Thursday, 24 June 2021
Affordable Housing Bill 2021 [Seanad]: Second Stage (Resumed)
I welcome this debate and the Minister's initiative, which is unique, special and important. This Bill will make provision of more affordable housing to ordinary people who would not otherwise be able to avail of it. That is why the Bill must pass and I support it.
I will also comment on matters that may help increase the volume of affordable housing that can be made available. We can look at what is happening in local authorities. Louth County Council, for example, has used CPOs to obtain 100 abandoned houses to refurbish and relet for an average of €182,000 per house. If other county councils around the country were to use their determination, grit and drive, as shown by Louth County Council, to provide homes at a reasonable affordable cost, it would be the way forward.
We can also look at local authorities using the repair and lease scheme to make houses affordable. Counties such as Waterford have spent €4 million over the past number of years on the scheme and it is a paragon of virtue, determination and drive again in this work while other county councils have done absolutely nothing and have not spent a single penny.
There are good things going on and I know the Minister wants to change the way things are happening. I urge him to place key people from his Department in positions where they can drive local authorities in the way Louth and Waterford councils are being driven. This will ensure we can spend the money that has been provided by the Minister to get people into homes. It is the way forward.
Candidates are walking the streets of Dublin canvassing for the upcoming by-election. Everywhere I go on every street I see empty homes and it is time for an empty homes tax to be introduced in the upcoming budget. The money coming in from those empty homes could be diverted to affordable housing. It is what is being done in Vancouver and it is working there. It needs to happen here now. Hundreds of houses have been occupied this way in Vancouver. They were put on the market because the owners who had left them vacant for years became afraid.
People have been put into these properties because the owners were forced to do it. We must ensure the owners of homes lying derelict in Dublin are forced to allow people live in them through an empty homes tax. We cannot sit back and let this drift on. The social cost is totally unacceptable. The Minister has my full support and it is time for the Government to act. It should not stand back from more radical measures and ensuring that the good work of local authorities is praised. The authorities that are not doing their job should be forced to do it.
I thank the Minister for introducing this important Bill, which is long overdue. I thank the Minister for the €5 million allocated to Dublin City Council today to tackle void homes. We look forward to such funding for other local authorities.
This is the first ever legislation that focuses purely on affordable housing. It is a significant intervention in the housing market that will put affordability at the heart of the housing system. The Bill has four key elements that will help increase the supply and availability of affordable housing. It creates a legal framework to support local authorities directly building affordable homes and this will result in thousands of new affordable homes directly built by councils. It establishes the first national cost-rental or affordable rental scheme, which will give people who want to rent but earn above the social housing support limit discounted rates and indefinite leases.
The Bill establishes a new shared equity scheme to help first-time buyers bridge the funding gap and purchase their first home. It rightly sets a cap on these prices. It also expands the Part V social housing provision to 20%, and this means all new housing schemes will include 20% social and affordable public housing. This will set aside thousands of new homes for public housing.
I am heartened by what appears to be a cross-party consensus for the Bill. We discussed it many times and there was indication that there would be opposition but I welcome that Deputies from all parties, particularly those from the Opposition, will support the Bill today. I hope we can continue to work in the vein of consensus to ensure we can deliver the provisions in the Bill.
This legislation is particularly welcome by the Green Party, not just because it will address the delivery of affordable housing but because it enshrines in legislation for the first time cost-rental housing. We have long advocated for this form of housing, based on the Vienna model. We met Green Party colleagues from Austria recently to learn from their experience and craft that European leading example into our legislation. It is simple, makes perfect sense and provides a long-term and sustainable housing model at affordable rents with security for those renters. It will deliver that much-needed State-supported public housing on public lands. It is not just the Green Party that has pushed for cost-rental schemes. The National and Economic Social Council stated in its recent report on housing delivery the importance of establishing a national cost-rental programme at scale, which is key.
I thank the Minister and his departmental officials for working with us to include this important element, which is provided for in Part 3. I spoke to many people during the general election campaign about housing matters and this Green Party proposal, and I indicated we would legislate for it if in government. Today, it is what we are doing.
The passing of this Bill will be a pivotal moment in the delivery of housing in this country and I view it as a moment when we will accelerate a whole-of-government approach to building homes, including social and affordable homes, along with affordable, secure and high-quality rental homes. It will not happen overnight and there will be challenges. This will require the full attention of the Government and a commitment to funding. That commitment is there and this Government will be the one to deliver on housing.
I hope we can get cross-party support to do so. We have massive cross-party support and we have put in a lot of time at the Oireachtas committee on the pre-legislative scrutiny. There were some 60 amendments submitted to our pre-legislative scrutiny report, and 54 of those amendments were agreed across the parties. I expect to see that cross-party support here today when we vote on this Bill. The committee had many witnesses, including the County and City Management Association, the approved housing bodies, and the Land Development Agency, all of which expressed their satisfaction with the Bill. They are at the coalface of the delivery of public housing. This is what impresses me about it.
I am out of time but I will be supporting the Bill and I thank the Minister of State for his work on it.
This Government's approach to housing favours vulture funds and institutional investors. Sinn Féin in government will turn the tables on these funds in favour of ordinary workers and their families. For too long, successive Governments have treated housing as a commodity, so much so that people who are on relatively good incomes have found themselves squeezed out of the market, leaving home ownership as an impossible dream. Sinn Féin in government will change this. We will deliver affordable purchase homes at scale for €230,000, and for less outside of Dublin.
The Bill is called the Affordable Housing Bill, but this Government's definition of "affordable" is not on this planet. In fact, I put it to the Minister of State that sometimes it is not even in the galaxy. The only solution is to build public and affordable homes on public land.
There is no doubt that during this debate the Government speakers will engage in deflection, they will ignore the failings of the Bill and they will tell lies about the Opposition. The Government says that we are voting against housing, when in reality we are voting against the gifting of public lands to private developers to enable them to screw ordinary workers and their families with overpriced homes as we saw recently with the rezoning in Fingal. It is Fianna Fáil councillors who are standing in the way of affordable housing. The Government says that the Opposition is voting against housing, but in reality we are voting against unsustainable development where towns like Newbridge are crying out for a new bridge over the River Liffey to relieve traffic gridlock. We are voting against the rapid expansion of towns such as Kildare without sustainable development. What is the point of building homes in a field with no services, no sports facilities and in some areas no school places such as for those pupils in Kildare town and Newbridge, with just two months left until school starts again? We need to provide infrastructure before or during the delivery of homes.
I have major concerns about the shared equity loan scheme section of the Bill. A shared equity loan does not make a home more affordable. It simply increases the level of debt held by working families, at best to lock in what otherwise would be unsustainably high house prices and at worst to inflate those prices even further. I am not alone in my concerns about shared equity. Numerous commentators have said it will have an inflammatory effect on house prices. The Economic and Social Research Institute, ESRI, the National Economic and Social Council, NESC, Professor Karl Whelan, and the former Secretary General of the Department of Public Expenditure and Reform, Mr. Robert Watt, all share this view. The Green Party's housing spokesperson had the good sense to buy the book by my colleague Deputy Eoin Ó Broin, Home: Why Public Housing is the Answer.I suggest that the rest of the Government would do the same.
The Government has failed. Despite all of the rhetoric it brings here, the truth is that it has failed on housing. The Minister has missed every deadline that he set. The Minister said he would have an affordable housing Bill in September, then it was by the budget, then it was by the new year. Week after week we have heard more infuriating stories about home buyers being locked out of ownership. The Government talks about ownership, but thanks to the Fine Gael policy of throwing the doors wide open to the wrong kinds of investment funds we know now that not only is the Government supporting these funds through an unfair tax policy, but taxpayer money is being used to assist in the funds buying up the homes. This comes as another slap in the face for anybody who is trying to buy a house, who plays by the rules, who pays sky-high rents or is living with their family while trying to save a deposit. It truly shows where this Government's priorities lie. People expect the Government to make radical decisions and interventions to support working people. Renters, first-time buyers and those in mortgage distress want a break. They want a Minister who does not miss deadline after deadline for legislation. They want a Minister who backs up legislation with State support. Budget 2021 allocated only €35 million for cost rental and €50 million for affordable purchase housing. People want a Minister who does not break election promises.
In its election manifesto Fianna Fáil promised 10,000 affordable homes every year for ten years. Why has it abandoned that promise? So far this year only 569 social homes have been delivered. Direct capital investment in public housing needs to be significantly ramped up in order to meet the social and affordable demand. Fianna Fáil's dream of 10,000 houses per year has been well overshadowed with the Tánaiste's announcement over the weekend of 40,000 homes. Maybe he was sleep talking, I do not know. As far as I remember he was in government for many years as Taoiseach of our country, yet he could not deliver a fraction of what he is now talking about. Maybe it was a bit of dreaming or coverage. RTÉ gave him plenty of time to talk about it and it gave him loads of time again on Sunday to talk about it. When we sit in here and talk realistically there is no sign of RTÉ giving us any coverage. It is an unbelievable situation that a Tánaiste could stand before our country and talk of delivering 40,000 homes. I could stand before any TV camera in the country and dream up figures. I could say that we want 60,000, but we are realists on the ground.
Deputy Bruton said a while ago that we need to meet the needs of families. I appreciate that the Minister of State was here yesterday, and the Minister, Deputy O'Brien, was here earlier. I was hoping he would stay but I am not having a go at him, I respect that everyone has schedules. I wanted to tell him about the crisis we have in my constituency. I presume it is also a crisis in every other constituency in the State, because if it is not then we have a more serious crisis in west Cork than anywhere else. As Deputy Bruton said, we need to meet the demands of families. Young people are applying for planning permission and they are being refused left, right and centre. There are beautiful green-field sites. The young people's plans pass the architectural rules, the guidelines on the roadside, and perhaps the council is happy with everything. Then, however, there is an issue with the scenic landscape or every other cock and bull story is put before them. It is a complete and utter farce. I was going to ask the Minister, Deputy O'Brien, who left the Chamber a short while ago, if he would consider holding a meeting between himself, the Oireachtas Members of Cork county and the planners in Cork county. We need to set a new stand for the people in west Cork. They need to be assured that if they do pre-planning and tick a lot of the boxes, which are fair, then they would not be caught out on the unfair boxes. Planning is now a no-go area and the Government has let it get to that. It puts further pressure on social housing in my constituency.
