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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Housing demand and population growth

Summary

Peadar Tóibín highlighted record rents, evictions and Dublin’s housing unaffordability, arguing that rapid population growth has increased demand beyond the infrastructure and housing being provided. The Taoiseach accepted population growth as a factor, defended investment in planning, utilities and housing, and said migration is essential to key sectors of the economy; the Chair then concluded Leaders’ Questions and welcomed Gallery visitors.

The average rent of a two-bedroom flat is now €2,176 a month. That is the highest on record. It is equal to €26,000 a year. Incredibly, a PAYE worker has to earn €32,000 just to be able to pay for that rent currently. The average rent in Dublin city is now heading towards €3,000 a month. That is eye-watering. It is incredible that now Dublin is the highest in the whole of the EU for one- and two-bedroom apartments. Rent in Dublin is now for the rich. The number of evictions increased by 50% in the first three months last year. The Government's policies have led to 7,062 evictions in just one quarter. It is incredible. The equivalent to the population of a full Irish town was evicted just in the first quarter of this year. It has enormous human consequences.

Ciaran and Jessie Redmond are from County Wicklow. They worked all their lives. Their daughter has now got leukaemia. Ciaran has had to leave his job to look after his daughter and help in her treatment. Jessie works and the family income is just above the threshold for supports. They are now facing eviction and going into emergency accommodation because of the Government's policies.

I have listened to the Taoiseach. His Government has been in power in one form or another for the past ten years. In that time, rents have increased by 80%. Rents have increased in 13 of the past 14 years. Each year, we hear him declare that we have turned a corner and each year those rents keep coming up. It is not by accident. We in Aontú warned that his policies would actively push up rents but he knew this. This was actually meant to happen.

The Taoiseach admitted it in his answer to the Social Democrats that this is actually a market activation tool. The Taoiseach believes that if rents go up, viability will increase, more builders will come into the market and house supply will increase. The Government could have achieved that viability without hitting hard-pressed renters. It could have cut VAT on house building. It could have cut connection fees on house building. VAT and connection fees work up about €50,000 in each housing unit. That would have reduced the price on families and increased viability, bringing more builders into the market and increasing supply.

Viability is not the only problem in this. Planning and infrastructure are so dysfunctional that even if we get more builders in, it is not going to make a difference. Uisce Éireann said to us in the committee that it will take until 2050 before all the gaps in the water infrastructure, which are blocking the building of homes, will be filled.

Planning, permitting, licensing, procurement, tendering and judicial reviews, all the tools the Government has in the sector, are all glacial in this country. Will the Government reverse this rent policy? Will it reform the dysfunction in planning and infrastructure? Will it ease the tax pressure on the building of new homes?

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The budget has eased the tax pressure in terms of apartments-----

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Just apartments.

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Verona Murphy An Ceann Comhairle Independent

Do not dare.

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-----through the reduction of VAT to 9%. That was a significant measure, which was attacked by large elements of the Opposition at the time. We put huge equity into EirGrid and we have put substantial equity into Irish Water, all designed to accelerate infrastructural development. We did that at the very beginning of the Government through the national development plan and through budget allocations. The investment in water is significant.

We have also put significant investment into the Land Development Agency, which has up to €10 billion in available capital for the construction and development of housing. We use every lever and mechanism we can use to get more supply, and it is about more supply. We brought in a rental tax credit to try to ease the pressure on renters because rents are too high and we acknowledge that. The only way to deal with it is to get more houses built and to get more apartments built. We have worked on all aspects of this, from the Critical Infrastructure Bill going through the House now, through the housing activation office, which has been allocated €1 billion to deal with housing enabling infrastructure on the ground to remove barriers and delays to housing, and through the reform of the rental market which simply had to happen and was advised by all concerned. Anybody who examined the market in detail, from the ESRI to the Housing Commission, all said this could not be sustained the way we had it and that we had to change it and create certainty for the long term. It will take time for some of that to yield. The State has already put €9 billion into housing this year alone, which is huge. If we want to get to 50,000 or 60,000 units per annum we need an investment of about €20 billion. This is the challenge facing the country.

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Planning and procurement.

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We have resourced An Coimisiún Pleanála quite substantially and the feedback now is that far more timely decisions are being taken by An Coimisiún Pleanála in respect of planning permissions. There is a much more positive feel about the changes we brought about some years ago to An Coimisiún Pleanála. The Planning and Development Act is having an impact. Reform to judicial review will also have an impact. This is a multifaceted approach to housing. We are focusing on it and prioritising it. We are not interested in slogans or cheap politics. We are interested in a proper analysis of the housing market and what it will take to get a volume of supply into the future. Yes, infrastructure is a key part of this and water infrastructure in particular. We will continue to work with Irish Water in respect of wastewater treatment plants in smaller developments. There has been some progress on this in terms of nature-based solutions throughout the country, which have approval and which will enable smaller projects in towns and villages to get off the ground.

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There is another aspect to this debate that is completely missing from the Chamber and that is the issue of demand. Leaving certificate economics will tell us demand is also a large aspect of this crisis. The population of the country has increased by 382,000 in the past five years. This is the same as the population of Galway, Mayo and Leitrim. These counties have seven hospitals, three universities, 400 schools and 170,000 homes. The Government is simply not building this level of infrastructure at the moment. One of the most basic rules of economics is that if demand increases without increasing supply, rents and house prices will rise and availability will reduce. There is a lot of talk in the Chamber about sustainability. It is unsustainable to allow demand for housing to exceed supply every year and that is what is happening. Will the Government reduce tax on homes and increase connections? Will it reform the planning system? Will it invest properly in infrastructure? Will it decrease the number of people coming to Ireland during this crisis?

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There is no doubt that population growth is a factor. It went up 8.5% between 2020 and 2025. If we go back to 1995, the population has increased by 52%. There are positives in this because we had been declining up to the 1960s and 1970s as a population down to 3 million. I am not clear on what the Deputy is suggesting. It is not easy to unwind that. There is no question a significant proportion of it is migration into the country. If we look at our health sector and the analysis by CSO recently in terms of employment growth-----

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It is a minority of people coming in the health sector.

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Verona Murphy An Ceann Comhairle Independent

Deputy, do not.

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I am interested in the Deputy's debate. I am trying to have a sensible debate about it and not one that gets me attacked because we are having the debate. Please allow me to respond. The bottom line is our health and care sectors are significantly dependent on migration. Look at the financial sector and the technology sector.

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Verona Murphy An Ceann Comhairle Independent

The time is up now Taoiseach.

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We cannot unwind an economy simply by saying no one else is allowed in.

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Verona Murphy An Ceann Comhairle Independent

Thank you, Taoiseach. That concludes Leaders' Questions.

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The Taoiseach admits it is a factor.

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Of course it is a factor. There is no question it is a factor.

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Then it has to be dealt with.

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Verona Murphy An Ceann Comhairle Independent

That concludes Leaders' Questions and the Taoiseach's time is up as well.

I have two welcomes with regard to the Gallery. Deputy Richard O'Donoghue would like to welcome a ladies group from Bulgaden, County Limerick who are in the Gallery. We also have group called It Takes A Village from Greystones, which has campaigned on social media protections for children, and includes children from St. Patrick's national school. They are all very welcome and I hope they are enjoying the robustness of politics.

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