Vol. 1004 Wednesday, No. 7 3 March 2021 DÍOSPÓIREACHTAÍ PARLAIMINTE PARLIAMENTARY DEBATES DÁIL ÉIREANN TUAIRISC OIFIGIÚIL—Neamhcheartaithe (OFFICIAL REPORT—Unrevised) Housing Shared Equity Loan Scheme: Motion [Private Members] � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 695 03/03/2021U00400Ceisteanna ó Cheannairí - Leaders’ Questions � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 727 03/03/2021Y00200An tOrd Gnó - Order of Business � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 736 03/03/2021BB01200An Ghaeilge agus An Ghealtacht: Ráitis � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 744 03/03/2021PP00200Teachtaireacht ón Seanad - Message from Seanad � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 772 03/03/2021PP00400Teachtaireachta ó Roghchoiste - Message from Select Committee� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 772 03/03/2021PP00550Estimates for Public Services 2021: Message from Select Committee � � � � � � � � � � � � � � � � � � � � � � � � � � � 772 03/03/2021RR00100Reopening Schools and Leaving Certificate Examinations: Statements � � � � � � � � � � � � � � � � � � � � � � � � � � 772 03/03/2021GGG00100Banking Sector: Statements � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 807 DÁIL ÉIREANN Dé Céadaoin, 3 Márta 2021 Wednesday, 3 March 2021 Chuaigh an Leas-Cheann Comhairle i gceannas ar 10 a�m� Paidir. Prayer. Housing Shared Equity Loan Scheme: Motion [Private Members] 03/03/2021A00300An Leas-Cheann Comhairle: I remind Members that any division called will be deferred to the next division time. 03/03/2021A00400Deputy Eoin Ó Broin: I move: That Dáil Éireann: notes that: - after much delay the Minister for Housing, Local Government and Heritage, Dar- ragh O’Brien, has brought forward his affordable housing plan; - much of that plan, including the Land Development Agency, the Serviced Sites Fund and the Cost Rental Scheme, are continuations of the last Government’s housing policy; - the only new element that the Minister for Housing, Local Government and Heri- tage, Darragh O’Brien, has brought to the plan is an Affordable Purchase Shared Equity Scheme for first-time buyers; - this scheme was not included in Fianna Fáil’s election manifesto or previously stated Fianna Fáil policy; - the origins of the scheme are two policy papers published by Irish Institutional Property and Property Industry Ireland in March and May 2020; - these proposals were based on a shared equity loan scheme in operation in England and Wales since 2013; - in 2015, a report by Shelter concluded that the English scheme ‘increased house prices by 3 per cent’; 695 Dáil Éireann - in 2019, a report by the House of Commons National Audit Office (NAO) found that house price inflation for new build homes was 3 per cent higher than for second- hand homes since the shared equity scheme was introduced; - in 2020, a report published by the Centre for Economic Performance at the London School of Economics (LSE) found that in London the Shared Equity Loan Scheme ‘led to a 6 per cent increase in house prices’; - while the NAO report concluded that the scheme increased the supply of new homes by 14 per cent, it also increased demand by 37 per cent, while the LSE report stated that the scheme ‘stimulated housing construction in the wrong areas’; - in 2019, a report by the House of Commons Public Accounts Committee con- cluded that ‘three-fifths of buyers who took part in the scheme did not need its support to buy a property’; - in September 2020, officials in the Department of Public Expenditure and Reform expressed concern that a shared equity loan scheme ‘will push up prices’; - in September 2020, the Secretary General of the Department of Public Expenditure and Reform, Robert Watt, said ‘the property industry wants an equity scheme because it will increase prices’; - in September 2020, at a meeting between the Department of Finance and the Cen- tral Bank of Ireland, concerns were raised that the shared equity scheme could ‘impact on prices’; - on 16th February, 2021, the Economic and Social Research Institute told the Oireachtas Joint Committee on Housing, Local Government and Heritage that the pro- posed shared equity scheme ‘will very likely lead to higher house prices’; and - on 22nd February, 2021, nine Fine Gael Councillors on Dublin City Council, in- cluding a close political associate of the Minister for Finance, Paschal Donohoe, wrote to the Minister for Housing, Local Government and Heritage, urging him to scrap the Affordable Purchase Shared Equity Scheme as it risked a ‘return to failed housing poli- cies of the Celtic Tiger era’; is of the strong view that: - the