We had a very strong and peaceful protest here this week by the fishers of this country. They are angered at the attack on their livelihoods in rural Ireland. The smaller farmers are also angered. Young people are making such gallant efforts, be it in Kinsale or elsewhere. I have lists of people in Bandon, down into Schull, down into Castletownbere, Drimoleague, Dunmanway, Skibbereen, and Bantry who have identified the right sites, they have done everything by the book, they want to get their lives off to a start, they want to take out a mortgage and they can do that. They do not want to be a burden on the State, but the State continues to inflict the most serious of refusals on them. Our Rural Independent Group is very lucky to have a Deputy of the calibre of Deputy Richard O'Donoghue from Limerick who gives us very good and strong advice as he is from the construction sector. Deputy O'Donoghue certainly knows more about planning than any one of us in the Rural Independent Group. I will certainly be listening and talking with him. I do believe that we need to take matters further even if it means that we must converge and block up Dublin city. This would be the only language the Government seems to know. In the fishing crisis we had a whole seven or eight months, and yet when the protest was heading to Dublin on Tuesday the Taoiseach decided to act on it over the weekend and meet with the fishing industry. Is that the only kind of language the Government knows? Why in the name of God can the Government not work towards solutions and not create a crisis point for people? That is the issue here. I will fight tooth and nail for every young person who wants to get planning in my rural community. I want the planners to be taken to account. I want it to work at the top level of government until these people get their planning in a fair way. Once their architecture design is perfect and once the council is okay, then to hell with the other stupid rules that are put there: they are not realistic rules.
They are certainly wagging the tail. I will not stand for it in my constituency. If it means we have to head to Dublin again we will head there. We will bloody well - pardon my language - make serious efforts to put the people's rural planning to the forefront in the next election because it certainly is a massive issue in my constituency.
We look at county development plans. What are we doing? Why are we putting together county development plans? I can guarantee if I had the chance, and I do not get the chance, to sit down to look at what plans are for Ballinadee or Ballydehob and what is in the county development plan for the rural towns and villages of west Cork, I would see plans for another six houses here,18 houses there and 20 houses there. The next thing is that we hear about places like Ballinspittle, where we have good genuine people willing to put in sewage plants and extend them close to Cork city where development could take place, and there are great businesses in towns and villages, and they are being refused. They will do the work when Irish Water cannot do it. We look at Clonakilty, an area that is rapidly running out of water. There is no development and no funding whatsoever. We are okay so long as the rain keeps falling but if we have a dry summer we will have a hungry and dry people in Clonakilty because they will not get water. These are the simple facts and the crisis we are facing. The Government has shut its mind to the real issues. Because it is a rural Ireland issue and an issue in west Cork it is secondary but if there is an issue up here that someone will do without a cup of water in Dublin there will be a crisis and we have to talk about it here for the whole day to resolve the situation.
I have always looked at rural development and the development of towns and villages in County Cork, in beautiful places such as Drimoleague, Allihies, Eyeries, Baltimore or anywhere people would want to go, including Schull and Ballydehob. There are beautiful empty houses in towns and villages. With regard to living over the shop, no proper grants were made available so people could come to live in these beautiful rural communities, whether in Dunmanway or Ballineen. They are fabulous communities in which to live. They have massive facilities that no town or city has and the Government continues to refuse to give them proper funding to build their towns and villages.
There are houses and the best of shops, community centres and schools throughout west Cork but no investment. People want to leave the cities and come to live there. They want to leave the cities and get planning permission in rural communities. There is a crisis in the cities because they cannot cope with it. We can cope with it but we will not be given the opportunity because the Government has its mind set on closing rural Ireland.
There are also difficulties with a massive lack of social housing. I will be doing clinics all over west Cork today, tomorrow and Saturday, and 80% of the people coming before me plead and cry in my office for houses. They literally cry. This is a scandal in this day and age when there are possibilities and solutions, and the solution is rural Ireland. I know the Government does not understand it at all because it does not have a clue where rural Ireland is. It is beyond the Red Cow, and my God that Red Cow is a huge Red Cow because it has the Government blinded. I am telling the Minister of State we will keep the Government's eyes open. Wake up. The solution to the housing crisis is in rural Ireland and I plead with the Government to work with me towards this solution.
We all know there is a housing crisis and I am disappointed the Minister, Deputy Darragh O'Brien, was afraid to stay here with me to hear some truths. That is no disrespect to the Minister of State, Deputy Noonan. It is amazing when the truth is heard from a rural Independent and a person who is self-employed. I have been self-employed all my life. I understand what a knock-on effect is for housing because I build houses. I have always built one-off houses. I am a small-time builder and a local builder. I tried to use local people and local merchants to support local. That is what I do. In the most recent contract I did, 92% of the people were local to the area. When big contracts are given to multinational companies, 4% or 5% of the people from the local area and the local merchants get the work. This is the difference between knowing what you are doing and working off Dublin standards.
We will look at why we have a housing crisis and the knock-on effect for the 37% of the people who live in rural areas. The Rural Independent Group brought forward amendments to the 2040 plan to allow people to build in rural areas. The Green Party, Fianna Fáil and Fine Gael voted against an amendment that would allow people to build on their own land, whether they were part of the farm or not. It is their heritage and it could be their inheritance. All we asked was that the Government would give people a chance to build their own houses on their own land or on a site they may have purchased or been given, once they met the environmental guidelines and the housing guidelines. However, the Government voted against it. Now we have people who want to use their own money and their own land to build their own houses and they are being added to the housing list.
Then we come to successive Governments. When I got here it was 32 years but now it is 33 years that Askeaton has been waiting for an upgrade of its sewerage system. It is pumping raw sewage into the rivers. Glin is in trouble, as are Drumcollogher and Hospital, with sewerage systems. A report shows the biggest contributors to pollution in Ireland are the local authorities from the lack of funding from the Government. I will break it down for Government Members in case they cannot understand. I do not mean to be disrespectful to anyone but in the country we can call people overeducated fools. What we call overeducated fools in certain cases are people who are so well educated they get up in the morning and have to look at a chart to put on their trousers and their shoes but they can run the country because they have no experience of what it is to be self-employed. I am a person who is self-employed and many people involved in fishing who were here yesterday are self-employed. The farmers on whom the Government puts more controls are self-employed. The SMEs that give 51% of employment in Ireland are self-employed. Who does the Government target with all of the taxes? It is the 37% of the people in rural areas.
The Government introduced a carbon tax. What does this entail for people living in rural areas? It means every man, woman and child who needs to go to school, to work or to do the shopping is charged extra tax because they have no infrastructure. They have no bus service. They have no train service. They have nothing. We pay more taxes to support the Government. Where does it put the money? Let us head to Dublin. A minute ago, we heard a Deputy thanking the Minister for providing €5 million to Dublin to upgrade some derelict houses. Every day I come up here I see how tunnel visioned the Government is. Deputy Michael Collins recognised it when he spoke about going past the Red Cow. A red cow could be a white head if people understand farming; but it is the Red Cow. Is this why it was called a Red Cow up here? Is it because when people go past it they have gone into rural areas so they try to stay this side of it? Is that why it is?
A total of 37% of the people in Ireland are going to revolt against the Government for its failure to recognise farming, fisheries, construction and SMEs. It is overtaxing everyone in the 37% to pay for its vision. A Minister said he believes that for a population of 3,000 people, 30 cars are adequate and we can carpool. Tell that to the farmer who wants to get cattle to the mart or somebody in an area who has to cycle to get to a carpooling car to go to work. That Minister, Deputy Eamon Ryan, has not yet commented.
He has been asked to come to Limerick twice. I will put him up for a week. I will give him a house. I will let him be isolated. I will give him a good bike. I will even give him a repair kit in case he gets a puncture on the road. I will tell him to go off and get his shopping, go to work and try to get to here for one week. That is real life.
Let us look at what else the carbon tax has done. I heard another Deputy say that if the rest of the country looked after Louth County Council, houses would be built for €182,000. I will give him a reality check. In the past three months, the price of steel has gone up by 62%. Why do I know this? It is because I buy steel for housing. The price of insulation has gone up by 44%. Why do I know this? It is because I am in construction. The price of timber has gone through the roof - it has increased by 44%. Why do I know this? I know it because I am in construction. Why did I pick out where the problems are? We cannot get our stuff through Dublin Port. We cannot get things through any port with the restrictions that are in place.
Where does the problem lie? It comes back to the Government. A simple solution to felling licences would be to include them in licences granted for planting forestry and growing trees. That would have to be monitored. We are six or seven months into the year and we still do not have felling licences. The costs are being put onto the people who want to build houses. The Minister provided statistics about the cost of building houses, which ranges from €160,000 to €310,000. The cost increase of a 2,600 sq. ft house in the past 12 months is €84,000, a figure which is rising.
I have mentioned the 37% of the people who live in rural areas. We are gathering and coming together fast. Fishermen protested yesterday and farmers have also protested. SMEs and people in rural Ireland will come back up and claim what is rightfully ours, and stop the Government squandering our money. It is putting people into cities. I have uncles and first cousins living in Dublin, but they came from another county. They will also revolt against the Government.
The Government has sent us the LDA, but the paperwork states it will only produce houses in areas with a population of over 30,000. That covers Limerick city. There is more to Limerick than the city because we are a county. I represent the county. The Government does nothing for towns, villages and rural areas. The Government has never given us funding to upgrade our infrastructure so that we can help the environment and address the housing crisis. All it does is put obstacles in our way to stop people doing things on a daily basis and increase costs. All of the services in large cities and towns are using our money from rural towns, villages and areas where the Government is not willing to invest. That is what is wrong with the Government. The Minister, Deputy Eamon Ryan, needs to wake up. I will give him a reality check. I will bring him to County Limerick if he would like to come. I will put him up and see how he lasts for a week in a rural area.
Tá mé ag roinnt mo chuid ama le roint Teachtaí eile ach níl na hainmneacha agam.
I want to pay tribute to the Department of Housing, Local Government and Heritage, the Minister, Deputy Darragh O'Brien, and the Minister of State, Deputy Noonan. We have heard a lot of people talking about fishing, insulation and rural and urban Ireland, but I have heard very few people talk about what exactly is in the Bill and why it will transform the housing situation in Ireland. This is the most comprehensive affordable housing Bill in the history of the State. In fact, it is the first affordable housing Bill in the history of the State. That is what this Government is doing.
The Bill and Government policy will mandate the direct building of local authority affordable housing. It will mandate and permit a national cost-rental scheme and a national shared equity scheme and expand Part V to 20% to include affordable housing. That is what is going to happen. The vast majority of that cannot happen without this Bill. As has been said by Deputy Matthews, a large number of amendments to the Bill were put forward by Opposition and Government backbenchers and were accepted by the Government in a spirit of generosity knowing that this is a national crisis that we have to solve. The Bill is going to be transformative. I cannot wait until it is passed and it will then be time for all of us to make sure it is put into action.
We all must look at our attitudes to housing and examine whether housing developments should be objected to. A Sinn Féin Deputy wondered earlier whether there was any point in building housing in a field in Kildare. I think there is a point in building houses in fields in Kildare and other places. To say that the infrastructure is not there is not an excuse. We need to put the infrastructure in place, but it is wrong to say that it is a reason to oppose housing. We must build housing with facilities and infrastructure and allow developments and construction to proceed, which will improve our economy and get people into family homes.
