Thursday, 25 October 2018

Ceisteanna (8)

Richard Boyd Barrett


8. Deputy Richard Boyd Barrett asked the Minister for Finance his views on the macroeconomic impact of the escalating housing crisis and the potential drain on the public finances of Rebuilding Ireland's heavy reliance on the private property sector to deliver social housing in view of the rapidly inflating cost of rents; and if he will make a statement on the matter. [44230/18]

Amharc ar fhreagra

Oral answers (6 contributions) (Ceist ar Finance)

The main path to emergency accommodation and homelessness, in which we see a shocking further increase today, is from the private rented sector. People are being made homeless by the private rented sector. From a macroeconomic point of view, never mind the humanitarian and social point of view, why is 80% of the housing plan dependent on the private rented sector? It is madness - social madness, economic madness and financial madness.

As I said to Deputy Paul Murphy on the question of funding, next year we will be spending more money to deliver new homes than on housing assistance payments to support people. My Department has published a paper, to which Deputy Boyd Barrett referred, looking at how money can be better used in this area. While new homes are being built and we are trying to get housing output back up to meet the level of social need of which the Deputy has spoken, does it not make sense to support citizens in accessing rental accommodation? The alternative is something neither of us would want to happen, where the level of homelessness increases. That is why the payment is in place.

As more and more homes are built directly by the State next year under the Rebuilding Ireland programme, the number of homes delivered through the housing assistance payment will fall from a peak of 17,000 new units to 10,000 new units in 2021. We are looking to change the mix of how housing needs are met through building new homes via the State and local authorities. While that is under way, however, it is incumbent on us to provide support to citizens who need it now.

We have no choice but to do everything we can to get people into accommodation other than hotels, hubs or the streets. Taken as a whole, 80% of Rebuilding Ireland is dependent on HAP, RAS and leasing and that is the problem. We do not know how much it will cost but some estimates are for between €20 billion and €30 billion in current expenditure over a 30-year period, for which we would get nothing. One estimate is for €1.7 billion per year which, over the period of a home mortgage of 30 years, would be some €30 billion. If we built homes, the upfront costs would be greater and we would need capital, which links to the argument about rainy day funds and strategic investment funds, but ultimately we would have an asset and revenue would be coming back in.

It is just plain wrong to say current expenditure going into housing assistance and RAS payments is getting nothing back. The payments are getting bigger year on year but they are used to provide accommodation and if we did not have those payments we would be faced with even higher levels of difficulty than we currently face, and which we want to reduce. We would be facing questions on what we were doing to help citizens to access rental accommodation at a more affordable level. As the level of new homes provided by the State increases, which it will, it will provide an alternative to the levels of investment in HAP and RAS, which will fall over time as we find other ways to meet housing needs.

The point I made is that the private rented sector is what is driving people into homelessness. The Minister says we are getting something back but we are getting back social housing that is not social housing. It is precarious and the landlord can pull out at any time. There is nothing in the HAP arrangement, which is the bulk of Rebuilding Ireland, that prevents landlords from pulling out, which they do. The people in hubs will be able to tell the Minister that they have been in and out of two or three RAS, HAP or private rented homes and are back in homelessness. To categorise this as social housing and call it part of a social housing plan is deceptive. One cannot hide the grim reality of what it means, which is record numbers of people in homelessness and huge numbers of people in a deeply precarious situation paying extortionate rents.

I am as aware as the Deputy of the grim reality for those who find themselves in precarious rental accommodation, not to mention the reality for homeless people or those facing the risk of homelessness. The plans for next year include meeting the housing needs of over 27,000 families, of which 10,000 will be met through local authority programmes to build new homes, either through direct build or by approved housing bodies. We are looking to a situation in which more homes are delivered directly by the State than in the past. More will be done next year than this year but as we do so, we also must find ways to accommodate and support citizens who face the grim reality described by the Deputy.