State's property leasing scheme 'an outrageous scam'

LOCAL AUTHORITY HOUSING: LABOUR PARTY president Michael D Higgins has called on Minister for the Environment John Gormley to…

LOCAL AUTHORITY HOUSING:LABOUR PARTY president Michael D Higgins has called on Minister for the Environment John Gormley to halt the State's property leasing scheme for local authority housing.

The scheme, initiated by Minister of State for Housing Michael Finneran last year, is an “outrageous scam” which will only benefit property developers, Mr Higgins claims.

It “now threatens to become the only scheme for public housing”, said Mr Higgins, who is Labour Party TD for Galway West.

The Department of the Environment says the leasing scheme is costing €20 million annually, and most local authorities are now involved. The target this year is for between 8,000 and 9,000 properties, which will be sub-let by local authorities.

Empty houses “built under the bank-promoted property bubble” are being leased by the local authorities for tenants, says Mr Higgins.

“The State will take the risk and responsibility for ensuring that the property does not become vacant for long periods as it has a flow of households with housing needs to use up the supply.

“At the end of the arrangement ownership of the properties will be vested, not in the residents, not in the local council, not with the State, but with the developer,” he said.

“The developer wins by having a guaranteed income from an asset that currently is lying dormant, and then wins again by being able to sell off or rent out the housing unit at the end of the deal.

“Now it is being imposed by the Government’s cutting of housing capital allocation and their refusal of loan approval to local authorities. This madness must be stopped and I am calling on Minister Gormley to intervene,” Mr Higgins said.

A spokesman for the Department of the Environment confirmed properties were being leased for an average period of 20 years, at which time the properties reverted to the owner.

However, the possibility of a “buy-out clause” was being examined, the spokesman said.

The National Institute of Regional and Spatial Analysis in Maynooth, Co Kildare, has estimated there are 621 “ghost estates” and more than 300,000 empty homes in the State.

Mr Higgins said Labour had proposed an alternative route, whereby local authorities would be given the resources to take advantage of present market conditions to build up their housing stock.