Government accused of ‘more handouts’ to private developers

Taoiseach insists Nama offshoot will generate return for taxpayer

Mr Varadkar said the new housing finance agency would provide €750m for development finance to builders so  they could build affordable housing across the State. Photograph: Getty Images

Mr Varadkar said the new housing finance agency would provide €750m for development finance to builders so they could build affordable housing across the State. Photograph: Getty Images

 

The Government has been accused of giving “more handouts” to private developers through the new National Asset Management Agency (Nama) offshoot which will lend money to build houses on commercial terms.

People Before Profit TD Richard Boyd Barrett made the accusation as he highlighted four cases of families who could not access hotel accommodation, “the last line of defence against homelessness”.

But as the Dáil debate on Budget 2018 continued, Taoiseach Leo Varadkar defended Home Building Finance Ireland and Lihaf (Local Infrastructure Housing Activation Fund).

Mr Varadkar said the new housing finance agency would provide €750 million, “a lot of new money”, for development finance to builders so that they could build affordable housing across the State.

“A barrier to building housing is the inability of developers, particularly small builders, to obtain finance,” Mr Varadkar said. The €750 million would be loaned on commercial terms, and the new agency would use the expertise of Nama. “We anticipate that it will not only produce new houses but it will also generate a return for the taxpayer.”

However, Mr Boyd Barrett described the move as “madness”.

“As the banks we bailed out will not lend to the private developers, we are now going to give cheap money to private developers to build on public land and who will then sell the properties back to the State at inflated prices. What sort of madness is that?”

Failure

He said the Lihaf fund was a failure but more money was being allocated to it. “Private developers are now looking for well in excess of the €300,000 cap, which the Government has lifted.”

However, Minister for Housing Eoghan Murphy intervened and said “that’s not true”.

Mr Boyd Barrett said “they are going to sell back at exorbitant prices the land we sold them at a discount. What madness is that?”

He highlighted four cases of families who he said could not now get emergency accommodation.

His office spent two days ringing around for a young mother and student whom he named as Kayley and her children. “Three staff members phoned all the hotels on the approved list for hotel accommodation for homeless people. There was nothing.”

The Taoiseach told him that he could not comment on individual cases, but said the Minister would be happy to look into them.

Mr Varadkar said that “up until now, we have been able to provide emergency accommodation for any families that need it”.

Emergency accommodation

He said “we do not have any families on our streets. I know that is nothing to be particularly proud of, but we have avoided that through the use of emergency accommodation.”

The Taoiseach added that there were now fewer people in hotels and bed and breakfast accommodation than was previously the case because of the development of family hubs.

He pointed to housing initiatives in the budget including the increase of the vacant site levy to 7 per cent and the capital gains tax move to end the requirement for developers to hold on to land for seven years to avoid the tax. Mr Varadkar said this would provide more land for development.