Rebecca Moynihan (Labour) | Oireachtas source

I would appreciate if the Cathaoirleach gave me extra time.

Against the advice of all of the experts, the Minister has persisted in going forward with the shared equity portion of the Bill. The evaluation of an equivalent scheme by the UK's Department with responsibility for housing was that 60% of the beneficiaries could have bought a property without the scheme. Furthermore, it stated the scheme contributed towards developers building bigger houses and increasing profits. The report of the London School of Economics was more damning. It stated the scheme did not improve supply or affordability in the areas where it mattered in London. Questions remain. Given all of this background, and the concerns of the Central Bank and the ESRI, why are we going ahead with this element of the plan? More importantly, from where did we get it? It was not from the experts.

Housing policy continues to be investor-led and the shared equity scheme exemplifies this. The approach, through encouragement to build to rent and REITs, has led to Generation Rent, who are worse off than their parents. What frightens me is that there is no indication that the Bill will end this. I am seriously concerned about the rhetoric put forward by the Government, which is either spin or fundamentally does not understand economics 101, that this is a supply-side measures. Everybody else states it is a demand-side measure that will increase house prices. It has echoes of the help-to-buy scheme. In 2017, Tom Parlon of the Construction Industry Federation, in language with which we might be familiar, stated that scheme would boost supply and help first-time buyers to purchase new homes. Can we honestly say in 2021, four years later, that it achieved those aims? Since then, house prices have increased by 22%. It is true that people are getting more from the State to pay for them but they are paying more. When it was introduced, the estimated cost was €50 million and in 2020 it cost €270 million. Will the same cost inflation happen with this policy, which is meant to be a limited intervention?The Fianna Fáil and Fine Gael market-led approach to housing should have led to supply increasing and rents falling but the help to buy scheme did no such thing. Since the scheme was introduced, rents have gone up by 24% in Dublin and 27% in the rest of the country. The scheme is not about making housing affordable; it is about giving credit. The shared equity scheme is designed to bridge the gap between Central Bank lending rules and what developers are saying it takes for them to develop housing, rather than address the reasons underlying the much higher cost of construction in this country. This is not a policy to get people on the property ladder, but one to generate more profits for developers and saddle people who are just within reach of owning their own home with more debt.

The Minister and the Government have an opportunity to institute a fundamental change in how we approach the provision of housing. I urge him to reconsider this part of the Bill rather than continuing with it. We should learn the lesson from the 2000s and the help to buy scheme that policies which investors and developers say will help the housing market are only really designed to help them.

This goes back to the issue of the lack of definition of "affordability" in the Bill as we move to cost rental. The whole purpose of an affordable rental model is to target lower income renters, protecting them and ensuring that they have a roof over their heads in a crazy rental market. Low-income workers and families cannot take any more of the fallout from the housing crisis. There is no definition of "affordability" in this Bill, just market discount. The minimum cost calculation period in this Bill is 30 years. I consider that too short to provide affordable rental homes to many on low incomes. While 30 years might seem like a long time on paper, for housing and place-making, it is not. I often look at the Iveagh Trust buildings that were used for subsidising low-income housing back in 1907. They are still used for that purpose today.

In addition, we are now opening up cost rental to investors. As they say, perfection is the enemy of progress. That change is meant to be based on the Austrian and German models. However, Austria and Germany established limited profit associations on a legislative basis. That is not being provided for in the Bill before us. It is being done through regulation. Housing policy in Austria and Germany has evolved very differently from housing policy here. Our housing policy has jumped from boom to bust. This is an opportunity for us to test this model. We are letting the investor and landlord class into this new form of tenure before it has even got on its feet. We saw what happened with the approach taken in respect of REITs. We gave an inch to encourage investment at the bottom of the market and they took a mile, in the middle of a housing crisis, to boost their incomes. We are giving the Minister the power to decide what a limited profit is. That is the same Minister who is now providing for a shared equity scheme against all the expert advice.

Let us take it as a good idea. If that is the case, why can we not also make provision in the Bill to limit profits of the build-to-rent developers or investors who buy up whole complexes? While there are many policies that may improve affordability, let us put this to the wider private sector and link rents to inflation, as is provided for in the Affordable Housing Bill. The Minister loves to pay lip service to young people, single people and first-time buyers. There is a whole lot the Government will do, yet when it comes to the detail, we see that it is heavily influenced by the desire to incentivise the investor and landlord class. It is all carrots and no stick. This Bill was an opportunity to back this up with action.

We cannot take this Bill on its own. Delivery is what is important, as is how the provisions will interact with the LDA and wider Government policy. That is where I am disappointed. From what I can see, in the approach to the cuckoo funds buying up housing estates in Maynooth, Government policy seems to be looking to lock another generation into a rental economy, servicing the needs of investors. How are we doing that? We are doing it through the build-to-rent sector. There are 1,400 units being built in my area against an agreed masterplan, none of which will be available for people to buy. Policy is based on high-income yields for investors. The head of Hines told us in public meetings that this is what his investors want. Security and affordability in cities and high-density areas matter too. People should be able to buy to rent and live in Ireland securely. The Affordable Housing Bill will not achieve that. It is trying to incentivise investors and developers rather than taking a State-led approach. I hope I am proven wrong but I fear I will not be.