Darragh O'Brien (Dublin Fingal, Fianna Fail) | Oireachtas source

At its heart this Bill is about the State stepping up to provide affordable homes for purchase and rent using all means at its disposal to tackle the housing crisis.

The ongoing affordability crisis has reduced home ownership rates to historic lows. It has increased the age of the average first-time buyer by almost a decade to 35 years of age. Ireland has plummeted from a world leader to below the EU average rate of home ownership. For an entire generation, owning their own home is slipping through their fingers as they pay unprecedented levels of rent or as they live longer in their parents' homes. A generation is caught in an unaffordable rent trap. The recent Maynooth housing controversy has underlined the scale of that challenge.

We must put in place the legislative buildings blocks of a new approach to the crisis, one which puts home ownership back on the table for a generation that has been smothered by rising rents and job uncertainty. Failing to do that will open the door to the disastrous populism and Trump-style hysteria that has sadly characterised much of politics across the globe. This housing crisis is not about one party or one Government; it is about giving a whole generation hope and investing in the future of our democracy.

The Affordable Housing Bill 2021 is a very important step in rising to that challenge. It places the legislative foundations for the State to put bricks and mortar in the ground to tackle the housing crisis directly. I firmly believe home ownership is good for individuals, good for families, good for communities and good for the State. With this in mind I have put affordability and the chance to own your own home at the heart of our housing policy. This Bill and the Land Development Agency Bill 2021 are going through the Oireachtas simultaneously and will work in tandem to give people the opportunity of home ownership. These two landmark pieces of legislation are backed up by the largest housing budget in the history of the State and our most ambitious social housing targets on record. Combined, this represents a major step change in our housing policy that mobilises both the public and private sectors.

The Affordable Housing Bill 2021 has four key elements. It will be the first local authority-led, direct build affordable homes on State lands in more than a decade and our first ever national cost rental scheme. It will also provide for an innovative shared equity scheme. It will expand Part V by designating units for first-time buyers. This element will be brought in on Committee Stage of the Bill in Dáil Éireann following the conclusion of further work I am doing with the Attorney General and with final Cabinet approval.

The roll-out of local authority-led, direct build affordable housing will be the central plank of the Government's affordable housing plan. Units will range from €160,000 to €310,000. I am working with the Minister for Public Expenditure and Reform, Deputy McGrath, to reform the serviced sites fund to ensure it can effectively fund major delivery. The upcoming housing for all plan, which will be published this summer, will set out the ambitious range of targets throughout the State over the coming years.

Shared equity will involve the State bridging the affordability gap by taking an equity stake of up to 20% between an individual's mortgage limits and the price of the unit. It will work in conjunction with the help-to-buy scheme to get people into homes this year. It will help to turn generation rent into a generation that can buy their own home. With regard to shared equity, I will address legitimate concerns but also tackle some of the opportunistic and unfounded criticisms around a particular aspect of the Bill to dispel any uncertainty and to tackle deliberate misinformation directly. Because of the Opposition's hesitancy to acknowledge it is broadly supportive of most of the measures contained in the Bill - the local authority direct build affordable homes, the expansion of Part V, and a new form of cost rental - a particular intentionally distracting focus has been paid to the affordable purchase shared equity scheme. I intend this scheme to be a short-term, targeted measure as part of a much broader multifaceted approach to increasing housing supply and affordability. It will increase viability and generate supply to provide an immediate boost to first-time buyers for new homes. It has been developed in close consultation with relevant Departments, housing delivery partners, international comparator bodies and other key stakeholders.

We have examined and assessed the impact of similar schemes in other jurisdictions, including in England, learning from experience in developing a scheme that is unique to the Irish market. The English scheme has supported 250,000 home purchases. An independent assessment concluded it has met its twin objectives of increasing supply and increasing home ownership. The UK's National Audit Office's independent analysis found it increased supply by 14% and increased purchase prices by less than 1% on a like-for-like basis. Some in Opposition have cited claims that inflation in the UK was rampant. The National Audit Office acknowledged there were higher inflationary figures circulating in the public domain and investigated this. Its analysis said "We found that these estimates do not compare similar properties and so do not accurately assess any additional premium paid by those using the scheme".

Taking on board legitimate concerns, safeguards are being built in to tailor eligibility to meet individual affordability needs only and to manage prices through area-based price ceilings. The price ceilings are based on real data, which are the CSO-recorded median prices of new first-time buyer homes sold in each area. This means developers will build homes in the lower half of the price distribution. I am happy to confirm this will be an equity product. It will explicitly not be a second mortgage, as claimed by some in the beginning when this scheme was launched. It will not compel homeowners to borrow more than they can afford.

I am pleased the provision of cost rental has been widely welcomed by a range of political and research groups. It will involve rents of at least 25% below market rates and generally 30% below market rates. This is an entirely new form of tenure and an exciting departure for housing in Ireland. I want to correct any suggestion that the inclusion of a limited return on equity is equivalent to allowing the private sector to generate large profits. That is the very opposite of what we are trying to achieve for this new sector. Rents in cost rental schemes will only ever cover the cost of providing the homes. This includes the repayment of the loans and the interest accruing on them, as well as a modest return on any money invested directly in the homes, which will be capped. A limited return on equity of between 3.5% and 5% is permitted under the exemplar Austrian cost rental model, which we are seeking to emulate in Ireland. This allows for any private providers of cost rental homes, for instance, large institutional pension funds, to make a modest return on any of their own funds they spend building cost rental homes, which can then be reinvested in future projects. It will also allow the Land Development Agency to participate at scale in the delivery of cost rental schemes. It is important to note that cost rental has been discussed for a number of years to give a new option to working people. The Government will be delivering it within one year of it coming to office. It is very significant in that regard. I hope we will have cross-party for this Bill and for these measures.

I turn to Part V and first-time buyers. I intend to bring forward further changes to strengthen this Bill on Committee Stage. This will include expanding Part V of the Planning and Development Act 2000, and designating a range of units for first-time buyers. Work is under way right now with the Attorney General to bring these amendments forward to level the playing pitch further for first-time buyers, which is an absolute priority for me and for the Government.We are in the middle of a national housing crisis and faced with such an emergency we need to use all the tools at our disposal to address this challenge across both the private and public sectors. We cannot tackle this crisis with one hand tied behind our back. I am committed to pragmatism over ideology and delivery over dogmatism to boost housing supply and open up real home ownership to a new generation. We need to stop letting one party's perfect be the enemy of everyone else's good when facing a crisis.

Silver bullet fantasies and hysteria politics do a generation locked in a rent trap a grave disservice. I am committed to using every weapon in our arsenal to fight the battle and turn the tide in our housing crisis. To refuse to use the private sector would, as I said earlier, be fighting this with one hand tied behind our back. Instead, we need to show energy, innovation, flexibility and commitment to get bricks and mortar into the ground with the State playing a central role and the biggest role that the State has played in generations. In this light the Bill is a major leap forward in our housing policy.

I look forward to our debate on the Bill's provisions. I will seek to respond to any specific questions and engage further with Senators on Committee Stage. I commend the Bill to the House. Go raibh míle maith agat.