Friday, 4 June 2021
Affordable Housing Bill 2021: Committee Stage (Resumed)
This is kind of fundamental. We talked about not having a commercial director involved, and certainly not the commercial director of a real estate investment trust. That is why they want a model wherein, after a period of 40 years, they get an asset in addition to the cash-out and the money along the way. The key thing is that a local authority can have that flexibility. What I like about Senator Boyhan's amendment is that it reminds us of something. We have seen something of a myth going around about things being free and so on but everybody knows that people pay what they can for social housing. They pay an appropriate price. This is another attempt to make the payment of rent manageable and to set it at a different level than cost rental. It is appropriate to look to the circumstances of the persons involved.Yes, there is a mechanism in respect of HAP. Unfortunately, HAP is very limited in terms of access. I do not agree with the decision that HAP should not be included. We should not push people who are vulnerable enough to need HAP into a private market which may well be more inflated than the cost-rental mechanism. Those who are more vulnerable should not find themselves paying higher rents, effectively, albeit with a State subsidy. That needs to be addressed.
This amendment is really sensible in that it ties it back to the applicant's net income and allows for 20-year and 30-year thinking. When a housing authority provides it, it is great. It does not necessarily need to have exactly a 20-year or 30-year term because it balances out. If there is a loan, a housing authority will still need to pay back that loan, but there are other ways in which it can balance that out over a period. It retains an asset so there is an assurance that if a loan period needs to be extended, for example, there is still a retention. I am concerned about the kind of cash-out model that might emerge from some of the measures in the Bill. I am also concerned about what happens at that 40-year point.
I support amendment No. 71. I just want to point out - I am not sure we will come to this but it is really important - that there is a real concern about the rent. Amendment No. 71 reflects the fact that a person's circumstances may change and his or her situation may disimprove for a period. It happens to everybody over the course of a lifetime. My concern is that the way in which the rent planning is done at the moment looks like upward-only rent. It is not simply a matter of the rent being able to go down to reflect somebody's income, but in some of the ways in which the rent is constructed here there is an upward-only dimension. We know what upward-only rent reviews did to Dublin city centre. The way the mechanisms are set up on the rent in this Bill, it is basically the original cost assessment plus any increase that might come because of market forces plus any increase that might come there. That is why I have a number of amendments tabled. The Bill says "plus". It allows only for a plus; it does not allow for a minus. I hope we can have what Senator Pauline O'Reilly spoke about, which is a calmed and hopefully even a reduced housing market, which is a goal I think we might all share. I am just noting this. I do not think that is necessarily intentional. I am concerned not only that this might not respond by moving down when an income moves down, but also that the calculation method could end up on an upward spiral. I have a number of amendments I hope we can discuss on Report Stage, when the Government might include in the Bill the fact that rent might go down as well as up over a period if market circumstances were to change.