in the housing market in which it gave an honest and accurate account of Government policy and its impact on renters and homeownership. The paper stated:
The current high level of house prices and rents in Ireland’s residential property market have been driven in a significant way by the Government’s housing policy with favourable policies attracting institutional investors in the market
It went on to state:
The aim of institutions is to maximise their rental income from their properties and developers are also designing apartment blocks to maximise this income for institutions rather than aiming to meet the needs of society
The investment advisory firm concluded accurately when it stated, "The current housing policy has benefited both institutions and developers at the expense of individual buyers." That is the truth of this Government policy. Those are not words according to me or Sinn Féin but to the industry speaking to itself in 2020.
Last week, Round Hill Capital snapped up 135 homes in a new residential estate at Mullen Park in Maynooth, snatching homeownership from struggling homebuyers who had worked hard to save for deposits. The previous week, the same fund snapped up an entire estate of 112 homes in a new development in Dublin called Bay Meadows. For the public and whole generations locked out of homeownership by this Government and those which preceded it, this was simply the last straw. The Government is now scrambling to fix a problem it created in the first place. I have heard Ministers try to claim that this is something new and that it is an unintended consequence of Government policy. Let me say very clearly that this is nothing new. It has been going on for years. In 2019 alone, developers sold off 2,909 newly-built homes as private rental sales in Dublin.
This meant that 57%, six out of every ten, of newly built homes in Dublin were taken off the market and sold, in the majority of cases, to these investment funds. This was in 2019, not 2021. In the same year, more than 3,000 second-hand homes were bought by these funds. This is not by accident, it is by design. The Government has facilitated and encouraged this policy.
Many of these investment firms are REITs, which were introduced by means of legislation brought forward by the Fine Gael-Labour Government in 2013. REITs pay no corporation tax on rental profit. They pay no capital gains tax when they sell their properties and pay little in the way of stamp duty. Many of their shareholders pay less tax on the dividends they receive than the average Irish worker does on his or her wages. Some of them actually pay no tax at all. These investments were afforded tax advantages by the Government. Sinn Féin's motion calls for these tax advantages and exemptions to come to an end.
Far from this being a new request from Sinn Féin, we have been calling for it to happen for years. Only six months ago, I tabled amendments to the Finance Bill calling for the full rate of capital gains tax and a stamp duty surcharge to be applied to these funds only for them to be voted against by Fine Gael, Fianna Fáil and the Greens. Now that the Government has been caught out, it is scrambling to give some appearance of action and an indication that it really wanted to do something.
This motion calls on the Government to take immediate action to introduce legislation to end these tax advantages and exemptions which it and previous Governments have given these investment funds, including REITs and IREFs. It calls for the introduction of the imposition of a stamp duty surcharge on the purchase of homes by investment funds, including REITs and IREFs, as proposed by Sinn Féin in our budget submission last year. It urgently calls for the introduction of measures to restrict the activity of these funds and to end their price gouging, as well as the pushing out of struggling homeowners and buyers from the market.
Investment funds are locking workers and families out of home ownership. This is nothing new. It is not an accident because it has been happening for years. It is the direct result of the Government's policy. Sinn Féin has been calling it out for years. It is now time to bring it to an end. This motion should be supported and investment funds should be stopped from making housing unaffordable.
I commend Deputies Pearse Doherty, Ó Broin and others in Sinn Féin on bringing this issue to the forefront of the political debate in recent months and years. What people saw in the past couple of weeks with REITs buying whole housing estates is a reflection of what is happening up and down the country. Many people have contacted me who have family members trying to buy homes. A man in County Leitrim contacted me the other day. He has two sons who he paid for to go through college. When one of his children was sick when they were young, he could not get a medical card and had to pay for the treatment. He subsequently had to buy health insurance. Throughout all of his life he has paid. Now his two sons, educated with good jobs, have no hope of affording houses. They would need salaries of between €100,000 and €120,000 per annum to buy a house in Dublin.
At the same time, the Government's policies are driving this whole agenda of what it calls the professionalising of the rental sector. What that means is making the rental sector something which will make maximum profit for large investment companies. That is totally at odds with what the ordinary people of this country want. It is time the Minister and the Government copped on to that. People are seeing what the Minister is doing. He is not working for the ordinary people of this country. Rather, he is working for the big investors and those with the inside track. That needs to end now.
The reality for many people is that they just simply cannot afford to live in this country. That is being brought home to so many. We have a situation whereby people work and save to buy homes for themselves and future generations of their families but the Government closes that off for them. This is down to the Government's policies, which come from the playbooks of Thatcher and Reagan. This is not an accident or a consequence the Government did not foresee. The Government's policy is driven towards making the whole housing sector a commodity which can be bought and sold in order that people will be slaves to it for the rest of their lives. That needs to end.
The Minister needs to support this motion and ensure that he acts on this. Yesterday evening, I watched the "Claire Byrne Live" show with the Minister of State, Deputy Peter Burke, fumbling his way through and coming up with answers nobody believed. It is time the Government copped on. People are seeing through the Minister in the context of what he is at. It is time he stated clearly that he will drive these vultures out of the country. Michael Noonan invited them in. It is time for the Minister to send them home.
Increasingly, the Government and that which preceded it have turned the State into a paradise for vulture funds. Contrary to what most ordinary people think, housing units are now viewed by the State as assets for the purpose of generating capital for investors ahead of building homes for workers. This may have come as a shock to many after what we saw happen in Maynooth. However, this has been a visible reality within communities across Dublin Bay South and inner city Dublin for years now. First-time buyers in communities like Ringsend, Kevin Street, Harold's Cross, Rathmines and even Ranelagh are all too familiar with seeing the same faces at each viewing, buying up home after home for a third party on behalf of these investment funds. Dublin Bay South has traditionally not been a strong support base for Sinn Féin. However, one of the key elements as to why Sinn Féin did so well there in the general election was down to the then Government's failure on housing. We had canvassers from Ranelagh and Rathmines. We got votes in those areas because people were fed up with the Government's housing policy. Anyone who thinks that a Fine Gael success in the forthcoming by-election in the constituency is going to be a slam dunk is going to be in for a surprise. The issue of housing has not gone away.
Those who were shocked at what happened in Maynooth were silent when the same thing was effectively happening in the inner city, with working-class families being pushed out right across the Docklands. In communities in that area, families had to watch their sons and daughters being pushed far outside those communities and having to live from them and their friends on foot of the actions of vulture funds and the big tech companies that rip communities apart. Once again, we see profit margins being allowed to reign supreme over local communities. As is often the case, these crises only seem to trigger outrage in the media when the issue transcends traditional class lines. Housing needs to be seen as a building block for communities not an asset from which to make financial profits.
There is no consensus on housing. We are certainly not as one on this issue. How could we be when one considers the Fianna Fáil and Fine Gael way? Ever since I became involved in politics, I have seen Fianna Fáil and Fine Gael bail this State out of its responsibilities in terms of building social and unaffordable housing. This Government and that which preceded it have left ordinary working people who work hard and want to own their own homes to the mercy of the market. The Minister has made sure that the private housing market is what comes first.
The victims in this are the people who get up early in the morning and work until late in the evening. They have no chance to buy homes of their own because of the Government's failures. Its affordable housing plan lies in tatters because it did not offer the necessary solutions. The Minister can shake his head but the people out there in the real world who are victims of the Government's housing policy and failures know it to be the case. We do not have to convince them. They are telling us every day of the week.
People who do not have access to social or affordable homes are seeing house prices and rents go up every week. Those struggling families who we represent and give a voice to are paying huge amounts of their income on rent. They cannot afford to save. For these hardworking people, home ownership is now beyond him because of the Government's failure. In the Ireland built by Fianna Fáil and Fine Gael, we have a situation where landlords come before tenants. We see this with rising rents year on year, month on month, and week on week. We saw in the past and we are seeing it again where banks are being put first above people who own their own home and are in mortgage distress. Now we see vulture funds and institutional investors swooping in to buy properties that should be available for people who want to own their own homes.
As a consequence, house prices are being pushed up. The Minister has no idea what it is like for the people struggling out there, who want to own their own home and need affordable homes. If he did, he would act. If he really wanted to take on these investor funds, he would.
As I have said time and again, people will only get some relief and see substantial change in the delivery of social and affordable homes when we do not have a Government made up of Fianna Fáil and Fine Gael, parties which put speculators, banks and vulture funds first, and when Deputy Doherty is Minister for Finance and Deputy Ó Broin is Minister with responsibility for housing. That is when we will see the substantial changes people need and the homes that need to be built for hard-working families.
The situation the Government has allowed to develop around housing is so horrific it is difficult to believe it is being allowed to happen here and now. When it comes to Fianna Fáil and property developers, the phrase "Catch me once" begins to form in the mind. I believe members of the public will agree with me when I say Sinn Féin is delivering a clear message today to Fianna Fáil, Fine Gael and the Green Party that the people will not allow themselves to be caught a second time. The shame in this belongs squarely at the Government's door. Let the message be clear and unambiguous - this Government must put an immediate end to the sweetheart tax deals that have facilitated wealthy investment funds in gobbling up housing at the expense of ordinary people attempting to get on the property ladder.
From the off, we have witnessed both Fianna Fáil and Fine Gael defending the tax advantages they have made available to these vulture funds, which squeeze out of the market first-time buyers such as those in Mullen Park in Maynooth. In my constituency of Wicklow, Glenveagh Properties is on course to secure over €60 million for the sale of 100 apartments at its Marina Village scheme in Greystones to the German investor, Realis. In the rental sector in Wicklow, renters are being forced to pay an average rent of €1,324.68 per month. Alongside the average rent in County Kildare, these are the highest rents in the country outside Dublin. The Minister refuses to put rent caps in place to tackle that. Why is that and who does it suit? The answer is simple; it suits the Minister's investor mates.
