Transcribe your podcast

The part Kenny show on news talk with Marter private network during current restrictions. Don't ignore your health concerns. Our expert team is ready to help. Affordable housing bill offers equity loans of up to 30 percent on new built homes, which cost under 400000 euro since the bill was published a number of weeks ago.


It's received a lot of criticism from opposition parties. And the central bank also has its concerns, as well as that the state's budget watchdog, the ESR. I warned that the shared equity home loan part of the bill will very likely lead to higher house prices. Well, Minister for Housing and Local Government and Heritage and FENA faulted for doubling Fingal.


Darragh O'Brien still believes that combined with the land development agency build, this will bring us the chance to turn the tide of the housing crisis. And the minister joins us on the line.


Good morning and welcome. Good morning. Good morning. How are you?


I'm very well now. When we spoke to you first, it was kind of the bones of the scheme. The idea then the last time we spoke to you, you flesh it out a bit. And since then, a number of people have stuck their oars into your scheme. And let's start with the Sauri who are quite critical of it and saying, look, the problem is supply, not affordability. And this is only going to push up house prices.


It would be yesterday and just deal with that, the bill is three components passed and thanks for having me on again about that. It's affordable, purchased homes and state owned land. It's a cost rental, which is affordable rental that we've already launched, eight schemes now around the country. And a third component of that is a very targeted shared equity arrangement, which will help, you know, thousands of people out there who are stuck in an affordability gap.


That's to the tune of 75 million parts and the 75 million in the context of the overall mortgage market, which is 11 billion, it's less than one percent. And so I'll deal with that piece in a minute. But just the Ezri, actually, their interaction has been very useful. They came to committee in the recent weeks and presented to the committee. And they did say as part of this, actually their opening statement wasn't as critical as some reporters or indeed wanted it to be, is that they talked about the the targets, the need for targeting measures of intervention is absolutely critical, which it is the need to protect against any future invasion, which absolutely I agree with.


And we're going to have measures within the bill to do that. And actually, they did concede that their their contribution to the committee that they were giving general comment on on risks around shared equity as opposed to specifically on my own schemes. So I welcomed their their input into us. Actually, a number of the risks that they would see could foresee in a shared equity type arrangement we're going to address as part of our scheme. And that is actually very useful.


But they actually said themselves that Congress's approval and targeted measures such as Minobe, which are a time bound in focus, that those who need them actually have a great deal of merits and benefits. So, you know, when it was fleshed out at the committee hearing, which is what we do pre legislative scrutiny for, you know, that discussion was able to happen back and forth. The central bank have been actually very helpful in this regard. And I think some comments attributed to them actually go back to last September, which were recently supported.


And we're engaging, obviously, on the scheme with the central bank and the Department of Finance, and that's been going very well. So next week, we'll go into the final phase of legislative scrutiny, where we'll have another couple of presenters to the committee with their views, like with the housing agency and last week, who are very supportive of what we were doing, including the shared equity piece. And then we'll get into the dialogue with the bill at second stage.


So I'm so on track to have this affordable bill, which will make a big difference for people and a big difference for those who have lost all hope and being able to own their own home to have it in place toward the end of the summer to the point that was being made by the NRA and the former Yessiree.


Professor Edgar Morgenroth was talking about this yesterday, I think was on the hardcoded programme just saying, look, unless you have supply, any measures like these are kind of tinkering at best, but also not addressing the fundamental problem. So if you make housing somehow more affordable for some people without supply, the inevitable consequence is that house prices get pushed up. Every scheme government has ever done. And I don't know whether you remember back to the old Section 23 and Section 27 schemes whereby they gave tax relief to people purchasing these houses.


The developers of the Section 23 and 27 gobbled up all the cream, if you like, that the government was offering. So the suggestion here is if you give people help, the developers will simply push up the price. Now you have a ceiling of 400000, but you know, a house that should have three Yagan. I was going to say that he was going to sell for at 300000.


The developers see are these people now with the help that the government can afford, 375. So that's what we'll charge.


OK, the first point is extremely valid and I agree with that completely. The issue is supply. And that's why these measures are actually supply side measures like building affordable homes and stayed on land. The week before last, we launched a scheme in Lorsque in my own area, where there the affordable homes built there and they were started 100, 65000 to 260000. There will be other schemes will be rolled out through what's called the service sites fund, which are actually changing to make sure we can deliver quicker.


There's 310 million there and they're focussed at affordable homes. So supply is the issue. And we're talking about supply was in the middle of a construction shut down. So I'm acutely aware of that, that we have to make sure that there are supply side measures to deliver affordability in the market.


So just a technical question from the minister. And I just want to ask you this question.


You finish and then I'll ask you the question, because it pertains to the land development, the land development agency.


