Marie Sherlock (Labour) | Oireachtas source

I welcome the Minister to the House. I am glad to have an opportunity to speak on this important Bill. As the Minister will know, details matter. The success or failure of this Bill to deliver what it aspires to do will depend on the detail within it. Everyone across this Chamber wants housing that is affordable. We all want people to have a decent sustainable roof over their heads. We all recognise the incredible challenges for young workers in trying to access affordable housing. The concept of cost rental, the expansion of Part V and the prospect of affordable purchase housing are all welcome, but how we do it matters. The Government cannot afford to repeat the mistakes of the past. Fianna Fáil cannot afford to repeat the mistakes of its past. In that context, I am extremely concerned about a number of aspects of this Bill.

Cost rental as set out in the Bill does not equate to affordable rent. The Bill sets out that rent be 25% below the open market rate. The reality of that approach is that it is out of touch with what is happening, particularly in the area that I know best, this is, Dublin city and the northside of Dublin. Do we seriously think it is okay that a worker in the Dublin area on average take home pay of just over €2,000 per month should go from facing rents of 84% of his or her monthly take home pay to 63% of his or her monthly wage, or that for those rents to work he or she will have to be part of a couple or live with another person? My party submitted amendments that would define affordability as a specific share of an individual's income, but the Government knew better. The market has to be allowed to decide the cost of rent. The question that has to be asked is if we really have that much faith in the market that we expect rents to increase at an acceptable rate. The reality, particularly in Dublin's north inner city and beyond in Dublin central and the northside of Dublin, the areas with which I am familiar, is that institutional investors are effectively keeping rent artificially inflated because they can afford to offer rent-free months. They have the financial wherewithal and fire power to be able to offer rent-free months in order to keep rents elevated. That brings me to my second concern.

This Bill is silent on housing affordability and housing standards in the part of the housing market to be developed by the private sector. That is not good enough. The private sector will always have a role in developing housing in this country, but there is no reason it should be the wild west which, in parts of housing at the moment, in particular build-to-rent, it is. In excluding apartments from the stamp duty changes, we can now anticipate that there will be a scramble of institutional funds into apartments. Why would any institutional investor build conventional apartments when there is a higher yield from build-to-rent? The impact of that build-to-rent on the local housing market is that, at scale, institutional investors can effectively set the rent for the local area, thereby up-ending the concept of cost rental being 25% below the open market rate and that that will ever be affordable.

If the Minister is truly serious about promoting affordable housing across all aspects of housing in this State, then I appeal to him to level the playing field in the development of apartments in this country. We have only to look at my own area of Dublin central where planning for 1,500 conventional apartments is being sought or they are currently under construction. Contrast that with over 5,000 build-to-rent, co-living or student accommodation units. That indicates where the big money is going. We need to remove the incentive to institutional investors to invest in only one type of housing, which is build-to-rent. Currently, build-to-rent means lower housing standards such as smaller floor area. There is also more flexibility with regard to storage space and less of an onus to provide a balcony or dual aspect and there is no restriction on the mix of housing. We need to reform the tax advantage that is given to REITs. When introduced, they were never intended as a long-term housing support measure. We need to introduce rent controls on new units because at the moment build-to-rent units are not subject to rent caps.

With regard to the purchase of land, because of the tax advantages that institutional investors can avail of in this country they can buy up tracks of land within our cities and develop a poorer quality of housing. Small developers and local authorities and, perhaps, the Land Development Agency, LDA, when it is up and running, will not be able to compete with the offers of the institutional investors. The Labour Party will bring forward amendments to this Bill on Committee Stage. I appeal to the Minister to seriously engage with them. We want to get this Bill right and if the Minister accepts our amendments, we will support the Bill.