First-time buyers are being trapped in a purgatory of excessive rent from which they find it hard to believe they will ever escape. If and when they can afford to purchase a home, it often results in them having to leave their community in search of something affordable because in the Minister's world, €400,000 is affordable in County Wicklow. That is certainly not a world ordinary working families live in. When these people are forced out of their communities they leave behind their family supports and the social fabrics of their communities. This Government is responsible for one of the worst social disasters in the history of the State, the impact of which will most probably be felt for many decades to come. Shame on the Minister, his party and this entire Government of Fianna Fáil, Fine Gael and their colleagues in the Green Party.
There has been a housing crisis in this State for decades. It has many facets and it has been presided over by this Government and previous Governments. That is a fact that cannot be denied by the Government or its predecessors. They have presided over the chaos that is housing policy in this State. They have facilitated developers continuously, year in and year out, decade after decade. Even when developers went bang, Governments have stepped in and bailed them out.
There have been many facets to this crisis, as I said, but the latest one was predicted and the Government was warned about it, yet it took no action. In fact, the Government facilitated and encouraged international REITs and Irish real estate funds, IREFs, to come in and invest in housing in Ireland. The Government encouraged them to compete with ordinary workers in this State who are trying their best to get money together for a deposit and obtain the permissions they need to draw down a mortgage for what might be a starter home or, in some cases, a dream home or "forever home", as they are known. What happens when these people have everything in place? The funds the Government has encouraged overbid them because they offer sometimes €50,000, €60,000 or even €80,000 more per home than the poor Irish taxpayers trying to buy these homes can afford. That is the Government's policy; it is what the Minister has stood over. These people have been let down by the Government, yet we have heard the Minister's spokespeople say over the years that there is not a problem.
In my area, ordinary workers are now being asked for huge sums. The price on the market for a council house in Ballyfermot, for instance, is €300,000. Down the road in Crumlin, prices of €400,000 are being sought. This is for an ordinary corporation house. There is nothing wrong with the area. What is wrong is the price and the people who have presided over that are this Government and its predecessors. They have encouraged multinationals to invest through the REITs and IREFs to ensure normal working people cannot afford homes.
The Minister should think back to when he may only have had a few bob and was trying to get a home for himself. Even if he was trying to rent one of the houses I mentioned, it would cost him €2,400 per month to rent a council house in Ballyfermot or Crumlin. That is crazy. No ordinary worker can afford that. The Minister is saddling people with huge debts. Not only that, he is now encouraging these firms to come in and invest in Irish property so they can make huge profits without paying tax and without benefiting the State or society. It is time for this to end.
I move amendment No. 1:
To delete all words after “Dáil Éireann” and substitute the following:
“notes that: — the Government is fully committed to tackling high rents and ensuring an increase in the supply of affordable high quality rental accommodation through continued
significant capital investment, including Cost Rental and other means and in a manner that respects the security of tenure for renters by ensuring equity and fairness for landlords and tenants;
— the provisions of the Residential Tenancies Acts 2004 to 2021 relating to Rent Pressure Zones are due to expire at the end of December, and the Minister for Housing, Local Government and Heritage will bring forward comprehensive new protections for tenants, balanced with constitutional property rights in the coming months;
— the Government is committed to improving the security of tenure for tenants through legislating for tenancies of indefinite duration, subject to legal advices;
— the new Affordable Housing Bill 2020 sets out the legislative basis for Cost Rental for the first time in the history of the State;
— the first Cost Rental units will be delivered this year and significantly expanded by the Government over the coming years;
— the Government has increased funding and capacity for the Residential Tenancies Board (RTB) to help further protect tenants, and the significant ongoing sustained funding provided to local authorities to inspect rental properties and the strong legislative framework under which they currently operate has made a positive contribution to supporting the ongoing improvement of standards and to ensuring the availability of an increasingly high quality stock of rental accommodation in Ireland;
— as per the commitment in the Programme for Government: Our Shared Future, the new whole-of-Government plan for housing ‘housing for all’, that the Minister for Housing, Local Government and Heritage intends to publish later this year, will ensure that the provision of an adequate supply of high quality affordable rental accommodation remains a cornerstone of the Government’s policy under the plan; and
— the Government has provided, and will continue to provide, enhanced income supports and protections for tenants, particularly the most vulnerable tenants, that are necessary during this pandemic; and
— the Government keeps the operation of the Residential Tenancies Acts 2004 to 2021 under constant review and will make any necessary enhancement to the legal enforceability of RTB determination orders, in consultation with the RTB.”
I am pleased to speak on behalf of the Government. At the heart of my approach to housing is a simple argument that owning a home is good for individuals, families, communities and our country. It rests on a fundamental belief that persons earning a decent wage should be able to buy their own home. What happened in Maynooth last week was unacceptable. It flies in the face of that core Government policy and belief. It offends our shared sense of fairness that if one works hard, one should have something to show for it.
Our democracy is founded on the idea that our children can do better that us, just as our parents hoped for. We need a housing system that reflects this. I assure renters, those saving now for deposits and adults living at home with their parents - whom I have spoken about on many occasions since taking over as Minister - that the Government is taking action to stop this from happening. In opposition I brought forward legislation in this regard and flagged the matter as recently as April. The Minister for Finance, Deputy Donohoe, and I are reviewing options right now to make a real, positive impact in this space and together we will bring forward measures on behalf of Government to address this issue.
Over the past ten months, the Government has brought forward the largest housing budget on record and the most ambitious targets in the history of the State. These included €3.3 billion for housing alone and 9,500 new build social homes as part of a programme to build 50,000 new social homes over the term of this Government. The Government is the largest builder and player in this State in relation to the provision of homes. By the summer, we will have passed two major Bills, the affordable housing Bill and Land Development Agency Bill, both of which will put home ownership at the centre of the solution to our housing crisis. These are specific measures to help generation rent become a generation of people who can afford their own home at an affordable rate. These are real measures and policies, not empty rhetoric.
In July, the new Housing for All plan will lay out a comprehensive new vision for affordable homes as part of our overall housing strategy. We are levelling the playing field for first-time buyers to give working people a real chance to realise their dream of home ownership.
In contrast, the Sinn Féin Party, which has brought forward this motion, is pretending to be a friend of first-time buyers when everything it does points to the contrary. Its cigarette box affordable housing scheme excludes a nurse and garda on average income and comes with a major catch, which is that people do not own their homes at the end. Today Sinn Féin even attempted further delay by filibustering the affordable housing Bill at committee, which is landmark legislation that will be a leap forward in tackling the housing crisis. It is the most comprehensive legislation for affordable housing and from day one, Sinn Féin has tried to delay its progress and stop it in its tracks.
I will not abandon first-time buyers or use them as a political pawn like the Sinn Féin Party does.
This Government will help them out and I hope Sinn Féin will see fit to support the affordable housing Bill when it stops delaying its passage in committee.
Sinn Féin's political tactics are slash and burn, not build and renew. First-time buyers are collateral damage in that political game, which is what part of today's motion is. Its record on helping first-time buyers is all too clear. The party publicly opposed the help-to-buy scheme, which ensured 22,000 homeowners got keys to their doors. Deputy Doherty and his colleagues oppose that scheme and would scrap it. They opposed the Land Development Agency Bill, which brings about a land management agency to put the State's land to productive use to deliver affordable and social homes for working people. Sinn Féin opposes it.
It also opposed the shared equity scheme and housing development motions on 16 of 21 occasions at Dublin City Council. It has opposed 975 homes being built in Clondalkin, including 30% social housing. It opposed 500 homes in Tallaght, of which 80% would have been social or affordable purchase. It opposed 278 homes in Swords and continues to oppose 1,200 homes in Donabate, 238 of which are affordable and another 238 of which are social homes. That is what Sinn Féin is doing on the ground. They are more real examples of the Sinn Féin mantra of "I am all for housing but".
We now know what Sinn Féin is against but we never know of what it is in favour. The country needs approximately 350,000 new homes by 2030, with funding of over €120 billion. How much of this does Sinn Féin believe should come from the private sector? There is a giant hole in the Sinn Féin doughnut-shaped housing policy, and it is the private sector. Small and medium-sized builders will play a massive role in driving supply and this is key to addressing the crisis. In the Sinn Féin vision, they have no role but we need people to build homes. One would think, listening to Sinn Féin, such builders are not required and the party could not even bring itself to call for the construction sector to be reopened after the pandemic. This Government and I will use every tool in our armoury to get bricks and mortar put on the ground for homes that working people can afford. To have a real impact on this, we must have pragmatic measures with both the public and private sector. We cannot fight with one hand tied behind our back.
We should not allow one party's perfect be the enemy of the common good. Half-baked Opposition claims that the public sector could next year deliver 20,000 units are really the stuff of Legoland building. Sinn Féin claims it could deliver 20,000 public homes this year but Deputy Ó Broin will not say where they would be, how they would be built, who would build them or how long it would take. This completely ignores the reality of the pandemic. We can see the party's trenchant criticism of specific housing projects, which have real plans to deliver homes for working people, without even thinking about the party's misleading ownership schemes. Political grandstanding will not build new homes but practical policies will. That is what the Government is committing to do through our affordable housing Bill, our Land Development Agency Bill and the single biggest budget in the history of the State related to housing.
Inevitably, the pandemic and the current shutdown of the sector will have a severe impact on output this year. We will need to be imaginative in the coming months to drive on supply by tackling vacancies and improving delivery. Silver bullet solutions like this motion will not cut it but we can also put in place legislative foundations for a new approach to this crisis, where home ownership can be put right back on the table for a generation. It is the very subject I have spoken about since the day I took over as Minister. That has been smothered up to now by rising rents and job uncertainty. We will use targeted planning and taxation measures to protect buyers from predatory actions such as those we saw in Maynooth, and will ensure that private institutional investment is focused where it needed, that is, to boost supply rather than take from it.
