Dáil debates

Tuesday, 25 January 2022

Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions

Housing Policy

8:55 pm

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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64. To ask the Minister for Housing, Planning, and Local Government his views on whether the increased reliance on turnkeys by local authorities, approved housing bodies, the Land Development Agency and the Housing Agency for the delivery of social and affordable housing as outlined in the Government’s new housing plan will inflate the cost of social and affordable housing and will put those public agencies in direct competition with private purchasers for the limited supply of private homes. [3577/22]

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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As the Minister is aware, his housing plan has a range of new measures and specifically for the delivery of social and affordable housing. One concern many of us have is that, certainly in the early years of this plan, there will be an increased reliance on turnkey affordable purchases of private sector developments. Does the Minister share this concern? If not, can he give us the reasons why he does not believe this is going to be a feature, especially this year and next year?

Photo of Darragh O'BrienDarragh O'Brien (Dublin Fingal, Fianna Fail)
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I thank the Deputy for his question. As he rightly said, under the Housing for All strategy, we confirm both the need and the intention to increase the supply, on average, to about 33,000 units per year. The strategy is, however, clearly based on increasing new supply across social, affordable and private housing from State-owned and private land. Our policy is to bring forward delivery in the shorter term by enabling supply that would not otherwise have been built. It is not about hoovering up things that have already been built but about enabling new supply. We are targeting the additional supply from unactivated sites, which otherwise may not have progressed. That ensures that we will not be competing with private purchasers for the limited, but thankfully increasing, supply that is currently on the market. We will instead increase supply across the board. That is our absolute focus.

The Housing for All policy is backed by an historically-high level of investment of €20 billion over five years, or €4 billion plus per annum. We have set a target in that period to deliver 47,600 new-build social homes over the next five years, as well as providing nearly 29,000 affordable purchase and cost rental homes. As part of a much wider range of measures to achieve these objectives, including the development of a strong new-build pipeline from local authorities, several initiatives to ensure the delivery of affordable homes in the near term have been developed by me and my colleagues. These are targeted at bringing forward houses that would not have been built yet and at activating uncommenced planning permissions, thereby bringing forward new supply in the areas where the need for affordable housing is most acute. My Department and delivery partners constantly carry out monitoring to ensure that value for money is also achieved. Supported by this strategy, indications of increased construction activity are becoming evident. Some 30,724 residential units commenced in 2021, and that is a year-on-year increase of 42%. This overall increase in the supply, together with the measures in the Housing for All policy, is key to ensuring that home ownership is supported for both affordable and private purchase.

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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I understand the theory. The problem is that it is going to run into some significant problems in practice, particularly when we look at the pipeline. As the Minister is aware, 2020 is the last year for which we have figures, and half of all new-build social homes were turnkey units delivered by local authorities and approved housing bodies. The other half was partly Part Vs and partly direct builds. Given the pipeline in the social housing sector, it is difficult to see how that is going to ramp up in respect of direct delivery this year and next year. It may happen by the end of the plan, but not in its first years. The Minister has also added the affordable housing fund, the cost-rental equity loan, Project Tosaigh for the Land Development Agency, LDA, and the Croí Cónaithe cities fund, including forward purchase agreements for the Housing Agency for apartments in the cities.

Given the limited targets in the Minister's plan, it is hard to see how new-build activity developed by those agencies is going to deliver those targets. The pipeline is not there for this year and next year and probably not even into the year after. That means turnkey units and forward purchases are going to be required and those mechanisms often activate supply. While we may disagree with how this process may pan out, the question is, what are the Minister, his Department and those agencies going to do to ensure that there is not increased competition for turnkey units and forward purchases, thus pushing up prices for public housing delivery and squeezing out owner-occupier purchasers?

Photo of Darragh O'BrienDarragh O'Brien (Dublin Fingal, Fianna Fail)
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I assure the Deputy the last thing we want to do is to squeeze out owner-occupier first-time buyers. That is why every measure we put in place in the Housing for All policy, such as those mentioned by the Deputy, including the first home shared equity scheme, which will kick in at the end of quarter 2 and be able to help people to bridge the gap between the finance they have and what they need through the State taking an equity share, is a supply-side measure. We are advertising advanced purchasing arrangements now among all the local authorities to activate planning permissions that would not have been brought forward otherwise. We have had a decent response to Project Tosaigh operating through the LDA. Again, that is concerned with compact growth in areas in our cities, but not exclusively so, where we have issues with affordability.

