Fianna Fáil Minister for Housing Darragh O'Brien has come under renewed pressure to scrap his proposed shared-equity loan scheme amid repeated Opposition claims that it will mark a return to the "bad old days of developer-led housing" and increase house prices further.
But Mr O’Brien also claimed in the Dáil on Wednesday that a Sinn Féin motion to drop the scheme was “deeply cynical” as he accused housing spokesman Eoin Ó Broin and his party of an obsession with “Trump-style hysteria”.
He said that “silver bullet fantasies and cynical hysteria politics do a generation locked in a rent trap a great disservice” as he claimed that Sinn Féin had no constructive housing proposals.
Under the proposed scheme, part of the Affordable Housing Bill, a first-time buyer of a new-build home can ask the State to take up to a 30 per cent stake in the property. A budget of €75 million has already been allocated for the first year of operation of the scheme.
Mr Ó Broin told the Dáil the scheme “will increase house prices, saddle working people with debt and line the pockets of big developers with taxpayers’ money”.
The scheme is based on a similar one in the UK, but Mr Ó Broin said the London School of Economics had found that that scheme had increased house prices by 6 per cent.
Insisting the UK scheme "is on its last legs", Mr Ó Broin highlighted concerns expressed in relation to the proposed Irish version by the ESRI, the Central Bank, the Institute of Professional Auctioneers and Valuers and the Department of Public Expenditure and Reform, as well as correspondence from former Department of Public Expenditure secretary general Robert Watt, who said "the property industry wants an equity scheme because it will increase prices".
Mr Ó Broin called for the €75 million scheme to be withdrawn and the funds spent instead to build 1,500 “genuinely affordable homes” through local authorities and approved housing bodies.
But the Minister for Housing said that refusing to use the private sector in housing “would be fighting with one hand tied behind our backs”.
Mr O’Brien stressed the need to “use short-term measures to boost [housing] supply while other supports such as direct State building of affordable homes comes on stream”.
Home ownership levels had fallen from 82 per cent in 1991 to 67.6 per cent, which is below the EU average, he said, adding that the proposed scheme would bridge the affordability gap in housing and create jobs as the economy recovers from the Covid-19 pandemic.
There was some conditional support for the scheme from a number of Independent TDs. Regional Independent Denis Naughten said the principle of the scheme "has merit" and should focus on assisting families in moving to regional towns and areas where there is a significant level of vacant housing.
Labour TD Duncan Smith told the Dáil the "increasingly personal element" in debate between the Minister and Sinn Féin needed to stop.
He said the scheme was of great concern, that the Minister had staked his political reputation on it, and as presented the taxpayer “will essentially be betting on the housing market” under the proposal.
Mr Smith said Fianna Fáil had two legacies, one a proud tradition of building local authority housing on a great scale, but also the legacy generated in the late 20th century and first decade of the 21st century.
“When housing failed in the 2008 [economic] crisis everything failed with it, and there has never been a recovery from it,” he said.
Effect on supply
Social Democrats housing spokesman Cian O’Callaghan said a key part of the Minister’s comments in support of the scheme “is that it’s going to boost supply. All of the experts have said the opposite.”
He said the Minister had provided no independent expertise or analysis on the issue and he called for Mr O’Brien to “publish any independent evidence at all that this is going to boost supply and not demand”.
People Before Profit TD Richard Boyd Barrett described the scheme as "thoroughly misguided"and said it would "throw petrol on the fire of an already out of control property market".
The Sinn Féin motion will be voted on in the Dáil on Thursday.