I fully recognise that the Government must tackle this matter and we are committed to doing so in a real and effective way by putting home ownership in a central position and passing our affordable housing and Land Development Agency Bills and by launching and rolling out the very first cost rental affordable scheme in the history of the State. These are real measures that will take effect in this country.
I have met the Minister for Finance, Deputy Donohoe, and the Minister for Public Expenditure and Reform, Deputy Michael McGrath, and it is a priority for our Government to address the issue of bulk-selling of properties from under the noses of first-time buyers. We will take measures promptly to ensure a fix can be put in place. I hope that when measures are brought forward, the Deputies opposite who introduced this evening's motion will see their way to supporting them.
I also hope that when the Sinn Féin Party, in particular, and others look at the measures being brought forward by the Government with the affordable housing Bill and the Land Development Agency Bill, it will be honest with the people they purport to represent. Within those Bills are real measures, money and resources to support first-time buyers and ensure people can realise the dream of home ownership. This is a whole generation that has, for too long, been locked out of that market. It is a priority for the Government that people can own their own home at an affordable rate and have somewhere secure to call their own, whether it is to rent or buy. It is what we are focused on doing. We will detail further measures on how to protect first-time buyers in future shortly.
The Sinn Féin motion stands up for young people. It puts those young people and their right to buy a home ahead of developers and institutional investment funds. The Government's policies continue to fail young people caught up in this housing crisis caused by this Government and its Fine Gael-led predecessors.
The Minister said he had the solutions when he was in opposition but now he in government and is continuing to act in the same way as Fine Gael. He is dancing to the tune of the developers and investment funds. The Minister knows this is wrong because he wrote a Bill to tackle this problem in the previous Dáil. Tweaks and smaller changes will not work; he must ban these practices outright.
The Minister must give young people a chance and give them hope. People are angry and they have every right to be. The now famous parliamentary party meetings last week indicated Fianna Fáil is blaming Fine Gael and Fine Gael is blaming Fianna Fáil for this mess but the people know who is to blame. This was caused equally by both parties. Fianna Fáil and Fine Gael have been and always will be on the side of big developers. The Government could change this today. They could surprise me and support this motion.
I will leave it at this:
To whom do we owe our allegiance today?
[...] the faceless men who for mark and dollar,
Betray her to the highest bidder.
I know where my allegiances sit. They sit with the young people all over this country who are desperate to own a home of their own.
I commend my colleagues, Deputies Ó Broin and Doherty, on all of their continuous work on this issue. I would like to talk about the impact of investment firms buying up large swathes of housing in Ireland from the perspective of young people, and in particular those in their 20s. It is a group that sometimes gets forgotten about, not just in housing but in an awful lot of things in this country.
The ESRI’s Poverty, Income Inequality and Living Standards in Ireland report, parts of which were published today, points to a significant share of young people facing excessive housing costs in comparison to their incomes. That will not come as a surprise to any of us. It examines the unique set of circumstances facing young people who are, in the main, engaged in insecure employment and who have been forced by successive failure in housing policy by Fianna Fáil and Fine Gael Governments into a rental market with significant and acute affordability issues. I know housing affordability and availability is an issue that affects all age groups but for young people, the prospect of home ownership has collapsed in recent decades. The findings paint a stark picture of housing affordability for young people in Ireland in 2021.
The consequences of declining rates of home ownership for young people over several generations mean that these same young people are forced into the private rental market, where affordability has been aggravated by eye-wateringly high rents. Outside of the capital and in rural areas like my constituency of Carlow-Kilkenny, the private rental market has become increasingly unaffordable for many young people. That is if one can find a property to rent. It is nearly impossible to find a property to rent and it is impossible to afford it as they are in the region of €1,200 to €1,500 per month for Kilkenny and Carlow. One can forget about it if one is trying to find a place that will take the housing assistance payment, HAP, as one has no chance.
The Minister might not like it and he can have a go at us all he wants but everybody on the street knows the reality and the consequences of allowing investment firms to buy up huge swathes of homes in newly-built housing estates throughout the country. This is what has resulted and this is what we will continue to see unless it is stopped.
We have a housing policy that has failed. We have heard many times over the years of the consistent and constant failure to build council houses, affordable cost rental homes and houses that can be bought at affordable rates. We have heard all the stories in recent days: of people who are paying extortionate rates of rent; of those who are lucky enough to avail of HAP and who still have to pay top-ups; and of the huge amount of money we spend on HAP as a State. In 2020 we spent in or around €464.6 million on HAP. This is crazy. We are on the side of IREFs and REITs and we have facilitated them with tax breaks every which way.
It is all well and good to say that public expenditure can only cover X, Y or Z but there are many means of drawing down money, whether that is through Europe or private money, but it needs to deliver for people. We need to put a shape and structure in place that allow people to afford rents and to be able to buy affordable houses and in order that we produce affordable cost rentals. The system we have is utterly dysfunctional and is not working for anybody. There is talk about the Land Development Agency, LDA, being a solution and selling land to developers, as opposed to using our own land. Even if that is the case, we will be getting developers to build on it to produce what we need to produce. If we talk about an affordable housing scheme with houses at €450,000, where are we going? Everybody is being priced out of the market. We have a huge quotient of people who will miss their slot to be able to buy houses.
We hear from Fianna Fáil and Fine Gael that they are the parties of delivering for homeownership. They need to do it. I am not overly concerned about anything from an ideological point of view but let us be clear that what Fianna Fáil and Fine Gael have done to date has not worked and what they are planning to do will not work. Rather than make snide comments, it would be far better for them to read the real solutions that Deputies Ó Broin and Doherty have put together. We should stop the political backbiting and we could deliver for our people because we are failing them.
It was already hard enough for young people, people trying to start out and people trying to have a home of their own. It was already hard enough trying to pull together a deposit with extortionate rents and with housing not being available anywhere near them or their communities. It was already such a challenge for many workers. The Minister is making the argument that this is an issue that has appeared overnight and has just come to light. The Minister knew this was happening in many communities around the State and he wrote the rules to encourage the institutional investors. Workers who are paying rents that are through the roof are competing with these international funds that can buy up whole estates and gazump them completely. It is soul-destroying for people of my age who feel they have no hope of ever having a permanent home. For them, income limits for social housing have not been changed in years and many of them do not qualify for that. The possibility of ever having their own home or a mortgage is completely out of their reach.
Some of the talk has suggested that the Government is delivering and that this is a key priority. Let there be no mistake; we have supported many measures that have been productive and useful but where they are failing, we will criticise them and make noises. The Bill the Minister has produced will not deliver and his policies will not deliver. I hear talk of affordable housing with prices up to €400,000 in Cork city. That is like Marie Antoinette and let them eat cake to people. It is Monopoly money to people. It is not anywhere near the mark to charge €400,000 for an affordable house in Cork city. It is beyond any imaginable reach for ordinary workers and families. This is one thing the Minister needs to do. There is an awful lot more and it is focused on cost rental and public housing but he needs to ensure that the advantage and incentives he has given these funds are removed.
I welcome the opportunity to speak on this motion on behalf of the Labour Party. I heard the Taoiseach say this week that the issue of housing is the biggest issue facing young people and I agree with him. It is also the biggest issue facing our society more generally. Precarious housing and precarious work produce precarious lives. Precarious lives destroy communities and wreck social cohesion and they will destroy our social contract.
The Minister made reference in his contribution to the fact that it used to be the case that if one studied hard, worked hard and saved hard, one had a shot at owning one's own home. This is no longer the case for far too many people. I have said time and again before this awful pandemic hit that this generation that was born in the 1980s and the 1990s was likely to be the first since Independence that was destined to do less well than their parents. The ESRI report published this morning confirms that to be the case. It makes for harrowing reading. On all the metrics such as housing, pay and decent work and life opportunities, younger people have been the casualties.
Fine Gael has told us in recent years that things are going ever so well. On GDP terms we are but if one looks under the bonnet it tells an entirely different story. The economic and financial disaster that was inherited from Fianna Fáil in 2011 was fixed, in no small part, by the work done by my party, and by Fine Gael I must acknowledge. It turns out though that the sacrifices made then brought about a recovery for some but left a whole generation behind, the generation at least facing the risk of being left behind. Household wealth has grown enormously since 2013. This is down to year-on-year growth in house prices and supply is a factor here. Fine Gael knows where its electoral and political market is. We are two Fine Gael housing Ministers later, all tacitly backed by Fianna Fáil.
During those years, we failed to build the public, private and affordable homes people need. We failed to make renting secure. We failed to see sufficient caps placed on ever-escalating record rents.
Fine Gael is in an ideological cul-de-sac and it now has a Fianna Fáil Minister cornered and captured. This is truly no country for young people. Is it any wonder that REITs and IREFs have declared open season on Ireland? These faceless monster investment funds have it every way. They are hoovering up everything in sight and are now outbidding would-be first-time buyers in areas such as my home town of Drogheda. The longer the supply problem exists, the better will be the yield for these funds' investors. These funds exploit tax rules introduced in a certain context in 2012. Those rules have remained largely untouched since, with a small exception or two. Almost ten years on, and in a fundamentally different housing market and environment, it is high time that time was called on certain activities of these funds. It is morally unjust and politically indefensible that REITs and IREFs pay the same percentage rate of stamp duty on residential purchases as typical first-time buyers. Even Boris Johnson's Conservative Party cottoned on to the impact of REITs and slapped a 15% rate of stamp duty on them, with additional surcharges in some cases. If the political will exists in the Government, this and other very targeted tax measures could be taken to soften the cough of these vehicles that are, frankly, drunk and out of control on tax breaks.
