Wednesday, 18 May 2022
Subsidies for Developers: Motion [Private Members]
That Dáil Éireann:notes that:calls on the Government to:— the cost of housing is having a significant impact on people's standard of living;further notes that:
— according to the Central Statistics Office, house prices have increased by 15 per cent in the last year and will soon surpass the Celtic Tiger peak;
— rents have doubled in a decade;
— rates of home ownership are falling fast;
— Ireland has some of the highest rents and house prices in the European Union; and
— the Government's decisions, policies and actions have increased these housing costs;— last week, the Government announced its intention to gift €450 million to developers to subsidise the construction of apartments that will be sold at full market price;
— these public funds are to be spent without any cost-benefit analysis, independent cost evaluation or regulatory assessment;
— subsidies of up to €144,000 per apartment are proposed;
— according to the Housing Agency, these apartments will cost individuals up to €450,000 each; and
— this is exceptionally poor use of public funds; and— abandon their plans to gift €450 million to developers;
— use these funds instead for the construction of affordable purchase homes; and
— end all policy interventions that inflate costs and make housing more unaffordable.
I am sharing time with Deputies Cairns and Whitmore. I am profoundly disappointed that the Minister for Housing, Local Government and Heritage, Deputy Darragh O'Brien, has not turned up for this motion or sent a Minister of State from the Department. It shows the contempt the Minister has for our raising of these issues that he will not come into the House to hear us. He gave no notice about that.
What the Government proposes to do here is outrageous. It will gift €450 million of the hard-earned money of the public to developers. It is a hare-brained idea and a bonanza for developers. The Government wants to give up to €144,000 of public money per apartment to private developers.
It is good to see the Minister has arrived.
To put the figure of €144,000 in context, last year an investment fund bought in Limerick city a number of apartments for less than €168,000 each. Despite the large subsidy the Government is giving to developers, these apartments will be sold at full market price. There will be no discount or affordability built in. According to analysis by Killian Woods in the Business Post, only the top 14% of households in terms of income will be able to afford these prices. What does it say about the Government that it is willing to spend €450 million guaranteeing the profits of developers to provide apartments for people on the highest incomes in Ireland? Whose side is this Government on? People across the country are struggling to heat their homes, put food on the table and pay rent and bills. What planet is the Government on that it thinks it is okay to use public money to fund a €450 million giveaway to developers? The only things guaranteed under this scheme are developers' profits. It is an outrageous use of public funds to subsidise these profits. It is a gross misuse of public money which could be better spent in many ways. It is another bailout for developers. Not only does the State bail out developers when property prices collapse, it now bails out developers when apartment prices have reached all-time highs. Is there another country in the world where the government does this? The Minister in his remarks may tell us what other country does this. I look forward to hearing about that.
That is a win-win for developers as, yet again, the Government gifts public funds and resources to private interests with complete disregard for public interest. It is an act of daylight robbery, taking from the people and giving to developers. How can the Government justify this? This is granting a developer's wish list. Not content with the reduction in apartment standards brought in to make construction apparently viable or with the even lower standards brought in for the build to rent schemes apparently to make apartment construction viable, the Government will give huge cash grants to make construction of apartments viable. How many times will the same lines be trotted out to justify making regressive changes that benefit developers? Each time we are told this will sort out the viability problem and each time the lobbyists come back demanding more. All the while, apartments have become less and less affordable for people. When will the Government learn?
I ask the Minister to answer three questions in his contribution. First, where did this idea for large subsidies for developers come from? Did the Minister dream it up or did developers and their lobbyists ask for it? We know it does not come from good practice in other countries. Other countries do not do this. This is an off-the-wall policy. When other countries invest in housing, they do so to ensure it is more affordable, not less affordable as this scheme will.
Second, why was no economic evaluation or analysis or regulatory assessment carried out to examine what effect the scheme and subsidies would have? Has any modelling been done on how this will affect land prices? Will that modelling be published, if it has been done? What will happen to the prices of these sites once the subsidies are secured? We will see some developers flip the sites once they have secured the subsidies. The scheme allows for that because the funding is attached to the company or proposer and developers of most of these sites set up companies which they can sell on and flip. The scheme allows for the sites to be flipped and for the companies holding the subsidies to be flipped, which will inflate land prices. This will have a knock-on effect on land prices, which will have a knock-on effect on the full market prices of apartments, pushing them up. Incredibly, at the housing committee last week the Minister conceded that he would not use tax incentives in this area because they are a bad idea. I agree with him on that but to conclude that tax incentives are not a good policy solution but cash subsidies are is an incredible leap.
Third, what level of profit for developers will be guaranteed under this scheme? Will the minimum 15% profit level that developers say is necessary for apartment construction to be viable be subsidised by the use of public funds? What controls exist in terms of the assessment process of applications to the scheme to ensure the subsidies will not be used to subsidise profits for developers? I could not find any. One of the reasons developers say a minimum 15% profit is necessary to the viability of the scheme is the high level of risk when it comes to construction and development of apartments. This scheme removes that risk for developers. In fact, if prices go down, the subsidies in the scheme will increase up to the threshold of €144,000. I do not know if the Minister has read his documents, but that is in them.
How can the Government justify using public money to underpin this level of profits for developers while removing most of the risk?
We have had over the past decade a disaster in terms of housing policies. Rents have doubled, while house prices have become more unaffordable, risen 15% in the past year and are about to pass their Celtic tiger peak. Rents and house prices, especially in Dublin, are among the highest in the European Union. Homelessness has skyrocketed, increasing by 22% in the past year. Under the last few Governments, the rates of home ownership have fallen year after year.
There is an alternative to what the Government proposes here that could see these homes built. At a fraction of the cost the State could buy out the sites and planning permissions and ensure true financing from the Housing Finance Agency so that much-needed affordable and cost rental homes are provided on these sites. That would provide the additional supply needed, create downward pressure on rents and house prices and, crucially, mean more homes available to rent and buy at prices people can afford.
The Government could also bring in a zoning for affordable housing with price caps built into the zonings. That should be introduced and has worked effectively in cities like Vienna.
This is one of the reasons people are able to rent a two-bedroom apartment near Vienna city centre for approximately €650 a month. This is about half of cost-rental rents here.
Will the Minister use his time to tell us where the idea for large subsidies came from? Was it his idea or did it come from lobbying by developers? Why has no economic valuation of the scheme been carried out? By how much will it increase land prices? What knock-on effect will this have on the price of apartments? How much profit will developers make from these subsidies? Why is public money being used to guarantee these profits while reducing and eliminating much of the risk? I want the Minister to use some of his time to answer these questions. The public has a right to get information on this and get these answers. The Minister owes this to the public given that he wants to gift €450 million of their money to developers.
The sum of €450 million is the incredibly large amount of money the Minister will hand over to developers. I can think of many better ways to spend it as I am sure can everyone in the Chamber. People are living with the incredibly difficult situation of rising inflation and the rising cost of fuel. We also have the constant backdrop of the housing crisis. This is the reality people face.As I imagine everyone in the Chamber has, I have constituents frequently contacting my office about fears of becoming homeless when their landlords decide to sell up. Some have had to move to completely different parts of the country, away from family and friends and their support networks, schools and communities. Many residents in Wicklow face the likely reality of never being able to own a home due to rising rents and house prices.
The high cost of housing is having a detrimental impact on our local communities. According to the CSO, house prices have increased by 15% in the past year and will soon surpass their Celtic tiger peak. Rents have doubled in the past decade and Ireland has some of the highest rents and house prices in the European Union. The number of people who have become homeless has increased by 22% in the past year. A report published in April by the Irish Independentrevealed that in Wicklow the average cost of renting a property is €1,635 while the monthly mortgage payment of a home is approximately €1,320. This means that over the lifetime of a 30-year mortgage people renting in Wicklow will pay €111,000 more. This is a huge concern for those renting in Wicklow who simply cannot save the money for a deposit as they continue to pay high rents. There is one property for rent in Bray at present. This is absolutely incredible. This is clearly an unsustainable situation for people renting.
It is also increasingly clear that ordinary workers and families are being priced out of the housing market and are trapped paying exorbitant rents. They are being priced out of their communities. Even the dribble of supply coming on to the market is priced out of the reach of most ordinary workers. Yesterday two families contacted me who are both in very similar situations. Both families have young children, have only ever lived in Greystones and are renting. They have both received notices to quit from their landlords. They are doing absolutely everything right. They have contacted Threshold, the RTB and Wicklow County Council. They have been on to all of the agents. They cannot find anywhere to rent in their home town. Now they face the prospect of having to pull their children out of their schools and move to a different county. The stress being placed on families at present is incredible. The irony is that in north Wicklow thousands of houses are being built. There are strategic housing developments and large developments as far as the eye can see. None of them are affordable. Not a single one in the area is affordable. It is also ironic that the biggest opposition to strategic housing development is coming from Fine Gael public representatives. It is incredible that a party that brought this policy in is now complaining when it is in its own backyard.
It is clear the Minister's housing policies are failing. I recognise it is not just Fianna Fáil's failure in this area. It is also a failure of Fine Gael and the Labour Party. The reason the Minister's policies are failing is that he continues to prioritise the wrong people. He continues to prioritise developers. I do not know whether this is an ideology of the Minister's or whether he has a fundamental lack of confidence in the ability of his own Government and the State to deliver housing rather than relying on the private sector to be the solution to its failures. It is not working. It is clear in every community throughout the country that it is not working. The Minister has continued to fail. Instead of acting in the interests of ordinary people who are suffering the consequences of his housing policies he is reaching across and lending a hand to developers with a €450 million gift.
It is clear this is a record of failure. It is time for the record to change and for the Government to stand up for the interests of people and their housing needs. These are people we know and love. These are people who live in our communities. It is time for the Minister to do the right thing and look at who he prioritises and who will benefit from his housing policies because it is not our communities.
I thank Deputy O'Callaghan and his team for their work on this Private Members' motion. At present on daft.iethere are 11 properties advertised for rent in Cork South West. There are fewer than 80 homes to buy for under €250,000 between all of the major towns in west Cork. It is a beautiful part of the world with strong communities. It is the type of place people want to live in. Unfortunately, like many areas of Ireland, young families and others simply cannot afford to buy a home there. Affordable housing is rare and social housing lists are unacceptably long. It is even worse for people with a disability. The reality for so many people of my generation is that home ownership is not possible.
In the past eight years house prices have doubled, growing by more than 12% in the past year alone. Rents have also doubled in a decade, while housing costs have skyrocketed, wages have flatlined and low pay is endemic. The situation is getting even worse. Many people now cannot find a place to rent, even at unimaginably expensive cost. Owning a home is just a pipe dream. This did not just happen. It is not some accident. It is the result of deliberate policy choices of Fianna Fáil and Fine Gael governments over the past two decades. The actions of this Government are not only perpetuating the problem; they are making it worse.