I object to the comments from Independent Deputies that rural Ireland is being put at risk. It is a very dangerous argument for rural Deputies to complain that they seem to be paying for everything or that not enough is being spent in rural Ireland. The truth is that Ireland has a very redistributive tax system, not just between rich and poor but also between urban and rural. We are a better country for it. I support the Bill. Deputy O'Donoghue complained about highly educated people. Further and higher education and second and third level has been key to this country's success, and that will continue. It is wrong to denigrate it.
I thank the Minister of State, Deputy Noonan. This is an important Bill and I echo what my colleague, the Minister of State, Deputy Byrne, said. It is very easy to get emotional and bang the drum for rural Ireland, but in reality if one reads through the Bill one will find it is one of the most effective pieces of legislation to enable people to come back and live once again in rural Ireland.
I come from County Longford, one of five or six counties that have a unique housing problem in that there is not so much an affordability issue in our county but rather a sustainable building problem. In Longford and other similar counties the problem is that the average mean price of a house is still less than what it costs to build a house. For the past 11 years we have looked on aimlessly and hopelessly as houses were being built across the country, while it was not commercially viable to build a house in Longford.
Now, thankfully, through the serviced site fund or shared equity scheme we finally have an opportunity to give first-time buyers in my county a real chance to get on the property ladder. It is an extraordinary statistic that it has been 11 years since a three-bedroom semi-detached house has been built in County Longford. That is probably indicative of the Bill in that this is the first piece of legislation in 11 years that will give hard-pressed young couples and families an opportunity to get on the property ladder.
I am proud of the Bill. It was a key plank in the programme for Government. The Minister of State, Deputy Noonan, the Minister, Deputy Darragh O'Brien, and the Minister of State, Deputy Peter Burke, have worked tirelessly on this, as have departmental staff. I am pleased to see it advanced to this stage. I look forward to local authorities like those in Longford being invited to issue their expressions of interest and finally start breaking ground once again on affordable houses in County Longford.
I welcome this Bill. It is a necessary Bill to achieve better affordability in housing. I want to pay tribute to our party colleague, Deputy Duffy, and thank the Minister, Deputy Darragh O’Brien, for the openness he has shown in working with him to improve this Bill. I want to thank the Minister of State, Deputy Noonan, for coming in to hear the debate.
In particular, I want to welcome the introduction of cost rental on a statutory basis. It has been a long-term aim of my party to introduce this, not just to achieve a short-term improvement in the affordability of housing for people but also to achieve the long-term impact of moving the property and rental markets away from boom and bust by taking a universal approach to housing provision.
One aspect of housing affordability that I wish to highlight is the issue of transport. We simply have to stop building houses in places where people have to own cars to live in them. The AA estimates that the average cost of running a family car for a year is over €10,000. The price tag on sprawl is significant and it is falling on families.
We know the answer, namely, transport-oriented development, as recommended by the NESC and international experts. It means building housing at medium densities around public transport stops. The Government has a plan to increase public transport services significantly, especially outside Dublin, but we must develop housing in a way that can be easily served by those services.
Recent Irish research shows the phenomenon of forced car dependency in Ireland, with people being forced to own cars even though they cannot afford them. The measures in the Bill will significantly increase housing affordability, but we must also get our planning right so that we are not forcing people to pay an additional price tag of €10,000 per year because of where they live.
The Minister states that the Bill will bridge the affordability gap for first-time buyers and contends that it will help the squeezed middle, but the whole thing has become something of a squeezed muddle. "Affordability" has become a word that, in many instances, no longer means "affordable". In Galway, there have been no affordable builds for many years. People will hear the word "affordable", believe it is positive and look forward to perhaps being able to buy their own homes. Many people constantly get in contact with me and say that they cannot afford a house. With just 90 affordable homes available for purchase in 2021, though, this will not be a major cause for celebration. That number amounts to fewer than four homes per county. What will it mean for Galway?
What about the cost-rental aspect of the Bill? We badly need homes that are available for cost rental. In my home county of Galway, rents are now 6.1% higher than they were in the first quarter of last year. In Galway city, the price of renting is up 16%. Despite that, just €35 million is being given to this scheme whereas the shared equity scheme will get €75 million. It is clear where the priority lies. The shared equity scheme, which will only be open to new builds, is a disaster waiting to happen. It is a recipe for more price inflation, which is why the developers wanted it. If anyone wants evidence to support the claim that it will be inflationary, the good news is that he or she will not have to look too far to get it. Research has shown that, in Britain, the average new build premium is a 29% markup as a result of the Tory party's shared equity scheme. In other words, it pushed up prices by almost 30%.
We have had well over a decade of housing being in crisis. Rents and prices have reached unaffordable levels. Cuckoo funds are buying up large amounts of the new stock that is coming online, causing further price inflation. Now we have this so-called Affordable Housing Bill. For many people, it will not make a difference in their lives. Is é an rud a theastaíonn uainn ar fad ná go mbeadh daoine in ann teach a fháil ar phraghas réasúnta, agus teach a cheannach a bhfuil siad in ann a bheith ina gcónaí ann in áit a bhfuil siad in ann a dteaghlach a thógáil agus saol deas a bheith acu. Is í an fhírinne, áfach, go bhfuil Fine Gael sa Rialtas le hos cionn deich mbliana anuas, agus san am sin bhí sé bliana ann nár tógadh teach amháin i nGaillimh. Ní dóigh liom go n-éireoidh leis seo déileáil leis an ngéarchéim ina bhfuilimid.
I welcome that there is at last some semblance of an idea and legislation in the Dáil on affordable housing. I question whether it actually is affordable housing, but at least there is something before us. I also welcome the cost-rental model being put on a statutory footing. However, the Bill will in no effective way solve the housing crisis. It will not make housing more affordable for many of those who want to buy. In fact, the Central Bank and the ESRI say that it could increase house prices.
Why is there such a reluctance by the political establishment to move towards a real solution to the crisis? A large State-funded and State-led programme of building public housing is one of the key ways of dealing with it. To me, one reason is obvious - the ties between Fianna Fáil and Fine Gael and the banks, developers, landlords and, now, vulture funds. The refusal to build public housing as far back as the 1980s was a deliberate policy to force people into the private rental sector to a point whereby, in 2016, Mr. David Ehrlich of IRES REIT was able to say: "It's a great market. We've never seen rental increases like this in any jurisdiction that we're aware of.... I truly feel badly for the Irish people." IRES REIT has invested heavily in this country over the past eight or nine years. The refusal also forced people to take on unaffordable mortgages, burdening a couple with a virtual lifelong debt, with one partner essentially working simply to pay it off. Even that option is not available to the majority of young couples now.
There is another reason, namely, good old-fashioned snobbery. I do not just think that - I know it. There has always been an element of people who look down their noses at people who live in council housing estates. It is astonishing, or perhaps it is not, to see this attitude reflected by a leading member of the Government. The Tánaiste and leader of Fine Gael, Deputy Varadkar, let the mask slip when he spoke about people wanting "free housing". No one ever talks about free housing. There is no such thing. There never was and never will be. People in council housing paid rent and still do. The Tánaiste likes to speak about people who want "free housing, free education, and free healthcare" without making any contribution towards their provision. It seems that he is unaware not just of council housing rents, but of how the tax system works. Even if someone is unemployed and not paying income tax, he or she will pay VAT and excise taxes. In fact, the lowest 10% of income earners pay 30% of their incomes in taxes, which happens to be the same percentage paid by the top 30% of earners. The Tánaiste needs to grow up, leave behind the privileged posh boy notions of his youth and get to grips with the reality of life for the majority of people in this country.
Having got that off my chest, I want to make it clear that people like me recognise that problems can arise from going about building public housing the wrong way. If public housing is used as a social dumping ground with badly designed estates, a lack of facilities, tenants being targeted by criminals to pull them into drug crime and no hope for the families living there, it can lead to problems with crime, drug abuse and anti-social behaviour. It does not have to be like that, and should not be. It is certainly not the type of public housing that the Opposition, and I am sure many in government, advocate. We can have a mix of public housing options, including traditional council housing and affordable cost-rental apartments for those who do not qualify for council housing lists because they are above the income thresholds. This will result in good, strong communities in well-designed eco-sustainable housing with good public transport, heavily subsidised schools and crèches, primary care centres, community and sport facilities and green spaces.
Many people have claimed to have led on cost-rental policy. The first time I heard of it was in 2017 when Dr. Tom Healy of the Nevin Economic Research Institute commissioned an explanation of what "cost rental" meant, taking from the Vienna or European model. The concept was initially based on a fair rent scheme and has since turned into the cost-rental model. The key aspect of the scheme was that the rent was affordable and there was security of tenure for all walks of life - bus drivers, retail workers, nurses, manufacturing workers, post office workers and all workers above the income thresholds for social housing lists.
The concept was that rent would be based on one third of a person's income, which is not provided for in this Bill. It was also based on the fact, and I refer to Dr. Healy on this, that it would not include a profit margin in the cost.
The Minister of State emphasised that where any private providers wish to deliver cost-rental homes, for instance, large institutional pension funds, they will of course seek to earn a modest return. That is profit no matter what way you look at it. The legislation provides for regulatory powers to set a cap on the allowable level of return, for example, between 3.5% and 5%. That is not on what the cost rental or fair rent scheme was based. It was based on non-profit. There are many ways things can be changed and become something they are not. This is certainly the case with the cost-rental model the Minister is putting forward today.
I am not opposed to private house ownership. The Small Dwellings Acquisition Act allowed for a scheme whereby the State provided mortgages administered by local authorities. The mortgages were for 35 years with interest at 50% of the going rate to make them affordable. Will the Minister consider a similar scheme to meet today's needs. Between the National Asset Management Agency, NAMA, and local authorities there is sufficient publicly-owned land to build 100,000 housing units. We know that. This has not only been reported, but scientifically proven. If 20,000 of said units were built over the next five years, we would be close to 100,000 housing units. It would have a dramatic effect on the crisis and would help to reduce rents in the private sector, alongside effective rent-control measures to give real security of tenure. It would reduce prices in the private sector by reducing demand and increasing general supply. This crisis will only get worse unless this type of radical action is undertaken because housing has to be based on need and human rights. The more we move towards the private sector controlling the public sector, the less that need will be met. The programme for Government includes a commitment to a housing referendum. What is the point of a housing referendum if we do not have houses to make it a reality?
I welcome the opportunity to speak in this debate. There is not a Deputy in the Dáil who would be against anything that can help the housing situation. That is the first thing that needs to be said. We have come up with a lot of reports, legislation and different ideas in the past few years but, the bottom line is, unfortunately, they are not helping the situation on the ground.
The first thing we need to do is start joining heads together and get people thinking together. There is no plan for three to six years down the road. Roads, sewers, electricity and water need to be put in place. The budget for the likes of Irish Water to build that infrastructure needs to be agreed. Some 35,000 sites in this country are owned by the State. Some are unserviced and some were not even known about. The infrastructure has to be put in place when talking about affordable houses. At the moment, we have housing agencies, councils, developers and ordinary people trying to buy a piece of land. When there are four people trying to bite one apple, the apple gets pretty scarce and dear. We need to have one body that will look after the land side or use the land we have. We are long enough talking about State land. To be honest, the councils need to stop blocking progress in other areas.
