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Dáil Éireann debate -
Thursday, 3 Mar 2022

Vol. 1019 No. 2

Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions

Housing Provision

Eoin Ó Broin

Question:

109. Deputy Eoin Ó Broin asked the Minister for Housing, Local Government and Heritage his response to the rising levels of homelessness and, in particular, the rising levels of family homelessness caused by an increase in vacant possession notices to quit and the collapse of homeless exits in the past 12 months. [12315/22]

The Department of Housing, Local Government and Heritage published the monthly homeless figures on Friday. They showed another significant increase in the number of homeless adults, children and, in particular, families. Will the Minister for Housing, Local Government and Heritage outline the actions he will take to reverse this clear trend since August of last year?

Gabhaim buíochas leis an Teachta. I flagged in advance that we expected an increase in homelessness over a number of months before we see it reducing again. What we have seen is of serious concern to me, the Government and all Deputies. We are acting to address it. While significant work has been done, more needs to be done. We are committed to doing that work.

I have established the national homelessness action committee and asked it to prioritise the issue of homelessness prevention and look at all avenues to address this. I have brought in a number of measures to enhance security of tenure for renters, including most recently in respect of tenancies of unlimited duration through the Residential Tenancies (Amendment) Act 2021.

The exiting of landlords from the private rental sector is a complex issue, as the Deputy and others acknowledge. Data from the Residential Tenancies Board in quarter 2 of 2019 showed the most common reason for issuing notices to quit is that the landlord intends to sell the property. We need to retain small landlords to provide much-needed accommodation and the Government will support the continued participation of small-scale landlords in the rental market. We are open to looking at further changes to ensure that can happen.

The most effective way to increase exits from homelessness in the medium to long term is to increase supply, particularly of social housing, and to accelerate supply of housing over the next decade. Significant progress is already being made under Housing for All to accelerate supply. Recent commencement figures on the social and private sides are encouraging. All additional measures we can take to address the rise in homelessness are being actively pursued.

The difficulty with the Minister's response is it does not suggest that the Government will do anything different in the short to medium term to deal with the two specific problems causing this increase in family homelessness. First, we are seeing a significant exit of landlords from the market. The Minister is right about that. They are going and will not stay. They are availing of high market prices to cease being landlords. I have heard nothing from Government on what we do to prevent the families, particularly families on the housing assistance payment, HAP, and the rental accommodation scheme, RAS, who are in those properties and who are at risk of homelessness.

Second, we have seen a collapse in exits from emergency accommodation, particularly in Dublin. The exits last month were 35, down from several hundred per month 18 to 24 months ago. My question does not concern what will happen in two or three years' time, if the Minister's plan works at all. What specific interventions will he make now to try to stop the flow of families into emergency accommodation and speed up exits next month, the month after and the month after that?

The Deputy is correct on exits, which have been difficult in recent months because of shrunken supply. We are affected by the lack of new supply coming in over the past two years. We could not build the number of homes we needed. Much of that was down to Covid. We will see a significant increase in social housing supply this year. We will hit our target of 9,000 new builds. That does not take into account acquisitions, the remainder of the leasing piece that will come in or vacant units coming back into use. Increased supply this year will help. We have had an issue in respect of HAP, which has been used as a mechanism to help people exit homelessness. It is needed as an emergency response but finding HAP properties for our place finder teams is more difficult.

A combined response on all these matters is needed. The national homeless action committee, which is made up of NGOs and all Departments, not just mine because we need justice, health and all those included, is focused on prevention and exiting. We are working through that. Any additional measures we can take, we will take.

