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 6 o’clock
(Speaker Continuing)
[Deputy Mick Wallace:   ] I do not understand why the State is not proactive about supplying affordable housing. I am very disappointed that the amount of social housing coming down the line is not enough. We need about 10,000 social housing units per annum for the next ten years. We also need a minimum of 10,000 affordable units per annum for the next ten years. We will not achieve that under the current policy.
We face two big problems, the price of land and developers' profit - that is a developer as distinct from a builder. As the then Minister with responsibility for housing, Deputy Simon Coveney, told us in December 2016, the local authority on State land in Dublin could have built a three bedroom house for €205,000, that might be €230,000 now, while the figure outside of Dublin was €154,000, which might be €170,000 now. The truth is that we will not get units through a major developer who has been funded by NAMA on State land for less than €400,000. It is not happening and it will not happen. Why will the Government not ring fence the land?
I have looked at what happens in Europe. In Germany, local authorities can freeze the value of the land after it decides to specify an area for residential construction. The freezing of land values means that the local authority effectively acquires the land at use value. That is not rocket science. Our site levy which was invented in 2015 is a joke. It is too easy to get out of it. It will not catch anyone with a brain in his or her head. It is no good for the Minister to increase it from 3% to 7% because it will not catch the developer. If I had a land bank I guarantee I would not have to pay a penny in tax because I know exactly what I would have to do to avoid it and so too do the developers. If one has borrowed more than 75% of the money one can avoid most of the tax, which is also the case if one is using the land for anything.
This week I was at a launch of a report by Jesuit Centre for Faith and Justice and I will mention a couple of relevant points made at that event. First was that the housing crisis was a direct result of Government policies and second that Rebuilding Ireland failed to address the financialisation of housing. It said that the market failure must be recognised, the market does not deliver when it should and the prices are too high. The report says that three out of four homeless people will end up in private rented accommodation. We are moving towards the private rental market but we have designed it in such a way with REITs and vulture funds that rent is too expensive here. The average rent for two-bedroom apartment in Dublin is now €1,800, where it is €400 in most cities in Italy or Germany. I ask the Minister of State, please can we have a change of direction and ring fence land so that State land can be used to provide housing - social and affordable - for the people of Ireland?
Deputy Damien English: I thank Deputy Mick Wallace for raising the issue of housing and the question of State land. He might not realise it but we are actually on the same page on much of this. People seem to keep missing that. Himself and many others who are not in government keep mentioning this magic target of 10,000 social houses annually. We agree on this and have set aside the money that will get us to that point. Over the next four or five years we will deliver 10,000 social houses annually and we will continue to do so thereafter. Some Governments might do more, and we might do more ourselves if the taxpayers' money is there, but we are agreed on that figure yet people keep talking as though we are not. It was recommended by the committee on housing and homelessness, we adopted it, the funds have been set aside for coming years and have been ring fenced in order to deliver, as a minimum, 50,000 social houses. We are on the same page. That is separate to affordable housing. Deputy Mick Wallace wants 10,000 affordable houses also, but we are on very similar territory there too.