Now the Government intends to gift €450 million to developers to subsidise the construction of apartments that will be sold at full market price. This is a disgraceful abuse of taxpayers' money. It is almost unbelievable that the Minister is planning to give up to €144,000 per apartment to developers who can then sell them for up to €450,000 each. This is gifting public money to private developers. In the same week the Government is giving a €1 billion hospital to a private company, it is giving almost €500 million to developers. If it were not so serious it would be farcical. This €500 million could build affordable homes in communities throughout Ireland. It could give young families and others a chance at owning a home. It could transform the lives of thousands of people. Instead the Government is giving it to developers. How can anyone stand over this deal, which is giving subsidies of up to €144,000 per apartment to developers rather than to ordinary people? It is the clearest statement of the Government's priorities.
As the housing crisis gets worse and worse the Minister seems to have no idea of the realities facing families. Research has shown that last year the number of new homes available for individuals to buy fell to fewer than 6,000, which was its lowest level in years. The Parliamentary Budget Office, which is independent, recently concluded that home ownership among adults of working age between 25 and 54 in Ireland has collapsed. Instead of building homes for families, investment funds are buying up homes and building to rent.
Dereliction is another major issue that disgracefully is not being addressed. There are thousands of buildings dilapidating throughout the country. Activists in Cork city have identified more than 700 derelict buildings within 2 km of Cork city centre. The same can be said for Bandon, Bantry, Skibbereen and other towns and villages throughout Cork.
There are large buildings in the centre of the community that could house families but they have been left idle and are falling into disrepair. The Minister visited Clonakilty, Skibbereen and other parts of west Cork this week. I hope he was shown the very many derelict buildings. There are also many formerly fine farm houses that have been left to decay and collapse. If the Government is serious about supporting rural Ireland, then dereliction needs to be tackled. So far the Government policies to address this major issue have proven to be ineffectual and inadequate. Reporting vacant sites has essentially been made the responsibility of the general public. In addition there are no vacancy reduction targets in the Government's Housing for All plan not to mention that the vacant home housing unit only has one staff member.
It is incredibly disheartening for communities to see buildings crumble before their eyes. These are sites that would have cost a few thousand euro to do up but that work will now cost hundreds of thousands of euro due to Government inaction. It is even more frustrating and distressing for families searching for homes to witness buildings being left idle. The time to act is now. The almost €150,000 the Minister is giving to developers for each apartment would make a massive difference in converting buildings in places like Bandon and Kinsale into homes or save farmhouses across rural Ireland.
Rinne sé botún. Go raibh míle maith agat, a Leas-Cheann Comhairle.
To delete all words after "Dáil Éireann" and substitute the following: "notes that
— as recognised in the Government's housing strategy 'Housing for All - a New Housing Plan for Ireland', there is a housing crisis in Ireland affecting ordinary working people who aspire to the security of home ownership, which demands a response from the Government on an unprecedented scale;
— Ireland is experiencing an acute gap between housing supply and demand, exacerbated by the economic effects of the Covid-19 pandemic and global supply-chain disruption, which requires, in line with Housing for All's four pathways, short-, medium- and longer-term State interventions;
— increased supply of social, affordable and market-supplied housing is the key solution to Ireland's housing concerns;
— meeting strong demand for urban living, with people wanting to live close to work and urban amenities, requires action to ensure developments at scale in our cities, particularly close to public transport connections and existing infrastructure and services; and
— there is a dearth of supply of apartments to buy in our urban cores, but there are high numbers of planning permissions already granted that could meet that demand if they are activated;
— the development and implementation of the Housing for All strategy, and its commitment to massively expand the role of the State and invest unprecedented sums to achieve the Government's aim that everybody should have access to sustainable, good quality housing to purchase or rent at an affordable price;
— the ambitious targets in the Housing for All strategy of over 300,000 new homes by 2030, with over 90,000 social homes and 54,000 affordable homes, recognising that delivery will ramp up over time as industry capacity increases and in response to Government interventions;
— the record levels of State investment in housing, with over €4 billion per annum in Housing for All funding;
— the most ambitious social housing building programme and affordable housing building programme in the history of the State;
— the confirmation that the measures introduced by the Housing for All strategy are helping to increase housing supply, with 5,669 new homes in Q1 of this year, the most in any first quarter since this official Central Statistics Office statistic began back in 2011, and 22,219 new homes completed in the last four quarters;
— the clear increase in construction activity demonstrated in the 34,846 new homes commenced in the 12 months to March 2022, the highest rolling 12-month total since comparable data was first published;
— the range of measures already introduced under the historic Affordable Housing Act 2021, including the 'First Home' Affordable Purchase Shared Equity Scheme, the Local Authority Affordable Purchase Scheme, and the expansion of Part V of the Planning and Development Acts 2000 to 2020 to include affordable units;
— the fact that over 32,700 first-time buyer households have been supported into home ownership by the Help to Buy scheme since 2017; and
— the separate measures in the Housing for All strategy to bring forward more supply, including the recent launch of the Croí Cónaithe (Cities) Scheme, as one of a number of Housing for All measures to bring forward over 5,000 new apartments for owner-occupiers, planning consented and ready-to-start housing construction and, in particular, address the challenge of apartment delivery in Cork, Dublin, Galway, Limerick and Waterford; and
— the Government's commitment to supporting home ownership through a range of targeted measures;
— the Government's continuing work under the Housing for All strategy to secure the delivery of housing in partnership with local authorities, the Land Development Agency (LDA), Approved Housing Bodies (AHBs), and private industry;
— achieving more compact growth and vibrant liveable cities with a greater range of options for both owner-occupiers and renters in cities, at all income levels, which as a first step requires that stalled apartment developments with planning permissions in place are built and occupied;
— the Croí Cónaithe (Cities) Scheme, as a short- to medium-term, time-bound measure, to activate the delivery of 5,000 apartments in high demand areas of the existing built up footprint of our cities for sale to owner-occupiers;
— the benefit of the proposed support ultimately going to the purchaser and not the developer, who is enabled to buy an apartment in a core urban location which would not otherwise have been built, at a price well below the development cost;
— the fact that the scheme will support the construction of apartment schemes where there is a viability gap between the cost of constructing an apartment and the apartment's open-market value (if the market value is lower than the cost of constructing it), as without this support these apartments would not be built, and the homeowner will get the benefit of this by being able to purchase apartments to live in at a regular market price;
— increasing the supply of owner-occupier apartments to free up housing in the rental sector;
— the open Croí Cónaithe call for expressions of interest for apartment developments in our cities which is underway now and for the next six weeks, and applications will be assessed on an open book basis and approved with strict conditions on delivery, appropriate development and benefit to the owner-occupier purchaser;
— in addition to and along with the Croí Cónaithe (Cities) Scheme, new affordable purchase schemes by local authorities and the 'First Home' Affordable Purchase Shared Equity Scheme, which will support households with affordability challenges to achieve home ownership, meaning potential buyers can access both Croí Cónaithe (Cities) Scheme supports and the 'First Home' Affordable Purchase Shared Equity Scheme;
— the further expansion of the Cost Rental sector in Ireland, which has already seen the first homes tenanted at rates of 40 per cent below market through the work of local authorities, the LDA and AHBs; and
— the LDA's plans to deliver affordable homes, with construction to begin this year on over 800 new homes, planning applications recently lodged for over 2,300 further homes on State lands, and proposals under the Home Building Partnership (Project Tosaigh) to deliver 5,000 new affordable and social homes by 2026 through engagement with private developers to unlock land with full planning permission that is not being developed due to financing and other constraints."
I thank Deputy O'Callaghan and his colleagues from the Social Democrats for tabling this motion. I wish to address a number of the points that have been raised.
As recognised in our housing plan, the Housing for All strategy, and as we all know, there is a crisis that affects ordinary working people who aspire to the security of home ownership, which demands a response from Government at an unprecedented scale and means doing things. Ireland is experiencing an acute gap between housing supply and demand, which is exacerbated by the economic effects of Covid-19 and global supply change disruption and which requires, in line with Housing for All's four pathways, short, medium and longer term State interventions.
Increased supply of social, affordable and, indeed, market supplied housing is key to providing a solution to Ireland's housing crisis. Meeting strong demand for urban living with people wanting to live close to work and urban amenities requires action to ensure we have developments at scale within our cities, particularly those that are close to transport connections and existing infrastructure and services so that is compact urban growth. There is a dearth of supply of apartments to buy in our core urban areas but there is a large number of planning permissions already granted that could meet much of this supply if activated.
Housing for All will deliver 300,000 new homes by the end of 2030. It will deliver 90,000 social homes, which will be new builds, and it will deliver 9,000 this year, which is the single biggest number of social homes delivered in any year in the history of the State. That is a fact. It will deliver at least 36,000 affordable homes and at least 18,000 cost-rental homes. That represents record levels of State investment in housing with more than €4 billion per annum. The supply pipeline is strong, thankfully, and nearly 5,700 new homes have been delivered in quarter 1 of this year, which is the most in any first quarter since this Central Statistics Office, CSO, statistic began back in 2011. There have been more than 22,000 home completions in the last four quarters. Nearly 35,000 new homes were commenced in the 12 months to March 2022. Again, that is the highest 12-month rolling total since these figures were collated. More than 32,700 first-time buyers have been supported into home ownership by the help-to-buy scheme since 2017, which we have continued.
The Government is committed to supporting home ownership through a range of targeted measures, including the delivery of housing in partnership with local authorities, which we are doing and doing this year, the Land Development Agency, which we are doing, approved housing bodies and, indeed, private industry. The Government is committed to achieving more compact urban growth and vibrant liveable cities with a greater range of options for both owner-occupiers and renters in cities of all income levels, which as a first step requires that stalled apartment developments with planning permission are put in place and are occupied.
The Land Development Agency plans to deliver affordable homes with construction to begin this year on more than 800 new homes. Planning permissions have been recently lodged in the last few weeks for a further 2,300 homes on State land. There are proposals under Project Tosaigh, which concerns unactivated planning permissions and partnering within the sector, to deliver 5,000 new affordable and social homes by 2026 through engagement with the sector to unlock land with full permission that is not being developed due to financing.
It is estimated that there are 70,000 uncommenced planning permissions in the five main cities of Cork, Dublin, Limerick, Galway and Waterford. The figure for unactivated permissions in Dublin alone is approximately 40,000, which is about four years of housing supply in this capital.
