Government ‘telling fairy tales’ about housing crisis, Sinn Féin leader claims

Sinn Féin leader Mary Lou McDonald has accused the Government of “telling fairy tales” and engaging in “make believe” over its approach to the housing crisis.

She claimed the Government was “imagining that your approach is working, but it’s just plainly failing”.

But Minister for Public Expenditure and Reform Michael McGrath in turn claimed that Sinn Féin “policies would actually further drive landlords out of the Irish market and you need to be honest about that”.

The heated exchanges came during Dáil Leaders’ Questions which was dominated by the housing crisis. Ms McDonald highlighted the “stark” report of the Irish Banking & Payments Federation Ireland (BPFI) showing, that since 2010 rents in Ireland have increased by 82 per cent compared with an EU average of 18 per cent for the same period.

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It also found that since 2011 the State’s population grew by half a million, but only 130,000 housing units were added in this time.

Social Democrats joint leader Róisín Shortall called for a “punitive vacant homes tax” to be implemented. She said the tax now proposed “is so low that it’s actually laughable”, at 0.3 per cent when she said it should be 10 per cent of the value of the property, which could make a significant difference.

She urged the Government to “urgently review the rate of this tax and raise it to a meaningful level”, describing it as “pathetically low”. The Minister acknowledged that “we do have an issue in Ireland with the underutilisation of existing stock in our towns or villages, and in our cities”.

But Mr McGrath said the introduction of the tax was a significant measure. He said the Government would monitor it as it was implemented and keep it under review.

Ms McDonald hit out at the Government’s house building targets, she said that in the middle of a housing emergency “housing construction is falling”. All of this was resulting in young people emigrating as she renewed her party’s call for a “complete and effective” ban on rent increases and tax relief that would result in a month’s rent being returned to tenants.

But Mr McGrath said that while housing was posing an “enormous challenge” close to 28,000 homes had been built in the year to September, while 21,000 had been built in the first nine months of this year. He added that the Government expected 26,000 units would be completed by the end of the month.

There were significant challenges but measures also included helping put 35,000 first-time buyers on the property ladder and construction of public housing on a scale not seen in a very long time, he said.

He said however that renters should know “what you are planning and what you are planning is a new tax on rental properties of €400. You are planning to increase income tax on landlords, many of whom have incomes over €100,000.”

He added that Sinn Féin wanted to increase capital gains tax on landlords with multiple properties, at a time “when we actually need to increase the supply of rental accommodation to the State” and retain “existing investment and attracting new investment”.

He told Ms McDonald that “your policies would actually further drive landlords out of the Irish market and you need to be honest about that”.

But the Sinn Féin leader replied: “You come in here week after week, telling fairy tales. make believe, imagining that your approach is working, but it’s just plainly failing.” And her party would “move heaven and earth” to provide homes for young people considering emigrating.

People Before Profit TD Richard Boyd Barrett said the four Dublin local authorities had built “zero” houses in the first six months of the year when there had been a €700 million underspend on housing. This was unacceptable in a “catastrophic market failure causing human misery”.

He said that very ill and vulnerable people were not getting the housing they need and Ireland “needs a new Government, not just a new Taoiseach”. He added that “rocketing rents” were forcing people to emigrate and this “puts shame on this Government”.

But the Minister said he should give all the facts, and that local authorities have 2,000 homes under construction and more than 3,700 others in the pipeline.

Independent TD Seán Canney called for the new residential zoned land tax to be “wiped off the agenda” because of its impact on farmers. Describing it as “daft”, he said some of the zoned land was unsuitable for residential development.

Mr McGrath said that local authorities had published their draft local development plans and farmers could appeal them.

He said that everyone agrees there was a huge challenge to deliver homes across the country. “But as soon as something is proposed that is an imposition on somebody, in some cases a major imposition, then objections are raised and progress is stalled.”

But he said “we can’t have it every way”. It was not possible for farmers to keep residential zoned land status and not pay tax on it’s when there was such a housing shortage.