In my opinion, affordable housing is where the State is able to supply a fully-serviced site. I do not care whether someone is building a 1,200 sq. ft house or 1,300 sq. ft semi-detached, because that is the size they are. Be that in Dublin, Cork or Galway the costs are roughly the same, maybe 5% to 7% more in Dublin compared with anywhere else. When we talk about affordable housing for a house of that size, once there is a serviced site - the State needs to use its own land for social and affordable housing - a design should be drawn up that is the same for Dublin, Galway or wherever, bar the facade at the front, so we can buy in bulk. It is wrong to have people designing houses, twiddling their thumbs and looking at changing this, that and the other. If there are two to four bedroom houses that are the same inside, and at the back and sides, and the only thing to be changed is to comply with the architecture in each area at the front, a lot of bureaucracy would be eliminated straightaway. We would then have a design we can move on and that can be priced in bulk in any part of the country.
We have a dysfunctional banking system for what I call the small builders. There are plenty of small builders throughout the country who are well able to build ten or 12 houses a year and who are basically pushed out of the way through the procurement set-up at the moment. If the State has an area where there are 60 houses to be built, it could give five different builders 12 houses each. In countries like the Netherlands the money put into a house is got back once the house is sold. These small builders need help because all I see at the moment is one or two, or four or five, of the big builders and big announcements of 600, 800 or 1,000 houses. The ordinary builders who have four or five people working for them are not in that category and will not give a price for that number of houses.
I heard the Tánaiste talk about building more houses and fair play to him if they can do it. I am not cutting down those who are trying to grow their businesses but, my God, if we pump another €2 billion, €4 billion or €6 billion into the housing industry, prices will go up and we will get no more for what we are doing. We have seen over the past year that materials have gone up by about 30% or 40%. To get materials now, the likes of timber and so on, is the other question. As I said earlier today, a load of timber could be coming here from a foreign country and somone in America or elsewhere could bid higher and the boat will turn. Suppliers here who had promised something are then left high and dry.
I heard Deputy Collins talk about people looking down on those in social housing, but there is a snotty attitude towards someone who is a digger driver, a pipe layer, a plasterer, a wet tradesperson, a carpenter or a plumber, of "you did not stay in school so you decided to go out to the buildings." These tradespeople go through many courses, get their certificates and are highly skilled with their hands and they should be appreciated. Over the years we have had a boom-bust situation, and that is the way it was in housing. People who come from rural areas, especially, are like swallows. They go to different places, see that Dublin might be going well and then, bang, they go away to London or somewhere else. That is not the way it has to be. What has really happened during the pandemic is that we shut down house building and sectors like that, while the Brits kept them going and have poached most of the digger drivers that were in this country. We now have our tongues out trying to get digger drivers to work on sites and they are not available. They cannot be made overnight.
The workforce is one thing on which there must be a focus. I hear many stories about apprenticeships and so forth. We must introduce a new system of apprenticeship to give apprentices high recognition for what they do. The other thing that must be done relates to houses made off-site. We must get into that further, with factory-built houses that can be erected rapidly when they come on site.
The one thing the State will have to do is make sure that it does not talk about an affordable house to the new poor in what I call middle Ireland. I refer to people who are above the threshold to qualify for social housing and are not earning enough to afford a mortgage. They are the new poor in this country. With regard to affordable housing, I saw a reference from the Minister for Finance to the Irish Glass Bottle site - I am almost sure it was that from the top of my head - where people were referring to €450,000. Lord God, one would want two houses for that. I will give my opinion on an affordable house in Dublin. We must get it into our heads that the cost of the house is the same in different places, bar 5% to 10% as I outlined, if one has the site. One should be able to build the house for between €200,000 and €220,000 or €230,000 if the State is supplying the site. If a couple decides down the road to sell that house and if the site is worth €50,000, €60,000 or €70,000, they pay it back to the State. That is the simple way of doing it.
Another thing we need to do in the LDA is make sure we do not give cosy little jobs to people who were in the National Asset Management Agency, NAMA, and the like. We have to poach people. That is how it was always done in the private sector. One poaches the people who are able to deliver. One gives them a bonus. We should forget about salaries and just give them a good bonus to deliver, because it is about delivery. What somebody produces, be it as a Deputy or in building houses, is what the person will be marked up on. This is the road we must take. Unfortunately, the councils do not have the resources at present. The councils have been depleted over the last ten or 15 years because of the way the country was or for one reason or another. Most councils now do not have enough people in their planning departments or in any other departments. There is no point in talking to them about building houses when they do not have the resources to do it. One will not get people by magic overnight who will do it.
The one thing we must do is make sure we have houses that are affordable - in my opinion, that is between €200,000 and €250,000 - for the bracket of people I mentioned. That is achievable if one does it the way I have said. We can talk about housing for years. I have listened to many debates about it here and about the things that are going to be done. However, if the attitude in the Department does not change, if the shredding machine is used for ideas that have been brought forward - I am saying straight that it has been, because the Department will not go along with them - and if Ministers do not take the bull by the horns, we will dangle along in the same way. If the same piano players are playing the same piano and they are not producing the goods in the first place, they are not going to change over the next few years.
We need a radical review of this. It requires joined-up thinking that involves Irish Water, the planners and the Department of the Environment, Climate and Communications. The private sector must be involved to be able to produce the goods. We must ensure we nurture and bring forward people who will work in the sector. Every year I visit schools, as I was involved with different companies down through the years on water jobs and so forth, and try to encourage youngsters to go for water pipe-laying, blocklaying or to be electricians. I go to the schools so that perhaps 50 youngsters would get that opportunity. If we do not do that and put a carrot before them, they will stay doing different courses and we will end up with a problem in the housing situation.
I am sharing time with Deputy Murnane O'Connor.
I am glad to have an opportunity to speak on the Bill. There is a great deal in the Bill, and much of it is praiseworthy. However, I will speak first about the overarching situation. The simple fact is that there are not enough houses available for people seeking houses. That is having two effects. One is that people are homeless because they cannot get accommodation. They are living in hotels, bed and breakfast accommodation and in all sorts of arrangements other than the one they want, which is a permanent home. The second obvious issue that arises is that when something is scarce the price goes up. That is inevitable. Ultimately, we must deal with the supply issue. As long as we are talking about it, but not building houses, we will not solve the housing crisis.
The second issue is that this affects many people in society. Every week people who are homeless contact me. In speaking about people who are homeless, I should point out that there are two types of homelessness. There are those who sleep in doorways, many of whom have social issues and, perhaps, addiction issues. There is also the huge number of the unseen homeless - people living in all types of temporary accommodation for no other reason than that there is no accommodation available or that if they were in a rented property, the owner of the property wanted the property back for one reason or another. We will not solve that problem until we deal with the supply issue and until the State provides social housing.
In the old days we had the rent allowance, which was meant to be a temporary expedient for people who found themselves temporarily without accommodation. It was never meant to be a permanent arrangement. The previous Government, in an effort to reduce the housing lists, by sleight of hand said it would abolish the rent allowance and establish the rental accommodation scheme, RAS, at first and then the housing assistance payment, HAP, in its place. However, that is still renting from a private landlord, and 80% of the people who I represent and who are in the HAP scheme would prefer to be in a local authority or a State-owned house. The reason is security of tenure, which the Irish fought so hard for in the 19th century. It is funny that it has come back to haunt us again. Therefore, we must give people permanent homes, if that is their choice. I am not saying that I have not met people who would prefer to stay in the HAP scheme. That is their choice. It should be a matter of choice, not a matter of being told. Certainly, the vast majority of the people I know would prefer to have local authority housing. The second choice is voluntary housing. I find that most people, given a choice between voluntary housing and local authority housing, prefer the local authority housing because they can aspire to buying it. Many people in Ireland still aspire to have what their parents had, a house they can own.
I always listen very carefully to what Deputy Fitzmaurice has to say about his experience on the ground. I often wish that people who design schemes had his type of experience at the coalface. Certainly, with all the bureaucratic structures and the bidding and tendering processes we have established, we have managed to destroy many small builders who always worked within their capacity and who always took a steady amount of work on hand, collectively, in large and small villages across the country.
They were happy to do the smaller projects and they provided many houses. We must look at our bureaucratic structures to make construction attractive for those small builders again.
The next issue we must examine is that of the delays in getting houses built. There is an inordinate delay from the time a local authority decides to build houses to the time those houses are ready. We lost a great deal of corporate knowledge in local authorities because many of the skilled people were let go. The same skill sets are not to be found in respect of design and other areas in the local authorities as there was previously. I also came across a case in my own constituency where it is going to take well over two years, some two and a half years, to develop a very small housing estate. We must again ask why it takes so long to build standard houses. Only half a mile away from that particular site is a school on which construction started in February 2011, I remember it well, and it opened in September of the same year. A full, standard-sized city school was constructed in that time.
It is funny how everything interconnects. Timber prices have gone crazy. Importing it is one problem, but even the price of native timber has gone up because it is so scarce and there is such a good market for it here and in Britain. Why has that happened? It is because there is a hold-up of licences in Coillte and not because of any shortage in timber. It is amazing, in fact, that the failure of the Department of Agriculture, Food and the Marine, including its appeals board, to deal with licences to fell timber has actually put up the price of timber in this State. I also agree with the point regarding the workforce. If we had planning permission in place tomorrow and we put houses out to tender, we would find that the workforce we had when we were able to build 90,000 houses does not exist any more and nobody has replaced them.
Many of our people in England, Australia and Canada, including skilled machine operators, blocklayers, carpenters and electricians, are now at an age when they would be interested in coming home. We have had this argument before concerning relocation costs and barriers. I refer to people having to sit driver tests again upon returning home and all these sorts of issues which arise. We should look into this matter and see if we should give an inducement to people with certain trades to come home, just as we issue work permits to non-EU citizens in areas where we have critical shortages. Why not induce some of our own to come home to build the houses?
I will address the issue from the perspective of people looking for a house. Local authority houses, if we went back to the previous generation, were inhabited mainly by people who had jobs. Now, people who only have a social welfare income are the only people who can get on the housing list. I have even come across cases where there is no income in a house except for social welfare income. Those are exceptional cases, but they are there. They too were above the income limits for social housing. This situation is creating its own form of social segregation. It is wrong. People working on low incomes should be entitled to get social housing.
Those people also have nowhere to go, because they will not be successful if they go to a bank to get money or go looking for a Rebuilding Ireland loan. It is absolutely farcical that hard-working people on very modest wages are regarded as earning too much to qualify for social housing while also not being able to borrow money. We move up then to those people who a generation ago would have been able to buy a house as a one-income family. They would have what would have been considered steady jobs in the Civil Service, An Garda, nursing and all sorts of areas. Such people cannot now buy houses. It is quite a ridiculous situation. In many cases, when these people apply to a bank, or to the State loan agency which gives money for houses when the banks fail to do so, the replacement for the old county council loans, they find out that the repayments for the highest loan possible would be much less than the current rent being paid by them and everybody else in the same cohort.
