When the fog of this pandemic eventually lifts and the country begins to move back towards some altered form of normality, the Government’s response to the housing crisis will be very much under the magnifying glass again.
The Level 5 restrictions on the construction industry combined with an increasing pent-up demand are factors compounding the pressure that already existed before the advent of Covid-19.
Sinn Féin, ever mindful of the fact that this was one of the big issues of last year’s general election, will this morning table a motion in the Dáil calling on the Government to scrap their new shared equity home loan scheme.
Under the scheme a first-time buyer of a new-build home can ask the State to take up to a 30 per cent stake in the property.
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A budget of €75 million has been allocated for the first year of operation. The Opposition has expressed doubts about it, to put it mildly. In fact, Sinn Féin now says that it is “dead as a dodo” in terms of expert opinion.
Minister for Housing Darragh O’Brien has this morning defended his grand plan. He said the housing crisis “demands a swift effective response using a range of options not silver bullet fantasies of the Opposition”.
Mr O’Brien said: “The shared equity scheme is just one measure in the overall Affordable Housing Bill 2020. The shared equity scheme will be targeted, time and finance limited and subject to regional price caps in order to immediately activate supply, stop inflation and ensure realisable demand.”
But the motion due to be tabled at 10am will make for uncomfortable reading for those on the Government benches.
In states that in 2020, a report published by the Centre for Economic Performance at the London School of Economics found that in London their shared equity loan scheme “led to a 6 per cent increase in house prices”.
The motion says that in September 2020, officials in the Department of Public Expenditure expressed concern that a shared equity loan scheme “will push up prices”. That same month, “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 mid-February, the motion points out, the Economic and Social Research Institute told the Oireachtas Committee on Housing that the proposed shared equity scheme “will very likely lead to higher house prices”.
Even Fine Gael councillors have made protestations about the scheme, Sinn Féin will point out, before arguing that the scheme will “expose the State and taxpayer to significant liabilities in the event of a future property downturn”.
There was more trouble for the Government when two Green Party TDs, Neasa Hourigan and Patrick Costello, indicated they would prefer to see the ring-fenced funding directed towards social and public housing instead. The two TDs did not respond to questions from The Irish Times yesterday asking how they intend to vote on the motion.
The Social Democrats have also now dubbed the scheme "Bertie economics". While Mr O'Brien is expected to issue a defence of his plan this morning, there is further trouble ahead as the Oireachtas Housing Committee plans to bring the Central Bank in to scrutinise the Bill. Read a report on the growing row here.
Pandemic green shoots
There are hopeful signs that the latest phase of the pandemic is coming under control, as we report in our lead story this morning. The number of Covid-19 cases reported last night fell to the lowest level in more than 10 weeks.
Furthermore the Health Service Executive is seeing a 95 per cent reduction in the Covid-19 infection rate of hospital staff.
But the costs are mounting. We reveal that the Minister for Housing is set to bring proposals to Government next week that would see protections for tenants struggling to meet their rent due to the pandemic extended for three months.
The measures, which include rent freezes and an increased 90-day notice period for the ending of tenancies, are due to expire on April 12th. However, they will remain in place until July 12th under the new plan. Read that story here.
Best reads
More trouble in the Green Party this morning, reports the Irish Examiner, as the row over Ceta turns legal.
Travel bans and border closure push Irish in Australia to make tough decisions.
We have some details from an RTÉ Investigates programme due to air tonight.
Jack Horgan Jones reports on how State bodies face "significant challenges" on the €116 billion Project Ireland plan.
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Playbook
First up this morning the aforementioned Private Members’ motion from Sinn Féin on the Government’s shared equity scheme. We can expect Leaders’ Questions at noon and later in the afternoon at about 3.30pm, the Dáil will hear from Minister for Education Norma Foley on the reopening of schools and Leaving Cert exams. There will also be statements and questions for the Minister for Finance Paschal Donohoe on the banking sector generally.
The Seanad sits again on Friday. And the various committees are holding private business, as Covid-19 continues to impair normal Oireachtas business.