There are three measures the Minister could take as a matter of urgency. First, he could lift the effective prohibition on local authorities purchasing properties where HAP or RAS tenants are in situ and have been given notices to quit. The problem, as the Minister knows, from the circular is that the councils are asked to prioritise vacant one- and four-bed properties and properties with disability adaptations in order to try to get people trapped in emergency accommodation out. There is a limit of 200 acquisitions in the capital programme for this year. We need the Minister to say to local authorities now that as an emergency measure, where a HAP or RAS tenant has a notice to quit and is at risk of homelessness, local authorities can purchase those in addition to the 200 vacant units the Minister is seeking to acquire. He could also revisit the Focus Ireland amendment to ensure that landlords who availed of tax relief to purchase buy-to-rent properties are not able to issue vacant possession notices to quit and he could work with us to fast-track matters, either by means of Government legislation or our legislation that passed Second Stage in December, namely, Residential Tenancies (Amendment) (Extension of Notice Periods) Bill 2021, which was developed in conjunction with the Simon Communities. The Minister can do these things now and I urge him to do them or these figures will continue to get worse.

There is no prohibition on the purchase of properties but we cannot have it both ways. We want to increase stock. I heard Deputies rightly criticising the Government last year for buying homes out from under first-time buyers. We have to have a balance. The figure of 200 set across the board is there but properties can be purchased in extremis. I am looking at further measures, particularly around Housing First, to allow additional properties to be purchased to come into that sector. I may look at other options.

I will provide that flexibility. I had housing summits with all directors of services for housing from all 31 local authorities last week and the week before last. The major focus was on delivery and on homelessness. Therefore, we are looking at other measures. If we can bring in changes, like allowing some flexibility on purchasing with tenants in situ, in extreme situations, I am open to that. A moral hazard can occur in such situations as well though, and I do not want local authorities just buying instead of building. The message going out from this Government is that we must increase our public housing stock substantially and that is the focus of Housing for All.

Land Issues

Gerald Nash

Question:

110. Deputy Ged Nash asked the Minister for Housing, Local Government and Heritage his views on the implementation of the land value sharing measures; when the measures will be implemented; if he will be introducing a temporary windfall tax in the interim for land that has been rezoned pending the delayed implementation of the land value sharing measures; and if he will make a statement on the matter. [12039/22]

The land value tax measures promised in the Housing for All strategy have yet to be delivered on. We have been told now that we will have to wait until next year for the implementation of those plans. Land value sharing was a key recommendation of the Kenny report and we resurrected those principles in a Labour Party Bill from last year. It is, effectively, as the Minister of State knows, a mechanism to allow the State to realise the benefit of an increase in land value when land is rezoned. The aim is to ensure that landowners do not enjoy a windfall from flipping sites. I ask for an update on these plans.

The implementation of a land value sharing measure represents an important step in the delivery of sustainable housing. The 2020 programme for Government committed to reviewing how community gain could be captured through the development process. The Housing for All policy includes a commitment to develop land value sharing measures to ensure that additional land value, which results from the zoning or designation, and the granting of planning permission, will be shared in a fairer way with the State and that communities will also benefit from improved infrastructure provision. A general scheme of a Bill for land value sharing and urban development zones was approved by the Government in December 2021, with detailed drafting to follow an economic appraisal and stakeholder engagement, ahead of enactment in quarter 4 of 2022.

Provisions for a residential zoned land tax were included in the Finance Act 2021 to impose a financial tax where land that is zoned and serviced is not brought forward for housing development. Land value sharing and the residential zoned land tax are key elements in a new approach of active land management. The lead-in time for their implementation is necessitated by virtue of preparatory work, economic appraisal and legislative enactment, in the case of land value sharing. All of this is essential in ensuring that a fair, reasonable and evidence-based approach is taken and it would not be appropriate to introduce a windfall tax in the interim.

Significant amounts of money are being made and have been made over the years by developers simply flipping land. Nothing speaks to the issue of the financialisation of housing more than the practice of land being bought, flipped, literally overnight sometimes, and nothing being developed. Genuinely radical measures, such as those called for by my colleague, Senator Rebecca Moynihan, must be introduced to address the issue of windfalls arising from the rezoning of lands.

I read yesterday in the commercial property section of The Irish Times about a parcel of land in Laytown in my constituency. It is not zoned for housing and would ordinarily sell for about €15,000 an acre, but it has been put on the market now for approximately €72,500 per acre. That has been done in the hope, from the estate agent's perspective, that the land may be rezoned in 2027. This speaks to the issue of the financialisation of housing as being a major issue. The Minister of State understands this and we need measures to be brought in urgently to address these problems.

