John Lahart (Dublin South West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I am grateful for the opportunity the Ceann Comhairle has given me to contribute. I acknowledge the courtesy of the Minister, Deputy Darragh O'Brien, in alerting me to his inability to take this matter, for which he has a good reason.

I voted against the programme for Government last year. I stood alone on the issue of strategic housing developments, SHDs, having witnessed their impact on my constituency, including their lack of democratic input and transparency and the fact that they so easily ignore and override local area plans and county development plans. As the Ceann Comhairle well knows, county development plans are arrived at by democratic agreement following what is usually 99 weeks of extensive public consultation and engagement and are approved by locally elected public representatives who have, by the end of the 99 weeks, attained a solid sense of what their communities can bear, taking into account national imperatives around housing needs.

The recent furore around investment funds seemed to surprise people, yet the first such bulk buy that I witnessed was of the former Notre Dame convent site in south Dublin. Young couples had eagerly placed their names on the list for apartments to buy in the development only to be told when the apartments were completed that none of them was to go for sale on the open market and that all of them would be rented. That must be close to four years ago. I believe it was an Irish pension fund that invested in them.

Strategic housing developments are a tantalising prospect for investment funds. We now see that some of them are applying the same rules to residential developments as they have applied to commercial developments for many years, leaving vacant units lying idle rather than reducing their rents in order to maintain the capital value of those units over time and keeping local rents high to boot.

From 2019, I witnessed the torrent of young adults returning, quite literally in their droves, to their family homes. No matter how loving the welcome or how secure the tenure offered by their parents, being forced to return home to live with one's folks because one cannot afford rents is humiliating and embarrassing, strong emotions that, if left unresponded to, will surely manifest in individual and public anger eventually.

The journalist, Mr. Killian Woods, wrote extensively at the time of the introduction of SHDs about how developers had pulled the wool over the eyes of officials and the then Minister for Housing, Planning and Local Government, who were sold on the concept lock, stock and barrel because SHDs promised fast-track planning. However, half of the permissions granted in 2018 and 2019, never mind in later years, have not been acted on and no ground has been broken on them.

Disturbingly, it is not only apartment developments that are now subject to either SHDs or bulk buying in my constituency, but even housing estates are becoming build-to-rents at colossal rents. One such estate is White Pines on Stocking Avenue. Twenty SHDs are in the system for Tallaght, the most famous locally being the Cosgrave lands in Knocklyon, where almost 600 apartments will be built to rent close by mature residential estates housing the very same young adults who have been forced home to live because they cannot afford market rents. The worst example that I have heard of was of a 60-year-old woman who had returned to live with her 80-year-old mother because she could not afford a rental in Dublin.

Investment funds have a place in the modern building environment but they have begun to dominate it in my constituency.

Malcolm Noonan (Carlow-Kilkenny, Green Party)
Link to this: Individually | In context | Oireachtas source

I thank Deputy Lahart for putting the case so strongly, well and passionately.

The Planning and Development (Housing) and Residential Tenancies Act 2016 introduced for a limited time new streamlined arrangements to enable planning applications for strategic housing developments of 100 housing units or more, or student accommodation or shared accommodation of 200 bed spaces or more, to be made directly to An Bord Pleanála for determination. The primary purpose of the SHD arrangements was to speed up the planning decision-making process, thereby providing greater planning certainty for developers in terms of the timelines within which proposals for such developments could be determined, while fully respecting the statutory requirements for public consultation in respect of such proposals.

The SHD arrangements have been successful in delivering on this objective, resulting up to the end of March in the granting of planning permission in respect of 49,291 housing units, comprising 12,991 houses, 27,816 apartments and 8,484 build-to-rent properties, as well as 769 shared accommodation units and 12,173 student bed spaces. In particular, the number of apartments approved annually under the SHD arrangements trebled in the period from 2017 to 2020.