Therefore, the people in these cases are not being refused because they are paying exceptional rent. They are paying the going rate. However, it is not possible to borrow an amount on which the repayments would be as big as the rent being paid. One would think the situation would be the other way around. Let us take the case of someone renting a house and paying perhaps €2,000 or €2,500 a month in rent, and it would be higher here in Dublin. We would think that it should be possible for people in that situation to borrow as much money as would give an equivalent repayment capacity and a little bit more in addition, given that there would generally be a feeling that people would stretch themselves a little bit further if they had their own house. We all did that when we got houses. We all stretched our resources that little bit further because our houses became our most precious possession.
I have not even got as far yet as the schemes in the Bill. There is just so much to be done on the subject. I really like the idea of affordable homes, but I have one warning and I have made this view known before to the Minister. I will repeat it. This scheme must not become too legally complex and cumbersome. The only way we will properly test this scheme is by the number of people who wind up living in affordable homes as a result. I have seen in the last decade so many attractive schemes destroyed by red tape. The tenant purchase scheme was destroyed by petty rules. The measure of this scheme, therefore, will be judged according to how many people manage to get an affordable house in the next five years and nothing else. I hope we will watch the small print carefully, because that is the thing which has damned so many initiatives which looked good. I hope we will ensure that this scheme will work as it says on the tin and that the houses really are affordable. However, we must also deal with the loan element, because people will still have to borrow money to buy these houses.
I could go on. As I said at the beginning, however, the problem is simple. If we do not build many more houses at a fair price for punters, we will not solve this problem. In that context, we must deal with the delays in planning and in process. Every process now seems to be slower than it was in the past. Now that we have computers, one would think that everything would actually be faster than it was in the past, but everything seems to be more complex instead. One of the big things we must do is to make things happen faster. One of the biggest hold-ups to making progress on the housing front is a hidden barrier that exists and which was put there by the last Government and by the State. It is called the national planning framework. The reality of the way that is working out on the ground is that it is going to hold up housing in every town and village. It might be very idealistic, but it is not very realistic. Ultimately, those who do not have houses want realism. That is the most important thing they want.
I fully support this Affordable Housing Bill. It is urgently needed and we must get it through the Houses as quickly as possible. Over the years, I have had numerous representations from people who do not qualify to go on the housing list and cannot get a mortgage. The people I am dealing with now are what I would describe as the new working poor. I was working with a couple last week, one of the many couples with whom I am working. They both have good jobs and so do not qualify to go on the housing list. They are paying their rent, paying for childcare and trying to save for a mortgage but they qualify for nothing. It is so difficult now. People are working so hard but they do not qualify to go on the housing list or to get a mortgage. This legislation must be passed as soon as possible.
The other issue being raised with me is that of adult children still living at home with their parents. They all have jobs but cannot get a house. They do not qualify to go on the housing list and they do not qualify for a mortgage. There is such a gap here and if we do not get this sorted now, a lot of people will never have a home to call their own. They will be renting for the rest of their lives or staying at home with their families. This has become a huge issue for all of us. The income cap for Carlow County Council's housing list is only €27,500 which is unacceptable. It means that very many people do not qualify to go on the housing list and that is very unfair.
We need to get this Affordable Housing Bill through quickly. We also need to make sure that we build houses. The biggest issue is the lack of housing supply and that is an issue that everyone in this House has been addressing. It is important to see affordable houses being built in one's own area because it leads to job creation and apprenticeships. We need to get people back into apprenticeships and this Bill can do it. We need to get it right and I totally agree with Deputy Ó Cuív in that regard. We have to get the houses built, stay local and make sure places like Carlow and Kilkenny are not forgotten. I know from talking to people that many are very disheartened. Everyone deserves a home and everyone has a right to a home. This is an area that Fianna Fáil and the Government can deliver on for the country and we have to do it. We have got to get this right. I hope this Bill will go through as soon as possible.
I was speaking to the director of housing in Carlow County Council recently and was delighted to hear that the council is availing of the incremental purchase scheme. That scheme will offer many families the possibility of owning their own homes. People on the housing list want the chance to own their own home. They work hard and they deserve that chance and we need to give it to them. I am delighted that Carlow County Council is working to that end.
The local authorities must move quickly on this once this legislation is passed. We need to embark on an information campaign because there is a lot of misunderstanding about what can happen when the Bill is passed. The main point is that we cannot have barriers or red tape. We cannot have people coming back to us to say they do not qualify or cannot get an affordable house. We must make sure that the people who cannot go on the housing list and cannot get a mortgage will qualify for affordable housing.
I have been speaking to a lot of people my own age recently who have grown-up children, many of whom are still living with them. While that may be welcome for some, if we do not give people the opportunity to have their own home, we are doing them a disservice. We have a duty of care. We must look after people and make sure they can have their own home. It is not their fault that they do not have one.
I strongly support and promote this Bill and urge all Members in the House to support it. We must get this legislation through as soon as possible and make sure that everybody has the right to a house.
The first thing to say about affordable housing is that it needs to be affordable. A number of contributors today stated the Government and Minister for Housing, Local Government and Heritage will be graded on the basis of the delivery of houses. The issue is not just the delivery of houses, but of affordable houses. Reference was made to affordable purchase but it cannot just be a heading; it needs to mean something. In Dublin, it needs to mean regular houses costing around €230,000 and outside of Dublin, considerably less. If that is not what we are talking about, then what are we talking about? We have heard figures in this House of €400,000 and €450,000 in the context of affordable housing but that is obviously not affordable. It may be affordable for some but I do not know many such people. That level is definitely not going to cut it.
We also have the issue of affordable cost rental and we have heard nothing but support for this particular idea. Every speaker who contributed to the debate yesterday, including me, talked about every town and village and city in his or her constituency in the context of house prices. Anyone who does a look-back on the Oireachtas website or on kildarestreet.comwill find this issue time after time, the only difference being that every couple of months there is an increase in our top line figure for rent for regular families.
Affordable cost rental has to work. Examples have been given with regard to affordable cost rental and the outworking of particular schemes that are being proposed by the Government, with rents of around €1,200 per month for a two-bedroom unit. That is not going to cut it. We really need to be talking about figures of between €700 and €900 per month. Only a couple of years ago, those figures would have seemed extravagant and ridiculous but such is the world we are in. That is why, when we spoke yesterday about the absolutely necessity for rent control, we said it needs to happen now because the rent pressure zones are not working. We are not keeping rent increases to 4%. Furthermore, the 4% increase has been doubled in some cases following the Covid period, which is hammering families who are already under severe pressure. It is not working so not only do we need a rent cap for the next three years until we get beyond what is an absolute crisis at this point, we also need to run with the Sinn Féin proposal for a tax rebate for tenants that would be the equivalent of one month's rent. That is both fair and absolutely necessary.
We have all spoken about homelessness, of which there are varying levels. There are people with severe difficulties who fall into homelessness. Some of that is because we do not provide the necessary interventions. We are not providing the individual and family supports that are needed at an early stage before people get into acute situations. I refer here to support around addiction, mental health issues and so on. We always wait until it is a disaster. When it is a disaster, it is far more expensive to deal with from the point of view of the State. Not intervening in a timely manner is an utterly false economy. We really need to get our act together across that area.
The other homelessness involves people who cannot afford the absolutely crazy rents and we need to get our act together in that regard too. It cannot be beyond the Government and the State to deliver housing for affordable purchase or affordable rental and to build council houses. This was done at particular times in this State when there was not a huge amount of money available. It cannot be beyond possibility that the tools of government are brought to bear to deliver a solution for the people. We cannot continue with this crisis.
I fear that there is a belief in this Government, as there was in previous Governments, that if we tip around the edges of this problem, the market will eventually kick in and rectify the problem. We are in an absolute crisis, however, and all of the rules are out the window. If we do not take action, look at this strategically and do everything that needs to be done, we will not deliver for our people.
That brings me to the crux of the matter in this legislation, namely, the shared equity scheme. I will not shock anybody by stating that Sinn Féin has a real difficulty with this. The difficulty is that we are backed up in this regard by the Central Bank, by the ESRI and even by the Department of Public Expenditure and Reform. We are talking about putting something into action that has been operated in Britain and which led to an increase in house prices. In the middle of a housing crisis where costs have gone through the roof, we will introduce this policy, which will add further cost. We are not sufficiently thinking in the long term, we are not solution-oriented and we are not doing all that needs to be done. We are failing abjectly.
It is no more than the difficulties that we and many others have with the Land Development Agency from the point of view of us getting the best bang from our buck in delivering public housing. That means council houses, affordable mortgages and affordable cost rental. No matter what certain commentators from the Government might state, that is what we are talking about. We have no difficulty with anybody owning their own home. The difficulty most people have is that they cannot afford to own their own home and they cannot afford some of the spectacularly high rents to be found across this State. We need to deal with that; it is as simple as that. The shared equity scheme is inflationary. As I said, the Land Development Agency will not provide the best bang for our buck and we are going to give sweetheart deals to developers to make huge profits. I have no difficulty with a developer that is making money on a development but when it is public land, we need to ensure that we get the best bang for our buck.
On what is going on in the private side of the market, we still have a huge difficulty in that we have offered overly fair sweetheart deals to investment trusts. Everybody comes back and says there is a need to deliver apartments and they talk about Berlin, Europe and the rest of it. I will repeat what Deputy Ó Broin said about dealing with one of those big investment trusts that was formally a pension trust in Berlin. He stated that it would have no interest in investing in this State at this point in time because of the chaotic housing crisis we have. We have a yo-yo scenario with prices that go through the roof and then drop off. We also have rents that are sky-high and then we have a drop-off so there is no consistency. These sort of investment trusts that are different from some of the cuckoo funds we have that come in to take what they can, make as much money as they can as quickly as possible and then leave. The difference with these other entities is that they are looking at a return over 50 years. They are looking at whether it is somewhere between 3% and 5% of an annual return.
The problem is that we need a Government that is thinking in those sort of cycles of 50 years and of putting solutions in place that will be there for a considerable amount of time. The problem is that we have short-termism in politics from a point of view that people are sometimes interested in what the next rung in the ladder within a political party is, as opposed to delivering for the people and putting long-term solutions in place.
A number of speakers from all parties have spoken about the difficulty of those people who earn too much to get themselves on the local authority housing list, which is bunged up anyway and we have people who are waiting huge amounts of time to get local authority housing. However, we have people who cannot meet those criteria because they earn slightly too much but then they have to try to compete in a town like Dundalk with three or four workers from the WuXi plant, for example. Those workers are coming in to work in a plant but three or four of them are all earning so they can afford some of these spectacularly expensive rates. They might also go up against a family that is getting HAP, as it should in order to ensure it is in housing. The problem is that the baseline rent is being set somewhere between €1,000 and €1,400 or more per month, which is disastrous. That is why we have the difficulties we have so we need to deal with that.