It is also open to the Government to change the tax rules that apply to these structures. REITs elect to be considered REITs by Revenue. There are clear rules that need to be complied with for a REIT to benefit from exemptions such as those relating to corporate tax and capital gains tax. These rules can be amended and aligned with Government planning on housing policy in a targeted way to restrict or, indeed, end the activity that we all say we are so concerned about.
My colleague, Senator Rebecca Moynihan, has proposed a number of key measures that would be game changers for renters, for the provision of public, private and long-term rental homes and for first-time buyers. She has also made some very important points about the way in which housing is discussed, the narrative around it and how it is almost always presented through the lens of a couple, and more specifically, a couple who are first-time buyers. Housing is an issue for everyone. Let us not forget the 400,000 people who live alone and those who want to remain as single-person households. They also need security, certainty and a chance to own their own place.
Senator Moynihan was not playing games when she pledged last week to introduce a Bill from the artist formerly known as plain old Deputy Darragh O'Brien before he entered the Customs House. That Bill has been submitted this week in the name of Deputy Duncan Smith. We submitted it because we believe it has potential, if amended, to be a fix for the problems we are experiencing. The submission of the Bill is also designed to keep the Minister honest.
Our view, expressed long before we reached this sorry pass, is that we need a complete and fundamental culture shift on the provision of housing and how we view housing policy more generally. Housing ought not to be a commodity to be traded. It is not a status symbol. The only ladder we should associate with housing is that one we use to clean our windows. The financialisation of housing has destroyed lives and communities. Let us get back to building good well-designed homes and integrated communities and not just units, in the language of the business, informed by cost and profit motive.
I also have a word of warning for the Minister. The kind of investment we will need for an ambitious public home building programme will require unprecedented levels of State capital investment. At present, we can borrow money at negative interest rates but EU spending strictures, which owe more to an economic experiment from the financial crash than to the circumstances of 2021 and beyond, could see us straitjacketed.. At the same time as we are prevented from borrowing, the European Central Bank and other central banks are flooding the markets with cheap cash. There are vast amounts of money circulating the world in search of investment. This includes investment in developing land and housing. The net result of this is a bidding war for capital assets, which inevitably is causing capital asset inflation.
The real effect of these investment funds outbidding each other is the impact this is having on potential first-time buyers in Ireland. This is the real world impact. This is the effect. The double whammy is that, on the one hand, Europe, through its lending, fiscal and monetary policy, is funding the investors who are driving up the price of Irish houses while, on the other hand, through its borrowing policy, it is preventing the Government from borrowing in order to build sufficient numbers of public and affordable homes. It is as if Europe were selling discount weapons to its enemies while imposing strict disarmament upon itself. No one could argue that the combined effect of these two policies was ever intended or that it is sustainable. Frankly, it needs to change.
My firm view is that if the future of the EU is to be a strong entity to which we can all give our support, and I do, then after the pandemic we will need a Marshall plan investment approach to rebuilding our economies and to building the homes, social infrastructure and secure jobs on which social solidarity and national and EU cohesion depend. This requires the type of investment that, frankly, anachronistic EU fiscal rules, which are completely outdated as they are structured, do not allow. This needs to change to help us reach our ambitions for Ireland in terms of capital investment in housing and infrastructure to make sure we can rebuild our economy and rebuild our society and build back better.
I thank Deputies Ó Broin and Doherty for tabling the motion. I was looking forward to hearing what the Minister's proposals and solutions would be. I was disappointed that instead he used most of his time to engage the usual attack on Opposition parties. That is probably designed to deflect and avoid responsibility. I would like to hear more proposals. Last week, we were promised by the Minister that there would be action this week. I hope he will carry through on that promise.
The Bill the Minister tabled in 2019 when he was in opposition, and which was referenced by Deputy Nash, is far too weak. Its ambition is to allow only 0% to 30% of new development land to be reserved for first-time buyers. If we were starting at 30%, we might be going somewhere. There is also the fact that the Bill looks at land and not the number of homes. It looks at a percentage of the land. It would be quite normal in a development to have the higher density homes occupying most of the land and the lower density homes being sold to individual buyers. This aspect of it needs to be changed. Part of this needs to come from the planning side but this will take years to kick in. It will take far too long. We also know there are weaknesses in the planning system with regard to enforcement. This can only be part of the solution.
The Minister correctly stated that there needs to be a very strong role for small and medium builders in addressing housing supply and yet there are reports today that the home building finance agency is funding large developers to build homes to sell off to investment funds and cuckoo funds and in the process is squeezing out small and medium builders.
In 2010, 76 individual homes were bought by institutional investors. In the first quarter of this year, a record €696 million was spent by cuckoo funds, which means €53 million a week was spent on buying up homes. At the same time, we are seeing that each successive generation is less likely to own their own homes than the previous generation. In the past decade, Irish house prices rose by just under 30%. At the same time, rents increased by more than 60%. In Dublin, rents have risen by 85% since early 2011. This increasingly means that investors will get a better return on renting out homes than on providing them for sale on the open market to individual buyers. This is part of the problem.
A paper published by Dr. Michael Byrne of UCD's school of social policy, social work and social justice on institutional investment and the private rental sector states demand on the part of international capital for real estate assets in Ireland appears to be virtually insatiable. How does he reach this conclusion? He looks at the yields that investors can get in Ireland from the rental sector. He notes there is consensus that the yields are at 3.75%. These yields are higher than the European average yields in the rental sector, which are at 3.25%.
It is not surprising that they are higher because our rents are among the highest in Europe. Rent for a one-bedroom apartment in Dublin is higher than anywhere else in the European Union.
Irish yields compare favourably to Irish sovereign bonds which are in negative territory and they compare favourably to EU sovereign bond yields which were only 0.3% in 2020. These conditions, which include some of the highest rents in Europe, make investment in the private rental sector very favourable for investment funds. They do not need favourable tax treatment on top of that to encourage them. The imbalance that this has created means the Government needs to do the opposite. It needs to dampen the returns for institutional investors from the private rental sector to rebalance housing construction and give people a decent chance of being able to buy their own home.
The analysis that I was referring to by Dr. Michael Byrne from UCD shows that there is consensus in the property industry as to why investment in the private rental sector is such a good option for investment funds. CBRE Ireland stated: "The fundamental issue supporting the investment thesis ... is the inherent supply demand balance in the residential sector". Sherry Fitzgerald stated: "The fundamentals which underpin PRS [private rental sector] demand remain strong, most notably favourable demographic and economic trends, together with a supply shortage, which has been an enduring feature of the market in recent times." Irish Residential Properties REIT stated: "There remains a clear and significant supply and demand imbalance for all tenures of housing in Ireland." A 2020 report by GillenMarkets, a Dublin-based investment advisory firm, stated that Ireland's policy has "benefited ... institutions and developers at the expense of individual buyers." The same report notes that the biggest risk facing investors in Ireland's property market is Government intervention aimed at improving housing affordability. As such, not only is institutional investment supported by favourable tax treatment and investment conditions, it is also supported heavily by a lack of supply to meet demand and a lack of Government intervention to ensure housing affordability.
These are not the only supports for this type of investment. The list goes on. There is a range of direct State financing and support for this type of investment. Fianna Fáil and Fine Gael have told us that we must have cuckoo funds in order to provide finance for housing. What they did not tell us is that the State is providing some of the funding to build housing that is then sold on to these investment funds. I already referenced the reports today from the Home Building Finance Agency, which is financing large-scale rental developments that are then being sold on to investment funds. Funding for the agency is coming via the Ireland Strategic Investment Fund, ISIF, from which funding is also going straight into supporting this practice. In addition, long-term leases from the State are guaranteeing rents for many of these investment funds.
According to Dr. Lorcan Sirr of the school of real estate and construction economics at the Technological University Dublin, local authorities are offering exceptional terms to lease new builds from funds, offering rent guarantees, property management and an obligation to return the houses as good as new after 25 years. Dr. Sirr described the deals as "unbelievably good." I hope we hear from the Government this week what action will be taken on this issue. Analysis by the Dublin Inquirerof over 12,000 apartments and homes in Dublin city owned by institutional investors showed that 76% of them were already built when they were bought out by investment funds.
In addition to all of the measures the Government is putting in place to support investment funds, the favourable tax treatment, the lack of intervention on affordable housing, the favourable market conditions, the excellent yields that investors get and the long-term leasing, the Government has also created another incentive for investors to come in and buy up homes. In the immigrant investor programme, the only thing someone has to do to get a passport and citizenship, including for his or her family, is buy two homes valued at €500,000 each. That is why we saw people taking to Twitter last week to say that every time they tried to buy a home, they met the same people who outbid them as they tried to buy up homes for international investors as part of these schemes. If the Government is serious about this, it should exclude house purchasing from this programme immediately.
Another aspect of this is the vacancy created by some of these institutional investors. Reports from RTÉ show that in two developments belonging to Kennedy Wilson where rents are just under €3,000 a month, at Clancy Quay in Dublin 8 and at Capital Dock, vacancy rates have been up to 50%. With more than 8,000 people in emergency accommodation, including more than 2,000 children, these homes should be put to use and to do that, the owners would have to lower the rents. It is imperative that the Government bring forward a fast and effective vacancy tax to prevent such vacancy from occurring. It has completely failed on this issue.
The Government can do a huge amount to fix this problem. It is doing a huge amount right now to encourage these international investments. We need action on this issue quickly.
I thank Sinn Féin for using its Private Members' time to raise this important issue.