Sorry, because this can't be looked at in isolation. Also, you know, we brought forward Land Development Agency, which is the topic that you've discussed many times and many of our commentators, which is to bring state land into productive use. There's so much state land out there that sitting idle that could be used for housing. And that is a really significant. And supply side measure the Land Development Agency bill, which will conclude its second stage in the bill next week, and I've been in seven months that we've managed to get this bill to work it through to improve us.


And the state actually will have a big role in driving supply through the land development agency there and indeed through the affordable housing bill. So I just wanted to make sure that we're not discussing them in isolation at all.


But now the other question was about the criteria for qualifying for your scheme.


And I was wondering in your bill and I know, you know, people don't like too much bureaucracy, but at the same time, can you lay down criteria by which housing developments would qualify? In other words, someone tries to sell a shoebox. Under your scheme, you say say no, sorry. That's not fit for a family not having it. So that scheme doesn't qualify. Can you lay down the criteria? You can.


OK, and we can because doing that already already under the affordable bill, which is the affordable purchase on state owned land, that we very much drive the type of houses that will be on that. I mentioned the scheme and lorsque that will have the house design and all that is something that has to be approved before the state enters into that contract. That would be the same part, I would imagine, right the way through. Now, when we're going to publish the specific details of the criteria for someone to apply, we'll do that by way of regulation.


And the reason we're going to do it by way of regulation is because that makes it easier to excuse me to change it into the future. Should we need to to to to tweak a scheme rather than having it in primary legislation? We will have regional price caps as well. So it's not just I know you mentioned a figure of 400000 different parts of the country. There's different levels of affordability. So we need that flexibility to be able to set regional price caps.


And looking at the people that we're focussing on, which are people right out there at the moment who are probably listening to your show, who are paying rents of up to 2000 euro per month, that if they do get a mortgage, they would only be paying a mortgage of a thousand eleven hundred euros a month. And many of those people want to have an opportunity to buy their own home. That's why these targeted measures are needed. The status quo, you know, just continuing and trundling along is not going to do it.


We are in the middle of a housing crisis. The state does need to get involved. And these measures are very much supply side measures that will help to boost supply. I use an example of a similar scheme, but not the same scheme in England that where they had a scheme such as this led to a 15 percent increase in supply and less than one percent increase in house price inflation. But to get to your point, which is really valid about the quality of the house, the type of the home as well, that criteria will be set down.


It's not a question that someone will be getting this type of loan or indeed entering into an affordable purchase on the state, on land and a family will be buying a shoe box. This is about affordable housing, sustainable good for families, good for individuals and good for communities. And some of the responses to it politically, I'm not talking about the survey because they are perfectly entitled and right. And I welcome their input into some of the responses politically from the left and hard left has been bordering on hysterical on this when they've been talking about the issue of house price inflation, 75 million euro in the mortgage market of 11 billion, less than one percent.


And they're targeted measures. I want people to own their own homes. I want to help them to do that. And I'm determined to do it. And that's why this bill, coupled with the Land Development Agency Bill, will actually do that. Others may want to, you know, pontificate and delay and delay. I don't want it. We can't afford any further delays in dealing with our housing crisis. Yeah.


Now, the question of the central bank, I mean, what the central bank did was lay down borrowing rules.


The people have to have their deposits and there is a multiplier of their income. And the reason for that was to stop reckless lending on the part of the banks.


The charge could be made that in a sense, the state rowing in with its own lending is, you know, contributing to the notion that some people will actually end up living in a home that they really cannot afford. And if the state wasn't involved, it would be utterly unaffordable. Does the central bank have to change its rules to accommodate the state?


No, they won't and understand. We have no desire. And there is no question of us looking to amend any of the central bank lending rules that are in place there. They're right there proper and they're prudent. And that would be the case when the scheme is published. You'll see that the equity piece, which will probably average around 20 per cent pass, it'll be most people won't be going necessarily for the full 30 per cent. It's not a second mortgage.


There won't necessarily be a requirement to pay that out. It'll be an equity piece in the house. When you look at the bigger driver for delivery of affordable homes, which is the affordable homes, and stayed on. And there will also be an equity stake. And not that the council in a given area will take like the one that I've referenced and lost up to 20 percent where the. So take that equity on behalf of the state and there might be a very small servicing fee relating to that piece, but no requirement to buy it.


So it's not a double mortgage and some of the charges laid against it. And that's what politics is about in political debate. That's fine. But some of the charges have actually been made without even seeing the scheme or wanting to look into it in any way. So it seems to me that some see the housing crisis as a political opportunity as opposed to them having a responsibility to helping to resolve it. So what we're going to do in government with these measures and coupled with a very, very large social health building programme, the largest in the history of the state is actually to tackle our housing waiting lists in a very significant way and to give hope and to give real measures that are going to help people buy homes at affordable, affordable rates or indeed rent homes at affordable rates to our cost rental, which is a tenure of housing that's new to Ireland, that's been talked about for about 10 years.