The Croí Cónaithe cities scheme will help to activate the build-to-sell portion of these figures. The Croí Cónaithe cities scheme will deliver up to 5,000 apartments by 2026 for people to buy. It will help increase the supply of new apartments in these cities by activating the construction of apartments that already have planning permission. The scheme will support the construction of apartment schemes where there is a proven viability gap between the cost of constructing an apartment and the apartment's open market value if that market value is lower than the cost of construction. The planned scheme is a short to medium-term measure. It is time bound and is aimed at increasing the supply of apartments for home owners. It will increase the choice of homes available to buy and will ultimately free up supply in the private rental market.
I want to be very clear on this point. The benefit of the proposed support goes to the owner-occupier, the purchaser, who is unable to buy an apartment in a core urban location which would not otherwise have been built at a price below the development cost. That is a fact. I will give Deputies a particular example. Where an apartment costs €350,000 to develop but the market rate is €250,000, then the person buying it will pay €250,000. Better still, people can use the help-to-buy grant to become eligible for the deposit. Should they wish they can use the Government's soon to be launched first-home shared equity scheme, which again the Deputies opposed. That is fine and is their right. The Deputies who have called for the scheme to be scrapped obviously do not want individuals living in city centres and they do not want compact urban growth or 15-minute cities.
Through a range of measures the Government is incentivising the supply of different tenures - social, affordable, private rental and private ownership. We are investing in new build social schemes like never before, delivering affordable housing to buy and rent and introducing measures to incentivise the building of homes for owner-occupiers. The support payable per apartment will be the viability gap calculated for each apartment. We have detailed that very clearly and that is exactly what will happen. It is important to emphasise that it is anticipated that targeted supports will differ across a range of different apartment types. For one-bedroom apartments, where it has been proven that there is a viability gap, then the figure is between €25,000 and €60,000. It will be between €60,000 and €85,000 for two-bedroom apartments and up to €120,000 for two to three-bedroom apartments. Where does that support go? It goes to the purchaser, the owner-occupier with exacting conditions and proposals through expressions of interest on an open-book basis. It is as simple as that. This is a quick and efficient way of activating dormant permissions within cities.
I thank the Deputies for tabling the motion because it allows me the opportunity to outline the Government's position. The Social Democrats voted against all Government legislation, so I know very clearly what they are against but I have very little clue what they support. They are against build-to-rent and now, apparently, they are against build-to-buy. They are against the help-to-buy scheme, which has supported 30,000 home owners to get their deposit together to purchase home. This is the same help-to-buy scheme that would be available along with this measure. That means the people who are stuck in the very rental trap that we are talking about or living at home with their parents will be able to own their home at an affordable rate. They are also against the first-home shared equity scheme, which can be used alongside this initiative or for all new builds, and not just by first-time buyers but for those on the Fresh Start principle. They are opposed to that too. It is scheme that will launch on 1 July. It is a scheme that will help people bridge the gap between the finance they have and the finance they need by the State stepping in and taking that equity. It is not a second mortgage as some of them claimed when the scheme was launched. They continuously, and rightly so, call for State lands to be used to build homes but are against the Land Development Agency. The agency was set up and we have legislated for and funded it specifically for that purpose.
The Deputies say they want homes built on State lands but they vote against the legislation. Deputy Cian O'Callaghan and his party are against home ownership, affordable and cost rental. As he is aware, his colleague voted against 1,200 new homes in Ballymastone in Donabate, of which 253 would have been affordable and 253 social. That was opposed by the Social Democrats and that is fine. The record shows what the Social Democrats did. Just last week, Deputy Shortall, the co-leader of the Social Democrats, posted online her regret at an application for 99 apartments in her constituency. That is awful, is it not - that we are building new apartments? She posted her regret that that is happening. Is the Social Democrats really against home ownership? It appears that it is. The Government is already ensuring that we can activate uncommenced planning permissions. The only comment I have seen from the Social Democrats is in a paper where it mentions the "use it or lose it" provision which the Government is doing already. We want to pull all levers available to provide homes for people, and that includes short-, medium- and longer-term measures while we are delivering the supply that is happening.
I support home ownership and social housing. I do not vote against it or the legislation that is brought forward in the House. I do not vote against the budgets the Government put in place to deliver housing at a scale that has never been seen before. We are proposing it and working it through and we are seeing that supply being activated during a very difficult time for people. I know what the Social Democrats is against. The motion refers to a gift. It is nothing like a gift; it is assistance and support to the homeowner and purchaser. Let us be honest with people in that regard. It is clear from the measures the Social Democrats has taken - opposing the Affordable Housing Act, the Land Development Agency Act and any new initiative proposed by the Government - that it does not want to see progress.
The question I ask is what this scheme says to generation rent, the generation of young people who are completely priced out of the housing market. They are watching the Government hand over €450 million to private developers. What hope do they have of ever owning their own home when, in many cases, 60% of their income goes on rent? How could they possibly save for a mortgage? They are being squeezed out of the market in a time of rising living costs. The average citizen is struggling with energy costs. The response of the Government is to give €200 to help with electricity or other energy bills. When the private developers run into a cost-of-living crisis, however, they are given €144,000 per apartment.
The Minister talked about supply. What kind of supply? It is supply that people cannot afford, supply that traps them permanently into renting when, in fact, they want a choice that gives them longer-term sustainability.
A poll conducted by Amárach Research featured on the "Claire Byrne Live" television programme this week.
It asked those polled whether they thought the Government can solve the housing crisis. Of those asked that question, 75% said "No".
This scheme being pursued by the Government does not do anything to build confidence. It is beyond belief that the scheme does nothing but place taxpayers' money directly into the pockets of private developers, enabling them to go on to make more profit at the expense of buyers.
I ask the Minister to answer the questions put to him by Deputy Cian O'Callaghan. From where did this idea come? What contact did the Minister have? Was he lobbied on this issue? Essentially, the construction industry tends to write Government policy. That is not dissimilar to the situation prior to the crash, when it was done in the Galway tent. It is more subtle now but there is no doubt the construction industry appears to be all over the kind of decisions that are being made.
The Social Democrats was in favour of a land development agency, but one with a different remit, a remit to use public land-----
The Minister should not tell us we are against the Land Development Agency. We do not want the Land Development Agency to just flip public land, however; we want it to use the land in a way that delivers affordable housing.
If a person came down from the moon and looked at what happened prior to the crash, and the role of Fianna Fáil, which was the architect of that crash, he or she would see the same reference points in the current situation. The Minister is using the same reference points to create another housing environment that is completely unsustainable. The public does not have confidence in the Minister. That was shown in the poll published earlier in the week. He would know the public does not have confidence in him if he listened to some of the radio programmes on which people who are likely to end up homeless are talking about their lived experience of being terrified and thinking this should not happen to them. I have recognised that and been talking about this since 2014 when the like of the housing assistance payment, HAP, was brought in. I said that if it was not accompanied by large-scale direct build, it would be a bonanza for landlords. That is exactly what has happened. Close to €1 billion a year is being used for things like the rental accommodation scheme, RAS, HAP and rent supplement.
Essentially, there was no large-scale housing development during that time. A stream of building that should have taken place that would have contributed to the solutions for what was evidently a housing crisis. I have no confidence in Fianna Fáil resolving this. I would be one of the 75% because I have seen no evidence. I ask the Minister to look for the evidence and listen to people. People must be contacting his constituency office in the same way that they contacting mine. I see a great deal of hopelessness and people talking about emigrating because there is no hope. That is the young generation that has been totally failed by the previous Government and that of the Minister.
I thank my colleague Deputy Cian O'Callaghan for bringing forward the motion. It is an opportunity to debate and scrutinise the frankly bizarre proposal of the Government to give €450 million of State resources to developers so that they may continue to profit from a crisis they created. The Minister keeps interrupting. I will give him an opportunity to do so in a second.
Having listened to his response to Deputy Cian O'Callaghan, I am still at a loss as to why he intends to give up to €144,000 per apartment to developers so they may do the job that they and, indeed, the Government believe they are capable of doing. Through the Chair, I will once again ask who initiated the scheme. Who was around the table when the Government came up with this scheme? The Minister should feel free to interrupt me now. He has rolled his eyes and jumped in at various points. Who helped him to initiate the scheme? Are any independent commentators advocating for it? Deputy Cian O'Callaghan asked several questions. I will repeat them and allow time for the Minister to answer them, if he wishes to do so. As the Minister hands out €450 million worth of State assets, what independent analysis was carried out on this policy? He should feel free to interrupt me.
He asked about what the Social Democrats stands for. We stand for evidence-based policies. That is why we are asking for an independent analysis. Why are we asking the Minister for it? Because we are conscious of our history. We are conscious of the Galway tent. When one becomes conscious of the scandals of one's nation's history, one starts to see them replicated in different ways. When we hear of €450 million going to developers, we have every reason to ask why that is happening and who benefits - cui bono-and we make no apologies for doing so. The Minister should again feel free to interrupt.
Are there any international examples to which he can point where the affordability of housing increased as a result of the state gifting huge sums of money to private developers without securing additional benefit for those seeking a home? Are there any benefits to Irish taxpayers in general, who are inevitably funding this enormous transfer of wealth? Why are there no affordability criteria locked into this massive subsidy?
I will accept absolutely no indignation from the Government when it comes to whom it deems worthy of State funding. Many Members throughout the Chamber act in different roles as spokespersons. Last night in this Chamber, I asked the Minister for Social Protection whether an artist with a disability, for example, who receives the minimum basic income should keep his or her blind pension or disability allowance. I was scoffed at and told that, of course, the Government has to scrutinise every cent in State subsidy. Why not apply the exact same standard in the context of this €450 million that is being gifted to developers just for doing their jobs and building apartments?
I am conscious this is the third time in seven years we have been told apartment buildings are so unviable for developers that the State must simply bend to their whim and on each occasion it has contributed to the worsening of our housing crisis and to the benefit of those who seek only to profit from it. In 2015, a former Minister with responsibility for housing and a former Labour Party Leader, Deputy Kelly, slashed Department guidelines, including the minimum size of apartments, because he said it would make them more affordable and would boost supply. It did not. In 2018, a former Minister, Eoghan Murphy, slashed guidelines for build-to-rent developments, further reducing apartment sizes and eliminating the need for apartment mix and outside space because he said it would make them more affordable. It did not. When one becomes conscious of one's State's history, one starts to see it replicated in different ways. It is clear what the Social Democrats stand for in this respect.
