Minister for Housing James Browne has acknowledged that the delivery of apartment housing “has collapsed” and “radical thinking” is needed to get supply moving again.
Private sector funding is essential to tackling the crisis, he insisted. The Government has already committed €6.5 billion in funding this year and, as €20 billion is needed, the rest will have to come from the private sector, he said.
Mr Browne was speaking in the Dáil on Thursday as he faced Opposition criticism over the Government’s handling of the crisis and its incentives for private investors.
TDs highlighted The Irish Times report revealing the State is on track to deliver just 17 per cent of its 5,000 apartments target in the Croí Cónaithe Cities scheme, which involves the provision of State funds to developers for the gap between the cost of building and the market price.
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Labour housing spokesman Conor Sheehan said the scheme “delivered nothing” in his constituency. “Rents in Limerick rose by 19 per cent last year”, and it had the highest national increase in house prices, he said.
“We clearly need to do something because apartment approvals dropped by nearly 40 per cent last year,” he said.
Mr Browne acknowledged “apartment delivery has collapsed” and “we need to have radical thinking in terms of how we get that supply of apartments moving again”. He plans “significant action” in response, he said.
Social Democrats housing spokesman Rory Hearne said there is an over-reliance on institutional investors. In the Croí Cónaithe scheme “developers could get €120,000 per apartment” and he asked where the subsidies would end.
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But the Minister insisted private sector investment is necessary. “The Government this year has already committed €6.5 billion towards delivering housing in this country. We need probably a minimum of €20 billion spent on housing to deliver the necessary housing.
“The rest of that money has to come from the private sector. Financial firms, whether national or international, are a key part of that because you need that private funding to deliver those properties.”
Mr Hearne said his party supported a “particular type of private investment” and they were against “shaping the entire housing system around the profitability demands of institutional funds and institutional investors”.
One solution is “using a new State saving scheme, as they do in France, to leverage the €160 billion that is available in banks in this country”.
In France the scheme “funds directly affordable housing”, he said. It is “private finance but it is not the speculative private finance that the Government seems to be obsessed with”.
The Minister said “it is private finance that will also want a profit”. But he said he would examine it carefully and look at “all possible levers”.
Mr Browne said he is also “determined” to tackle the problem of unregulated short-term lets that is “putting huge pressure on our rental sector and on our homeless sector”. It is “unacceptable” that some companies were “profiteering” from breaches of the law.
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But he added that “it can be quite difficult to detect and gather the necessary evidence to bring it forward for prosecution”.
Legislation will be brought forward, and a register will be established and run by Fáilte Ireland.
Sinn Féin housing spokesman Eoin Ó Broin said a “simple” approach would be to “amend the Planning and Development Act to allow planning authorities apply administrative spot fines to platforms like Airbnb for every day they are not in compliance with planning law”.
Mr Browne said: “I intend to bring a fresh pair of eyes to this with regard to enforcement and certainly, the deputy’s suggestions will be part of those considerations.”
