Affordable Housing Bill incentivises investors rather than taking a State led approach

Senator Rebecca Moynihan
18 May 2021

Speaking on the Affordable Housing Bill, Labour housing spokesperson Senator Rebecca Moynihan said that Minister O’Brien now has the opportunity to institute a fundamental change in how we approach the provision of housing in this country, urging him to reconsider his position, rather than continuing with these developer led approaches that have been tried and abjectly failed.

Senator Moynihan said:

“People should be able to buy, to rent and to live in Ireland securely and without the relentless stress so many are experiencing. I do not believe the Affordable Housing Bill before the house today will achieve that. It is trying to incentivise investors and developers rather than taking a State led approach. I hope I am proven wrong, but I fear I won’t be.

“There is no definition of affordability within this Bill, a fundamental flaw for an ‘Affordable Housing Bill’. As a result we are left with a Market Discount Bill that doesn’t guarantee affordability.

“This Bill doesn’t look like affordability, swim like affordability or quack like affordability. I have wondered should we not rename this bill, not the Affordable Housing Bill but rather the Market Discount Bill, which I think better describes it. Indeed while there is no definition of affordability in this Bill, just market discount, the term is a minimum of 30 years which is far too short to provide affordable homes to many on low incomes. 30 years may seem a good deal of time on paper, but for housing and placemaking it isn’t.

“The Minister, seemingly more knowing than experts from the ESRI, Central Bank, the LSE, has persisted in bringing forward the shared equity portion of the Bill. In the UK, as per the UK Department of Housing’s own valuation, in an equivalent scheme, 60% of beneficiaries could have bought a property without the scheme.

“Furthermore, the UK NAO argues that the scheme contributed towards developers building bigger houses and increasing their profits. The LSE report was more damning, highlighting that the scheme did not improve either supply nor affordability in the areas that matters most in London. In fact, the shared equity scheme managed increased prices by around 6 per cent. With all of this background and with the Central Bank / ESRI concerns, why is the Minister going ahead with this plan? More importantly, where did he get it from? Who has his ear? Certainly not ordinary people. Housing policy continues to be investor led and the shared equity scheme is proof of this.

“The approach of Fine Gael and Fianna Fáil, through their encouragement of build to rent and REITS, has led to a generation rent who are worse off than their parents, and what frightens me is that there is no indication that this will end on the basis of this Bill. I’m seriously concerned by the rhetoric put forward by the Government – it is either spin or they fundamentally don’t understand economics. It feels like the ‘Ghost of the Help to Buy Scheme Past’, which Tom Parlon described in 2017 as boosting supply and helping first-time buyers purchase new homes. House prices have increased 22% since then. When it was introduced the estimated cost was €50 million. It cost €270 million in 2020 alone. Will the same cost inflation happen with this policy?

“The Minister loves to pay lip service to young people, to single people, to first time buyers, yet there is a lot of we will do but when the detail comes before us we see it has been heavily influenced by the desire to inventive the investor landlord class. All carrots, no sticks. This Bill was an opportunity to back this up with action.

“The whole purpose of an affordable rental model is to target lower-income renters, protecting them and ensuring they have a roof over their head in a crazy rental market. Low income workers, families cannot take any more fallout from the mismanagement of the housing crisis.”

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