My colleague, Deputy Cian O'Callaghan, asked which side is the Minister on? It is a very reasonable question. We are ploughing through a scenario where €450 million of State assets will be transferred to developers. The Minister can feel free to tell me how that is not the case. At different times in this Chamber, as we discussed the housing crisis and solutions to it, we have been told of things we simply cannot do. The Minister told us a record number of commencements are beginning to happen. I want to believe him. I want to take what he said at face value. However, while that is happening, it will take a number of years to introduce. Therefore, why can we not introduce a rent freeze? That is what people are calling for. We have been told that simply cannot happen. Yet the Government can give €450 million to developers.
Over the weekend we were told the long sought-after vacant home tax simply may no longer come to fruition. We have had delay after delay and prevarication. It will simply not happen and that will be to the advantage of those who have benefited from the housing crisis. We have been asked to legislate to deal with short-term lets. We are told that simply cannot happen despite the fact it is clearly increasing the cost of rent throughout the country.
Deputy Cairns referenced the level of dereliction in her constituency. Many of us see such dereliction in our constituencies throughout the country. Funding of €450 million would go a very long way towards solving that problem but the Government intends to transfer it to developers.
I am at a loss as to why this Government, of which Fianna Fáil is a member, continues to want to give the scorpion a lift on its back. Once one become conscious of one's nation’s failures, one starts to see them replicated in different ways. That is all we can see happening from the introduction of this measure. The Social Democrats stand for evidence based policy that will alleviate this crisis. What does the Minister stand for?
I thank Deputy Cian O'Callaghan and his colleagues in the Social Democrats for tabling this important motion, which Sinn Féin enthusiastically supports. In my six short years in the Dáil, Croí Cónaithe cities is the craziest housing scheme any Minister with responsibility for housing has brought before us. It is nothing short of a pro-developer subsidy. There is no price discount on unaffordable market rates. There is no affordability dividend for anyone. To date, the Minister and the Department have been silent on the fact that the vast majority of apartment planning permissions are for build-to-rent, which strictly speaking should not be eligible under this scheme.
We know the vast majority of this Minister’s housing plan is a rehash of the failed Rebuilding Ireland policies of former Ministers with responsibility for housing, Eoghan Murphy and Deputy Coveney, but the only thing the Minister, Deputy Darragh O’Brien, has brought to the table is a return to the bad old days of Fianna Fáil Celtic tiger hubris. The Minister, in his remarks, said that tackling the housing crisis means doing things. That is not correct. It is about doing the right things and not doing things that make the housing crisis worse, something he now has a habit of doing.
With respect to the origins of this scheme, my understanding is its origins are within the Department of Housing, Local Government and Heritage and a concern among some officials that the gap between affordability and viability was running contrary to the national planning framework and compact growth, exactly as the Minister outlined. We know from the Society of Chartered Surveyors Ireland that the cheapest possible all-in development cost of apartments is €400,000 plus. That means people cannot buy apartments. They cannot be built without forward purchasing agreements, which is why we have the issue of cuckoo funds.
The original idea, as I understand it, was that where apartments would be delivered for €400,000, the developer would get a subsidy of about €80,000 and the apartment would be sold for €320,000. While that scheme, in itself, was not a great idea it has been surpassed by something much worse. I understand there was some concern as to whether the subsidy would be equity, a subsidy or a grant but rather than getting that proposition, the Minister has come back with something even worse. We are now told that the problem is not viability versus affordability but it is viability versus the market price.
I want to read a short excerpt from a very good article by Killian Woods in the Business Postat the weekend because it stands in stark contrast to the figures the Minister quoted here today. Killian Woods's information is based on information from the Minister's Department. The article states:
An expression-of-interest document being circulated to the development industry by the Housing Agency, a copy of which has been obtained by Business Post, shows it is anticipated that the open market value of a two-bed apartment delivered through the scheme will be €390,000. A three-bed apartment is anticipated to have an open market value of at least €450,000.
The article then goes on to detail the various subsidies involved. When the Minister says he believes in homeownership, what is patently clear from this scheme is he only believes in homeownership for the very wealthy, for 14% of households. Is he seriously saying it is now Government policy that the only people who should be allowed live in Dublin city and own their own apartments are those earning €100,000 a year or more?
This is a chronic waste of taxpayers' money. At best, it will lock in unaffordable prices. At worst, it will drive prices up even further. The scheme should be scrapped. There is no justification for taking €450 million and investing it in a way that does not deliver either a discount on market price or genuine affordability. The amount of money that has been quoted in newspapers, with sources from the Minister and the Housing Agency, I am not sure what it is for this scheme over the next number of years, pales into insignificance compared to the amount of money for the affordable housing fund. This year, for example, the affordable housing fund has €60 million. We do not know what the Minister will increase it to next year but, on the basis of the targets, it will not go much above that. Therefore, we have a situation where the only mechanism this Government has designed to deliver affordable homes for people to purchase, and he is not even using that scheme correctly, for example, by delivering homes for €410,000 in O'Devaney Gardens, but even the affordable housing fund, which can deliver genuinely affordable homes if it is used properly, will not get a fraction of the money he is giving to this pro-developer scheme.
I will reiterate Deputy Cian O'Callaghan's comments and those of his colleagues. A number of very simple questions were put to the Minister. I know the Minister will probably not remain for the debate and he will be substituted by his colleague but those questions should be answered and answered in writing. I presume Deputy Cian O'Callaghan has already submitted parliamentary questions in the absence of the Minister giving any straight answers here. I think the rest of us will do so but we need straight answers. For example, if there is an expression-of -interest document being circulated by the Housing Agency, the Minister should publish it. Let us see the information he is giving to developers.
I will conclude by saying this. The Minister comes in here week after week. He dismisses the legitimate concerns of the Opposition. He defends the indefensible while all around him things are getting worse - rents, house prices and homelessness. As we fast approach his being two years in office, it is quite clear he is an even worse housing Minister, in terms of results, than Eoghan Murphy and Deputy Coveney or, indeed, Deputy Kelly, before him.
I thank Deputy Cian O'Callaghan and the Social Democrats for bringing forward this motion. What is shows, and having listened to the Minister, is how out of the touch he is with ordinary people. When the Opposition comes together to put forward proposals and to highlight problems with the Government's strategy on solving the housing crisis, we know the attitude he adopts to the Opposition. The way the Minister criticised Deputy Cian O'Callaghan earlier is like the way he criticises Deputy Ó Broin every week. The Minister's only answer is to criticise other people and parties who have put forward genuine solutions. That is typical Fianna Fáil-Fine Gael policy. Anyone who might watch the proceedings of this discussion or read about it would be of the view that this Government and the Green Party, which is a member of it, should be ashamed of their lives to give €450 million to the developers. We know Fianna Fáil is pro-developer, we know Fine Gael is pro-development but where is the Green Party, which said it would stand up for ordinary people and ordinary families? If we want to spend €450 million, I will tell the Minister how we should spend it.
We have 90,000 vacant houses right now that with this investment we could turn into homes to put families into in the short term. That is what we could do. Instead, we are in the middle of the worst housing crisis ever.
I have a clinic every Monday and Friday. On Monday alone, five families came in to me who will have to be out of their homes by September. The Minister is giving €450 million to developers. Is the Government so out of touch with reality? People cannot afford to rent and even if they could afford to rent, they cannot find properties to rent. They cannot find properties to buy and there is no social housing there.
I appeal to the Green Party, which has a lot going on this week. They should stand up. If there is one issue they should stand up on today ,it is the housing crisis. They are letting Fianna Fáil and Fine Gael get away with what they have got way with for 100 years, that is, looking after their buddies, looking after developers and looking after the well-to-do while ordinary people are suffering and they have never suffered. The housing crisis has never been as bad as it is today.
I might manage to give a minute to my colleague, Deputy Daly.
I am struck by the sums of money we are talking about. We have so many debates in this House where we talk about there not being money for this and that, and €450 million has been found for this scheme. Now I like the idea of breathing life into our cities and ensuring that our city centre cores are strong and that we have affordable apartments, but this is not the way to do it. There is not even a condition on affordability. When we are handing €450 million over to developers, there is nothing to say that it will not simply be absorbed by them. We will not see a benefit. We will not see apartments or housing become more affordable.
By every metric, as has been already said, the housing crisis is getting worse when one looks at rents, when you look at house prices and when you look at the number of people finding themselves in homeless situations.
Our clinics are inundated, as, I am sure, are the Minister's, with people who are getting notices to quit who have nowhere to go but also with people who do not qualify for social housing lists, who have been knocked off social housing lists because of the income thresholds and who have no hope of getting a commercial mortgage. The advice that we can give them is limited because the schemes that are available are limited and this will not help them.
This will not change how affordable apartments are. There are apartments right now in Cork, two-bedroom new builds, for half a million euro and three-bedroom ones for €695,000. In many respects, that is as bad as Dublin. That is the situation that we are facing in Cork. They are unaffordable and absolutely out of reach for people.
This is not the way to go. I urge the Minister to put that €450 million into vacant homes and into building affordable houses on public land and making sure that they are actually at affordable prices.
I thank the Social Democrats.
I was struck this week by information on Twitter, which showcased the high ratio of Airbnb vacancies as against advertised rental vacancies. One of the users mapped these figures and showed that County Kerry has the highest ratio in the entire country, with 1,959 vacancies on Airbnb yet only 34 advertisements on Daft.
My colleagues have spoken about the measures required to move suitable properties and I understand there are planning enforcements happening. My party's charge on non-primary residents can also play a role, if it is to be implemented.
In relation to the €450 million, there are things that could be done to divert land, labour and capital. In the past, it has been diverted away from proper housing. We see all the craftspeople, builders and contractors leaving Kerry every day. They should be used to deal with the housing crisis, including, for example, the 15-year waiting lists in Kerry, particularly the newer houses that are needed west of Dingle in the Gaeltacht.
I also thank Deputy Cian O'Callaghan and the Social Democrats for bringing the motion before the House. It gives us the opportunity to speak for the thousands of families that the failed policies of Fianna Fáil and Fine Gael over the years have locked out of housing.
Tipperary has witnessed a house price increase of 14.3% year on year, according to the latest daft.iereport, but it does not stop there. If a family looks to get out of the stranglehold of the rental market, the cost of a three-bedroom semi-detached house has increased by a staggering 17.7% in the past year, yet the very same county was excluded from the Government's list of 18 local authorities identified for their affordable housing programme up to 2026. Even if Tipperary was in the plan, it would have to share a grand total of €60 million with the other counties while the Minister puts €450 million in the pockets of developers.
Unaffordable housing impacts both the purchase market and the rental market. It keeps housing lists long and prolongs the uncertainty many families deal with daily.
