I move: "That the Bill be now read a Second Time."
Before I get into the short Bill before us I want to ask a couple of sincere questions. How many real social houses do we actually need to meet the level of demand that is out there at the moment? I use the words "real social houses" deliberately, partly because that is what the Joint Committee on Housing and Homelessness spoke about in 2016 in its report in discussing houses owned by local authorities in approved housing bodies. When we are talking about meeting the long-term needs of people on social housing waiting lists, notwithstanding the need for subsidised private rental accommodation as a short-term measure, real social houses are what we should be looking at. We need approximately 130,000 real social houses. There are just over 70,000 households on the local authority housing waiting lists, approximately 40,000 households in receipt of the housing assistance payment, HAP, and just under 20,000 households in receipt of the rental accommodation scheme. Any Government strategy that is going to work in the short to medium term has to have a target of a minimum of 130,000 units to meet current need.
Rebuilding Ireland has committed, between 2018 to 2021, to building 30,000 real social houses owned by local authorities and approved housing bodies. Post-Rebuilding Ireland, if one looks at the targets outlined in the national development plan, up to 2024 approximately 10,000 real social houses a year are planned. That means that between now and 2024, on the basis of the current targets, the Government is going to meet approximately 45% of the real long-term social housing need of the households currently on the list. That means, of course, that not only will it be short on current need but it will also be unable to take into account future need as more people join the list. Of course, that is assuming those targets are met.
I have always been very clear that the Rebuilding Ireland targets in 2016 and 2017 were met. There is a concern, particularly given the fact that the construction targets at the end of the second quarter of this year are only at 28%, that that target might not be met this year. It is a significant target, so we will have to wait and see. The gap between what will be delivered under Rebuilding Ireland and the national development plan is not in doubt. It is enormous.
When we look at affordable housing we can see that the situation is actually somewhat worse. If one were to ask how many affordable homes to buy and rent we need in our housing system, the straight answer is that we do not know. The Government does not attempt and has not attempted to calculate the level of need that is out there in terms of affordable homes for rental or purchase. Amarach Research figures published yesterday at the Housing Agency's conference tries to give a sense of how many people living in the private rental sector, for example, are paying over 30% of their income for their accommodation. The number is quite high. The ESRI, in a paper published earlier this summer, spoke about 32% of households paying more than 30% of their income on rent or mortgages. However, in the bottom 25% of income earners it is 75%. This clearly shows that there are thousands, if not tens of thousands of households, in desperate need of affordable housing.
Rebuilding Ireland, when it was originally published, had no targets whatsoever for affordable housing. While there are now a number of schemes, including cost rental pilots, the serviced sites fund, local infrastructure housing activation fund, LIHAF, and the Rebuilding Ireland home loan, the targets are still very hard to understand. Perhaps over the course of the next three to five years we might get 6,000 to 10,000 affordable rental and purchase units, but clearly nowhere close to what is required.
All of that, of course, is before we raise the issue of Brexit. We have had two very interesting hearings in the Joint Committee on Housing, Planning and Local Government in the last two weeks. All of the people appearing at that committee, including representatives from the ESRI, the Nevin Institute and industry bodies, told us that any negative Brexit, whether a hard Brexit or a negative soft Brexit, will have an impact on both housing demand due to increased inward migration from Britain or elsewhere in the European Union, and also an impact on private sector costs in terms of construction and financing, as well as potentially affecting delivery of the private sector units.
Rebuilding Ireland and the national development plan will not meet social or affordable housing need, and we have a very significant risk coming down the line which might further reduce private sector supply at a time when we have a significant reduction in the number of private rental units in the private rental sector. It could also knock some of the social housing support targets off-line as private sector units that are targeted for HAP, RAS and long-term leasing do not come on stream.
The conclusion of all of this is that the current plan, even if one thought it was a good plan and that it would deliver on all its targets, is not going to meet anything close to the level of social and affordable housing need. It is on that basis that I have brought forward the Bill in front of us. It is very simple. It says that with respect to standard private sector developments the Part V component of social and affordable units should be at around 25%, which is close to the original Fianna Fáil legislation of 20%. It also adds that in strategic development zones, particularly because of the importance of these sites, the target should actually be 30% social and affordable homes, the mix to be determined by the relevant local authority and the planning process. Many developments are already doing this. In my own constituency, in the Shackleton development a developer recently entered into a voluntary agreement with the local authority and Túath Housing for 26% social housing. It makes eminent sense from its point of view. The Minister will know that his predecessor, the Tánaiste, played a very positive role with Dublin City Council and local communities in Poolbeg to ensure that strategic development zone would have just under 30% social and affordable housing.
What we are putting on the table is something that is already happening. Many developers are actually very interested in a higher percentage of Part V housing because it solves some of their financing problems and makes it easier to secure bank finance for the remainder.
The Government says that mixed tenure is key to sustainable communities. I support the social housing infill projects, but many of them are not encouraging greater mixed tenure. In fact, there is social housing infill in areas with large volumes of social housing already in place. Some research from social housing policy experts in this State is beginning to suggest that if the portion of Part V units is too small it creates a sense of isolation and marginalisation for the small number of social housing or lower-income tenants living in large private housing estates. If the Government was really serious about sustainable communities and the mixed income and mixed tenure model, it would be looking to have a portion of Part V units in private developments higher than the current figure of 10%. From the points of view of the developers, of need and of the Government's own policy, what is in this Bill is actually eminently sensible. I find it hard to imagine anybody would be unable to support it.
