Alice-Mary Higgins (Independent) | Oireachtas source

I welcome the Minister to the House. It is good to debate the issue of affordable housing and to have a new Bill, although there are many concerns.

I open by joining together the dots between four different articles that appeared in the Business Postlast week. I commend the work the Business Post has been doing in diving into the real detail of our housing policy. We can all bemoan the experiences but we need to look at the detail.

The first of the four stories showed that State investment in cuckoo funds amounted to €225 million, of which €60 million was in one fund that was mentioned. These are the same kinds of cuckoo funds we have all been giving out about and which have been buying up entire housing estates and gazumping local authorities, including Kildare County Council, that wished to purchase properties.We have, on the one hand, State investment in cuckoo funds. It is worth bearing in mind that the €198 million that has been invested in housing schemes is less than the €220 million we have put into cuckoo funds. The other story is about the local authorities that are being forced to lease. To buy the Heron Wood estate would cost €18 million but to lease it for 25 years will cost €20 million. The council is being forced to lease it because it has been told about the fiscal rules. At the same time, the fiscal rules in Europe are suspended. We are not obligated to be doing this on the balance sheet. We can, in fact, have major public investment. Local authorities are limited in what they can do.

Another of the Business Postarticles was a deep dive conducted by Killian Woods. He discussed investment funds with some of the people involved, specifically Pat Davitt of the Institute of Professional Auctioneers and Valuers, who talked about how brilliantly the rental system is set up for funds right now. He said that the properties come into the market at the highest price a fund can get, unaffected by rent control rules and existing stock. He went on to say:

Then the Government comes along, in some cases, and they guarantee they will lease the properties for social housing for 25 years [the same amount of time as applied to the Heron Wood story]. So you get a 25-year lease from the Government on the basis of the rent. Somebody then has what they call a fund. It's not a property any longer.

We are turning housing estates into funds. In the same article, Mr. Davitt talks about how investment funds do not really mind if the cost is €300,000 or €400,000. What they care about is their 4% per annum return in an inflating market.

On the same day, there was a positive, hopeful story in the newspaper in which the Minister for Public Expenditure and Reform told us he does not know if he will be able to spend our capital expenditure budget for this year and that €1 billion had to be handed back to the Exchequer last year. Why do we not give a lot of money to local authorities and allow them to buy or build, not lease, on public land and keep those houses in public ownership? The solutions are there. We must be clear that the EU rules no longer prohibit us from doing that. Why are we favouring a model of a 25-year lease and leasing in general? What does that do to the next generation? As Senator Moynihan said, life moves faster than we think and 25 years is not an eternity.

The Minister said we should use all the tools but we are making our local authorities work with one hand tied behind their backs. He spoke about the State playing a central role but the State must play a sustainable central role. The role of the State should not be to hand a large amount of public land over to private developers for a set period of time, after which the assets might be gone. This is where the detail will come in when we debate the Bill. Will the Minister's adaptation of Part V include a limitation on leasing? Will it recognise that leasing is not adequate delivery under Part V? Will it include not only the 20% requirement for social and affordable housing, but also a 10% requirement for social housing? I am concerned about that, although I am conscious that we will see the details.

Will we also see that, as a part of the cost rental scheme, any house built on public land will, at the end of the period of time, revert to public ownership? The nature of cost rental is that it is long term and gives long-term security of tenure. I think everybody embraces the principle of cost rental but the important point is that eventually the money is paid off and the house or flat should not become an asset at that stage. The local authority or approved housing body should still have the property as public housing. That is why I am concerned about bringing in investors. I am concerned that at whatever level the return, we are creating a situation whereby cost rental housing will leave in 25 or 30 years' time and go back to its function as an asset, rather than as a long-term home and the place-making about which we have heard. Can we give security beyond that term? Local authorities and approved housing bodies should be satisfied with having covered their costs and should not need an asset output.

In terms of the affordable housing that is being built, can we guarantee that a certain amount of that housing will be designed in a way that is appropriate for the needs of those with a disability, as is our obligation under the UN Convention on the Rights of Persons with Disabilities? Many disabled people long for independent living in appropriate housing.

I do not need to add to what others have said about the shared equity house purchase scheme. The ESRI, the Department of Public Expenditure and Reform and the London School of Economics have told us that the scheme has the potential to contribute to the inflation of house prices. I have concerns about the requirement that persons must seek the maximum possible mortgage. I know that is designed so that the State would only lend to those who need it in order to bridge the gap to the amount required but I am concerned that it creates a dynamic whereby the margin gets pushed up and everybody is encouraged to push. Others with great expertise have argued that it will have that effect.

The Minister mentioned a constraint on investor purchases of entire housing estates such as those the State has supplemented to this date. He stated that those constraints might, however, exclude estates for which planning permission has been secured. If the Minister introduces a constraint on the disposal of housing estates to ensure that some of them are reserved for first-time buyers and the estates cannot be sold on a large scale to institutional investors, I ask him to include those with planning permission, certainly in the case of strategic housing developments, bearing in mind that only 30% of strategic housing developments have commenced building since 2016. We were told by a previous Minister that strategic housing developments would guarantee a supply of houses, yet only 49 of 162 projects that have planning permission have commenced construction. Let us be clear that planning permission is not the obstacle because I am talking about projects that have planning permission. Strategic housing developments have benefited from fast-track planning because they were meant to address our housing crisis. Surely it is reasonable that we would add those housing estates to any constraints on investor purchases. That would be a reasonable measure and I hope the Minister will take the suggestion on board.

Perfection is not the enemy of good. Greed is the enemy of good.