And we're delivering it within the first seven months of the new government aid schemes across this country that will deliver the first cost rental units and we'll build on that into next year. So it's a pretty exciting time, actually, but we're going to be extremely prudent and cautious in our approach here. But these measures will help and they will have an impact.


There has been, I suppose, criticism of that very prudence and caution and slowness from Dublin City Council, the chief quantity surveyor, Mark Burke. I mean, you saw that what he's saying, six years. It could be from the moment you decide, OK, there's a site, we own the land. It's terrific.


Then you've a European laid down procurement process, which can take maybe half the time, three years to get through to make sure that everything is kosher, that it's not jobs for your spouse or contracts for your friends.


And then the department's own system can add another three years to it to get the money that the department, you know, will rightfully give to the council to help with the construction six years from the time the site is isolated. I mean, it's marvellous. It's crazy. It is.


It is. And actually, in other instances, the six years will be elongated further by having, you know, you know, objections at a council level to moving on with certain schemes as well. And so politicians of all parties have a role in making sure that they're not part of the of the problem either. But to deal with Mark spoke at a symposium yesterday. There was a useful when I saw reports from the procurement area is something that we are governed by EU procurement rules.


And that's something that you have to be guided by. You can't just set them aside. And he wasn't suggesting that either. But one or two areas in particular, one, what we can do to make it better. I have already changed at the single stage approval process, which is open the limits to six million. So it means that a council can can actually pretty much get a single stage approval for a scheme on a value up to six million now in Dublin.


And he makes a point that doesn't really have an impact because a lot of the schemes will be under our side, will be over the six million euro threshold. So I am looking at that. But the really important point, I think, that was made was around certainty of investment and a multiannual programme. And with colleagues such as Michael McGrath and Pascal Donahoo and government, we are working through our review of our National Development Plan to look at a multiannual plan on housing, because that gives the type of certainty around funding that Dublin City Council we're talking about now.


The issues that Denmark raised are just some of the issues. There are other areas and some of the issues that he talks about.


For example, council commissions, after all the tendering process and after getting the money from the department, they they commission a contractor to build a scheme and the contractor does a brilliant job. They have another scheme, pretty similar, but it's back to square one, back to the blank page. They can't say Joe Bloggs did a fantastic job there. His price was good. It's value for money. We can't just give him the contract because we get a legal letter from somebody saying, I should have got that.


Even though I have no track record in this regard. I can understand it because how does a small man get a break? But, you know, it's got there's got to be a better way.


Well, there has to be mean. Also, I think we're talking in the context of a housing crisis right now. So what would have, you know, be normal maybe a couple of number of years ago should not be normal now? I think as part of the contribution made there, John O'Connor of the housing agency actually mentioned that maybe, you know, we look at excuse me, maybe that we look at pre-approved lists or panels of contractors and see whether in some instances there is actually a challenge.


I think many of the instances around this are following the correct procedure. And that's right. But not having a pre-approved list for fear that that would be challenged as opposed to actually have being challenged.


So we're going to have to look in that space because one thing that perhaps the scope minister for establishing the criteria by which you get on the list and other words, you've done a private scheme.


It came in as a price quality and so on. That was good. OK, you can join our list and you know, you'll get your return when the opportunity arises, that that that could be a.


Well, you say that the commerce of that as well was something that was mentioned by Mark and others yesterday. So we do, unfortunately, have had situations in the past whereby contractors who haven't carried out a good job on a previous scheme have then been approved for another scheme because we've been following it by the letter of the law. I would expect common sense to prevail in instances like that as well, to be part of the Decision-Making process. That's not something I believe can be sustained or start over, that we're awarding contracts to people who don't do the job properly and don't do it well.


And I have seen examples of that myself. So that is an area that needs to be tightened up. The symposium yesterday was very useful because a lot of this information came up. And I think right now that when we're in the middle of ensuring that we're tackling the housing crisis by measures that I've just discussed with you earlier, that the land development agency in the Affordable Housing Bill, we have to look at the other blockages. And I am looking at that around.


You know what we can do better on procurement, what we can do better on undesigned, like we do have standard designs now. And we're going to be launching very shortly a suite of designs for four state bills that are like off off the shelf that will speed up that whole design process from exterior to interior. And then you're knowing that you're going to get the quality that you need. Like I was in the Liberty last week and near St. Theresa's Gardens and the quality of the build of the new homes there is absolutely exceptional.


So we're getting our quality right. We've got to speed up our delivery, though. We are making inroads into our social housing list. But we then need to balance that by ensuring that those who want to own and buy homes and rent long term at affordable rates also get that opportunity. And that's why I'm really determined to do that.


All right, Minister, the next time we have you on, we'll talk about maybe rent caps for a living to stop that particular blaze and the business of apartments being built to rent only and not enough to buy, but that's perhaps for another day. And Minister for Housing Daryn. Brian, thank you very much for joining us on the programme today.


Now. News, talk, breakfast in association with our seamless connexions with Ireland's number one broadband provider.