The Government has learned absolutely nothing from the disastrous mistakes that have led to the current housing crisis. The two mistakes were the disastrous decision to invite in the vulture funds, cuckoo funds and speculators, particularly in 2013 and 2014, and the simultaneous and equally disastrous decision by the Fine Gael-Labour Party Government to essentially stop the building of public housing directly by local authorities. Fianna Fáil started those mistakes when it set up NAMA and increasingly outsourced and cut back the provision of social housing. However, Fine Gael and the Labour Party turned a bad situation into a disaster in 2013-14 with the two decisions to stop building council housing and to bring in the vulture funds with tax incentives, etc. Those are the reasons.
First, NAMA handed over more than €40 billion worth of land and property assets to these vultures, giving them significant control over the market. It gets worse, however, because these funds are now buying up new builds. We are now being told that despite the disastrous situation these vultures have created, we cannot do without them.
You only need to google the profits of some of these entities - anybody can do it - to see what enormous fortunes they have made. The worse the housing crisis is, the more valuable their assets are, the more profits they make, the more rents they can charge, and the higher the prices of the properties they sell. It is a simple equation. While they control the market, they have no interest in solving the housing crisis. This is the simple truth the Government does not understand.
Now the Government wants to compound this disastrous situation by not only allowing these funds to have control of the private housing sector but to open up the public land bank to them with the Land Development Agency Bill that will go through next week. I cannot ring the alarm bells enough for the public out there about what the Land Development Agency, LDA, is. This is letting the fox into the hen house to plunder all of the public land bank. The one thing that could dampen the market and counteract the influence of these people is for the State, on a large scale, to build its own stock of public and genuinely affordable housing.
I see the Minister, Deputy Darragh O'Brien, nod and then I look at the figures for 2020. Last year, 269 council houses were built in the four local authority areas in Dublin where the crisis is most acute. The figures in Galway, Cork and so on are similarly pathetic.
In Dún Laoghaire-Rathdown the number is zero. Zero council houses were built. A few were provided by AHBs and most of the rest were provided through HAP or the rental accommodation scheme, RAS, that is, outsourced to these funds that are making a fortune. The result is situations like that faced by residents in St. Helen's Court in Dún Laoghaire, which has been going on for four years. The property was sold by NAMA to Apollo Global Management, represented by PwC. It was flipped on to Mill Street Projects Limited, which has made four attempts to evict the tenants. Some tenants have been driven out while others - ordinary working people - are accused of over-holding and are facing homelessness. The owners want to drive up the value of the property but what has the Government done to stop this? It has done nothing.
What we need is to start building public and affordable housing on public land. We also need punitive taxes on vacant properties and vacant sites and rent controls. We need to stop the tax breaks for these vultures and to completely exclude them from the housing market. Were we to do those things, we could start to solve the housing disaster the Government's policies has created.
I thank Sinn Féin for tabling this motion. Fianna Fáil's response to this crisis would be laughable if it was not so serious. It was summed up in a tweet by Fianna Fáil MEP, Billy Kelleher, who effectively pointed to what was happening in Maynooth and said "something" must be done but this is Fianna Fáil's policy. It is Fianna Fáil and Fine Gael policy to incentivise the vulture and cuckoo funds to come in here. Now that the chickens are coming home to roost, the approach of Fianna Fáil is to wring its hands and say that something must be done while simultaneously not doing what obviously needs to be done in terms of excluding these funds from the housing sector. This week we learned that not only is the Minister for Housing, Local Government and Heritage refusing to ban these cuckoo funds, he was actually an early investor in the cuckoo funds. No wonder he would not evict the vultures; he is one himself.
Fundamentally, the housing crisis comes down to a very simple question, namely, which side are you on? Are you on the side of those struggling to pay rising rents or the corporate landlords making a killing with unprecedented income? Are you on the side of those trying to buy their first home or the cuckoo funds buying up whole estates? Are you on the side of the half a million young people still stuck at home or of the developers who are making massive profits? Fianna Fáil and Fine Gael policy has been to invite, encourage and incentivise these vultures into the so-called housing market to turn this country into a cuckoo land.
The outpouring of anger over the last week should be just the beginning. We need a mass movement on housing to scrap all the tax incentives offered to REITs and other investment vehicles and ban them from buying up housing here. Instead of a Government that serves the interests of the landlords, vultures and cuckoos, we need a left Government with socialist policies that will take on the vultures, kick them out and serve the interests of working-class people.
Leo Varadkar rolled out the red carpet, Mícheál Martin opened the door and seated the guests while Eoghan Murphy poured the wine but now the Government is throwing its hands up in horror because the guests are eating too much. What the hell did it expect? It gave them everything they wanted. It gave them tax breaks on corporation tax and on capital gains tax. It gave them what they wanted on the rent roll and on stamp duty. Last week the Government said it was going to sort it out but it has not been sorted out yet. It is not a question of clipping the wings of the vulture funds; we want them driven out of the nest, out of the housing market. We need housing for people, not housing for profit. The Government must reverse all of those tax breaks as an immediate first step.
There was some interesting commentary during the week. One chap from County Kildare, who announced his intention to vote Sinn Féin at the next election, although he did not express too much confidence that it would fundamentally change things, said that he wanted a Government to support a policy of not lining the pockets of developers with crazy lease agreements. He wanted a Government that would not put him in a position of choosing between paying some amateur clown's second mortgage or renting from a faceless institution, both insanely at a rate of between 120% to 150% of a typical mortgage on the same property. A poster on Twitter today said that the really problematic joint for young people's mental health is the need for a joint income to get out of their parents' house. A big conversation has started about this. The Government says that housing is now its number one priority. Housing has been the number one priority for a huge number of working people, especially young people, for quite some time. They have more or less got their cards marked at this stage but they will watch this Government to determine which side it is on. Unless the Government shows - I do not believe it will - that it is on the side of working people and young people rather than speculators and cuckoos, then the housing issue, which is a ticking time bomb, could actually blow this Government up.
I thank Sinn Féin for tabling this motion, although I do have some sympathy for Fianna Fáil as it has been left with the disastrous housing strategy of the previous Fine Gael Government. We now have a planning policy primarily based around transport and climate change for rural towns where no public transport infrastructure exists. We have a policy that has little regard for the social consequences for future generations of low-income families and one that has not been reconsidered in light of the massive changes in society as a result of Covid-19. This policy will change the supply of housing, drive up house prices and destroy towns in rural Ireland. The policy does not, in the majority of cases, allow the building of family homes with front and back gardens. The World Bank has said that the merits of the policy are by no means clear and that it was not evident that its objectives were desired by the majority of urban residents. This policy has failed everywhere and was abandoned by the British in 2010.
On 1 April I addressed the issue of a missive from the Office of the Planning Regulator to Wexford County Council where clearly, the regulator was acting ultra vires. Subsequent to that contribution, the regulator issued a deluge of diatribe to the press saying that I was misleading and inaccurate, which is complete rubbish. I had the opportunity to challenge the regulator yesterday when he made a presentation to the Regional Group. The man is incapable of answering a question. It is now clear that the regulator is misleading councillors and politicians the length and breadth of this country. He is completely ignoring the Minister's circular on density issued on 21 April, clearly-----
I am loath to interrupt because it could be argued that you are making a political charge but you are effectively making a serious charge against someone outside of the Houses-----
I am being very careful. I have spent a lot of time on this. He is actually misleading people and refused to acknowledge that yesterday when the evidence was presented.
He has presented a letter to Wexford County Council contrary to what the Minister sent to Wexford County Council and refuses to acknowledge it. I will continue, a Cheann Comhairle, bearing in mind that we have had an interruption.
Subsequent to my speech on the floor of the Dáil floor on 1 April, I procured the opinion of former Attorney General and senior counsel, Senator Michael McDowell. His opinion concluded the regulator was and is acting ultra vires. I put that to the regulator, from whom I received no response. I am not alone in my view on the regulator's thoughts. Senior counsel for Cork County Council, in judicial review proceedings, described the regulator's recommendation to the Minister as unlawful, flawed, irrational, of no legal effect and without jurisdiction.
On the same subject, from which the Ceann Comhairle will be glad to hear I am moving on, last night on "Claire Byrne Live", we heard the Minister of State, Deputy Burke, talk about high-density developments and, in the same breath, about family homes of three or four bed semi-detached houses, probably with gardens. Clearly, the Minister of State is asleep and has not read his own guidelines.
The specific planning policy requirement, SPPR 4, which Mr. Justice Collins referred to as unimplementable, is a specific planning policy requirement - I want the Ministers to listen carefully - to "avoid mono-type building typologies (e.g. two storey or own-door houses only)". This is the policy of the compact, high-density development that is to apply to every town of more than 5,000 people. Watching the Minister of State last night, it was as plain as a pikestaff he was not aware this SPPR 4 existed. It makes no provision for three or four-bedroom homes. Three or four-bedroom semi-detached homes of the type the Minister of State envisages can be developed in the range of 20 to 30 dwellings per hectare. His policy provides for 35 to 50 and not less than 30, according to the regulator, so I do not envisage any three or four-bedroom semi-detached houses.
The Minister and the regulator refuse to allow local authorities to adopt planning policies to provide for family homes. When will the Government wake up? This regulator will have the policy enshrined in every county development plan before it realises what has happened. The SPPR 4 must be abandoned. It is clear the regulator is the fox in the fowl house of, what is now, Fianna Fáil's housing policy. The consequence of his interpretation of the Minister's guidelines will choke housing supply. It will put an end to family homes, increase house prices and create the ghettos of tomorrow. It is the policy that will create the tribunals of tomorrow.
The regulator has refused to debate with me on national radio. Being the cute fox he is, when he is challenged he recoils to his little office in Grangegorman, or probably a big office which is bigger than some of the houses he is proposing.
Who is regulating the regulator? It would appear from his presentation to the Joint Oireachtas Committee on Housing, Local Government and Heritage, he is the Steve Silvermint of planning. He has come to save us from the darkest days of the planning tribunals. I hope the Taoiseach will not be faced with the surprise that faced him in this House last week, when he realised the effect of the policies of this Government in real terms, in that county councils are taking long-term leases from cuckoo funds.