The State is serious about several measures it is taking in this context. The land value sharing tax will be a significant measure in driving the share to the State up to 50%, potentially, when it is included with the affordability mechanisms introduced by the Minister. The Deputy will also be aware of the residential zoned land tax, whereby mapping procedures are now underway throughout the State. It was also included in the Finance Act 2021. Additionally, the Law Reform Commission is also preparing a report regarding reforming the compulsory purchase order, CPO, mechanism to allow the State to take a stronger hand in bringing derelict and vacant properties back into use. Therefore, taking the trajectory in recent decades, several reports have found that the State must be active in this area and the Housing for All policy has provided the vision to breathe life into that objective.

Housing Schemes

Eoin Ó Broin

Question:

111. Deputy Eoin Ó Broin asked the Minister for Housing, Local Government and Heritage the way that the cost rental equity loan will deliver affordable cost rental homes in Dublin city; and if he will make a statement on the matter. [12316/22]

Will the Minister confirm that none of the successful applicants for the second round of the cost rental equity loan, CREL, scheme involved projects in Dublin city centre? Will he outline what changes he is currently considering to ensure that this much needed scheme is able to deliver homes in Dublin city centre and in the other areas in need of cost rental accommodation?

The cost rental equity loan funds approved housing body, AHB, development of cost-rental homes through low-interest loans over 40 years for up to 30% of delivery costs. We have had two calls for proposals to date, with a major focus on delivery in 2022. We set parameters specifying that proposals submitted must see homes being tenanted this year. There was one application from Dublin City Council, DCC, that did not meet that criterion. We expect it to come in again. To explain what we will be doing in this regard, I will be opening the call to all local authorities and it will refer to post-2022. I will open the call this year and it will look to development in 2023 and 2024. I expect that DCC is working on some proposals in that context as well.

Overall, 911 homes have been approved for funding, with the first 65 occupied by tenants last year. The current pipeline for delivery this year is nearly 700 units, and that will increase. The most recent vacancies have just been advertised by the Tuath AHB, in Parklands in Citywest. It is a development of 44 two-bedroom apartments, with rents ranging from €1,200 to €1,300 per month, which is way below the market rent sought in the private sector. CREL properties have so far been delivered as turnkeys due to my determination to respond in the short term. That is why I set this criterion for near-term delivery. As I mentioned to Deputy Ó Broin earlier, however, I am providing more flexibility in the open call to allow all local authorities, including DCC, to make new proposals and this will result in a better pipeline.

Specifically concerning DCC, we had one proposal for the second call, but that did not meet the criterion for delivery this year. We do have other examples in Dublin, to which I will return in my supplementary response.

I have no objection to the use of turnkeys in the short term while a pipeline of development of affordable cost rental homes by AHBs and councils comes on stream. The difficulty, though, and as the Minister is aware, is that the price of purchasing turnkey properties in Dublin city centre means it is not possible to deliver the affordable element of the cost-rental proposition. Therefore, I have a specific question. Is the Minister actively considering any amendments to the cost rental equity loan scheme that would provide additional flexibility in the short term for the turnkey acquisitions?

There is a real problem, in the sense that the Minister is right in respect of there being 716 cost rental units in the pipeline for this year, according to his officials, but half of those are units that were funded and agreed in principle in the context of last year's funds. In fact, therefore, this year's additional cost-rental provision is about the same as what was meant to be delivered last year. None of those units, however, is in the city centre. What is the Minister considering to try to ensure that some cost-rental homes could be delivered at genuinely affordable prices in the city this year and next year?

It is a new scheme and a new call and it is important that we recognise that this year we are going to have hundreds of families in State-backed affordable cost-rental units with rents up to 40% and 50% below the market rate. It is something that is most welcome. Equally, just to be clear, when I referred to turnkey units, many of these properties being developed are ground-up turnkeys. There are not being purchased from someone else just to provide cost rental homes. These turnkeys are being developed from the ground-up. There are issues with costs and particularly so in our cities, in Cork and in Dublin. Lancaster Quay will see the provision of our first tenanted cost-rental apartments in the heart of Cork city in quarter 3 of this year. They will be tenanted this year.