Where are we at in Tipperary? It is becoming increasingly common in Tipperary to meet people who have no choice but to seek emergency accommodation from the local authority but it is also becoming increasingly common to hear the local authority say it is having difficulty in getting emergency accommodation for those families. They are the people who the Government is leaving without any protection. They are the families sleeping in cars, on sofas or packed into box rooms while the Minister puts money into the pockets of developers who seek to maximise their returns.
This scheme subsidies private developers up to €144,000 for apartments outside of Dublin to give them a profit margin, yet it does absolutely nothing for the people who are locked out of the market. This forces the price upwards and continues the cycle of unaffordable housing and the lack of supply and yet the Government guarantees profits for developers while turning the screw further on those it has put on the outside and who are forced to look in, helpless.
Last week, Sinn Féin called on the Government to direct the funding to this scheme and the shared equity scheme into the delivery of an average of least 4,000 genuinely affordable homes to buy each year. We would ensure that local authorities and approved housing bodies are adequately resourced to deliver affordable homes to rent and buy. That is the future, not the politics and actions of the Government, which increase housing costs and limit supply.
I welcome the opportunity to speak against this ridiculous proposal from Government, namely, the gifting of €450 million to developers. It is the most Celtic tiger, Fianna Fáil-type of insanity that I have seen since they destroyed the economy in 2007 and 2008.
House prices are spiralling. They have increased by 15% in the past year. Rents have doubled in the past ten years. We have among the highest rents and house prices in the EU and Fianna Fáil's solution is to throw hundreds of millions of euro at developers. It is like déjà vu. It is genuinely unbelievable.
This scheme will gift €450 million to developers to subsidise the construction of apartments that will then be sold at market price. The Government is seriously going to do this. We now know that this will translate into up to €120,000 per unit in Dublin and up to €144,000 per unit outside of Dublin. The Business Postreported on Sunday last that the open market value of a two-bedroom apartment under the scheme will be €390,000 and a three-bedroom apartment is expected to be at least €450,000. It is absolute madness.
This is public money being spend seemingly without any thought, any cost-benefit analysis or any cost evaluation. How is it value for money for the taxpayer? How is it value for money for people who want to own their home? There is no affordability here.
This fund will inflate costs. It will make housing less affordable. It is the exact same as previous hare-brained schemes from the Minister for Housing, Local Government and Heritage, Deputy Darragh O'Brien, such as the help to buy and the shared equity schemes.
The Minister released his affordable housing targets for 2022 to 2026 and the figures were shocking in their lack of ambition. In County Louth, the target is 226, that is, 45 affordable houses on average a year. It outlines in black and white the Government's attitude towards affordable housing.
The most galling part of all of this is that the money being used in this scheme to line the pockets of developers could actually be put to good use. It could be used to provide housing that will address the unaffordable issue rather than making it worse. Sinn Féin's motion on Wednesday last called on the Government to use the funding for this scheme and the shared equity scheme to deliver an average of at lease 4,000 genuinely affordable homes each year. The affordable housing targets need to be revised as a matter of urgency. Funding needs to be redirected to capital investment in affordable housing for purchase, all schemes that push up the cost of housing need to be scrapped and, above all, affordable needs to be affordable.
I thank the Social Democrats for bringing this forward.
I often get up here and say that I will not repeat what has already been said and then I repeat exactly what was said, but in this case it is impossible not to because it takes about 30 seconds to point out that the Government will hand €450 million to developers. There is no affordability win. All we are doing is failing to use that money to deliver housing for people. It is an abject, absolute failure. It does not make any sense whatsoever. We have already heard about two-bedroom apartments potentially costing €390,000 and a three-bedroom apartment costing €450,000. It is hard to make sense of these figures.
Deputy Munster talked about the affordable housing targets and Louth's derisory figure of 226. It is straightforward to say that this will not cut the mustard. We all have people coming into our constituency offices, I am about to enter into my single transferable speech on housing, with whom we talk about the amount of money they are paying in rent. In some cases, it is €1,400 or €1,600 and more, which they cannot afford. I do not know how they get the money together in any way, shape or form.
Deputy Ó Laoghaire has spoken many times, as I have, about the income thresholds for getting on the housing list and the means by which they are assessed over the entire year, which throws up multiple anomalies. People have lost out on housing having been on housing lists for eight or nine years plus. This is absolutely ridiculous and scandalous. They subsequently apply, get back on to the housing list, and are in receipt of HAP, once again. It is just an abject failure. I have raised it a number of times in the Chamber the fact that people in receipt of HAP have been told that there are no payment plans. That even includes people who end up in hospital or experience unforeseen circumstances. What are we going to do? We will add them to the homeless list.
We have a plan that is not a plan in respect of delivery across the board. This certainly is not any sort of plan that will deliver for people. We need at least 4,000 affordable houses a year. Beyond that, we must deliver affordable cost rental and affordable mortgages but we really must deliver social housing. We have seen the failures of government after government. This is certainly not going to make anything better. We need to go back to the planning table. It is time to listen to the Opposition.
In response to Deputy Ó Murchú, that will not happen. There has been no listening to the Opposition on this or any other issue. I thank Deputy Cian O'Callaghan for yet another very good motion on housing.
It is incredible what the Government is doing here. Last year, we interrogated and tried to highlight as best we possibly could the problems with the shared equity scheme and how it would inflate prices. We cited the Economic and Social Research Institute, ESRI, and international practice of how this was a poor scheme. We highlighted the problems with the help-to-buy scheme and how that inflated prices.
It is almost as if the Government has decided it will do something that is so big, grand, brazen and fantastical, in terms of transferring taxpayers' money directly to developers, that the media, the Opposition and the public will not latch on to it. That is what I believe is being done. This is the most quintessential Fianna Fáil policy we have seen since the halcyon days of the so-called Celtic tiger Government.
I speak on this debate at a time when my advice clinics in Fingal are crippled with people in housing distress. I have been doing advice clinics for eight years and they have been about housing, housing, housing. During Covid, given the ban on evictions, there was a slight pause in the intensity of the housing representations. That is now gone and people are attending in huge numbers, in massive distress. On a glorious Saturday morning in Swords, with the sound of a wedding in the church next to me, I had a man come to my clinic on behalf of his family who was in floods of tears and facing eviction. It was one of the most heartbreaking juxtaposition of what was happening outside compared with what was happening in the Brackenstown adult scene of education, BASE, community centre in Swords. This is happening in all our clinics. I am disappointed that the Minister is not here because it happened in his constituency.
The Government must know that this measure will not solve the housing crisis. It will not do anything for cost rental. It will not do anything to increase affordable or local authority supply. This measure will only increase the bank balances and income streams of the developers, who are back where they were in the 1990s and early 2000s. They are in total control of the housing market and supply. They are calling the shots. It is not new developers. It is the same developers in the same areas on the same plots of land that were under the microscope for years and they are now being activated through the last of the strategic housing developments, SHDs, and future planning permissions. All the tracks are being put in place to ensure that the very elite will have good times ahead while the majority of people in this country, be they young or old, families, divorced or separated, people with disabilities - the list goes on - face numerous obstacles, many of which are insurmountable, to get secure housing, be it through local authorities, cost rental or via their own purchase.
From what has been reported in the media, it is not clear whether there is a clawback mechanism built into these new grants for developers. It is clearly vital to ensure that public money is spent wisely and is not simply bumping up developers' profits. The fact that there is no clarity on this tell us that there is none, that this is not being spent wisely, and that this could be the most unwise spending of money we have seen by this Government.
We have mentioned the shared equity scheme and the help-to-buy scheme, which seem to be the appetiser to this absolute monstrosity being put forward by the Government. Any grant given to anyone to build any type of home should be given on the condition that those homes would be truly affordable to the average worker, people with disabilities, and young, old or separated people, as well as those on the edge.
It was said that there have been numerous failures. I must come back to a number of points raised in the debate earlier. Deputy Gannon mentioned Deputy Kelly when he was Minister, in the context of apartment sizes. Deputy Gannon then said that we need to call for rent freezer, we know they can be done. We know they can be done because Deputy Kelly, in his 19 months as a Minister, having taken over from three years of absolute inactivity by Phil Hogan on housing, delivered two rent freezes. Deputy Ó Broin mentioned Deputy Kelly as well.
During my time on the council, when Deputy Kelly became Minister, we actually saw Part 8 developments come through. We saw direct local authority builds in councils that were able to do them and had resources, such as Fingal. Racecourse Common in Lusk came through, as did Darcystown, Balrothery; Rolestown and Holymount, Swords; Pinewood Green in Balbriggan; and the Grange in Ballyboughal. These were 2015 Part 8 developments. They were not targets. They were not commencement notices or planning permissions. These are real homes delivered by a local authority. It took them a while to deliver them but they were commenced under Labour leadership.
When the Labour Party left office and when Eoghan Murphy took over, there was a shift in policy. It was a case of going with HAP; which would be the be-all and end-all. What should have been a transitional payment from the rent allowance poverty trap scandal towards a wider scheme of public delivery of housing, between 2016 and 2020, became the squandered years of public housing delivery due to the policy shift towards HAP. Now what do we have? We have a relatively stable economy that is now being geared in a high-powered overdrive fashion back towards developers. We are back to square one. It is even worse. It has never been this bad.
We have never had so many people excluded from housing. We have never had so many people who are about to be evicted, who are in homelessness or who are unable to afford to buy or rent. All we have is spin and a housing market that is solely reliant on developers. That is the bottom line. Our local authorities that were hollowed out in the 1990s and the early 2000s remain hollowed out. They do not have the resources. If we go into any local authority and try to do a head count of people who are able to deliver housing, they are not there, because successive Governments and Ministers have not done that.
I thank Deputy O'Callaghan for putting forward the motion. One cannot be too strong in condemning what is an absolutely insane scheme from this Government. It is a demonstration that Fianna Fáil, Fine Gael and sadly, the Green Party, have reverted to type. They have returned to the utterly disastrous developer-led policies which led to the crash in 2008 that almost destroyed our economy and inflicted a decade of suffering on working people. The worst legacy of that is the ongoing housing crisis that we now face. The vast majority of working people cannot afford to put a roof over their head. I am sorry that the Minister has gone. It is appropriate that the Minister of State is here, because nowhere is the disastrous failure of the Government's policy more evident than in our constituency of Dún Laoghaire, where average house prices are now over €600,000 and average rents are the highest in the country, at well over €2,200 a month. The vast majority of working people cannot afford to put a roof over their head, and more and more people who are working, paying tax and getting up in the morning are actually being driven into homeless accommodation.