The Government needs to have an epiphany in relation to the planning regulator and deal with the red fox in the fowl house. If it does not, there will be few if any family homes. Towns will be ghettoised and there will not be a GAA team left in rural Ireland.
I apologise to my colleague.
While the housing crisis seems to have caught the imagination of everybody in a very short time, it has been with us but has been hidden behind Covid-19 for the past year.
There is a huge emphasis on new houses, but we have a challenge and a potential within that challenge, in that we have over 2,000 vacant properties in this country. The Society of Chartered Surveyors Ireland has stated that 75% of the space above ground floor retail in Dublin is empty. There are reasons all of that is happening. When we are looking at policies or ways to get houses built and young people and first-time buyers housed, there is potential to do things quickly.
As I have said previously, the help to buy scheme should be expanded to include first-time buyers of vacant properties in order that they can bring them back into use as homes, especially in our towns and villages. If we do that, there will be a threefold benefit. First, first-time buyers will have a home at an affordable price. Second, we will rejuvenate our towns and villages by bringing these houses back into use. Third, we will reduce our CO2 emissions because we will have the foundations in, the walls built and the roofs on the houses. We need to spend the money on retrofitting these houses and assist in that regard. We have a deep retrofit scheme and we should encourage first-time buyers to use it for these properties.
If we are serious, we have options other than creating policies and a land development agency which will develop sites and so on. The reality is the cost of building new houses is way beyond the reach of most people, whether it is couples or single people trying to get a mortgage. It is not the fault of developers or anyone, but we are now building houses to a standard that is increasing the cost.
We need to look at this issue in a rational way. How else can we do this? There is no town or village in this country that does not have vacant properties. We need to incentivise first-time buyers to get involved in taking over these properties, creating homes, regenerating towns and, at the same time, helping the Minister to solve this problem and doing it quickly.
I thank Sinn Féin for bringing forward this important motion because this is such an important issue. It is beyond belief that, in the world we are living in today, these groups can come into Ireland, buy up vast amounts of property, earn money and pay no tax. I just cannot understand that. I cannot understand why a government - past, present or future - would want to allow that to continue. Why would it want this unfair advantage to be given to companies over our own people who want to buy their own properties?
I deal with young couples every day of the week who are starting out in life, working hard and want to get on the property ladder by purchasing their own homes but are being denied that opportunity because the property prices are rising so much due to these groups coming in and buying hundreds of properties at the same time.
It is unhelpful - I heard it earlier - to hear speakers who are opposed to this motion attacking Sinn Féin for highlighting this matter tonight. I do not agree with that. It is not a good way to do our business. Everybody here should support this motion and, failing that, they should make amendments if they think they can make it better. They should not criticise it for the sake of criticising it because they do not like the fact that Sinn Féin is bringing it forward. That is not right. I do not care who brings forward the motion. I believe it deserves to be supported.
We should be making it possible in every way for our young people to get on the property ladder and for work to be rewarded. I hear people saying prices of €400,000, €450,000 or €500,000 are affordable. They are not affordable homes. It is not realistic for young people to purchase or get a mortgage for that amount. The banks are making it extremely difficult for young people.
I deal with young couples who are working diligently, have two wages coming in and have saved as much as they can but they are still being denied a mortgage. That is not right. It was easier to get on the property ladder many years ago when people had less money. That is not right and does not make sense. I ask the Minister to please take on board the merits of this argument and what we are trying to achieve here for young people.
I thank Sinn Féin for bringing forward this very important motion. The Ministers for Finance and Housing, Local Government and Heritage know as well as everyone else that these investment firms are bidding against young couples for single houses and blowing them out of the market. That is wrong. The Ministers are saying they are going to rectify it and I hope they do that because they must.
Young couples are facing many real obstacles to put a roof over their heads. First, there is the problem of getting planning permission and zoning. They go through hell and high water to get planning permission. The planning regulator is not being fair and is dezoning land. In one instance a few years ago, Mick O'Connell, the best footballer that ever graced the fields of this country, got Killorglin Town Council to vote to zone a bit of land for him for a small number of houses. The planning regulator did not even know where Valentia Island was but he insisted that Kerry County Council rescind that zoning and Mick O'Connell was stopped in his tracks.
There are other issues, for example, the increase in material costs, as well as levies and taxes. We have great local builders like Michael Jack Cronin, who has done great work in recent times. The Government must go back to the traditional way of house building, which was to give the local authorities funds to build houses. The Government is also blocking the tenant purchase scheme and stopping tenants from purchasing their houses, which they did traditionally over the years and there was nothing wrong with that. Any house built since 2015 is not allowed to be bought out. We should go back to that old system. The banks are messing people around.
Fianna Fáil and Fine Gael have blamed each other for the current housing crisis, which has seen thousands of homes end up in the hands of global investment funds. These funds are commonly referred to as either vulture funds, which tend to buy up distressed mortgages, or cuckoo funds, which are buying up new housing estates and apartments and of which every person in the country is now well aware. If this matter were not so serious, one might be forgiven for finding it rather amusing, or even childish. If Fianna Fáil and Fine Gael are looking for someone to blame, they should look inwards for they are both to blame for this issue. This crisis, which will likely worsen, is inextricably joined at the hip with the banking crisis of over a decade ago. Let us not forget what is happening in our local towns and villages, where Bank of Ireland branches are closing, including one in Bantry and another in Dunmanway in my constituency.
Much has been made over the past week of the fact that global investment funds are buying up entire housing estates and apartment blocks in Ireland. Such unethical activity is depriving families and young people of owning an affordable home and is driving up prices, on both the rental and purchase sides. In my constituency, there are people trying to rent, buy a property or build a home but it is impossible. Sadly, the same mistakes have been made every single day at Government level.
Who are these investment funds? Many US, EU and, increasingly, Chinese investment funds are investing in Ireland. While investment should generally be welcomed, when that investment becomes number one in the world for tax evasion purposes, it should be questioned. For instance, these funds have been given unique tax treatment. They pay no tax and are given an array of special incentives by the Government. It is like a loophole in the law.
There is another very serious issue on which the State has to step in. In Baltimore an individual is buying between 25 and 55 acres of rock on some hill, which is of no benefit to anybody, and then selling every acre on DoneDeal for €5,000. All sorts of unsociable people are purchasing a piece of rock for €5,000 and turning up in a beautiful place like Baltimore. I ask the State to intervene on that issue, which I will be taking up with the Minister. The crisis that has emerged in the last week is scandalous beyond belief.
I thank Sinn Féin for bringing forward this motion. The Minister for Housing Local Government and Heritage, Deputy Darragh O'Brien, Deputy John McGuinness, mé féin and Senator David Norris, with the help of Edmund Honohan, the highly respected Master of the High Court, brought forward the Affordable Housing and Fair Mortgage Bill in 2018. The skullduggery and blackguarding that went on inside Fianna Fáil to nobble Deputy McGuinness and stop that Bill in its tracks, from the Taoiseach down, was nothing short of scandalous.
It was said earlier that today is Seán Lemass's 50th anniversary. Fianna Fáil was the party of house building and home building and looking after the ordinary people, na daoine óga agus na daoine beaga. Where is it gone? I thought Fianna Fáil learned something from the housing crisis, the bust and the brown envelopes of the Celtic tiger. The Minister, Deputy O'Brien, is no longer here. A blind man could see what is going on. People talk about cuckoo funds. A cuckoo used to live in Kilnacarriga in the purple heather. It made a lovely sound. It is an insult to call these funds after that wonderful bird, which is welcome to our shores every year. The cuckoo funds are not welcome and nor are the vulture funds that came before them.
This issue has been going on since the banking crisis, with people being turfed out of their homes down in the courts. All through the pandemic, people were being evicted and homes were being taken off people. Banks are now putting properties and farms up for sale on the web at midnight or 11 o'clock at night. The first the owners know of it is when a neighbour sees it and rings them up, then it is gone and sold to a vulture fund. This is a brazen sell-out of our people, who Dan Breen, Seán Treacy, Seán MacDermott and Pádraig Pearse fought for. The Government should be ashamed to claim to represent a democratic Ireland under this kind of watch. It welcomes in all these gangsters and funds that are raping and plundering our country. We kept Cromwell out of parts of Tipperary but now we cannot do this on our own, in this modern-day democracy. We celebrate the centenary of independence this year. My God, they are turning in their graves. It is so sad.
This is not rocket science. Prices are spiralling for people who want to build their own houses. The cost of insulation has spiralled because of the carbon tax the Government has imposed. The Government does not have the foggiest idea. This is criminal and Government members should be brought before the Nuremburg tribunals for destroying our people and driving them to suicide due to their mental and physical health issues. Above all, the Government has had the cover of the famous plandemic for the last 13 months. It thought it could extend it and hide everything behind it but now it is being found out because the foxes, bears and otters are inside the hen house and all the hens are being plucked. The Government will be plucked too.
I thank Sinn Féin for bringing forward this motion, which I fully support. I missed the beginning of the debate so I am not sure whether the Government is agreeing with the motion. The Minister might clarify that.
I am sick and tired of the mantra and ideology coming from both Fianna Fáil and Fine Gael, through the Tánaiste and the Taoiseach, that we are ideologues on this side of the House. I have repeatedly said that I am a proud Galwegian and a practical, pragmatic politician. Since the day I came into this House in February 2016, I have begged and implored, tabled motions with my colleagues and joined with other motions, to highlight the housing crisis. We have appealed to the Government to have a referendum and place the right to housing in the Constitution because a home is a basic human right. The most fundamental things required by people are shelter and security so that they can participate actively in a democracy. Both Fianna Fáil and Fine Gael have repeatedly demonised us, laughed at us and placed us in a box - all inappropriately - to justify their housing programme, which is not sustainable.