Those are short-term supply measures as well. I assure the Deputy that the pipeline we have in social housing for the next several years is actually very strong. That is why we need local authorities and local authority members to continue to support the delivery of social housing. We approved at Cabinet only today the start of the construction phase to provide 1,047 homes at O'Devaney Gardens. That involves an investment by the State of just short of €135 million. I remind the Deputy that his party opposed this project in Dublin City Council, DCC. These are 1,047 new homes for working people.

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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Based on what the Cabinet announced today, unfortunately, not only will half those homes be unaffordable private units but, equally, the 22% of homes that are so-called affordable will also be way beyond the reach of ordinary people. What we want are affordable public homes on public land. In fact, the all-in cost of the affordable purchase in this regard, based on Cabinet information provided today, when the purchase cost and the affordable housing fund repayment is added in, is between €344,000 for one-bed units and €404,000 for three-bed units. That is not affordable housing for working people.

To return to the issue at hand, the difficulty is that if I were a developer with planning permission for 100 apartments in Dublin, I now have a wonderful opportunity because I can go to a local authority for a mixed social-affordable scheme, to an approved housing body for a cost rental equity loan, CREL, scheme and the LDA for a Project Tosaigh scheme. The LDA can, of course, pay more than the local authorities can because it does not have the same departmental cap ceilings. I could also go to the Housing Agency or any of the several funds which exist. Therefore, it is a sellers' market and that is going to push up the price developers will seek for those turnkey units, particularly this year and next year, as well as squeezing out owner-occupiers. Nothing the Minister has said has convinced me that he has a plan to deal with that prospect, if, as I suspect, it happens. I hope it does not but I would like to know that the Minister has a contingency plan to ensure that is the case.

Photo of Darragh O'BrienDarragh O'Brien (Dublin Fingal, Fianna Fail)
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We must increase apply across the board. I gave the example of the O'Devaney Gardens development, which will provide 1,047 homes. There is also Ballymastone in Donabate, which was also opposed, where there will be more than 1,000 homes. Then there is the Oscar Traynor Road project. Thankfully, because of this Government's affordable housing fund, we at last have agreement on that project in Dublin City Council to proceed with real homes for real people.

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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It is not affordable.

9:05 pm

Photo of Darragh O'BrienDarragh O'Brien (Dublin Fingal, Fianna Fail)
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I want to assure the Deputy-----

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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They are not affordable. The Minister should be honest with people.

Photo of Darragh O'BrienDarragh O'Brien (Dublin Fingal, Fianna Fail)
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What we need to do is raise supply and bring about affordable homes. That is what this Government is doing. I know that will not suit the Deputy. It does not suit his political narrative.

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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Not at O'Devaney Gardens and Oscar Traynor Road it is not, with the greatest of respect.

Photo of Darragh O'BrienDarragh O'Brien (Dublin Fingal, Fianna Fail)
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Deputy Ó Broin and his party were happy for 41 years to see Oscar Traynor Road lie idle.

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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Fianna Fáil was in government during all of that period and refused to fund it. It sat on its hands, starved our local authorities of resources and would not fund the building.

Photo of Darragh O'BrienDarragh O'Brien (Dublin Fingal, Fianna Fail)
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The Sinn Féin Members just cannot take the truth this evening.

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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The Minister is giving us a shocking distortion of the truth.

Photo of Darragh O'BrienDarragh O'Brien (Dublin Fingal, Fianna Fail)
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They are continually interrupting. Any Minister who tries to answer any questions, they just try to shout us down. What will not happen on this side of the House, is that we will not be bullied. We are focused on delivering homes for people.

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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Just not affordable homes.

Photo of Darragh O'BrienDarragh O'Brien (Dublin Fingal, Fianna Fail)
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During the last oral questions just before Christmas, Deputy Ó Broin actually asked in respect of Oscar Traynor Road to set aside the public spending code that governs value for money in this country. He said to set it aside.

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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There is no value for money when we are paying Bartra €400,000 for a social house. That is not value for money.

Photo of Darragh O'BrienDarragh O'Brien (Dublin Fingal, Fianna Fail)
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I am just being honest with people. The Deputy is being found out.

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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The Minister is responsible for a breach of the public spending code.