Fianna Fáil calls for €100m affordable housing scheme in budget

Housing to become tension point between Fine Gael and Fianna Fáil in negotiations

Under proposals, councils would be given targets of how many houses they should build and the work would then be contracted on to private developers. Photograph: Jason Alden/Bloomberg

Under proposals, councils would be given targets of how many houses they should build and the work would then be contracted on to private developers. Photograph: Jason Alden/Bloomberg

 

Fianna Fáil is to insist on the inclusion of a €100 million affordable housing scheme for first-time buyers in this year’s budget.

The proposal would be applicable only to households that are paying more than a third of their income on rent, or would be doing so in potential mortgage repayments.

Darragh O’Brien, the party’s housing spokesman, said the money in this year’s budget would provide an additional 2,000 homes for those struggling to get on the property ladder but could result in 50,000 units over a five-year term.

Mr O’Brien told The Irish Times local authorities would set the qualifying criteria for those eligible for the scheme, which would vary in different parts of the country.

Under the proposed scheme, councils would be given specific targets of how many houses they should build and the work would be subcontracted to private developers.

“The money earned through the sales of these units will be reinvested in building further units. The scheme would be accompanied by regional affordability guidelines,” Mr O’Brien said.

“What is affordable in Galway may not be affordable in Dublin. Wages vary across the country too. This scheme would mean people could actually purchase their own home at an affordable price.”

Meaningful change

The party says its proposals differ from Fine Gael as they include long-term targets, additional exchequer funding and specific local authority targets.

Mr O’Brien claimed Fine Gael’s current affordability measures have not resulted in any meaningful change, pointing to recent Freedom of Information data he received showing only a third of loan applications under the Rebuilding Ireland Home Loan scheme have been approved.

The scheme offers loans at reduced interest rates which can be used to buy new and second-hand properties, or to build a home.

Some 2,105 applications have been received, 656 have been approved and only 134 drawn down.

Mr O’Brien said it was to be the flagship policy of Fine Gael’s affordability plan but had proven to be “an overhyped home loan scheme”.

The issue of housing is to become a significant tension point between Fine Gael and Fianna Fáil in the upcoming budget negotiations.

Fianna Fáil senior sources said its two priorities in the discussions were an affordable housing scheme “that works” and pay equity for public servants.

Two-tier system

The party is insisting Minister for Finance Paschal Donohoe commits to ending the two-tier system within two years. The Department of Public Expenditure estimates a cost of €209 million a year to give equal pay to public servants recruited since 2011 on lower pay scales.

Fianna Fáil will not “walk in the door until that is committed to”, the party source has said.

It is also insisting on addressing the waiting lists for occupational therapy and measures to deal with the recruitment and retention of nurses.

Meanwhile, the party’s spokesman on social protection Willie O’Dea has said he would not support a budget that did not include a €5 increase in the State pension.

He also called for a €5 increase in carer’s allowance, widow’s pension and lone parent allowance.

However, it is understood he did not consult with the party leadership before making his budget demands public.