It would be remiss of me not to mention a number of issues that have come across my desk in the last while, including that of people who fall into another bracket again. Not only have we been hearing consistently about reviewing figures or rates for being able to access the local authority housing list, we also need to ensure that discretion can be shown and that scenarios in which people's circumstances have changed drastically can be taken into account. We are all aware of people who have children with severe disabilities that require certain types of housing and which involve huge costs. These people are trapped and will find it difficult to even get a landlord who will rent to them because they are considered to take a bit more effort. This means they fall between stools and hit the ground. There is no discretion and there are no write-offs for earnings.
I know of a constituent who has been considering the job they are in for a huge amount of time. The person is wondering if the best thing to do is to leave the job and get onto the dole because then at least, that person might be able to access housing. Given this person has a child with severe mobility disabilities, they could at least access a house in that scenario. If they were considered and could get the housing then that person could possibly look at going back into employment again. Think of the mad system that allows for this to happen.
In addition, Louth County Council has huge amount of really old housing stock. It was built in the 1970s, some of it before that and some of it after that. A huge amount of it needs to be upgraded and updated and the difficulty is the moneys are not there. There are insufficient moneys for maintenance. I accept that money has been drawn down recently for voids and that will put a considerable amount of houses that have been lying vacant across Louth County Council's portfolio for a number of years back into use. That is what needs to be done but we need to deal with the fact that this housing stock is falling into disrepair. The residents of those houses may never have looked for any upgrade works but now are dealing with serious situations where the maintenance budget is not there to deliver. The problem is that we wait until it gets worse and worse and then it becomes more costly and eventually will need to be dealt with. I acknowledge that a retrofitting programme has begun but it is small scale at this stage. I accept that it will be escalated but it will not deal with the remedial works that are needed. I call on the likes of Louth County Council to do a full audit on housing stock from the point of view of needing a programme of works that at least looks at windows and doors. We talk about climate change but a huge amount of this housing stock is losing every bit of heat and is utterly costly from a climate change point of view.
We need to get serious about all of this. It is like the person asking for directions in Kerry who is told the person answering would not start from here but unfortunately here is where we are, so we need to take this action and there are no two ways about it. The thresholds for local authority housing need to be reviewed. I will return to this with the Minister of State, Deputy Noonan, and I have already brought this up with the Minister of State, Deputy Rabbitte, in the area of disabilities. There is a separate issue in respect of disabled person's grants and I am dealing with a number of people who fall into priority 1 in Louth County Council. I am talking about people who have severe disabilities, some of them caused by cancers. I know of one person suffering from brain cancer who is in a really difficult situation.
Another has considerable mobility issues following cancer care. We are dealing with issues for people in council houses and those who own houses. They have been accepted and assessed as priority 1. However, the problem is the list is so great, these people may not be able to access these absolutely necessary supports for another two or possibly three years. That is not good enough. It is another situation where we are facing an incredibly difficult problem. We have a health need but we do not put sufficient money in and allow the situation to get much worse. We let the problem escalate and will then have to deal with it when to do so will be much more expensive from the State's point of view. That is what we are doing. We need joined-up thinking.
I add my voice to the other scenario. Even if we get our plans for council-led building correct, we will then need to ensure councils have full powers, are able to draw down moneys, deal with developers, put developments in place and get houses built. We have heard from directors of services for housing in county councils throughout Ireland about the difficulty that can exist, from time to time, in drawing down money. We know that, over the years, it has been much easier for an approved housing body to draw down the money. It was also easier for those bodies to get planning approved. We have created difficulties for councils in building houses. That is before we get into the necessity to put money aside for upgrade and upkeep and whatever other resources are needed.
We must get absolutely serious about all of these matters. We are talking about going down individual culs-de-sac that will all end in costly failure. I am not absolutely dogmatic about any form of housing delivery. I am not ideologically caught up in how we deliver housing. I am caught up in the fact we need to deliver. The Minister will be graded on how well this works.
I will come back to the Minister on the individual issues about which I have spoken. There is a real issue for people who are experiencing particular issues and costs around disability. On the wider issue, we need to use every tool there is. We need to make sure a full Government approach is taken to delivering housing. That must include affordable housing, affordable purchase, affordable cost rental and council housing. We must get serious and think long term. If investment funds are coming into the country, buying up housing estates or building unaffordable rental properties and taking all they can, we need to shift the paradigm. We need to introduce special purpose vehicles, as has been done in other countries across Europe. We need to ensure we create companies that are acting from the point of the State but operating in the private sector and which can draw down money, whether from the European Investment Bank, EIB, or the many other sources that exist. We then need to deliver housing. It is as straightforward as that. As I said, this Government will be graded on housing delivery and nothing else. It must deliver from the point of view of affordable purchase, affordable cost rental and council housing. That is before we go into the wider issue of estate management. As I have said before, we need early and clever interventions that include providing family supports, building houses or whatever we need to do. We need to resource all the bodies that are needed to deliver.
The Ceann Comhairle and I have learned a lot about housing over the years. We have put many of those things into practice in our own constituencies over the years, and they worked. However, approximately 20 years ago, the emphasis on the right to own a house fell away. A great deal of emphasis and advertising went into the glories of renting and how wonderful it is to rent. Even in recent years, it was not unusual for someone to come on "Morning Ireland" to tell us how wonderful it was to rent. That was never the case. Renting was always a way out of housing, a way to make it impossible for people to own their own houses.
We all know that affordable housing is part of the taxation system in this country and always has been. If people were able to afford a house, they were able to plan their lives and work without having to go back to their employers or the public service every three or four months looking for a pay increase. They had stability. We were able to solve any issues because we did something serious about them at the time. We did that in a number of ways. We built local authority housing. We provided annuity loans and housing agency loans through the 1966 Housing Act. Those loans were excellent. They applied a principle of two and a half times the income of the main earner and, later, included the income of the second earner. It worked extremely well. It meant there was latitude there for borrowers in the event of something going wrong, for example, somebody in the household becoming ill. It meant a family would be able to survive because they were not overborrowed.
Wise people then came along to lead us in a different direction and told us those ideas were old-fashioned, that we should change all that and have a formula. People were then loaned up to ten times their incomes. That was a crazy situation and, of course, when the crunch came, they were the people who were hit first. I am sure the Ceann Comhairle and everyone else in this House dealt with cases when then crash came. The people who were way over that two and a half times their income limit when they got their mortgages in the first place were the first casualties. It was sad to see many people, poor families, being hammered in a way that was totally unnecessary. There was no need for them to be led astray in that fashion.
I listened to Deputy Ó Cuív who has the experience of having lived and worked with these sorts of situations over the years and he has learned from them. What he said was true in that we need to get it right this time because there will be no second chances. The public are depending on our ability to deliver. That means we must deliver big time in the first instance. It is no good telling people that in five, six, seven or ten years, we will have houses for everybody. The children of today will be adults at that stage, and long since past caring whether they ever get houses.
In 1992 and 1993, people were leaving this country and emigrating. There was a shortage of housing then in the same way there is now. People emigrated because they could not get houses at home. People were sleeping on floors. The parents of emigrants who returned from abroad were sleeping on floors because they had nowhere else to go and it was not possible to deliver housing in time.
I believe we are only tinkering around the edges of the issue. The only way to deal with it is commensurate with the demand and the requirements. There is no use in saying we will make 15,000, 20,000 or 30,000 houses available if the need is for 150,000. We need to provide houses upfront in a serious hurry.
An opportunity comes up every so often to inflate house prices. Scarcity is one way to do that and that is the way things are now. A modest house in the Rathmines area went on the market in recent weeks for a modest asking price and eventually sold for €1.2 million or €1.3 million. This is utterly crazy stuff. It is all because people see an opportunity. It is people with money, not first-time buyers, who are doing that. People who bought houses four years ago, if they were able to get a loan to buy a house, can now sell those houses at a profit. That is a danger signal. It will displace first-time buyers who are now coming on the market. It is a crazy situation. It means the people who are waiting to get a house now for the first time, people with small kids and so on, may wait forever. Nothing will happen because they have been displaced. There is always a good reason such people cannot be accommodated now.
The Ceann Comhairle and I, from our experience, look at this kind of thing with a great deal of concern.
If we now want to find out how far and where we are going to go, let us evaluate the cost of building a house. In recent weeks, we noticed reports of increased building costs. Once we go beyond the building cost of a house, whatever it may be on the market, a person borrowing money for a house is in dangerous territory for the simple reason that he or she is now competing in a market. At that stage, all that person is doing is satisfying what needs to be satisfied when somebody else wants a house ahead of him or her and he or she is outbid.
The thing to remember is this. Incidentally, at the all-party special committee after the 2016 election, which we all attended, some of us put down a marker at the time to say we needed to build large numbers of affordable, good quality houses through the local authorities, which people could rent or buy as they wish. Do not forget that as soon as that happens, whether a person is renting or purchasing, whoever builds the houses for them, be it the State or the private sector, it means that an income is accruing there and then from the construction of those houses.
It is a very lucrative market for the rental sector. People say if it was not there, we would have a really serious problem and we would. If we did not have to rely on that, however, house prices would be much lower. I will digress for a minute. I thought this was the saddest story I came across in recent times. An immigrant returned home from abroad with a good job and profession. That person arrived here, took time to settle down and then decided to apply for a local authority loan. The person's income was within that scope but they were told they need six months' bank statements and income clarification because they had been out of work for the previous six months. I thought it was a crazy attitude. The person was in work before and was going to get a job. This person had to get a job because there was scarcity of labour in the area in which they majored. The result was that this person did not get a house, and still does not have a house, because the crisis raced ahead of them. The daftness of it all is when people in that kind of situation, who could easily be helped, are not being helped, encouraged or given hope. Hope is important to everybody, whatever their social status in life.
I had a discussion earlier with a lending institution that had designs on somebody's home. Hopefully, it will only be designs. I had to say this. The same despair applies to people at different income levels if they are not able to hold on to their homes. It does not matter what their income is. If they are going to lose it or if the loss is imminent, it affects them in the same way as a poorer person on a lesser income. Everybody is, therefore, entitled to hold on to their home and do the best they can to achieve that.
I hope we do not have many more of these debates. I know the Minister of State is genuine in his efforts to deal with the housing situation but I would warn that will take a much bigger effort than we have anticipated. My reason for so believing is that every so often, when it is about to become possible for many people throughout this country to realise a home of their own, something happens. The market takes off and it is outside their reach. Suddenly, they are competing with a market they cannot handle.
The Ceann Comhairle will recall that we had the shared ownership loan system, which was quite good and helpful to get people onto the housing market ladder. Some genius had a brainwave about the rental part of the equity, which was originally at a 4% interest charge or the equivalent of a local authority rent. Some genius decided he was going to increase the rental by 4% per annum, putting it right outside people's means and making it impossible. Entire reams of house loans went into arrears. It was not the loan part but the rental part of the equity that went into arrears because they were no longer able to handle it.