I do not want to sound disrespectful, but I can almost hear the Minister's speech as I am saying those words. I am sure he will tell us that he appreciates the sentiment behind the Bill. He will tell us he accepts that I am genuinely trying to increase the supply of social and affordable housing. However, he is going to tell us about unintended consequences. It has almost become the standard response when something is actually a good proposal but for whatever reason the Government does not want to support it. It relies on the politics of unintended consequences. The only unintended consequence I can imagine the Government might see in this is as follows. It might allege that the developer, denied the profit margin on the 15% that would have been private and is now social and affordable, will seek to recoup it on the remainder of the private units. The irony, of course, is that every time we propose putting social housing into private development the first thing everybody tells us is that it will lower the value of private sector homes. It is one of the objections by which some parties' councillors around the country try to block Part V developments. I do not think there is any evidence to suggest this, and if the Minister does use that argument I hope he relies on evidence rather than mere supposition to justify his position.
With respect to Fianna Fáil, I genuinely do not know what that party's position will be. I really hope that Fianna Fáil supports the Bill, both because of its spirit and the fact that it is close to Fianna Fáil's original Bill. If Fianna Fáil Members are concerned that 25% is too high I am genuinely open to amendment on Committee Stage. I would prefer 25% and I think that logic suggests it. However, if on Committee Stage Fianna Fáil's representatives were genuinely to suggest they could agree on a lower percentage, I am open to doing that. Anything above 10% is better than 10%. I appreciate that this is a slightly different idea, but I can say the same about the 30% figure for the strategic development zones, SDZ. If Fianna Fáil is interested in a genuine discussion with us either on the percentage or on the wording by which we frame it, we are genuinely open to doing that. The Bill could outline an aspiration of up to 30% rather than making it the minimum figure.
The reason I say that is that something very important happened in the Joint Committee on Housing, Planning and Local Government today. A positive outcome followed a very strong collaboration between Opposition parties, spurred on by the very successful mobilisation of students in Dublin, Galway and elsewhere, which put an issue on the agenda of this House that I do not think the Government had intended to deal with. Opposition parties, in particular ourselves and Fianna Fáil although others supported it too, said that we need action on this. We tabled our own legislation and we met with the Minister. To the Minister's credit he accepted the arguments that we put forward, and it was reported in the committee today that the Department is working on amendments in line with the intent of the Sinn Féin Bill, the Fianna Fáil Bill and the desire of other political parties on the committee. It looks like we are going to end up with exactly the kind of protections that everybody here says they want as a result of that action. My appeal to Fianna Fáil today is that we did it on student housing. There is a credible argument that we could do it on this as well, and we are genuinely open to compromise if that is of any assistance.
What is the consequence of us not doing this? It is very simple; there will be fewer social and affordable housing units. At a time when we are in desperate need of increased output no matter what interpretation of the figures one uses, anything which increases the quantum of social and affordable housing must be considered. The offer I made to Fianna Fáil of looking at the percentages and the wording I also make to Government. We said today as we progressed our Residential Tenancies (Student Rents, Rights and Protections) Bill 2018 that if the Government brings forward its own amendment we will take ours off the table. I make exactly the same offer today. If the Government comes forward with something sensible and credible we will work on a cross-party basis to achieve it.
I refer to the Housing Agency's conference yesterday. The Minister spoke at the start and I was there for the bulk of the presentations. One of the really interesting things that struck me was that during the course of the conference, a range of voices who were particularly expert in looking at the private rental sector made some very startling and blunt observations. Sherry FitzGerald, not an organisation known for its left-wing radicalism and calls for State intervention, very clearly stated that if we consider the properties leaving the private rental sector, that is, the 9,000 rental properties we have lost in the last year and a half, and consider the current low level of private sector investment in the private rental sector, which may be producing 4,500 to 5,000 units a year at a time when 10,000 units are needed, there is clearly a huge problem in the rental sector. EY, another organisation not known for its radical socialist politics or strong advocacy of State intervention, examined what is happening with job growth in the economy. Its representatives noted that while there are very positive signs in aggregate, large numbers of people are coming into employment who are still on low or modest wages and private investors' activity in the rental sector will not meet the need of those people now in work. In may cases they are not eligible for social housing support and they are desperately in need of affordable rental or indeed purchase.
Mr. John O'Connor, with all of his expertise, was asked if he thought the market could fix that problem. When he was asked if it is time for an even greater level of public intervention in the affordable housing market, particularly rental, he said yes. He was not having a pop at any political party, but he said very clearly that in his view there was not a sufficient appreciation across the political spectrum of the scale of intervention in State-led affordable housing, particularly affordable rental housing, necessary to tackle the crisis. He said that if we do not address that, we are going to end up with an even bigger problem in the months ahead.
To conclude, this is a genuine attempt to put a proposition on the table to deal with an important issue. It is not going to solve all of the problems. It is a small but significant piece of the jigsaw to advance the response to the crisis. I am genuinely urging all parties and independents to look at it positively and to support the intention of the Bill. If they want to amend it, we are open to amending it on Committee Stage to ensure that instead of the 10% that is currently provided we can have a potential proportion of 15%, 20%, or as I would much prefer, 25%. This will ensure a greater level of social and affordable housing is delivered in the years ahead for the people who so desperately need it.