The Government thinks the answer to that level of unaffordability and that crisis is to give €450 million more to private developers to give them a subsidy of up to €144,000 per apartment to deliver two- and three-bedroom housing units that will cost €390,000 and €450,000 respectively. That is what the Government's answer is. Are the Members of the Government off their rockers? I can see why the developers want it. Some €450 million of public money is being given to developers to deliver housing that people will need an income in excess of around €120,000 a year to be able to afford, or the units will be bought by investors - who else could afford them - to rent at rents that nobody can afford.
I do not know if the Minister of State is aware of the scale of individual human misery that is resulting from this insane sort of policy. Of course, this is just the latest and most brazen example of such failed policies. We can add to that the local infrastructure housing activation fund, LIHAF, funding of €200 million that was given to developers for infrastructure and the old Part V affordable housing scheme that the Greens and Fianna Fáil dreamed up, which provided so-called affordable housing. That led huge numbers of people into negative equity and led to them losing their homes after the crash in 2008. The Government is at it again, letting the developers dictate policy.
I ask the Minister of State what this means for people in our area. I will tell him what it means. Those whose income is below €35,000 net are entitled to go on to the social housing list, which is 20 years long in our area. That means that people cannot get a social house. They are told to go and get HAP. They are told to go on Daft.ieby the people in the council and look for an apartment or house within the HAP limits. For those facing homelessness, the rental limit is €1,950 a month. There is not a single house available in the Dún Laoghaire constituency within that limit. In fact, people are looking for one-bed accommodation at €1,950. The HAP limit for one-bed accommodation is €990 per month. Imagine the despair and hopelessness when those are the options. People are goosed if their income is below €35,000 net. It is as bad for those whose income is over €35,000 net. For example, I am dealing with the case of a woman who is €38 per week over the income threshold. She has been in homeless accommodation with her now 11-year-old child for three and a half years. Her child is getting counselling because of the mental impact of being in one room with his mother for three and a half years, who, by the way, ironically, is working for Tusla, looking after vulnerable children. She is working for the State, looking after vulnerable children, has been in homeless accommodation for three and a half years and has just been knocked off the housing list. What can she get a mortgage for on an income of just over €35,000? She could get a mortgage of around €127,000, when average house prices are around €600,000. She is goosed. She is also being threatened with eviction from homeless accommodation.
I know of another family of six who are in Blackrock. There are two parents, one of whom is working, and four children, who are all at college. The family is just about to be evicted from homeless accommodation because they have gone over the income limit. Can the Minister of State see the madness of this? The family has no chance of paying €350,000, €390,000 or €450,000 for a home. If they were to rent at the average rents in our area of €2,200 or more, that would account for two thirds of all of their income. They simply cannot do it. They are absolutely goosed, but the Government thinks it is okay to carry on with this madness. Up in Cherrywood, in the biggest residential development in the entire State, there are 8,000 housing units which, if they were affordable, would probably go a long a way to solving the housing crisis. Although I agree with the points they have made, I must say to our Labour colleagues that part of the responsibility lies at their door. I recall that when the decisions were being made to sell off what was NAMA land to private developers, I, Deputy Paul Murphy and others railed against it. The consequences are that we are only going to get 300 affordable houses out of 8,000 on what was previously public land. We are being told that affordability will be €37,000 less than the market price, when the developers are saying that they probably will not be able to sell the houses for anything less than €450,000. In other words, the houses will not be affordable for 95% of workers. We still have no idea what the affordable housing in Shanganagh is actually going to cost. When is the Government going to stop with this madness? When is the State going to directly build public and affordable housing on its on land at prices that are really affordable for ordinary working people?
First, I think we have to stand back from what has been said here. We have to stop blaming politicians and past decisions that were made. The biggest problem we have now is that we are giving money to developers. We should not be giving money to developers. Housing should not be developer-led; it should be development-led. If the €450 million in funding was made available in my constituency in County Galway, it would build the infrastructure for the wastewater treatment plants that we need in our towns and villages in order to build houses. It would help with taking over and putting into public charge the private wastewater treatment plants that are littered across this country. There is nobody maintaining them. Residents in the housing estates are paying local property tax and feel they should not have to contribute towards the expensive maintenance of these wastewater treatment plants.
What is also happening is that more houses cannot be put on to these treatment plants' systems. In effect, we have frozen out the planning process for extensions or infill to existing private developments. We have also frozen out any development in any village or town where we do not have a municipal wastewater treatment plant.
We have growth centres around Galway city which would act as a place for people to live at an affordable price, rather than having to live in the city. They are finding that we cannot build houses. The council will be coming up with a plan to build houses in clusters in which we put five houses with individual sceptic tanks in towns and villages. I do not know where the environment will match up with that. We have much to do. We should be targeting towns' and villages' infrastructure and making sure that the wastewater treatment plants are in place. We should also make sure that the houses which are being built and which are deemed to be affordable are built for the people. The people should benefit from those houses being affordable.
Deputies refer to the problems they have in their constituencies. I have people who are living in caravans and mobile homes outside their parents' houses because they cannot rent, buy or build a house. Planning has frozen them out, and houses are not available. We have a perfect storm. We need to decide that this is a housing crisis and an emergency. We need to make sure that we put plans in place to deal with that emergency. We need to look seriously at derelict and vacant properties throughout the country. We should make them affordable for first-time buyers. We should make them affordable for people who need housing. A woman contacted me this morning. She is living with her parents. She was born in 1974, which would make her between 45 and 50 years old, and has two children. She is working but cannot rent a house because she cannot get one to rent.
The HAP scheme is not working. Unintended landlords are now pulling out of the HAP system because they are being burdened with too many rules and regulations and have no protections. In the event that a tenant refuses to pay his or her contribution to the HAP, the landlord does not get paid at all. That needs to be looked at. What are we doing to encourage people to make their houses available to people who are on the social housing list? There is a considerable amount of work to be done. This is an emergency. Let us get into dealing with it in depth in order that we might make some progress.
Fianna Fáil offers hundreds of millions of euros to big property developers. That sentence could have been spoken in any one of the past four decades. The more things change, the more they seem to stay the same, unfortunately. Ideological debates on this crisis have been happening in the House for many years. It is the view of Aontú and I that there is an ideological block inherent in Fine Gael and Fianna Fáil and the Greens, as their sidekicks, that prevents the resolution of the housing crisis. Fianna Fáil and Fine Gael often see themselves as supporters of the free market and, yet, many of the actions they are taking distort the market more and more and keep it from functioning properly.
The support of the Government for the Airbnb system is incredible. It has the effect of distorting the market, with the ludicrous situation whereby the majority of homes that are for rent in towns and cities in this State are for short-term rent by tourists. We have an incredibly ludicrous situation whereby families are staying in hotels and tourists are staying in homes. Aontú brought forward a Bill that would ban short-term rents in towns and cities of populations of more than 10,000 people. Again, however, the Government refuses to act in respect of this matter.
The Government has also distorted the market by providing taxation red carpets to real estate investment trusts, REITs, and international vulture funds. International vulture funds and REITs now compete with young, first-time buyers. They have lower interest rates and taxation and access to endless funds. The Government still allows for such taxation advantage for REITs in this State. That is incredible when you think about it. I grant that there has been a change in Government policy over the past two or three years. The Government has increased the level of funding that has gone into the sector. Some €25.8 billion has been spent on solving the housing crisis since 2017. We have seen a 180% increase in our annual housing budget in that period, but what the hell do we have to show for it? Where are the housing units for families at the end of that?
The truth is that if one follows that money, much of it is going into the pockets of private landlords, developers or international funds. The ideological barrier to fixing this is still rock solid within the Government. The Government is subsiding the market, but there have been no improvements to the level of housing development. Some €305 million of taxpayer's money was spent to lease social housing from private companies. We have a situation in which there are 70,000 HAP and rental accommodation scheme, RAS, tenancies throughout the country. This underscores the wholesale dependency of this Government policy on the private rental sector for social housing provision.
Most of the so-called regulation that is being brought in to protect the tenant has more holes than a colander and no impact at all on the developers. Any investment in housing by the State must have a public good. There is no price discount in this plan. There are no affordability protections. There is no profitability limit for the developer at all. The money is being given to developers, irrespective of the profits they are making. Developers could receive this money. They could sell the apartments for €500,000 or €600,000 and still make a significant profit. The Government has put in no protections there. In many ways, this is social welfare by the Government for developers. It follows on from the party that socialised banking debt. It is the same ideological barrier again.
I thank the Social Democrats and Deputy Cian O'Callaghan for allowing us these couple of minutes this morning. We are sick and tired of the Government blathering, blowing and boasting about affordable houses and Housing for All. It will build 5,500 affordable houses for Dublin and the rest of the 7,500 houses are for the remainder of the country. However, no affordable house will be built in Kerry in the next five years. People are asking me day in and day out where the affordable houses are and when they will come on stream. The Government has no one on the list for Kerry for the next five years. People cannot get planning permission across half of the county. It is more or less sterilised, and the planning regulator is butting in again. He wants to sterilise more of it.
I have nothing against the Ukrainians or any people coming into this country but surely the Government should make the same attempt for our own people in Killarney who have been on the list for 13, 14 or 15 years. That is the God's gospel truth. Families that are on the list for nine or ten years are thrown off it because they exceed the €33,600 limit. I have asked the Government to raise that cap. What house could be built with an income of €33,600? One could not build a henhouse to be honest. In the tenant purchase scheme the Government has in place, no one can built a house that is built after 2015. God almighty, someone may want to buy out a rural cottage that is built on their own land when they get on their feet but the Government has disallowed that. The money acquired from the tenant purchase scheme used to go into doing up voids. We have no money to do up voids in County Kerry. That is the God's gospel truth.
The Government seems to be going around in circles talking. Practical things should be done, such as reintroducing the first-time buyers and builders grant scheme. This scheme was scrapped by Fianna Fáil and the Green Party when it was in government from 2007 to 2011. Fine Gael and Labour failed to reintroduce the scheme. Now is the time to reintroduce it and to provide grant aid directly to the young people who wish to build or buy a home for themselves. This scheme could help young people in rural areas in places such as County Kerry, where I am from, to proceed to build a home on their own land.
However, for the scheme to work, a grant-aid package has to be made available to qualifying applicants.
The Government seems to make a mess of the whole housing issue continuously. My clinics in the Dingle area on Monday night, held over seven and a half hours, were predominantly taken up by the issue of housing. Attendees wanted a house to buy or rent or to get a local authority home. Quite simply, they cannot get one. Since the area is nice and a beautiful part of the world, it is increasingly difficult to get planning permission on one's own land. Surely to God we should be able to allow those with a site to build on it because they are doing it for themselves. Look at how badly we have let people down because our local authority housing programme is so weak.
I thank, as I always do, the staff in the housing department in Kerry County Council. They are excellent, from the director of services down to those working in every sector. If given enough money, they will take care of housing in County Kerry.
