Aideen Hayden (Labour) | Oireachtas source

It could be said that the Irish have paid the price for their obsession with home ownership and while it is widely recognised that the economy is in recovery with many back at work - unemployment is currently below 10% - we must acknowledge the significant and serious overhang in debt, in particular mortgage debt and mortgage arrears. This has, again, been highlighted by the Commission in its country specific recommendations for Ireland for 2015. It bears repeating that, as of the first quarter of 2015, there are 38,000 principal dwelling homes in mortgage arrears of more than 720 days. That is a substantial group and this raises significant concerns. The Governor of the Central Bank, Professor Patrick Honohan, confirmed to me at a recent meeting of the Joint Committee on Finance, Public Expenditure and Reform of which I am a member that approximately 50% of those home owners have already had legal proceedings initiated against them. We must not forget that we have almost 40,000 buy-to-let mortgages in arrears as well and those mortgages are held over the homes of families who are renting, leading to considerable insecurity in the rental market.

Mortgage arrears is a significant issue not only for those who, unfortunately, find themselves in that situation, but because they are a block on the recovery of the economy. As to whether that means we should not revisit home ownership, we must take a step back before we reach that conclusion. The Irish have paid the price for lax regulation and a dysfunctional housing system, but I would argue that those who have paid the most, apart from those in negative equity and those whose homes have been repossessed, are young people, particularly those between the ages of 30 and 40 who now face the possibility of never owning their own home and living in a rental sector that is unfit for purpose in terms of giving them security.

The answer is supply but, as I already said, excessive supply in the past did not lead to greater affordability - in fact, far from it. We need to ensure both supply and an affordable housing system which means ensuring that banking, as we have come to know it, is not the only game in town. We have a lot to learn from other jurisdictions.

I applaud the model Senator Barrett has put before us today, both in terms of its regulatory framework and its robustness. Most of all, I applaud the principle behind his model, which espouses using profits from the housing corporation, as set out in Schedule 4 of the Bill, to fund social housing and to enable low-income households into ownership. The model is simple. It uses State access to cheap money to fund not-for-profit lending for home ownership.

The Government will not accept this proposal today but I firmly expect that it will be seriously considered in the future when other solutions based on the existing market do not work. We must learn from the past and failing to accept that the housing market in Ireland is subject to failure in a cyclical way is just plain stupid. As Henry Ford famously said, "If you always do what you've always done, you'll always get what you've always got." In 2003, the economist Jerome Casey pointed out that the proportion of a house that was accounted for by the cost of land in the 1990s was 15% and this had risen to 50% by 2003. That is something we must deal with, but we can also look to the past at what the models of the mutuals and the local authorities brought to home ownership in Ireland. This Bill captures the best of both in bringing the State together with the wider society to ensure access to a home for all. I wish Senator Barrett well.