In Galway, people have been on a waiting list for a house for 15 years. I do not need to exaggerate because the figures speak for themselves. Once, councillors could go with applicants to the city council and give them some hope, telling them that if they did their time on the list they would get a house in seven to ten years. At least they could do that.
Not alone is that chance gone, but now the council will not even facilitate us with a meeting. That is now gone completely, and was gone well before the onset of Covid-19.
We had a construction programme in Galway. It is important to give a context because this crisis has not just arisen. Someone referred to it as just becoming more focused lately. This is a crisis which has been created by ongoing Government policy. The policy was to stop building public housing and to hand over the process, lock, stock and barrel, to investment funds with various names to look after homes and provide them in any manner they saw fit. That is what happened.
I spent 17 years of my life at local authority level. We fought to make it more accountable. We fought to get quarterly reports, which, in fairness, the management gave us. It told us what the problem was, the solution and the construction programme. From 2009 onwards, the category for housing construction was suspended. That continued in 2009, 2010 and thereafter until April 2019 when the Government was forced to set up a task force. I have begged and implored the Minister for access to the various letters and he has finally given them to me. I would not call them reports. I thank him for giving them to me and I have read them all. I would have thought, however, that a task force, by its very nature, was a recognition that there was a problem, and that the nature of the problem would then be analysed and solutions devised. What seems to have happened here, however, is that the task force is ongoing, with many meetings receiving many presentations. However, that could have been done at council level. What we wanted from a task force was an analysis of the problem. The Minister does not have to agree with me but surely an analysis of the problem is the most basic requirement before we can deal with the solution.
I will raise again the Simon Communities in Ireland report. It regularly does a three-day snapshot. In March 2021, its snapshot looked at 16 areas all over the country. With regard to Galway, it found "There was an average of 65 properties available to rent in Galway City Centre over the study period, similar to the 62 properties available in the December 2020 study". Can we imagine that? It also noted that only two properties fitted into at least one housing assistant payment, HAP, category. This was "the first time a property has been within a HAP limit in six study periods". We will return to the HAP in a minute. Even with the system in place, however, no houses are available under any of the categories in Galway, except one or two.
All the details about Galway are here in the Simon Communities in Ireland report, Locked Out of the Market Study March 2021, in table 12 for Galway city centre and table 13 for Galway city suburbs. I invite the Minister to look at those tables. Before he makes comments again about those of us on this side of the House being ideologues, he might look at this report and make his comments relate to reality. The reality is that we are down to one or two properties being available under the HAP limits in Galway city, and that has been repeatedly the case with these snapshot studies. In addition, rents in Galway have gone up and up. They came down a little in Dublin but have gone up by 4.6% in Galway city.
Some progress has been made, and I thank the task force and management in that regard. It is not, however, progress of the type we need to sort out the housing crisis. The State must be central to the policy. Housing is not a commodity to be traded and given over to investment funds. It is a basic human right. That is where we differ. People should be given choices of whether to buy or rent a house, depending on the different stages of their lives. They should not be forced into a mortgage for any number of years to suit the ideology of the Government. We should of course support and encourage people to purchase houses. However, that should be done on a balanced basis, with the State building public housing for everyone to give them a choice and change the limits.
Fine Gael and the Labour Party brought in the HAP system in 2014 or thereabouts. From that point onwards, the Government gave up any pretence of building houses. Not alone did it do that but anyone who went on to the HAP was taken off the housing waiting list. I spent much of my time arguing over this point. I was told I was a liar. I have pointed out in the past that, no, I was a lawyer at that point and while there might be some overlap between liars and lawyers, I was not lying. That was the type of idiocy we had to go through because of the policy on HAP, where the Government wanted to hide the fact that people came off the housing waiting list.
From the Committee of Public Accounts, we knew that HAP payments were rising. My colleagues and I were laughed at when we said that the Government was bolstering the market. When I looked at the report from the task force, I found out that the average top-up payment in Galway is €56 per week from the tenant. That is the average top-up. These used to be hidden, under-the-counter payments. Now, they are over-the-counter payments. Rent for a two-bedroom house in my area in Galway city is €2,000. It is nothing short of scandalous.
What am I asking for? I am not asking to argue. I am not asking to roar and shout. I am asking the Minister to recognise that there is a housing crisis and that the Government must be central to the solution by building public housing on public land.
In the minute and a bit left to me, I return to the situation in Galway. I attended a presentation on the redevelopment of the harbour in the city recently and what is planned in that regard. At least 17 acres are redundant to need and the land is now to be sold off to the highest bidder or a deal will be done with the Land Development Agency rather than hand over that land to the city council, when we have a housing crisis. Ceannt Station is also being developed, and that is a developer-led project on fantastic land in the middle of the city. There is no provision for social or public housing and no master plan for that site. The university is developing a plan for another area, Nuns' Island, and the city council is undertaking work as part of the Dyke Road and Sandy Road regeneration plan as well.
We have land now. The task force tells us it will run out in 2023. In the meantime, what land we have we are allowing the harbour company to sell off to the highest bidder. We are also allowing all the other developments to go ahead with no master plan, city architect, overall vision or recognition that public land is essential to the solution of our housing crisis. I have repeatedly raised this issue, and I make no apology for doing so. I will continue to raise it for as long as I have a voice in this Dáil. The Minister should not insult me and my colleagues by telling us we are ideologues because it twists language on its head. The Government is the ideologue, and every policy it has pursued is for the market.
In my last ten seconds, I finish with a quote from Dr. Michael Byrne of the school of social policy in UCD. He points out regarding the Government's housing policy, that investment in the private rental market is "a major new development in the Irish housing system, and one which is likely to shape how Irish cities develop in future". He continues: "The Strategy for the Rental Sector document (Department of Housing, 2016b: 17), for example, highlights the benefits of institutional provision of rental housing in terms of its capacity". It then comes as a surprise to the Government that the investment funds are buying up estates and apartments.
I thank the Acting Chair for the opportunity to respond to the different points made, and, indeed, to respond to some of the charges made against the Government, my party and the Ministers working on responding to the great challenge we face.
Let me begin by making it completely clear where this Government and I stand and where previous Governments have stood, and whose side we are on. We are on the side of those seeking to be able to rent a home at an affordable price and those seeking to buy their first home at an affordable price.
They are the people this Government is serving. When the Government is looking at the right policies that need to be put in place to meet those needs, they are the people who we have at the centre of our planning and our thinking.
That is not just a claim on behalf of me or the Government, it is matched by actions that we have taken and changes that have happened. I can see it at first hand in my constituency in the lives of those who I serve and represent. I know the challenges faced by those who look at how they are going to pay their rent every month, worry that the rent is going to increase in the future and wonder how they will ever be in a position whereby they will be able to set aside money for the deposit for a mortgage. I know what it is like when I knock on the door of a home and meet people who have been on a Dublin City Council housing waiting list for years and are wondering when that new home is going to become available. Equally, however, I know and can see the difference that policies have made, and will make again, to those households.
I see homes currently being built in Dominick Street by the State. It is being supported in the delivery of those homes, the purpose of which is to meet current needs, by city council. I see the work that is under way at O'Devaney Gardens. I see the commitment in respect of the redevelopment of St. Mary's Mansions and what has happened there. That is not consistent with the rhetoric to the effect that this Government is not playing its role in meeting housing needs. The homes to which I refer are being built on behalf of the State to meet the needs that are there, that are growing and that are the cause of such anxiety for so many. The Minister for Housing, Local Government and Heritage visited and opened the redeveloped St. Mary's Mansions. I see the difference that project has made, at the very heart of the Dublin Central constituency, in Sean McDermott Street. It was a project that for so long was a sign of how progress was not being made. To see that project actually being delivered is not a sign of a State that is subcontracting out its responsibilities in the context of meeting housing needs in Ireland. It is the sign of a State that is meeting those needs directly. The previous Government sought to do it and this Government will continue to do it, and will find ways to do it more effectively.
If that is the reality of what I see in the context of houses that are being built and needs that we must meet, and I know that we must meet many needs and do even more, it is also the case - and the figures are there - regarding homes that were being built before the pandemic hit. There is also the intention that the Government has to directly build more homes this year. I heard speaker after speaker this evening ask why the State is not playing a role and why it is not responding directly to the needs that exist. In 2019, before the pandemic hit our country, more than 5,000 homes were built by the State in response to existing needs. This year, despite all of the challenges that we are facing in opening up our construction sector, the closure of which was supported by many who have spoken this evening, the Government is still aiming to meet the demanding goal of delivering 9,500 homes, either directly or indirectly. That is the reality of what is happening. Even with all of the challenges we have faced and are facing in the context of Covid when it comes to reopening up our construction sector and getting it up and running again, it is still the case that the single biggest provider of homes in the country this year, either directly or indirectly, will be the Government. I heard speaker after speaker ask where the Government is. That is where the Government is. The meeting of housing needs in this way this year, the commitments that have been made, the work that is being led by the Minister, supported by a housing budget of over €3 billion to continue to build on this work and meet the needs that are there, is the sign of an active Government and the role that it is determined to play.
To deal with the issue that is also lies at the core of this matter, namely, the role of institutional investors, the role they have to play and the debate that has taken place about that this evening in recent days, I highlight the following. The Department of Housing, Local Government and Heritage recently published its housing demand needs analysis, which highlights the fact that 33,000 homes need to be delivered here. The analysis makes the point that 18,400 of those homes will either need to be delivered through the private rental market or will need to be built by the private sector for people to buy and own. Ours is a small economy, and one with two banks that will be active in the coming years in meeting the needs that exist. If we do not have an economy that is big enough to meet, for example, the employment needs of our society - which is why there is a role for foreign direct investment within our country - and the need for a private sector that uses private capital to add to the efforts of the Government, then there is a role for large investors and pension funds to play in meeting those needs within the parameters of a legal and regulatory framework that is put in place by the Government.