Can we please come to conclusion on it this time? Can we ensure that we build houses up front? The construction sector is well able to do this if we give it the authority, instruct it that the funding is available and ask it how many houses it can build, how quickly and for how much. It is not rocket science at all. It is quite simple. The Ceann Comhairle and I did it in our constituencies and proved that it could be done at a fraction of what the cost was otherwise in the marketplace.
I believe the Minister of State is genuine. I think he will do everything possible to achieve the result we want, which is to make a house available to everybody as quickly as possible, not in ten or 20 years’ time. When we tackle the housing situation for the 100,000 families on the housing list, we need to make serious inroads in the first year. If we have to do what was done in the past in this country and import the construction sector into the country to deal with the job, then that is what we must do. If we do not provide houses sooner rather than later, however, the tide is going to go out and it will be deemed to be a failure of the administration of the State, unfortunately, to provide for that cohort of people. It would be a sad thing to happen.
I appeal at this stage, therefore, to those who make the choices and decisions in certain high places - they are not the Ceann Comhairle and I - to make the decisions clearly in the knowledge that we do not have much time. At the very maximum, we have three years to solve and break the back of the problem we have nowadays. People start talking about how we can do it over ten years. Over ten years, we can do what we like. It makes no difference. If we do not deal with the problem up front, the children of today - the adults of tomorrow - will have gone past the stage where they are going to need a house at all.
It must be really awful for small kids to live on what is effectively a waiting list forever only to have no home of their own. Daddy and mammy are being asked on a daily basis when they are going to have a home, and the landlord or somebody else is pressing to tell that family they need the house to sell it to somebody else.
I will finish with this. I was asked by one of our councillors in the very recent past if I would visit a couple who were living in a caravan, which the Ceann Comhairle and I have often done. It was not to see for the first time what it was like but to simply see how they were coping in the circumstances. In the middle of winter, in freezing cold weather, two adults and a child were wearing summer clothes. All I can say is that if we do not respond to that kind of situation soon, we will rightly be blamed for failing in our duties.
It seems I got the short straw. I thank the Ceann Comhairle for the opportunity to contribute to the debate today on the Affordable Housing Bill 2021. I would love to be excited about, welcome and look forward to the difference this Bill will make to the housing crisis. The reality is, however, that Fianna Fáil and Fine Gael would not know what affordable was even if it was part of a presentation at a golf dinner.
Last week, Billy Kelleher MEP tweeted that the Dublin Bay South by-election is dictating the issues around “free housing for everyone”. Will we get free houses everywhere that Fianna Fáil and Fine Gael lose seats or is it just starting from now?
There was uproar on Twitter after Mr. Kelleher's ridiculous comment about free houses and rightly so. Everyone knows that there are no such things as free houses and those who live in local authority houses pay rent. Oftentimes, those who live in local authority homes can be living in unsuitable conditions with damp, urgent repair needs, replacement windows needed etc., but have to wait until the maintenance crew gets to them.
Approximately 1,000 people living in social housing in Donegal have walls crumbling around them because their accommodation was built with defective concrete blocks infested with mica. It was an accident waiting to happen. There are, of course, at least 4,000 owner-occupied homes crumbling because of mica. The cost of rebuilding or refurbishing one's home while continuing to pay the mortgage, and pay rent somewhere else while the repairs are taking place is unaffordable. The 90% mica redress scheme is not fit for purpose and I reiterate my call for 100% redress for affected homes, alongside the other necessary measures such as covering rent and pausing mortgage repayments.
Last Monday, the Take Four blog by Unite the Union was launched, as part of which Conor McCabe wrote an excellent opening article: Why Fine Gael created a housing crisis – and who they are doing it for. It is the most recent in a long line of reality checks being delivered to the Government about the housing crisis. Dr. Rory Hearne, for example, has also been highlighting the culpability of the Government in the crisis. Mr. McCabe's article begins as follows:
On 14 October 2015 Taoiseach Enda Kenny stood up in the Dáil to speak against government intervention to tackle the rising cost of rents. "It is very clear that interference in the market to its detriment is not something that we should do" he said, adding that "if you interfere in the wrong way you make the matters worse"...
However, there is a wider context to his remarks, one that shows that what is at play here is not just ideology but the protection of a state-sponsored strategy that has led to profits of hundreds of millions of euros for private investors, to the detriment of social cohesion and stability.
When Kenny stood up in the Dáil to denounce rent freezes, it had been two years since Fine Gael and Labour had introduced legislation to allow Real Estate Investment Trusts [REITs] to operate in Ireland.
Given the recent outrage and faux shock at the vulture funds gobbling up full housing estates, the article is an important reminder that those funds were welcomed by the Government.
Mr. McCabe goes on to say: "[T]he REITs business model, then and now, demands an under-supply of housing that forces rents up in order to work." He also writes:
[D]avid Ehrlich of Ires REIT was able to say in 2016 that Ireland is "a great market. We've never seen rental increases like this in any jurisdiction that we're aware of... I truly feel badly for the Irish people."
Mr. Ehrlich may have felt bad for Irish people but he went ahead and made profits off their backs in any case. I could quote much more from Mr. McCabe's blog but, instead, I urge members of the Government to read it for themselves. I urge them to listen to the voices of those affected by the Government's broken housing policies. For many people, there is no bank of mam and dad. There is no reprieve from extortionate rents to enable them to save a deposit and get a secure home. There are no options to stay in their neighbourhoods or community settings, where they have support networks. For too many people, there is little or no choice when it comes to housing.
Mary Coogan, a 41-year-old single woman from Wicklow has been very vocal on the difficulties she has experienced in finding a home. Mary has a good job with above average wages but she is buying alone and is finding it impossible to afford anywhere in Dublin. She has appeared on "Claire Byrne Live" and other media outlets to highlight the accessibility issues for single purchasers. On her blog, Mary writes:
Facing into a future of never having a secure home, no matter how early you get up in the morning, is grinding down tens of thousands of people in this country. It is heartbreaking. The housing system that successive governments have created – the refusal to tackle fundamental issues like security of tenure and rent certainty, the slavish commitment to private investors, and above all, the ideology that treats housing as a source of profit rather than as a home – is ruining people's lives. It is fracturing our communities, wrecking our mental health, stifling creativity and innovation and forcing yet another generation to feel that their best option is emigration. It is robbing children of their childhoods and robbing parents of the ability to protect their children.
Turning to the Bill, a number of issues struck me when I read the explanatory memorandum. The first was the statement that "the current schemes of priority (adopted by housing authorities in 2018) will cease to have effect on the coming into effect of section 11." That is grand but how transparent will this process be? Will people who were not housed prior to the enactment of these provisions lose their place or priority on housing lists? There are people, including families, who have been languishing on lists for ten or 15 years. Will they be kicked to the back of the queue?
The second point I noted was that applicants would be given priority "on the basis of having lived some length of time in the housing authority area". What about people fleeing domestic violence? What about applicants who are in recovery from addiction and need to be away from their previous circles? Will priority be given to people who are leaving direct provision or coming out of State care? We have seen the problems that arise from the DRHE's local connection criterion for providing emergency accommodation. The Government denied there was a problem in that regard but it was clear it was happening.
The third point that struck me was the explanation relating to the provisions under section 34, entitled "Setting and review of rent in cost rental tenancy". The first paragraph explains that the rent calculations will "take account of any increase in the Harmonised Index of Consumer Prices" and that the rents calculated in this way "are upper limits, giving landlords the option to charge lower rents as circumstances allow".
The other essential reading when examining this Bill is the briefing paper by the always excellent Oireachtas Library and Research Service. This paper by Dr. Sinéad Ashe, Shane Burke, and Hari Gupta, published at the end of April this year, is entitled Proposals for Affordable Housing. The subtitle is "Briefing paper to support consideration of the proposed legislation". Did the Minister take on board any of the key issues highlighted in that paper? It makes for stark reading and offers astute analysis and important points for consideration.
In regard to cost-rental housing, the Minister has said that the provisions in the Bill are targeted at those with "moderate incomes", but what that means is not defined. Given that he seems to think €450,000 is affordable for a house in Dublin, I dread to think what rents he imagines people on moderate incomes should be able to pay. The pilot scheme in Stepaside in Dublin, for instance, has rents set at €1,200 per month, which is ridiculously high. The ESRI has said that the Minister's shared equity scheme will probably push up prices. The Central Bank has come out against his proposals. Neither of these bodies could be called a radical left-wing think tank.
For whom is the Minister introducing these schemes? Are they, once again, for the benefit of private developers and landlords? The Central Bank has said that an average of 34,000 dwellings must be built per year. The Tánaiste - I will call him Comrade Varadkar - promised at his party's Ard-Fheis that 40,000 houses would be built. In fact, there were fewer homes built in 2020, when 20,676 were constructed, than in 2019. The Covid-19 impact is likely to be drastic for construction this year and next. There is much more I would like to say on this issue but I am running out of time. I will just note that in 2020, the 16th annual Demographia International Housing Affordability Survey placed Dublin and Galway in the category of "seriously unaffordable".
At the pre-budget 2022 online meeting of the Oireachtas Disability Group last week, we were informed about the housing crisis for disabled people. Why does the Government not insist on universal design standards for buildings? Most disabled people acquire disabilities in later life and need adaptations to their homes. We cannot account for every eventuality in our designs, but why do we allow developers to cut corners and minimise living space or light in an effort to fit as many units onto a site as possible, instead of ensuring buildings are designed and built to a high, inclusive and universal standard? The Oireachtas Disability Group is asking for a commitment that 7.5% of new builds will be accessible. This is a drastic under-ask but it has decided to go with the evidence-based approach.
Finally, I want to refer to my submission to the Minister on the housing for all policy, in which I listed proposals that would make a huge difference to the housing crisis. I noted of the significant funding available for housing, the majority of it is being misdirected, misspent and is far too focused on lining the pockets of private landlords. I called for a referendum on economic, social and cultural constitutional rights. I asked that the maximum income limit for the housing list be removed, thus giving a realistic picture of the numbers in need of housing. I called for vacant homes to be subject to immediate compulsory purchase order and made available to people on waiting lists and first-time buyers. I proposed that all unoccupied apartment buildings be commandeered to provide immediate housing as an emergency measure. I urged that NAMA release all residential units to local authorities immediately for the provision of social and affordable housing. I argued that affordability should be set to enable those on the minimum wage to buy a home. I proposed that Central Bank lending rules should be changed such that an applicant's ability to pay would take account of years of rental payments. I suggested that house values be set by an independent commission and that there be greater regulation of estate agents. Finally, I argued that vendors should be instructed to undertake a structural survey prior to the home going on the market, as is the case in Toronto and Ontario, where the home inspections are then provided to interested buyers prior to their making an offer. This means they know how much work is needed and that can speed up the process.
I have had the advantage of listening to the entire debate today and I feel I am swimming in mud. There have been wonderful words about affordable housing and cost-rental housing and all that type of language. I have read about the subject and listened to what was said today and I can only repeat that it is like swimming in mud trying to understood all of it. Then I stood back and wondered why that should be the case when this Bill is being described as transformative legislation.