Government’s shared equity scheme does not make homes more affordable; - the scheme risks pushing up house prices and burdening working people with un- sustainable debt; - the scheme will benefit significant numbers of people who already have sufficient funding to purchase a home; - the scheme will expose the State and taxpayer to significant liabilities in the event of a future property downturn; and - the scheme will breach the Central Bank of Ireland’s macro-prudential lending rules if the banks are allowed to become participants in the equity loan; and 696 3 March 2021 urges the Government to: - remove the Affordable Purchase Shared Equity Scheme from the General Scheme and final version of the Affordable Housing Bill 2020; and - re-profile the €75 million allocated to the Affordable Purchase Shared Equity Scheme in Budget 2021 to the Serviced Sites Fund, to allow for an increased delivery of local authority and Approved Housing Bodies affordable homes to rent and buy. Fianna Fáil’s developer-led shared equity loan scheme must be scrapped� It will increase house prices, saddle working people with debt and line the pockets of big developers with tax- payers’ money� Facing a barrage of criticism from all quarters, this scheme is on its last legs� Before I remind the House of some of that criticism, it is worth remembering where this scheme came from� An entire generation is locked out of home ownership� Three decades of Fianna Fáil and Fine Gael housing policy has led to ever-higher house prices, ever-higher rents and a growing number of young adults stuck at home or stuck in a rent trap� Need for genuinely affordable homes for working people to rent and buy was a key issue in the general election campaign last year� Interestingly, the shared equity loan scheme the Min- ister, Deputy Darragh O’Brien, is now trying to introduce did not feature in the general election campaign� It was not part of any election manifesto� Indeed, it had not been part of our housing policy discussions for the previous four years on the Oireachtas housing committee� The first we heard of this scheme was after the general election when two leading lobby groups for the property and investment industry published proposals for a shared equity scheme and met housing spokespeople, including me, Deputy Darragh O’Brien and others to sell their wares� IBEC’s property arm, Property Industry Ireland, published a detailed proposal� Another group, Irish Institutional Property, headed by a former secretary general of Fianna Fáil, pub- lished something similar� Both of these proposals accepted that house prices were too high, but instead of focusing on solving the problem and bringing down house prices, they asked Govern- ment and the taxpayer to plug the gap. Sinn Féin told them in no uncertain terms where to go. This was, and continues to be, a reckless proposal� At best, it will lock-in unsustainably high house prices and, at worse, and more likely, it will push those prices up further� It should come as no surprise that the Minister, Darragh O’Brien, and Fianna Fáil bought into this developer-led scheme because that is what Fianna Fáil did with housing policy when it was last in government� The last shared ownership scheme of the Celtic tiger era was based on similarly flawed policies. The 50:50 shared ownership scheme racked up huge levels of unsustainable debt on first-time buyers. More than 50% of those who entered that last Fianna Fáil developer-led scheme ended up in significant mortgage distress, some losing their homes and others having their properties transferred back into social home ownership� This scheme is even worse� Contrary to what the Minister has been saying in recent days, there are no meaningful checks to protect first-time buyers. This is not a scheme targeted at those in great- est need� The direct involvement of the banks, which the Minister is seeking, with potentially punitive interest charges makes it much worse� We know this scheme from the property industry lobby and the Minister is based on an English scheme that has been in place since 2013� That, too, was meant to be short term but has been repeatedly extended for almost a decade. The most recent research on that scheme from the London School of Economics, published last year, shows in high demand areas it 697 Dáil Éireann has pushed up house prices by 6%. It has increased the supply, but in the wrong place where houses are not needed, and it has increased demand three times more than it has increased sup- ply. Worse still, 60% of those who availed of it did not need it; they had sufficient mortgage credit to purchase a home, but those that were not able to buy a home