As the Minister indicated, and I want to reiterate this point, we are looking at measures that can be taken to deal with incidents such as that which happened recently and which was reported on last weekend. I understand why this matter is of concern and how families feel when they worry that they will be priced out of the market and will not be able to buy a house and call it a home for life. We understand that. That is why the Government is looking at options in respect of how we can deal with this issue. The Minister and I are working on that at the moment. We will do that work and we will complete it. For those who have made the charge this evening that the State should not allow these investors into our country, that they should play no part at all in meeting the needs that exist, there is a question that falls to them to answer. If we want to make progress in dealing with the rental needs of a generation that needs more apartments at rents that are affordable, does the private sector have a role to play? Is there a role at all for investors of scale to become landlords that are able to meet needs and provide rental accommodation in large numbers? In the same way that we look to international investors to become involved in our economy, the State will set up a framework in which that can be done in this sector. We will deal with, and look to make progress on, the issue that has been of such concern to so many and that has provoked and incited the need for the kind of debate we are having this evening and the motion that has been put forward.
I will go back to where I began. What is motivating this Government and all of its efforts, is meeting the housing needs that are there. We know that they are growing. We know how high is the level of anxiety among those who are renting and who are worried that their rent will go up or that they may not be able to own homes in the future. The answer to dealing with much of that is in how we increase supply. The Government will play our role in that regard. We are playing our role through the scale of the housing budget that is in place. We will continue to look at the framework that is in place and how it can be strengthened to channel in investment in such a way that it can meet the need for more homes. That is the mission of this Government and it is what the Minister and I are working together to deliver.
It is very telling that the Minister for Housing, Local Government and Heritage spent far more time misrepresenting Sinn Féin housing policy than he did addressing the issue at hand. What is remarkable about that is that when the Minister was in opposition, he was the arch-enemy of what he at that time called the cuckoo funds. He tabled legislation which he said would clip their wings and he campaigned on an election manifesto which guaranteed action to ensure that no single buyer could purchase large numbers of homes that were not intended for the build-to-rent sector.
Despite this staunch opposition to what he then called cuckoo funds, when the programme for Government was negotiated, there was not a single mention of the issue. The Minister must have forgotten about it or else he decided the promises he made to get elected were no longer valuable. The only reason the Minister and his colleague, the Minister for Finance, Deputy Donohoe, are even considering this matter now is the huge public anger at the failure of the Government to keep its word. People do not want bluff and bluster. They want action and they will judge the Minister, Deputy Darragh O'Brien, by what he does.
With respect to the Minister for Finance, the difficulty is that by every single indicator from the beginning of the ten years of Fine Gael in government until now, the housing crisis is worse. Homeless levels, rents and house prices are higher. The Minister is right in one aspect. If we are arguing that high-yield, short-term, speculative investment funds are the wrong kind of investment, then where will the money come from to build the homes? It is a very reasonable question, although the Minister knows we have answered it repeatedly. The first answer is that the State needs to do far more than it is doing. Half of all the social and affordable homes that are required should be fully funded by the State. The Government should do what the ESRI advised and double capital investment in public housing from €1.2 billion to €2.8 billion. It also needs to start attracting the right kind of private sector investment, instead of investment that leads to rents in Dublin city centre of €2,500 to €3,000 and pushes house prices up to €350,000 to €450,000. That is the Fianna Fáil and Fine Gael way. Let us have more public investment and the right kind of private investment to deliver the homes working people desperately need and rightly deserve.
Tonight, people in my constituency of Kildare North are reeling. The raid on houses by global wealth funds has left them stunned. As Deputy Ó Broin pointed out, the Minister, Deputy Darragh O'Brien, has gone back on what was set out in the Fianna Fáil manifesto. Instead of clipping wings, as promised, he has given wings to the wealth funds. This is the Red Bull Government. A total of 135 homes were scooped out of 170 in a housing development in my constituency. Fianna Fáil promised to ring-fence a miserly 30% of homes for ordinary buyers and workers who keep our economy going. In fact, the Minister gifted the investors 79% of the homes in Mullen Park. He might as well have walked into that development and put up a big sign saying "No mortgage holders need apply". Did we ever think we would see the day that people would need a war fund to buy a house, not in Monte Carlo but in Maynooth in County Kildare? This is the Minister's doing. His legacy is a housing market that is mutant and its priorities perverse. The full pamper package is provided for investors but workers can go to hell. Not even the bank of mammy and daddy can save them now. They must be good little tenants and pay the mortgage for the wealth fund investors.
I commend Deputies Doherty and Ó Broin on their tireless work in seeking to call a halt to the sweet deals and pamper packages. Our Private Members' motion would see the cuckoo funds hit with a stamp duty surcharge for raiding residential property. It would put a smacht on their activities and ensure they cannot push people out of homes and install profit in their place. A home is not an option or luxury for people. A home is essential. Having a roof over our head is one of our most basic needs. We must have a radical rethink of our official attitude to housing whereby a few privileged and pampered investors are deciding where many hard-working and unpampered young people can live. Now is the time for big government. A house is a home, not an investment. Big government will save young people and couples from falling through the cracks of this awful Government of Fianna Fáil, Fine Gael and the Green Party.
Gabhaim buíochas le achan duine a labhair sa díospóireacht inniu, go háirithe na Teachtaí a thug tacaíocht don rún os ár gcomhair. I listened to the words of the Minister for Housing, Local Government and Heritage and, to say the God's honest truth, if the situation were not as serious and if so many people had not had their hopes, dreams and aspirations dashed as a result of Government policy, they would be laughable. Here is a Fianna Fáil Minister, himself an investor at the peak of the boom in regard to one of these REITs, talking about Sinn Féin and others in opposition engaging in slash and burn politics. This is a Minister whose party's policies, as has been well established, fuelled the housing crisis. Fianna Fáil's policies in the aftermath of the financial crisis slashed and burned the incomes of people right across the State and, unfortunately, left many people with no option but to emigrate from the country in which they were born.
The Minister lectures Sinn Féin without coming forward with any proposal of his own. He took issue with our opposing the shared equity scheme. Let me point out that we are very proud to oppose that scheme.
I will explain it to him in case he does not understand. The reason we oppose the shared equity scheme is very simple. We believe it risks increasing house prices for people who are already locked out of the market. The Minister need not take our word for it. The Departments of Finance and Public Expenditure and Reform, the ESRI and the Central Bank have all warned him about the scheme. He can do his amused thing all he wants but people are suffering as a result of the policies of his party and Fine Gael. He might think it is a game in here but it is no game for people who are paying sky-high rents and are locked out of the property market.
One would swear that butter would not melt in the mouth of the Minister for Finance, Deputy Donohoe, and all he wants to do is make sure people have a home. Since 2016, I have been telling and warning him that the experiment with REITs and IREFs in this country has failed. I told him that they are squeezing out first-time buyers and those who want to purchase their own home. I told him they are dominating the market, particularly in Dublin. In 2019, six out of every ten new homes that were sold in Dublin did not even come onto the market. The funds snatched them up and the Minister knows damn well why. They did so because he has created a tax-free environment that incentivises this type of investment and ownership. Those same funds then charge sky-high rents.
The Government is adamant its strategy is right but it is running around like a headless chicken. What happened in Maynooth was a lightning rod for the people of this State, who are very angry that rents are so high. They are angry that their sons and daughters are locked out of home ownership. They are angry that there is no chance of any ordinary person owning a property in Dublin or, indeed, the commuter belt. They are angry that the policies of the Government are fuelling this scenario and that it has encouraged and rolled out the red carpet for the vulture funds that are benefiting from and profiting off this situation. Mullen Park was the lightning rod but what happened there has been going on for ages in different estates. The Minister is trying to convince us that we need this type of investment to ensure developers can build estates. He is conflating two different issues. Private rental sales do not fund developments. These funds give no money to the developer to finance building. All they do is purchase the properties after they are built and pay for them at that stage. The developer gets the money from international finance, the banks and other sources. There is no issue with that. It is not the private rental sales that fund these developments. All they do is come in at an early stage and say they will buy the properties from the developer when they are finished, and they pay up when the properties are completed.
That has been happening right across the board, not just in the case of Mullen Park in Maynooth a couple of weeks ago. In 2019, there were 2,909 new homes sold in private rental sales, mainly to these funds, as well as 3,039 second-hand homes. Where was the Minister's outrage in regard to the XVI portfolio that saw 765 homes sold to IRES REIT in 2019? What about the Vert project that saw 385 homes in Leopardstown sold to funds in June the same year? Also in 2019, 370 homes were sold to the funds under Project Turner. In Heuston South Quarter, 266 homes were snatched up by the funds in the same year, locking out first-time buyers, and another 222 homes were sold under the Belgrave Collection. I could go on to name 42 other transactions totalling 5,700 homes bought up by the funds in 2019 alone.
The problem is not just that these funds are buying up properties. They are pushing up the price of a home by paying more than €80,000 above market price, thereby creating a new ceiling and locking out people. The Minister thinks this is okay because, somehow, €450,000 is an affordable price to pay for a house. He is living in cloud cuckoo land.
We have been putting forward the proposals set out in this motion year after year in the debate on the Finance Bill.
Fine Gael, Fianna Fáil and the Green Party voted against even looking at the idea of additional stamp duty on these types of funds just six months ago. Those parties voted against even looking at that because they want the status quo. Now, because of the public anger, they are running around like headless chickens. There are proposals here to deal with this issue. The Government should support this motion and stop these funds from squeezing out first-time buyers.