The Housing Minister has claimed that new legislation on affordable housing will help to “bridge the affordability gap” for first-time homebuyers, however, opposition TDs in Cork have expressed concern over the bill and say it could push house prices up.
The Cabinet unanimously approved the Affordable Housing Bill 2021 for publication at a meeting on Tuesday.
More than 6,000 homes will be built over the next four years under the scheme, Minister Darragh O’Brien said.
Key elements of the bill include: the first scheme of direct state built affordable homes in over a decade, the first-ever national scheme to provide for the delivery of Cost Rental housing, a new Affordable Purchase Shared Equity scheme for homes in private developments, and provision for the extension of Part V to a set 20% in every Local Authority area with a 10% minimum requirement for social homes and a further 10% requirement for affordable homes where required.
Proposals under the shared equity scheme would see affordable housing price caps introduced at varying levels, based on location with reports that housing could be capped at €400,000 in Cork city and €350,000 in the county.
The Minister for Housing Darragh O'Brien said the Bill will ‘empower’ local authorities so middle-income earners can be supported to own their own home.
“This Bill is delivering on the Programme for Government commitment to put affordability at the heart of the housing system and to prioritise the increased supply of affordable homes. We will be empowering local authorities to deliver affordable homes for purchase on their own lands, meaning that middle-income earners can be supported to own their own home,” he said.
Cork North Central Fine Gael TD Colm Burke said the Bill was good news for Cork people.
“Everything possible must be done to assist people who are looking for housing. Presently in Cork, there are more than 1,400 local authority houses that have either been completed in the last six months or will be completed in the next 12 months. There is a whole cohort of people who won’t be able to buy a house on their own and they require assistance. Supports have to be available because it is hugely beneficial for all. The important thing is we don’t inflate prices.”
He added: “The Bill is good news for Cork people. It is important people can access suitable housing. It is good news for young people who want to set up a home, have a bit of security, and raise a family. They can focus on their daily lives and their jobs,” he added.
Cork North Central Fianna Fáil TD Padraig O’Sullivan said this Bill was a ‘step’ in the right direction.
“It is welcome. The scheme will make housing affordable for that middle bracket who didn’t qualify for social housing but also found it difficult to get a mortgage approved by a bank or lenders. It gives people hope. This Government is hinging its credibility on the delivery of housing for people and this is the first step,” he said.
Sinn Féin TD for Cork North Central, Thomas Gould, said however that the Bill will ‘rip hope away’ from many Cork people.
“The Minister is trying to bulldoze ahead with a plan that will see developers and investment funds clean up, while ordinary people continue to be locked out of the housing market. The Bill was the last shred of hope for many of my constituents in owning their own home” he said.
He added: “The very real concern is that the limit of €400,000 (for Cork City) will become the target and then the norm."
These concerns were echoed by a number of other opposition TDs however, Minister O’Brien had defended this element of the Bill saying “they’re caps, they’re not targets.”
Cork South-Central Sinn Féin TD Donnchadh Ó Laoghaire said he doesn’t have ‘much faith’ in the proposals.
“We have serious concerns about these proposals. Capping a house at €400,000 is unrealistic in terms of what is actually affordable for people. €300,000 is beyond the reach of many people not to mind €400,000.
“I want to see affordable housing, but I don’t have much faith in the Government’s proposals. We will work with them and try to amend them if possible to try and deliver affordable housing,” he added.