Alice-Mary Higgins (Independent) | Oireachtas source

Senator Moynihan has put it very well. There is a point I should have made earlier when we were discussing the previous amendment from Senator Boyhan that referenced the bottom 40%. The Minister of State might note that given we are only reserving 10% for affordable housing under Part V, it would be very reasonable to have 10% of developments affordable to the bottom 40% of earners in this State. It seems a very reasonable provision. It is similar where the median income is concerned. When he spoke earlier, the Minister spoke of €75,000 being not very much but the fact is it is still two median incomes, effectively, combined. We are therefore looking at the bottom 50% of earners in the State and that is the cohort for whom the cost is likely to represent a larger proportion of their income. That is why it is relevant there.

I must point out those concerns about the 40% do not apply in this suite of amendments. These three amendments do not talk about 20% or 40%, they just talk about the proportion of income. However, it is those below the median income, those in the bottom 50% of the population who are finding 50% or 60% of their income is going. These people are then having to make choices and sacrifices in respect of other life opportunities because of the amount of their income that rent takes up and because they do not have reserves, other assets or other streams of revenue. Consequently, they are making choices about whether or not their child will have extracurricular opportunities, whether or not they will access health treatments they may wish to access but cannot otherwise, or whether or not they will take the risk of returning to education. All of those are choices a person makes.

When we talk on a practical level, it is not an arbitrary figure. When any household or family sits down and looks at their finances for a week, a month or a year they look at what they can afford; they ask if they can afford this or not. We want to ensure that discussion is about two thirds of their income rather than more than that. We want only 30% of their income taken out. Various Senators have variations on that. I have 33%, I think Sinn Féin has 30% and Senator Boyhan has 35%. All of these begin with the key point that affordability should begin with what is affordable for the individual, what is affordable for the household. That is the policy purpose of cost rental. If we cannot achieve cost rental being 33%, 35% or 30% - effectively one third of people's income - then we should extend it and have it become 60 years or 80 years. We are confusing the priority point here. The priority point is the experience of people paying rent and that they pay it at a rate they can afford and their household can afford. That is the policy goal we have as a State. Then the mechanisms around that, be it the idea of looking to a longer period of time or a longer way of spreading costs, those become the mechanisms to achieve it. My concern is we have begun with the mechanisms but then we are not willing to commit on the outcome, when in fact the outcome should be the priority.We have built-in reviews that would happen every few years, which we will come to in a minute. Some of these amendments tag affordability to an individual's income but even if the Government did not want to do that, it could tag it as a percentage of median income or a percentage. Term times and scales can be adapted accordingly if we begin by asking what people can afford. That is important. We have added profit in, as Senator Moynihan has said. We have accommodated the needs or desires of a private market and private investors in this regard. They want a limited equity return and want to know there is a guaranteed return. We are accommodating that. I do not see why we would not accommodate and make as a priority the needs of the person concerned.

I get frustrated by the point about limited equity because there is predictability there for the investors. They can plan, based on that 4%. We simply want for those who are renting to be able to plan based on knowing that the amount concerned will only be a percentage of their income. If the cost is the cost and people's incomes change, we want to provide flexibility and variability to reflect that and carry them through those periods of time.

This is a fundamental point and I hope it can be addressed. I worry that a failure to have a proper definition of "affordability" may be the scuppering of the success of some of this cost rental.