SHDs are, by their nature, developments of at least 100 units. The financing of large-scale developments and the viability of apartment development in urban areas are challenging. This is an area where investment funds can, and do, play a role to enable investment and promote viability. This represents additionality in terms of supply, which would not otherwise have come forward for rent or purchase. Enabling development at scale in urban areas, particularly of apartments, is key to ensuring that we meet the need for housing in the coming years, which we know is likely to be around 33,000 dwellings per year.

However, the Government shares the concerns expressed widely regarding the purchase by investment funds of traditional houses that might otherwise have been sold to ordinary families. The Government has clearly signalled that they should not be competing with first-time buyers and it has committed to proposing as a matter of urgency appropriate solutions through a mix of planning and taxation or related measures to ensure that the pathway to home ownership is protected in low-density suburban developments and enabled in high-density apartment developments.

The Government will take steps to deal with this issue and the relevant Ministers are working on proposals in that regard.

I note the points raised by the Deputy in terms of the impact on his constituency, particularly in Tallaght. There probably are some unforeseen consequences of what were intended to be good provisions. Good legislation can sometimes have unintended consequences.

John Lahart (Dublin South West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thank the Minister of State. I take this opportunity to acknowledge the focus and motivation of the Minister, Deputy Darragh O'Brien, in this area. I commend his incredible energy in addressing his portfolio.

This issue is worthy of interrogation. The Minister of State pointed out in his reply that the arrangements for SHDs apply for a limited period. One of the reasons I voted against the programme for Government was the inclusion of provision for SHDs, although Fianna Fáil has succeeded in ensuring the limited time extension will lapse on 31 December this year. The problem is that this time limit accelerated the rate of SHD activity. Developers know the scheme is coming to an end in December and have piled on the applications. Half of the permissions granted have not been acted on. If a developer gets planning permission via a SHD for 1,000 units, there is a huge increase in the value of the land to which the application pertains. The Minister of State said that permission has been given for more than 27,000 apartments. How many of them have been built? The number of planning permissions granted for apartments has tripled but, as I said, only half of the developments that were given permission since 2018 or 2019 have been built.

My concern is that the rents being charged on these apartments leave absolutely no saving room for those who rent them if they want to move on and buy their own homes. That is assuming they can afford the rent. In my constituency, people are looking at paying approximately €2,000 per month. In addition, as I keep saying, these apartments are being built adjacent to housing estates where young people have returned in droves to live in their family homes because they cannot afford current rents. As Killian Woods recently pointed out in the Business Post, vacant apartments in these new blocks will be left idle rather than let at a lower rate in order to protect the ongoing capital value of the entire development. We have seen the same thing happen with shopping centres and other commercial developments for a number of years. Rather than reduce the rents, the funds are leaving the apartments idle or, in some cases, as we are learning from Killian Woods, they are offering incentives for tenants to rent them.

Malcolm Noonan (Carlow-Kilkenny, Green Party)
Link to this: Individually | In context | Oireachtas source

There is no doubt that the Deputy is correct in his points. He highlighted in his opening comments a lack of transparency and public engagement around SHDs, which he described as "a tantalising prospect" for development funds and a cause of inflated rents. They have undoubtedly had a distorting impact on the housing market. I take on board the point that putting a deadline into the legislation at the outset has perhaps led to a rush of applications for SHDs. However, viability in the housing sector remains a very significant issue. Any combination of planning and taxation measures to support home ownership in lower density types of developments must be balanced and proportionate, while remaining cognisant of the ongoing viability issues.

The Minister, Deputy Darragh O'Brien, recently brought to Cabinet measures that will increase Part V provision from 10% to 20% and include affordable-purchase housing as well as social housing. That will prevent investment funds from snapping up entire developments. We will also continue to prioritise the range of measures that are in place to increase supply and support first-time buyers to take their first step onto the property ladder. The SHD arrangements are being extended to 25 February 2022, after which they will expire. Work is ongoing on the development of new legislative proposals for the wind-up of the current SHD arrangements and dealing with the submission of large-scale housing planning applications, including student accommodation, to local planning authorities. It is intended to publish the general scheme of a Bill for this purpose as soon as possible.