I am, however, looking at some changes in this regard and particularly concerning the management fees. The Government is providing generous grants through the affordable housing fund to the local authorities. Therefore, I envisage that DCC will be coming forward with further proposals in the open call to come for cost rental provision. We already have the projects at St. Teresa's Gardens, which is an important one, and at Emmet Road, and we will have more questions on this later. We also have our own projects which I want to see developed by our local authorities and we are going to do that.

With the greatest of respect Minister, any arrangement concerning management fees is not going to deal with the central problem now being experienced by Dublin City Council which, of course, is the cost of units that are acquired. Whether those turnkeys are developed from the ground up or are at any other stage of development, the cost is more than €400,000. As the Minister is aware, there has been some media commentary regarding correspondence between him and Bartra, in the context of the company seeking to charge somewhere - we do not know the full figures - between €400,000 and €440,000. Under the current scheme, that would mean cost rents of €1,600, €1,700 and €1,800 a month.

Neither the Minister nor anybody on the Opposition benches would support that.

My specific question, which I will ask again, is whether the Minister is looking at any further changes to the way in which the cost-rental equity loan is currently operating to ensure the delivery of affordable cost-rental in Dublin city this year and next year. So far I have not heard the Minister indicate that he is.

Let me be very clear. We are going to be delivering cost-rental units in Dublin city.

Will that be this year or next year?

As I said, what I wanted was short-term delivery. I want people in homes this year. As a result, I set the parameters around the call to the local authorities and AHBs to bring proposals to us whereby the units could be delivered this year. That is what I wanted. Dublin City Council had a proposal that would not be delivered this year, and I stated that it would not be included in the call. I look at all these proposals with my colleagues. There will be further proposals and we will deliver cost-rental at scale. We want to deliver 18,000 units during the lifetime of Housing for All. It is a new tenure of housing and, of course, the scheme will evolve. We have the first 65 tenants in place.

I should be clear that when I mentioned management fees, I was referring to the managing costs and how we look at managing cost-rental versus what is done in continental Europe. There could be significant savings, and I am looking at some changes in that space. I will report back to the House or the committee when I do that. I will keep Deputies advised of it because there could be significant savings in the management of these units that will help to drive down rental costs further.

Housing Policy

Cian O'Callaghan

Question:

112. Deputy Cian O'Callaghan asked the Minister for Housing, Local Government and Heritage if he will increase protections for tenants by preventing those landlords in receipt of Government retrofitting grants from ending tenancies for related works; and if he will make a statement on the matter. [12314/22]

There is already a serious problem with tenants being evicted due to renovations and grants for retrofitting should not lead to tenants being evicted or rent increases. The retrofitting scheme is very welcome, but public money should not incentivise evictions or rent increases. What measures specifically will be introduced to prevent this happening and will there be changes to the legislation governing the sector to prevent this?

The current protections for tenants where a landlord terminates a tenancy because he or she needs vacant possession to substantially refurbish or renovate the rented property are sufficiently robust. The Residential Tenancies Acts 2004 to 2021 provide that where a landlord terminates a tenancy because he or she needs vacant possession to substantially refurbish or renovate the rented property, that property must be offered back to the former tenant upon completion of such works, where the tenant provides contact details for such an offer to be made. Such a notice of termination must contain or be accompanied by a written certificate of a registered professional under the Building Control Act 2007, such as an architect or surveyor, stating that the proposed substantial refurbishment or renovation works would pose a health and safety risk necessitating vacation by the tenants and that such a risk would be likely to exist for at least three weeks.

The tenancy protections in place are not impacted by the funding stream used by landlords for such works. A tenant may refer a dispute with regard to the validity of a notice of termination of a tenancy to the Residential Tenancies Board, RTB, for resolution. Since 2019, the Residential Tenancies Acts provide enhanced powers for the RTB to investigate and sanction landlords who engage in improper conduct, including non-compliance with the tenancy termination provisions. A sanction imposed can comprise a written caution, a financial penalty of up to €15,000 and RTB investigation costs up to €15,000. The operation of the rental market and the Residential Tenancies Acts 2004 to 2021 are kept under constant review and any necessary legislation will be introduced.