We agree about the use of State landbank and the very important role that it can play in delivering housing, increasing and accelerating its delivery especially in the social and affordable area. That is what we are trying to do. The plan places a particular focus on maximising the output of housing on landbanks owned by local authorities, the housing agency and the broader public sector. This is what we want to do. We also want to maximise taxpayers' money and its use to drive housing activity for social and affordable housing but also to get private housing back going too. If we are to solve the problem it must be across all tenures. The first task was to map the land and track what we had because all the land that was owned by the State was not known, we had to go find it. In April 2017 we published a list of 1,700 ha of land belonging to the State, 770 of those sites belong to local authorities and about 30 belong to other State agencies. In total all those sites could accommodate up to 50,000 houses. This land bank is under the control of housing authorities and given their broader role as planning authorities they are crucial in operationalising social and affordable housing delivery from the sites. Importantly, in addition to that, local authorities are already working on 11,000 social houses which are part of 700 construction projects. There are 11,000 social houses in the pipeline which is not enough. We would like to treble that and add to that further. A sum of €6 billion has been set aside to drive this and deliver these houses. Once again, the number of houses which Deputy Wallace seeks and which I seek and which we need are the same and we want them in a hurry. I wish that we could produce them tomorrow, but we cannot. The Deputy will see much more social housing being delivered in the coming years. We have gone from 75 social houses two years ago to 500 last year, to 2,000 social houses built directly this year and nearly 4,000 next year. Those are figures for direct build. When one adds in Part 5 acquisitions and other houses, there will be around 6,000 social houses built next year and that does not include leases under the HAP scheme. It is steady progress. We all want to get to the figure of 10,000. I agree with Deputy Wallace. We will get there but it cannot happen with a switch. We had to put the plan in place, make it happen and provide the money to do that. I have also set aside LIHAF funding to open up sites which will deliver social, affordable and private houses. We have set aside an extra €75 million of funds for LIHAF, which consists of a fund of €50 million for LIHAF and €25 million specifically to open local authority sites in order to deliver housing.
Anyone who builds houses on State land will have to sign up to a reduction in the price of those houses to the market. Naturally, if they are being given access to a free site or a low cost site belonging to the State, there must be a pay back in the price of the house which will be passed on in the cost to the customer or in providing access to affordable housing. We will try to get the maximum from those sites. We have set aside €6 billion but in order to stretch that it makes sense that when we open these sites we would allow a combination of social, affordable and private housing, by which we can get a lot more houses for everyone which will bring prices down. We are on the same page.
NAMA has to work with its debtors. They have debts to repay. Everyone knows about those situations for the builders and developers with those debts. They have to repay those debts and NAMA cannot force them to deliver social housing and sell them for free. They are entitled to work out their debt on their sites and lands which is what they are doing.
Regarding NAMA, people with skills will be used in relation to the loan of €750 million. That is other money that will be used to deliver housing. Naturally, if that housing is delivered on State sites, there will be payback to the State. They will not go in and deliver a house which will be sold on the private market without any payback to the State or any nod towards affordability. It will be dealt with on a site-by-site basis.
Regarding all the sites which I mentioned, the local authorities have all been asked to bring forward their plans by the end of September so over the coming weeks they are expected to come back to the Department with their plans for each site, showing how they will be developed for affordable and social housing with some private units too. Those plans have been submitted and are currently being analysed. There will be much more in this area in coming months and it is a positive development.
Deputy Mick Wallace: The Minister of State says that we are on the same wavelength but that is not true. Myself and Deputy Bernard J. Durkan, who is also in the Chamber, were on the Committee on Housing and Homelessness last summer. The Government has ignored most of its recommendations.
Deputy Damien English: We have not.
Deputy Mick Wallace: I am sorry but the Government has. This week the Jesuit Centre for Faith and Justice - I am talking about people like Fr. Peter McVerry, Ms Margaret Burns, Dr. P.J. Drudy who know a lot about housing -----
Deputy Damien English: Do they?
Deputy Mick Wallace: -----said that we need to reverse the policy pursued by successive Governments of relying to an ever increasing extent on rent supplementation of different kinds as a way of meeting long-term social housing need. We are discussing 10,000 units but the Government still does not want to go to a place where it will get the local authority to build-----
Deputy Damien English: That is where we are going. Which bit does the Deputy not understand?
Deputy Mick Wallace: Hold on, I did not interrupt. In Wexford this year, three local authority houses will be built. That is three, with a waiting list of 3,700. The Minister of State needs to give us a break. It is nonsense. The Government is still totally dependent on the private market to deliver. The Minister of State says that no one gets to build on State land without providing affordable housing. Anyone to whom NAMA has given land has not provided affordable housing. They are selling four bedroom houses in Dún Laoghaire for €700,000 each on land that NAMA provided and financed. NAMA did a deal on loans belonging to the developer Harcourt, known as Project Abbey. |
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