Is it not wonderful that the Government is in a position to gift developers €450 million to subsidise the construction of apartments, all collected from fuel tax, income tax, motor tax and vehicle registration tax? It just shows that the worst-off in this country are the working-class people. The funds comprise a gift that does not have to be paid back. There is no cost–benefit analysis or regulatory assessment. The proposal is to give a subsidy of €144,000 per apartment. This policy does not make sense. At present, 120,000 people are on social or council housing waiting lists. In Limerick, there are 2,347 on the list. Under the scheme, a developer will get €120,000, with the subsidy to be as high as €144,000. With inflation this year running at 13%, costs could rise significantly, depending on building products. The cost of insulation is rising.
Again, this is a city-based budget for developers. Where will most of the apartments be built? In Dublin. Does the Government not look beyond Dublin? Limerick county has no capacity or infrastructure. I have been saying it since I came here. The proposal does nothing for County Limerick or any other such county, including Kerry, Clare and Galway. It is all city based so the Government can get its numbers up and get additional Deputies in the cities to further close down rural Ireland. It is a matter of a city-based Cabinet, policies and infrastructure, with nothing for the towns and villages around rural Ireland. Many of the cities do not have the infrastructure to do what is proposed either.
I thank the Social Democrats for tabling this motion.
Members of the public got €200 from the Government to help with the soaring cost of living but wealthy developers, the vast majority of which are multinational development companies, will get a handout of up to €144,000 each. The proposed scheme will be available only for apartment developments in the five major cities: Dublin, Cork, Galway, Limerick and Waterford. This policy is reckless and will do nothing to support the delivery of affordable houses. The scheme represents a social welfare or State handout for the biggest developers or builders in Ireland and there is no means test. What makes this obscene scheme worse is that the cash will be handed over without the Government seeking any reduction in the price when the apartments are sold. Yet again, we are doing nothing to help the first-time buyers. The proposal will help the bigger cities, as many have said before, but it will not help the ordinary people seeking houses in Clonakilty, Skibbereen, Bantry, Bandon and many more places in west Cork. It is of no benefit whatsoever to them; as a matter of fact, it probably makes things worse for them.
There is a massive housing crisis. I welcomed the visit of the Minister, Deputy Darragh O'Brien, to Skibbereen and Clonakilty last Friday but he did not announce money for a water scheme in Clonakilty. Clonakilty is now stifled; people cannot build there. Individuals cannot even get planning permission. It is a scandal that a growing town in west Cork has been left like that. We seem to have money for foreign developers in most cases. There is no problem at all for them but Clonakilty will be stifled and held back until we dish out all the money all over the country. Constituents of mine who come to my clinics every weekend cannot get a mortgage or council house. They have been waiting for ten or 12 years. Young people with a site at home are being refused planning permission but there is no problem with development and building, building, building. It is a matter of the Government pumping money into the wealthy. Where it gets the money when it suits it, I do not understand. Why has it not considered the counties? Why has it not considered a place such as west Cork, which badly needs money for development? The Minister has to wake up and understand that. Development in rural areas must not be stifled.
I am grateful for the opportunity to speak on this motion and I thank the Social Democrats for tabling it.
I believe I speak for everyone when I say the Government's decision to gift €450 million to developers is a massive slap in the face for the many in this country who are struggling with the cost of housing. Why is it always the priority of this Government to put developers first? Why do we allow this at the expense of our citizens?
I support this motion's proposal to scrap the subsidies at which the Government is throwing €450 million for the construction of apartments that will be sold at the full market price. The reality is that these apartments will be too expensive for most people to buy. Basically, we are using public funds to give to developers to build accommodation that will be too expensive for the public to buy. On top of that, the funds are to be spent without a cost–benefit analysis, regulatory assessment or independent cost evaluation. This is an appalling use of public funds. The money would be far better spent building affordable homes.
The amendment to this motion put forward by the Government is very weak. Much like most of the answers to parliamentary questions that we receive, they do not lack in words or length but in substance. They state the Government is committed to supporting homeownership through a range of targeted measures, which is completely untrue. The Government may support ownership for those few who can afford the current extortionate rates but it certainly does not support homeownership for low- or even average-income families. It is completely disingenuous to suggest otherwise.
This is further proven by the introduction of yet another scheme for the well-off: the first-home affordable-purchase shared-equity scheme. Much like the help-to-buy scheme, it does little to address the affordability challenges seen in most households today and only facilitates those on higher incomes to buy their house at a cheaper cost.
Have we not yet learned that pumping money into subsidies and schemes just does not work? What we need is direct investment in the building of affordable homes. Anything less is not addressing the issue, end of. We on this side of the House believe the outcome should be the provision of homes but the Government side believes the outcome should be the provision of wealth to developers. There is a difference, and a difference in tack.
The Government cannot pretend that this issue is not a result of its bad housing policies. I note the Government amendment suggests the Covid-19 pandemic and global supply-chain disruption are to blame for the housing crisis today. That is amazing. It is as if we had not had a housing crisis at all before Covid-19. Who does the Government think it is fooling? This crisis was around long before Covid and everyone in this country knows that because everyone in this country has been affected by it.
The Government amendment also suggests there has been a strong demand for urban living, with people wanting to live close to work. This just shows how out of touch this Government is. The constant focus on urban centres will only worsen this housing crisis. Our cities emptied during the pandemic, with many people returning or moving to rural areas and working from home. The suggestion that everyone wants to live in an urban centre is unfounded and simply wrong. My constituency, Donegal, saw an incredible influx of people over the course of the pandemic. People want to live where there are amenities, services and public transport connections. The pandemic made it clear that people would move to rural areas if they had these amenities. If the Government sought to invest in rural areas, it would encourage people to locate in them and put less pressure on urban areas; however, the Government is not interested in investing in solutions that actually make sense.
Overall, I support this motion in its original form. If the Government were serious about the housing crisis, it would have supported it too without putting forward such a weak and disappointing amendment. The one thing pointed out to us all is that the Government is not interested in people who need housing; it is interested in supporting and making developers rich. For that reason, this motion works.
Last week in Dublin City Council, there was a special meeting on O'Devaney Gardens. Councillors had the opportunity to withdraw from the rotten deal. The Labour Party, Fianna Fáil, Fine Gael and the Green Party voted to maintain the deal. Bartra, the developer, was clearly in breach of the development agreement by not beginning construction within four weeks of the granting of planning permission. Planning permission was granted last September but Bartra chose to challenge it legally to ensure maximum profits. The site is a prime public city-centre site of 12 acres. Councillors gave it to a developer, committed to subsidising the infrastructure to the tune of €10 million and waived development levies of €5 million.
That is free land and €15 million. In exchange, Dublin City Council will buy 30% of the homes for public housing, 20% for affordable purchase and the other 50% will be sold privately, and, no doubt, the State will end up renting a significant number of these homes under HAP, rent allowance or long-term leasing. In the worst-case scenario, an approved housing body will buy the majority of private homes for a vastly inflated cost to house tenants in public housing on what was formerly public land. We simply could not make this up. It is ideological madness but no surprise as the same Government has now set up a scheme that plans to give developers more than €450 million - over €100,000 per unit - for simply doing their job and building homes.
I want to put on record that we were told strategic housing developments, SHDs, were imperative because we needed to build homes in the cities. On Davitt Road, 265 build-to-rent apartments have just been completed. It is an SHD and this is supposedly to build homes but 238 of these have been sold to Google and 27 will be allocated to Dublin City Council. The people in Drimnagh, where this was built, will not be able to access these one-bedroom and two-bedroom rental apartments. This shows the ideological madness of the Government.
I support the motion from Deputy Cian O'Callaghan. The Government's scheme is not about creating affordability for those on ordinary incomes. It is clear from this scheme that, at best, it will lock in the sky-high and unaffordable prices and, at worst, will drive up housing prices even further as developers will simply price in the subsidy. As was stated in the Dáil last Thursday, the scheme will provide nothing for people who want to purchase affordable homes. Instead, first-time buyers will still have to pay up to €600,000 for apartments and houses that will be sold at market prices.
This plan is fatally flawed. The €450 million is a direct subsidy for developers, which is insane. It is essentially the State taking on the risk for developers but the developers will be able to get all of the profit margin for these apartment developments. The Government is removing the risk for developers, it is removing everything that a developer is meant to do, so why does the Government not just become the developer? It is crazy. Every scheme that has been brought in has been geared towards developers making huge profit margins and the communities are left to scramble for what the Government is providing.
At the housing committee in April, Dublin City Council outlined a plan for the next five years. The total number of housing units to be built was 14,338, which includes long-term leasing, regeneration projects and advance planning and design acquisitions. That is in five years but there are 13,100 people and families on the housing list in Dublin City Council now and more than 5,000 HAP tenants looking to transfer. That is a total of 18,000 and we are talking about potentially building 14,300, despite all of the other tenants who will come onto the housing list in the coming years. This plan is incredibly destructive. We have enough publicly-zoned land controlled by the State, Dublin City Council, the other councils and NAMA to build 100,000 homes. That is what we need to do to solve the crisis.
I sometimes wonder if the sponsors of the motion represent the same city that I do. The core problem in my constituency is that new high-density compact development is simply too expensive for first-time buyers. The old model, whereby modest builders sold to homeowners, is not able to mobilise these sites. As a result of that, what we have seen in recent times is that the REITs have moved in to purchase, for example, at Griffith Avenue and the Shieling development, and it is not only the REITs as the housing bodies have also moved in to buy in Beaumont and Coolock and at Blackbanks, which Deputy Cian O'Callaghan will know.
We have to fix that model because the traditional model will not deliver. As the Minister of State, Deputy Smyth, will know, we need compact development for climate reasons. We have to be aware that this logjam has to be broken. In Dublin city in the last four years, planning permission was granted for 29,000 but only one third of those have been activated, so there are currently 19,000 in limbo. By contrast, in the other three Dublin authorities, 75% of those that got permission have moved on to commence and build. We have a logjam in the cities, and it is not just Dublin. In my constituency alone, there are 8,000 such homes blocked in that position and they would not be triggered unless, under the policy up to now, the REITs or one of the housing charities came along and bought them.
What we are doing here is developing a way of unblocking that. The strategy the Government has developed has three strands. First, there is the State developer, which I believe Deputy Joan Collins has overlooked, that is, the Land Development Agency, which under Project Tosaigh will activate these sites. It is actively going to find those sites and get them moving and, as I said, there are 8,000 such units in my constituency and 19,000 across the city. The second element is the subsidy we are now talking about, which reduces the price of those very high-spec homes to home buyers in these high-density developments. The third element, which we will see in the forthcoming budget, is taxation of vacant sites. In my view, this is a balanced package of activist intervention by the State and it is the correct way to address this problem.
