A strong and compassionate state has to play a central role in our housing system. That viewpoint underpins the sweep of measures contained in the Programme for Government under the Housing for All banner. Housing for All is ambitious. Itt needs to be in order to address our current housing shortfall, rental trap, affordability issues and homelessness crisis. Despite the on-going impact of the global pandemic, that energetic ambition funded by the largest housing budget in the history of the state will see bricks and mortar going into the ground, new ladders of opportunity to own your home, our first ever cost rental system and the state getting back building at scale with a plan for an unprecedented 9,500 directly built social homes. We are using multiple policies across the short and long term to address the housing crisis, not the silver bullet fantasy of some parties. Ideology cannot be a barrier to delivery and supply must involve both the public and private sector.
The need for new state intervention is particularly clear in the affordability crisis. Home ownership in Ireland is lower than the EU average and at 67.6% is a far cry from its peak of 82% in 1991. The average age of owning your first home has risen by a decade to 35 since then. A generation caught in a rent trap or living with their parents risk being left behind. I believe home ownership is good for individuals, good for families, good for communities and good for the state. However, certain opposition parties do not agree with that assessment and vote against home ownership measures at every turn. They oppose the Help-to-Buy scheme which to date has helped over 19,000 buyers get on the property ladder, and recently called for the affordable shared equity scheme to be scrapped, before it was even published. This opposition for opposition sake is unhelpful at best and dangerous at worst.
Last month Cabinet took an important step in tackling the affordability crisis head on and approved the general scheme of the Affordable Housing Bill 2021. The bill sets out the basis for our historic national cost rental scheme, the legislative basis for direct state led affordable housing building and for the establishment of a new Affordable Purchase Shared Equity scheme. This will see the State take an equity share linked to the value of the property, up to 30%, while the owner takes out a mortgage with a bank on the remainder as usual. A 2019 independent UK National Audit Office report found the comparable English shared equity scheme increased overall supply by 14.5% and inflation of just 1%. This short term measure has the potential to boost badly needed supply by activating existing planning permissions at a time when building commencements have dramatically fallen back due to COVID-19. It will also help save prospective owners up to €11,000 per year in rent and in the long term reduce state rental support payments.
I agree there are risks to poorly designed schemes. That’s why Department of Public Expenditure official’s observations regarding a shared equity scheme were shared before the scheme design was drafted and regional price caps agreed to directly address concerns over house price inflation. Any scheme worth its salt has to be subject to rigorous debate. However, this sharp analysis is clearly not the case with opposition alternatives. They advocate an affordable home ownership scheme where you don’t actually own your own home at the end of it. One in which a Garda in year three of their employment and a senior staff nurse would be deemed ineligible because they are slightly above arbitrary price caps. A simple question of ‘where are the 20,000 planning permissions to build public homes on public land in 2021?’ is met with silence, because it cannot be answered.
No one measure on its own will solve the current housing shortfall. We can’t let endless ideological debates in councils hold up badly needed development, letting one party’s perfect be the enemy of everyone’s good. The government is taking a practical stance and will step up wherever needed. This is where a “All hands on deck” approach with a single vision is required, drawing on multiple strands with short term boosts such as the equity scheme gradually replaced with long term direct building which will weave affordability permanently into our housing system.
In 2021 alone the government has committed €620m in affordable measures spread out across measures such as our serviced sites fund to directly build affordable homes, the expanded Help-to-Buy scheme, the local infrastructure housing activation fund, Rebuilding Ireland home loan and the Land Development Agency. Importantly, €35m has already been provided for a new funding model to accelerate the delivery of Ireland’s first ever cost rental homes this year. The government will pass the LDA bill this session to put in place a new structure for long term land management. I will also announce ambitious funding for the Urban Regeneration Development fund in the coming weeks that will emphasise sustainable, affordable homes in our cities and towns.
This is a strong and compassionate state in action and marks just the beginning of our exciting new housing policy. The task is immense and the stakes are high but the government is committed to real delivery.
Darragh O’Brien is Minister for Housing