I thank the Minister of State for the reply, but all the information he provided is available, almost word for word, on the RTB website. This is a problem and this public money could be used to incentivise evictions and rent increases. Under current rules, there is an onus on the tenant to make a complaint. Tenants often are not offered their tenancies back in such circumstances. Will a change in legislation be introduced to protect tenants and stop this from happening, ensuring that a tenancy will continue unless a tenant chooses otherwise? A tenancy should continue rather than end and be offered back to the tenant. Will that change be introduced so that rents cannot be increased if a landlord is in receipt of public funds for renovations? It is reasonable that if public money is being used, it should not lead to an eviction or rent increase. What will the Government do to address this?

On the specific question of rent increases, since 2019 there have been exemptions around rent pressure zones for certain types of works. These might include a tenancy not existing in respect of the dwelling in the two years immediately prior to the current tenancy beginning. Such works might include a permanent alteration to the internal layout, adapting it for a person with a disability, a permanent increase in the number of rooms or improvement of the building energy rating of up to seven points.

There are robust mechanisms already in place and the vast majority of retrofitting works taking place in rental properties, such as installing attic insulation, pumping insulation into walls, etc., will be non-invasive. In some cases, deep retrofits would not ordinarily require an occupier to leave the property. The protections are there. If there are specific examples that the Deputy has in his area, please provide them to us because we would like to look into them further.

I am bringing up a matter of specific evictions. The Minister acknowledged before that there have been evictions arising from renovations and it has been a problem. He acknowledged it here in the Chamber while I was present. I am seeking to find out what the Government is looking to do to protect tenants in such a position. Saying the current provisions will not be changed is not good enough. We should not have any position where public money could be used to incentivise evictions.

The chairman of the RTB, Mr. Tom Dunne, told the Committee of Public Accounts recently that landlords may use the retrofitting scheme to evict tenants and he is an independent voice on this so his opinion should be highly valued. What will we do now before public money is used to incentivise rent increases or evictions? What changes will be introduced to address the matter before that happens?

The Deputy mentioned the information available on the RTB website. It is quite clear that if vacant possession is sought for substantial works to the property, that property must be offered back to the tenant.

Often, it is not offered back.

Again, I would appreciate it if the Deputy could provide examples to us as the property must be offered back. As we referenced, there are penalties in place if that is not the case. I referenced separately the point relating to substantial works around rent pressure zone areas. It is important to provide specific examples because it would be really useful from our perspective to see what they are and where those cases exist. The legislation is quite clear in protecting tenants in this regard. These works will be really important. They are not just for meeting our national retrofitting targets and they will also provide cheaper home energy bills for tenants. Everybody will benefit.

Housing Provision

Eoin Ó Broin

Question:

113. Deputy Eoin Ó Broin asked the Minister for Housing, Local Government and Heritage his views on the purchase of 300 new homes, including houses and duplexes by a company (details supplied). [12317/22]

I am sure the Minister read in the newspapers two weeks ago that Orange Capital Partners have announced a forward purchase agreement of currently developed stock in three locations. These are in Cherrywood, in my constituency at Adamstown and in the Minister's constituency at Portmarnock. Many of these developments include not only apartments but also duplexes and family homes. Does the Minister accept that the measures undertaken by him and his colleague, the Minister for Finance, Deputy Donohoe, to stop these institutional investors swooping in and snapping up family homes have failed?

I do not, frankly. I cannot comment on any individual case; I am not privy to private negotiations and nor should I be. I cannot confirm either whether the reports are 100% accurate. What I will and can say very clearly regards the measures that this Government has introduced.

We have committed to introducing a form of owner-occupier guarantee - this has been done - to enable local authorities to specify the proportion of houses and duplexes in a development for owner-occupiers. This is intended to build on the existing higher rate stamp duty measures that the Minister for Finance introduced and restrictions on planning permissions introduced in May 2021 that I brought forward by way of section 28 guidelines on the regulation of commercial institutional investment in housing. The current guidelines ensure new own-door homes and duplex units in housing developments can no longer be purchased in bulk by institutional investors in a manner that causes displacement of individual purchasers or social and affordable housing, including cost rental properties. It is really important that people understand this.

