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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Housing affordability and supply

Summary

Deputy Boyd Barrett attacked the Government's housing record, citing high rents, house prices and insecure tenancies, and suggested a Berlin-style rent freeze. The Tánaiste replied that housing output was improving, affordable housing schemes were progressing, and HAP and RAS should not be stigmatised.

The abysmal failure of the Government's housing policy is well known and acknowledged at this stage. There are 100,000 households on the housing lists, some waiting a decade or more. There are extortionate rents in Dublin running at an average of €1,600 per month, which means someone would need to be able to spend more than €18,000 a year on rent to afford that. House prices are completely unaffordable, costing an average of €383,000 in Dublin. One would need to have saved €40,000 and have a salary of €100,000 or more to afford that. In my area, average house prices are €570,000 which does not even bear thinking about. One in five of our population is paying 40% or more of income on housing, one in ten is paying 60% or more and one in 20 is paying an incredible 75% of income on housing.

These failures are well known but the Government often asks if we have any solutions. I want to propose a few solutions that presented themselves from developments this week. As we speak, the city government in Berlin has proposed a five-year rent freeze because rents have gone through the roof and become unaffordable. The Government says this is not practical but it is being done in Berlin. Could we not do what is being done Berlin and freeze rents? This is the major reason people are being driven into homelessness and emergency housing. As they are also planning to do in Berlin, could we regulate vulture and cuckoo funds which are wrecking the housing sector and driving prices and rents through the roof? More than 11% of housing sold in 2018 was bought by vulture and cuckoo funds, worsening the housing crisis as they profiteer from it.

There are more than 200,000 empty houses in Ireland.

There are 360 vacant sites which could be built on. The Economic and Social Research Institute has stated loopholes mean there should be a hell of a lot more sites on the register. It is asking for something we have demanded for a long time, namely, an aggressive vacant site and property tax that would force such sites and homes into use for people who desperately need them.

I turn finally to affordable housing. This week, I attended a meeting of the Joint Committee on Housing, Planning and Local Government. The National Development Finance Agency and the Housing Agency pointed out that, effectively, there is no affordable housing scheme. They noted that it is being done on a site-by-site basis and they simply cannot come up with formulations to make it affordable. In one of the few pilots that was promised to be delivered three years ago in Enniskerry, not a single house has been built but there is talk of rents of €1,200 a month. The two bodies acknowledged that it is not affordable. Could we not have an affordable scheme based simply on the principle that only one third of one's income would be required to pay rent, with rents set on that basis? I have presented a few practical proposals to which I would like the Tánaiste to respond.

Comment on this
Simon Coveney The Tánaiste Fine Gael

It is good to hear some practical proposals but many of the proposals the Government has put into practice are working. Independent reporting, such as the Goodbody report published in recent days, has revised the forecast and indicated there will be between 21,000 and 22,000 new builds this year. Added to that, the number of vacant properties and derelict stock that will come back into use means approximately 25,000 new properties will come onto the market for use this year. That is very much in line with where we said we needed to be in the Rebuilding Ireland plan. We will push on now beyond that and get up to well over 30,000 in the coming years. In the number of planning permissions, which is a real indication of the appetite to build new properties and get them done, there have been significant increases. The number of commencement notices has increased by 41% as of April. That is a steady increase and acceleration of where we have been in recent years.

The core problem, as the Deputy recognised, is supply. One of the reasons we have such reliance on the private rental market for social housing solutions is supply, which is why we are building significantly more social housing than has been done for many years. We will continue to do that and will add approximately 10,000 social housing units to the stock this year. The core issue we need to resolve, which, to be fair to the Deputy, he raises all the time, is the delivery of supply in multiple sectors, namely, social housing, affordable housing, affordable rent, cost-rental models and a more conventional purchase market, for both apartments and family homes. All those things are progressing. The figure on the housing lists is now 70,000, which is down 20,000 because it was at 90,000 for some time. Since Rebuilding Ireland was started, the output of new homes that have been delivered and are available to the market and families is 52,000. There have been 42,000 new builds, 7,000 properties were vacant and are now filled, while 3,000 unfinished properties that were in ghost housing estates are now completed and have families in them.

That is progress. It is not yet fully where we need to be but it is significant progress. If we continue to make the kind of progress we have made, in accelerating output of supply, many of the other issues the Deputy understandably raises, such as the pressures that individuals and families are under, will be solved. If there is focus not on the delivery of supply but instead on freezing rents overnight, if landlords are driven out of the market because certainty is not given through allowing for modest inflation and so on in the marketplaces, we will not receive the kind of investment we need.

Comment on this

In Berlin, there is a five-year temporary emergency freeze until the problem is resolved. There is no reason we could not do that and it would not necessarily drive people out of the market. It would be temporary and would recognise the emergency.

On the issue of housing lists, let us be clear. If the numbers on housing assistance payment, HAP, and rental accommodation scheme, RAS, transfer lists and so on are included, the figure rises to 100,000. RAS and HAP tenancies are very precarious. Many of the people in emergency accommodation come from RAS and HAP tenancies. They are not secure forms of housing.

On supply, let me ring the alarm bells. The Construction Industry Federation appeared before the housing committee yesterday and stated categorically that the supply targets will not be met. The industry cannot deliver housing that is affordable to people, people are not buying it because they cannot afford it, but it cannot be delivered any more cheaply. That means the State must intervene and deliver affordable housing on public land.

I reiterate a question the Tánaiste did not answer. Where is the affordable housing? The few pilot programmes will not be affordable. We were told at a meeting of the housing committee this week that Japanese knotweed in Ticknock will prevent the housing being delivered at affordable levels. We do not have a national affordable housing scheme based on income affordability.

Comment on this
Simon Coveney The Tánaiste Fine Gael

There is a €310 million affordable housing programme, which was agreed in the previous budget. It will take some time to deliver but it is progressing.

It is important not to stigmatise HAP and RAS. The whole point of HAP is to provide more certainty than was previously the case with rent allowance payments. Approximately 300 new HAP tenancies are put in place per week, which provide affordable accommodation in the private rental market. We want more people who seek conventional social housing to be able to get it but the only way we can ensure that will happen is to deliver on the build programme that is under way. It is well funded and resourced. We are spending billions of euro building a significant increase in the social housing stock. It is happening and we can see it in our cities and other parts of the country.

The Deputy calls for State intervention as if it is not already happening. We have introduced rent pressure zones, which are the alternative to rent freezes because they limit rent inflation, and we have extended the powers of rent pressure zones to include cuckoo funds in respect of the rent they charge after the initial rent is set. We are intervening in many areas in the housing market but we need to be careful our interventions are not counterproductive, as many of the interventions the Deputy proposes would be.

Comment on this