Alice-Mary Higgins (Independent) | Oireachtas source

To clarify my point, I am suggesting that the facility should be part of the contract. Of course I am not saying the contracts should be broken. However, we should be setting the terms of the contracts that the State, through local authorities and housing bodies, is signing with housing developers in such a way that it is made very clear that we are not going to disadvantage people to the point that they will not get the market value back. We are not engaging as a company signing a contract with another company, where we are all trying to speculate and see where we can get the edge. The goal of the State, in engaging with these developers, is the provision of housing. The State is not engaging as a speculator. It is not a win or lose situation where stocks go up or down.

To be clear in respect of what the State is offering, the local authorities are offering, in many cases, to guarantee that a certain portion of a housing development will be sold. It would be reasonable to assert that we will guarantee the purchase of a specific amount of the housing, but we will set a caveat that we will not pay above the market rate for it if the market happens to deflate. That is a reasonable provision that could be inserted. Of course, it may also work in the other direction but that is a different scenario. That is where a company is going in for commercial reasons and looks to the steadiness of what is offered by the State, which is a guarantee. Planning permission for the development - the fact that a company can proceed with a development at all - is at the behest of the housing authority and the State. That is something else. We should be clear that what we are offering in this is already quite substantial.

There should be a little bit of insurance for the State. I do not want to see a situation where the State is worried about deflationary measures or we end up carrying the cost in a way that private housing purchasers will not. The State is working in large blocks and will be engaging potentially in the development of a large amount of affordable housing. It is reasonable - indeed it is a common practice - when signing a contract, the terms of which involve large numbers, that there should be caveats. Some terrible and unfair caveats were added into contracts in the past, upward-only rent reviews for example. It is a reasonable caveat to insert such a provision into the contracts. It is an insurance for the State that, in the event that the deflationary dynamics needed in the area of housing arise, it will be in a position to benefit from that, rather than fear it.