The Opposition seeks to depict this as a subsidy to developers. The reality is this will ensure that ordinary home buyers can go in and get these homes at a cheaper price than those who want to buy for buy-to-rent purposes, be they REITs or individuals. Of course, the value of that money expended has to be tracked and we have to make sure we get full value for it, but it means there will be a lower price for first-time buyers in these estates. That is something we need. The trouble with the Opposition motion is that it deplores falling rates of home ownership but it opposes help-to-buy, which 32,000 people will take advantage of, it opposes shared equity, which 8,000 people will take advantage of, and it now opposes this, which is another 5,000 homes that we can deliver. We have the highest rate of social housing provision ever in the history of the State, although, from listening to the Opposition, no one would realise that. We need to correct affordable housing and that is what this initiative is about.
I am not going to get into the intricacies of what the solutions are for Dublin. I just want to commend the Minister of State, Deputy Smyth, and the Minister, Deputy O'Brien, on all of their efforts. One thing I know from the many contacts I have in the city is that demand for housing is savage. This is an effort to come up with novel ideas and new ways of doing things, as Deputy Bruton pointed out in regard to the State-led Land Development Agency, which has been in the making for a number of years. Any proposal to try to provide building solutions for the many people who are in desperate need to start their families, start the next phase of their lives and get independence from home, has to be commended. I want to acknowledge the Minister and the Minister of State for their work in this regard.
Closer to home, I want to make a couple of points. I want to acknowledge the Minister, Deputy O'Brien, for his efforts to try to move forward as quickly as possible with the mica legislation. It is very important that we start to move on that. The frustration continues to build and, in the meantime, many councillors in Donegal are advocating very strongly for modular housing for mica families while they are waiting for their houses to be rebuilt or to get the outer leaf done. We have to really look at something within the mica legislation to allow modular build in the short term. If we go through the normal channels and planning processes, with third-party objections, that will not fit the timeline of what is needed in the short term. I believe we need to look at the all-encompassing demands on housing that we have at the moment.
I led a delegation to Romania recently and we met with many politicians in Bucharest. Romania has a dedicated sectoral working group on housing to deal with the current demands in terms of local housing need but also the pressure of 100,000 Ukrainians coming into the country.
They are looking at an all-encompassing solution for their home needs and that of Ukrainians in totality, rather than doing them in isolation because that creates its own social difficulties in terms of segregating people. We have a great opportunity in this country if we are considering modular solutions for Ukrainian families to consider an all-encompassing model. I used the example in my county of mica families who will need short-term housing.
The second point I would like to make is that many houses built 20 years ago had three or four bedrooms because families had three, four, five or six children. Many of these children have moved on and families will want to downsize. They may not want to build a house with the same footprint. The Minister of State will consider scenarios whereby when people build a house with the same footprint they will not have to apply for planning permission because that takes away the incentive for families to downsize.
I again reiterate that I do not think people who want to downsize should have to go through the planning process not only because it takes away the incentive, but because it also opens things up to third-party objections. People in a 2,500 sq. ft. house may want to downsize to a house of about 1,500 sq. ft. or 1,800 sq. ft. They would have to go through planning and there could potentially be third-party objections where somebody is trying to replace a home. We have to consider something within the legislation to provide incentives rather than the current disincentives in regard to downsizing.
I believe Deputy Ó Broin said earlier that the majority of uncommenced apartments with full planning permission are in the buy to rent sector. I wanted to correct that, because there are twice as many apartments, around 19,000, in the build to sell sector with full planning permission that have not yet commenced. Only about half of that number are in the build to rent sector. The scheme is exclusively for build to sell.
Research has shown that the State needs, on average, 33,000 houses to be built every year to 2030. Additional supply is also needed to respond to the number of Ukrainian refugees we are committed to helping. The Government is determined to deliver an additional average of 11,000 social homes each year and 6,000 new homes under affordable housing arrangements each year. With this scheme, we are delivering support for the first-time buyers, right size housing and housing for our increasingly urban population. Far from gifting developers money, this scheme is about bringing much needed additional apartment supply on stream quickly. It will deliver 5,000 units. Prospective homeowners will be the beneficiaries.
It will offer additional choice to households who want to live in cities in areas that are accessible in terms of public transport infrastructure, and are close to work and other social amenities and services. This is an opportunity to help reimagine how we live and work in our cities. Over the longer term, other measures in Housing for All will act to reduce the cost of building apartments and reduce the price of development land. In the meantime, we need to get these 5,000 ready to go new apartments built. Apartments are key to delivering the national planning framework objective of compact urban growth, sustainable communities and vibrant liveable cities and reducing urban sprawl, which presents us with so many challenges, including unsustainable emission levels.
Those who want to live in the heart of our cities must have choices available other than renting. Without this scheme, new apartment owner occupation will not be available, except at the higher and more expensive end of the market. Without this scheme, only buy to rent apartments are likely to be built.
Affordability for the buyer and the State is the fundamental issue in our housing market, but one would not think it looking at the Government's housing policies. We are repeatedly told that supply is the answer. While this is undoubtedly part of the solution, it is not a silver bullet the Government would have us believe because so much of it is the wrong sort of supply, namely, unaffordable small rental units.
Housing is too expensive. That is the crux of this issue. Just ask anyone looking to rent or buy. The problem is that they do not have the ear of the Government. Developers do. Successive Ministers for Housing, Local Government and Heritage have bent over backwards to address developers' so-called viability concerns, and this Minister is no different. Last year, The Irish Timesreported that the CIF had made 61 representations to Government in the first ten months of the year. That absolutely beggars belief.
The Minister knows full well that this approach to housing policy, where developers, landowners and investment funds dictate housing policy, does not work because the only people who win are those calling the shots. This latest policy, namely, a direct subsidy for developers, represents a continuation of this deeply flawed approach to housing policy development, if one can even call it that in the absence of any cost-benefit analysis, independent cost evaluation or regulatory assessment. This just smacks of another proposal that was written on the back of an envelope and accepted by a Government that is all too willing to appease developers.
This insidious relationship between the Custom House and the sector has had a particularly profound effect on our planning laws, which are inextricably linked to housing, something that is not lost on the construction lobbyists. Since 2015, we have seen what was a reasonably decent planning framework being transformed into a developers' charter. These attacks on the planning system began when the then Minister, Deputy Alan Kelly, introduced mandatory section 20 guidelines. This paved the way for unrestricted building heights and slashed apartment standards. His successors, the Minister for Foreign Affairs, Deputy Simon Coveney, and the former Minister and Deputy, Eoin Murphy, oversaw the failed fast track SHD process and retrograde build to rent schemes with even lower building standards. We were told the changes were necessary to bridge the viability gap supposedly faced by developers. All they achieved was greater dysfunction in the market.
Now the Government is set to subsidise developers to the tune of €144,000 per apartment. When these apartments come to market, the Housing Agency estimates they will cost up to a whopping €450,000. How can the Minister of State honestly stand over this egregious use of taxpayers' money? These funds should be used to build affordable purchase and cost rental homes, not gifted to developers. The Minister, Deputy O'Brien, is utterly misguided if he believes for one second that the market can be relied upon to deliver affordable homes.
We already know that this dysfunctional market is yielding the wrong types of home, namely, unaffordable shoebox apartments. Analysis undertaken by KPMG for the city development plan shows that there was an increase demand for two and three person household accommodation and declining demand for single person households and one bed units. Yet, the Government is proposing a payday for the very people who are failing to meet this demand simply because studios and one bed are more profitable. What else should we expect from the Government?
Developers will always chase the maximum return on their investment. In so doing, the Government is locking a whole swathe of society out of homeownership and locking others into exorbitant mortgages and rents. It is time to abandon this sweetheart deal for developers and address the real problem, which is affordability for the buyer and the State.
I thank Deputies from different parties and groups who have spoken on the motion. During the debate we witnessed something I had not seen before. The Minister for Housing, Local Government and Heritage, who is not shy for words, was utterly silent when we put three questions to him, questions the public have a right to know the answers to given that he wants to gift €450 million of public money to developers. We asked him if developers and their lobbyists were involved in dreaming up this scheme. There was no answer, just complete silence and no response. Why would he not answer that question? We asked why there was no cost-benefit analysis or economic or regulatory assessment of the scheme. There was total silence and no answer.
Why will he not tell us about that? Why will he not carry out that evaluation so we can find out what the scheme will do? Why will he not answer questions about what this will do to land prices? There is no answer; it is utter silence from the Minister. He will not tell us anything he thinks about this.
We asked the Minister what level of profit would be guaranteed to developers under this scheme. Will developers who are seeking 15% minimum profits, which they define as viable for apartment construction, get those profits subsidised through public money? There was zero answer from the Minister to that. He had nothing to say. There was no comment, just total silence. Why will he and the Government not answer the very legitimate questions we are putting about the use of €450 million of public money the Government is going to hand over to developers? I asked the Minister if he could give an example of a single country in the world where a government is behaving in this way by gifting such money to private developers. He had nothing to say. There was utter silence, with no answer or comment on that. Why will he and the Government not answer the legitimate questions we are putting to them when they are seeking to gift €450 million of public money to developers?
I wish to respond to the Minister of State with regard to what the Social Democrats stand for in housing policy. I will be very clear about this. We stand for measures that make housing more affordable and we are opposed to measures that put upward pressure on rents and house prices to make housing and rents less affordable. We oppose all the Government's measures in that regard, including this off-the-wall scheme. This is the same Government that is putting more than €1 billion in subsidies every year into the pockets of investment funds and private landlords through rent subsidies and long-term leases. It is not an accident that we live in a country that has some of the highest rents and house prices compared with those of European Union capital cities. It is no accident because every time the Government intervenes in housing it brings forward measures that create upward pressure on rents and house prices, as it is doing with this scheme.
The Government has no mandate for this. Fianna Fáil, Fine Gael and the Green Party did not tell the electorate during the last general election that they should vote for those parties because they would give €450 million of the electorate's hard-earned money to developers. They did not tell people about that. There was not even a whisper of it during the election campaign. They have no mandate whatsoever for it. Then the Government will not even answer the very legitimate questions we have put about this today. There is zero answer. Why did the Government parties not come clean with the electorate during the last election that this was their plan if that is what they intended to do? I call on Government Deputies to join Opposition Deputies today and to vote down these horrendous plans, to scrap these plans, to put this money and these resources instead into building affordable purchase homes, and to use this funding as it should be used. We should be increasing home ownership, but under this Government home ownership continues to fall year after year, while rents and house prices increase.