I am looking and what is missing here is a failure to recognise that this Government and previous Governments have treated housing and homes as commodities. It would be bad enough if that was all that they did but their policies actively encouraged the treatment of housing or a home as a commodity.
From 2009 construction stopped in Galway. I do not wish to be parochial but it needs to be put in context. Why did it stop? Ostensibly it stopped because of the financial crisis, but it never resumed. Not alone did it stop and was not resumed but parallel to that we introduced different schemes that actively ensured the private market would be kept floating when it was in trouble and when prices should have continued to tumble. We set up the housing assistance payment and told those on the waiting list it was the only game in town. We took them off the waiting list and put them into private houses with absolutely no security of tenure. We added to that repeatedly with various schemes. The figure of more than €3 billion has been boasted about as the highest amount of money ever to go into housing when almost half of that is going into the private landlord sector. Again, just to pre-empt any comments, I believe we need private landlords. They are absolutely part of the solution to the housing crisis but the other major part is the role of the State in stepping in and giving a strong message that we believe a home is absolutely the most basic ingredient of a civilised society. Without a home, without security of tenure, a person can say goodbye to taking part in a democracy. We, as a country, through our Governments, have completely and repeatedly undermined that.
I will take a little look at Galway, very quickly. The daft.iequarter 1 2021 rental report showed the average monthly rental price in Galway was €1,400. I know for a fact it is much higher than that; it is €2,000 for a three-bedroom house in the area where I live. There was a rise of 6.7% in Galway in that first quarter. The prices for the year show the increase was 11.9%. We will go back to HAP, which I mention repeatedly. The Simon Community does a snapshot report every quarter called Locked Out of the Market. There were two properties in Galway city and two properties in the suburbs that were within the standard discretionary HAP limits. The House should remember we are giving out €1.4 billion, which I am told is the cumulative figure, and it is rising. HAP is the only game in town and there are two properties available under it.
Where do I go with this legislation, which I have read, and the explanatory memorandum, which I have read too, and also the digest? The digest was produced back in April and my note tells me the Oireachtas Library and Research Service was unable to provide a full digest on the final legislation due to the short time of two working days between publication of the Bill and the scheduled Second Stage debate in the Seanad. I thank the service for its briefing. My colleague, Deputy Pringle, has already referred to it. It is an excellent document and highlights 15 issues going back to when the heads of the Bill were published. Not one of those issues has been addressed satisfactorily, to my knowledge. I almost want to give up in relation to this because we get tied up with words and propaganda and lose the trend and the thread of what has happened here.
We must go back and declare a "housing crisis", a term which I see the Minister is finally using in his speech. I was elected for the first time in February 2016 and am acutely conscious of the privilege. Before that my colleagues, Deputy Pringle, former Deputy, Clare Daly, and so on fought bravely and continue to do so to say we have a housing crisis. Why do we have crisis? It is because we need to change Government policy. How do we change Government policy? We do so by pushing and pushing each Government to do that. Thus we finally have a recognition here by the Minister, Deputy Darragh O'Brien, that we have a crisis. He talked about it at the beginning and the end of his speech and in between he forgets to tell us it was caused by the Government and the previous Government. He fails to explain why he has not complied with the programme for Government, which commits to holding a referendum. He fails to explain that in a reply this morning he told us it was now going to a commission to review that commitment to put it into the Constitution. By the time we enshrine it in the Constitution we will have no public land left because this Bill, along with the Land Development Agency Bill, is planning to use the one asset we have, our public land, which is an integral part of the solution. Instead of that we are giving the thumbs-up to the Land Development Agency which is being set up under statute now but which has failed to do the job it was set up to do, namely, to do an audit of all public land and give us a report. It has not done that and now we are backing that up with an Affordable Housing Bill that is going to have housing that is anything but affordable. Why is that? It is because the Government is still taking its mark from the market and not from what people earn in this country and what the cost of a house is. I am looking at the digest and from that I see the Central Statistics Office states the median average earnings are €36,000. I repeat, the median figure is €36,000. We should then look at the cost of the house and ask how we build houses and provide houses for our people that allow a person in that earnings bracket to either rent a house or to buy one. How do we do that? We do it by being honest and by changing Government policy.
There is an inbuilt snobbery in all the policy coming forward from the Government as it assumes we all want to own a house. We do not. We want choices. We want a choice to buy a house if we can afford it and we want a choice to rent a house for life with security of tenure. The best way to give a house for life is for the State to build houses. I used the words "public housing on public land". I do not mind if it is cost rental or any of that language. I do not mind if it is cost rental, where the rent is related only to costs of building the house but not profit and if it is built on public land to remain on public land forever. There is absolutely no guarantee in any of this that the cost rental will not be sold off in the future. There is absolutely no guarantee of security of tenure. The Minister of State is sitting here telling us this is an affordable housing strategy that will transform. It certainly will do that. It certainly will transform our public space such that it is not public space any more, not public land.
I am looking at this and wondering, in the minute I have left, what else I can say. What else can colleagues do to get behind all this propaganda and say a home is an essential unit for everyone whether it is rented for life or purchased? A home is the most basic thing to have so we can participate and take part in society. I am so tired of the propaganda and the twisting of language. That twisting of language has led to there being absolutely no confidence in the democratic system or in the Government. That for me is the worst thing that has happened. People are losing respect for the Government and for language and believe we are all the same and that we are all in it for our own gain, and that is not accurate. There are many good people on this side of the House who have repeatedly stood up and lost votes by standing up saying this is not the way to do it. I have five seconds left. I am not going to make a difference at this stage except to place on the record that this is going to make the problem worse rather than better.
I thank all the Deputies for their contributions. I know the frustrations among many Deputies. As Deputy Pringle leaves, I note he mentioned Toronto as an example of somewhere we could take ideas from. Obviously, he has not researched the current state of play in Toronto and the housing crisis that is there. I point out also that there is absolutely no inbuilt snobbery whatsoever in the way this Government approaches this problem.
We are trying to provide solutions. We are doing our best, day in and day out, to come up with the best possible solutions to try to deliver as many homes as we can for all our citizens while protecting the most vulnerable. That is key.
We are keenly aware of all the housing affordability challenges facing people across Ireland but it is only by taking measures across all aspects of our housing system, including housing for purchase and rent, whether delivered privately or publicly, that we can we begin to improve affordability for our citizens across the board. The suite of measures we are proposing and implementing is designed to provide affordable housing for all our citizens.
This Affordable Housing Bill and the Land Development Agency Bill 2021 will work in tandem to give people the opportunity of affordable home ownership and long-term secure rental. These two landmark Bills are backed up by the largest housing budget in the history of the State and our most ambitious social housing targets on record.
I will now follow up on some specific issues raised during the debate.
Although perhaps attractive, the provision of one single and absolute indicator may not provide the most helpful response to the question of what is affordable. There is limited academic or international support for an affordability measure that concentrates on averages alone. This is because different groups can experience very different conditions. As all Members will be aware, the concept of "affordable" is different according to each household's unique position. Assessing affordability and the financial constraints on households is not best identified by rules of thumb or asking how much is too much, but rather by asking how much is too much for whom and in what circumstances.
What a number of Deputies do not seem to appreciate or acknowledge is there is no "one size fits all" approach in assessing affordability. Our proposal will assess and define affordability by household and will accommodate each eligible household’s particular family need and financial circumstances. To this end, I broadly confirm the intention is to provide that a household can apply to purchase a modest family home using the mortgage funding available to it. If the family cannot afford the home in question at its market value, the equity support being made available can bridge the gap between the mortgage funding and the price of the home.
All Deputies have agreed the development of a cost-rental sector is a welcome intervention. By this very definition, the rents charged must be structured to cover costs. The starting rents for cost-rental homes can and will be lowered by public subsidies to support development or acquisition. Given the high cost of housing, it is right that public land, infrastructure and construction grants and favourable financing terms are used to ensure that rents are not excessive for the target cohort of tenants. It is important that this Bill provides flexibility for the Minister to set certain eligibility and income parameters via regulations as opposed to placing them in primary legislation. This flexibility allows us to quickly respond to changes in the housing market.
A number of Deputies raised the point that the Bill does not guarantee that new homes will be subject to cost-rental regulations in perpetuity. The period of 40 years is an absolute minimum. If a provider wants to offer cost-rental housing independently, complying with the restrictions without any particular incentive or support, any such commitment to the sector will be welcomed. However, projects that receive public support will require long-term commitments. Where our local authorities and the Land Development Agency deliver cost-rental homes, I envisage their committing homes to the sector in perpetuity.
The initial delivery of cost-rental homes will be undertaken by public bodies and housing charities. The models employed for the first projects are entirely funded by State-backed debt and public subsidies. However, if we agree that cost rental must be delivered at real scale, there is a necessary limit to what the Exchequer can manage alone. This is not a peculiarity to our cost-rental proposals but a feature of all mature cost-rental systems. Limited equity returns may attract non-State investors with a long-term view like pension funds providing for the retirement of workers and investors with an emphasis on environmental, social and corporate governance. Limits on returns will be informed by the 3.5% to 5% equity return allowed in Austria’s limited profit housing associations, which is a good example of a mature cost-rental system.
As I have said, one of our key priorities is the completion and roll-out of the new affordable purchase shared equity scheme. By assisting in lowering the entry purchase price for households, this scheme will provide an equitable way of assisting people to afford their own home while also building a sustainable model that reflects the State’s support for homeowners. The scheme is a short-term, finance-limited measure that will boost housing supply and get first-time buyers into new homes by bridging the affordability gap faced by many. It will help bridge the gap between the first-time buyer's maximum mortgage and the price of the new home he or she wants.
Extensive engagement has already been undertaken with key stakeholders to ensure the optimum design of the scheme and significant feedback has been factored in. I am confident that the final design of the scheme can mitigate any potential inflationary risks. All homes will be delivered below the Central Statistics Office median price ceilings and in many cases significantly so. However, I recognise the concerns that have been raised and I confirm the scheme will be kept under evaluation and formally reviewed after one year of operation.
I am happy to confirm our intention to bring forward amendments to the Bill relating to Part V provisions, which will be an important way we encourage the development of more affordable homes. We will expand Part V to encompass affordable purchase and cost-rental homes in addition to its current important role in providing social homes. This commitment will not only add to the number of homes available in these areas but it will increase tenure options for people and will assist in providing a good tenure mix within our communities.
We believe that everybody should have access to good quality housing to purchase or rent at an affordable price and in sustainable communities. The provision of more affordable housing has a profound benefit socially and economically, and the State has a fundamental role in enabling the delivery of new homes and ensuring that best use is made of existing stock. Everybody in our society should be given the opportunity of home ownership, as has been the case for their parents and grandparents, and these measures support this aim.
I thank all the Deputies for the engagement on this Bill and I look forward to discussing amendments on Committee Stage soon.