Minister ‘is taking these figures on housing out of thin air’
HOUSING Minister Darragh O’Brien has pledged to end the ‘rental rip-off trap’ for young people with a proposal for more affordable housing.
However, he has faced opposition from Sinn Féin’s Eoin Ó Broin, who accused Mr O’Brien of ‘pulling figures out of thin air’ and asked for details on the scheme to be published.
The Housing Minister promised to build affordable homes that will cost between €160,000 and €250,000, and said he wants to put affordability back into the market for people in their 20s and 30s who are struggling to get a mortgage.
Mr O’Brien told Newstalk Breakfast: ‘We all know there’s a whole lot of people who are stuck in a rip-off rental trap, or living with their folks into their late 20s and 30s, and saving as much as they can to be able to get that mortgage which continues to elude them.
‘There will be a major focus on building affordable homes, firstly on State-owned land where the State will subsume the cost of that land.’
Mr O’Brien added that the affordable homes will be sold on a ‘shared equity’ basis where the State will put some money forward for each prospective homeowner. ‘House prices will be in the region of €160,000-€180,000 and €230,000- €250,000 on a shared equity basis,’ he said.
‘It’s been done before very successfully in Ireland – even in the 2000s, about 16,000 families got their homes through affordable purchase.
‘That will be one mode of it. It’s to give hope to that generation who feel like, “When am I ever going to be able to get a home?”, who may be above the social housing limits, but are not earning enough to actually get a mortgage,’ added Mr O’Brien.
Sinn Féin’s housing spokesman Eoin Ó Broin said the State’s ‘equity share’ in the affordable housing scheme made him uneasy. He questioned whether the State’s portion of the cost is in addition to prices Mr O’Brien quoted.
Mr Ó Broin told the Irish Daily Mail: ‘He has yet to explain in any detail how he intends to do this, and if the shared equity portion is included in that price or in addition to it. This is a really crucial distinction.
‘For example, in O’Devaney Gardens, which Fianna Fáil councillors supported, people will buy homes at €310,000. But the State will also have an equity share of another €50,000 which will have to be paid down as well by the homebuyer. So they’re actually purchasing a house at a price of €360,000. ‘Darragh O’Brien needs to set out clearly how he thinks it’s possible to deliver homes at less than €250,000.’ Mr Ó Broin urged the new Housing Minister to publish the details of the scheme and prove that he is not pulling figures out of ‘thin air’. ‘If the equity stake is above €250,000, then the homes aren’t affordable because the house owner will have to pay back that further portion as well. ‘Until he publishes the scheme, I don’t know whether Darragh
‘Publish the details of the scheme!’
O’Brien is just pulling figures out of thin air or has some concrete proposition,’ he added.
Professor of Architecture at UCD Orla Hegarty questioned the ‘scalability’ of the proposed scheme, telling the Irish Daily Mail: ‘A shared ownership scheme that’s linked to high market prices would require large subsidies, so it’s unlikely to be scalable for the numbers of people who are currently priced out.
‘In a downturn, market prices fall and other housing becomes more affordable, so there’s a risk of no buyers at these prices, as happened in the last recession.’