John Cummins (Fine Gael) | Oireachtas source

I welcome the Minister and thank him for initiating in this House what is some of the most important legislation that will be debated during this Twenty-sixth Seanad. Despite what some would have us believe, the Government takes the housing crisis extraordinarily seriously. Rather than talk about grand plans, ideology and misplaced analysis that the State should be the only player in the delivery of social and affordable homes, the Government is taking action and is willing to deliver social, affordable and private housing via any mechanism possible to deliver what every expert in this space agrees is needed most, namely, supply. As the Minister said, we cannot and should not allow perfection to be the enemy of the good.

The Bill, in conjunction with the Land Development Agency Bill 2021 and the significant increase in the delivery of social homes that has occurred, are the structural foundations that will resolve the housing crisis we face. We need to be honest with people, however, and that goes for the Opposition too. It will not be done overnight. Anyone involved in construction will say it takes three to four years, from concept to completion, to deliver housing units. There are, as has been mentioned, more than 80,000 inactive planning permission applications for units nationally, on which I believe builders will move as a result of the measures in the Bill in relatively short order. The Programme for Government: Our Shared Future, commits the Government to building on the foundations of Rebuilding Ireland to deliver housing for all. The document articulates the core belief that everybody should have access to good-quality housing for purchase or rent at an affordable price.

That is why we are introducing the following four main measures as part of the Bill.The first of these measures is the local authority affordable purchase scheme. This will allow local authorities to acquire, build or cause to be built housing units for purchase by those who cannot secure a mortgage for 90% of the market price of the unit. Units can be delivered directly by the local authority, by approved housing bodies, AHBs, in conjunction with the Land Development Agency, LDA, or via public private partnership arrangements. To support the delivery of affordable homes by local authorities there is a €310 million serviced sites fund to provide infrastructure support to local authorities. One of the main recommendations of the pre-legislative scrutiny was that access to the serviced sites fund be made more flexible and that an open call be introduced. I ask the Minister to ensure this happens without delay and to look at the €50,000 available per unit and adjust it upwards to reflect the higher costs in the greater Dublin area.

I welcome the flexibility to the first-time buyer rule being inserted for those who previously had a dwelling as part of a marriage that has ended, those who sold or lost homes due to insolvency or bankruptcy proceedings and those who are in a home that is now too small for their needs. These are matters I raised on the first day of pre-legislative scrutiny and I thank the Minister for their inclusion in the Bill. I also welcome the standardisation of the scheme of priority for the affordable purchase homes, and the 30% flexibility being introduced for local authorities to prioritise those who perhaps do not meet the standard criteria.

The second measure being introduced, to which the Minister has referred, is cost rental. This is specifically targeted at those who are above the income threshold for social housing but are trapped in high-cost rental accommodation. It is intended that cost rental properties will be long-term secure tenancies. As the Minister said, it is based on the Vienna model, with rents charged to cover the cost of delivering, financing, maintaining and managing the homes. As rents will be linked to the consumer price index, these homes will in fact get more affordable as time progresses.

The development of this new sector is already ongoing with the LDA due to break ground on 306 cost rental homes at Shanganagh, and 440 units will be delivered in association with AHBs in Dublin and Cork, with rents at least 25% below market value. As the Minister knows, there was an open call for the cost rental equity loan earlier this year and I hope, in light of the construction shutdown, that schemes in Waterford, Limerick and Galway can be prioritised and given the green light to proceed without delay to increase the supply of cost rental homes in this calendar year and the early half of 2022.

While I appreciate that the Department is keen to prove the concept with the AHBs, to ramp up significantly the production of cost rental homes we must allow, as in other European countries, the entry of low-cost ethical funds to deliver units at scale. I would appreciate if the Minister could clarify whether there is any impediment in the legislation to enable this to happen. I would also welcome some clarity on how the selection of cost rental tenants will be decided as these will be highly desired properties.

The third pillar of the Bill is the introduction of the affordable purchase shared equity scheme to assist eligible individuals and families in purchasing a private home. Surprisingly, this €75 million scheme, which equates to 1% of the mortgage market in Ireland, has received all of the attention but in truth it is only one small part of the measures that will improve access to, and affordability of, new homes for viable but hard-pressed purchasers who are potentially paying higher rents than the mortgages they could get from the banks. We all know these people. They are our friends and families and they are the people in our areas. In addition, the scheme will incentivise and encourage the construction of more new-build homes to help address clear supply shortages. I welcome the fact the Minister will introduce caps on these, which should probably be reviewed before they are finalised.

Individuals or families will be required to take out the maximum mortgage with the equity percentage being the gap between the maximum mortgage and the cost of the home, up to a maximum of 20%, which can be paid off without interest in the first five years. This is a safeguarding measure to ensure we target those first-time buyers who need it most. The scheme can be combined with the Rebuilding Ireland home loan product and with the help-to-buy scheme, which provides 10%, or up to €30,000, towards the deposit of a home for a first-time buyer.

The fourth pillar of the Bill, which I understand will be introduced on Committee Stage, is the increase in Part V provision from the requirement to have 10% of any housing estate delivered for social housing purposes to at least 20% for social and affordable housing. This will have the net effect of delivering approximately 3,000 affordable purchase units per year, which is hugely welcome. We must also be conscious that increasing the percentage above this level could result in higher prices for the remaining percentage of the development, as builders do not make money on delivering Part V houses as the land costs are attributed at the existing use value.

Housing is the biggest challenge we face outside of Covid-19. I truly believe the Bill will assist us in delivering affordable purchase and rental homes. By all of us putting our shoulders to the wheel and working together, the measures in the Bill will unlock the delivery of affordable homes. I look forward to working with the Minister to realise the ambition in the Bill.