Analysis and data - rather than reports - suggest that with the changes made by me, the Minister for Finance and this Government in 2021 on the purchase of single family residential units, the proportion of such purchases fell from 11% of residential deals in 2020 to 2% in 2021. This is coupled with the fact that more than 30% of the 46,000 homes purchased in 2021 were bought by first-time buyers.

I am satisfied the Government's actions to increase home ownership for individuals and families are starting to work.

That is no comfort to the people in Portmarnock in the Minister's constituency or in Adamstown in mine, who today will not be able to avail of any of these homes because they have been purchased by an institutional investor. In the same article in the Irish Independent, the fund said that "it is irrelevant what we pay for them." It does not matter that the Government has increased stamp duty by a modest 8%. These funds will make such a return at current market rents over the 50-year period that this fund, for example, says it will remain at these locations, that a modest increase in stamp duty will be quickly recouped by higher rents. Likewise, the planning changes the Minister has introduced in the main will only apply to future planning applications. The 80,000 live planning applications that are in the system are open game for these institutional investors. In terms of what is coming down the pipeline this year, next year and the year after, the Minister's measures have failed. Again I ask him what he can say to reassure those people looking to buy such properties in our constituencies that the measures he undertook last year are having any impact in squeezing out these funds.

Deputy Ó Broin cannot ignore the facts. He would say they have failed because that he what he would say. There is no question. He would never come in and say that any Government measure is working because his go-to point is to say that it is failing, everything is wrong and nothing is working. That is what he does. He is the one who said in his interview with The Currency and elsewhere that he meets these private investors and developers regularly. He has met Johnny Ronan and all these guys and he talks to them about investment and the need for investment. The Deputy is the one who said that in an interview, so that is fine. Maybe he knows what is happening in Portmarnock or Adamstown. I am telling him we need to increase the overall supply and we have brought in measures. The analysis of those measures has shown a reduction from 11% to 2%. They are the facts. That is what is happening. There will be investors in the market but the Minister, Deputy Donohoe, has brought in a very significant increase in stamp duty and I have brought in planning changes that affect all future planning permissions. That is working and it is starting to work.

The facts flatly contradict what the Minister is proposing because we know from the BNP Paribas report that a quarter of all purchases last year were by non-households. The Minister is right that some of those were approved housing bodies and local authorities but the vast bulk of them were institutional investors. They are now not just buying up new homes through forward purchase agreements but snapping up significant numbers of second-hand homes from which housing assistance payment, HAP, and rental accommodation scheme, RAS, tenants have been evicted and then leasing them back to the local authorities at extortionate prices.

Of course I meet everybody. How else can I do my job properly? I cannot do it by not meeting people. The difference between the meetings the Minister has and the ones I have is that I meet these organisations to make very clear that policy under Sinn Féin Government would change and funds would not be able to buy either houses or apartments. The measures we would take would push them out of the market. Instead, we would use public funding to buy those same developments for social housing and large volumes of affordable homes.

Again, what reassurance can the Minister give to his constituents in Portmarnock that there will not be more of these developments bulk-bought by institutional investors because they can pay over the odds and price young families out of the market?

This Government has banned bulk buying. We have changed planning and brought in an owner-occupier guarantee. For the first time in planning we have recognised owner-occupier as a tenure of housing. We are doing that and have done it. I am at a loss to understand what Sinn Féin housing policy is. I listened to the Deputy a few weeks ago talking about bringing in 10,000 vacant units in one year, which would supplement his magic 20,000 homes he wants to deliver. We are grounded in reality. The reality is that what we want to do and what we are doing is increasing housing supply on the public side, where we are going to build more social homes this year than ever before. We are bringing in affordable housing. We have cost-rental units in place. Yes, we are increasing private supply too. We need to get up to 33,000 a year. How we do that is by delivering and by building, not by objecting and blocking.

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