Proving just how contentious the housing debate can be, four little words uttered by Micheál Martin were enough to cause another row in the Dáil chamber this week.
After accusing the Taoiseach of “singing from the same hymn sheet as the lobby groups for big institutional property funds”, Sinn Féin leader Mary Lou McDonald then accused the Government of having “no new ideas” and “no vision” on housing.
After hearing Mr Martin and his ministers were preparing to make “unpopular decisions”, she asked him to reveal what these plans might be.
“Is oth liom a rá go bhfuil an Teachta Dála ag insint bréag arís,” Mr Martin said, which roughly translates as: “I am sorry to say that the deputy is telling a lie again”. However, there is debate about whether Mr Martin meant “lies” or “fairytales”.
Dáil rules dictate a member cannot accuse another member of lying or telling a lie. Ceann Comhairle Verona Murphy has written to Mr Martin requesting he “review his remarks”, kicking the row into another week.
The head-to-head highlighted two things: that Sinn Féin TDs intend to spend the next number of years hitting the Government’s rawest nerve on housing and that the looming “unpopular decisions” will further bolster what already looks like a more unified Opposition. Housing will remain the biggest challenge of the coming years.
Ministers are expected to gather on Monday for a Cabinet committee meeting on housing. The meeting will happen at a time when the Government is under pressure to reset housing policy radically after it emerged only 30,030 homes were built last year.
This fell quite short of the promised 40,000 homes, which Government figures were promising late last year and in the lead up to the general election.
One Government source said there was an awareness that big moves were now needed to get to grips with what is becoming a permacrisis.
“We know we have to move heaven and earth,” they said. With that in mind, ministers will, on Monday, discuss the establishment of a new “clearing office”. This “strategic housing and infrastructure” office will aim to clear blockages in the system and co-ordinate homebuilding and the servicing of zoned lands. The office will bring utility providers together to address issues such as a lack of access to wastewater treatment facilities, which could hamper the development of housing estates.
It is like Government, or Fianna Fáil in particular, is a mere stepping stone away from heralding the return of the Galway tent
— Labour TD Conor Sheehan
It is understood that Tánaiste Simon Harris, the Fine Gael leader, is particularly keen to see this office set up immediately. Ministers will also discuss the National Planning Framework, a key document that underpins policy in a range of areas, notably state investment.
Earlier this week, The Irish Times also reported that proposals for tax incentives to stimulate private sector investment in housing are also expected to be discussed. Some form of tax incentive scheme – offering tax breaks for investment in a bid to ramp up homebuilding – would be among the ideas to be tabled.
A number of options are understood to be under consideration, but the finer details are still being kept under wraps. News of the potential tax incentives caused some discomfort for Government this week.
Labour TD Ciaran Ahern described the plans as “Fianna Fáil’s Bertie-era tax cuts for developers” with fellow TD Conor Sheehan saying the Government had “resorted to the old reliable of ill-thought-out tax cuts for property developers. It is like, ‘Welcome back Fianna Fáil’. It is like Government, or Fianna Fáil in particular, is a mere stepping stone away from heralding the return of the Galway tent. We know where that got us before and, frankly, people my age are still paying the price”.
There was a bigger concern within Government about the proposals, with officials becoming anxious that promises of tax cuts could create further uncertainty in the housing market, and that builders could hold off for a few months if there were a promise of goodies on the table in the next budget, which is eight months away. Some officials in the Department of Finance are also opposed to the idea of tax cuts on principle, fearing a return to policies that landed the country in so much trouble less than two decades ago.
And yet despite all this, and despite the potential political landmines, there is a growing feeling across Government that something big needs to be done on the tax side. “It is the last big lever that we have yet to pull. In the past, we had schemes that were terribly designed and resulted in houses being built in the wrong places,” a senior source said. They said future tax incentives would be more prescriptive and designed in such a way that the right kind of housing would be built in the right place.
Speaking in the Dáil this week, the Taoiseach also said he believed a greater balance is needed between state and private sector investment. He has pointed towards figures showing that €20 billion would be needed to get to a situation where 50,000 to 60,000 homes were built every year.
The State, meanwhile, has earmarked €6 billion for the housing budget. Financial measures to incentivise the private sector may be seen as politically unpalatable, but their consideration reveals the extent of the government’s frustration about action on that side, but also generally that enough is not being done.
The final CSO figures for the number of houses built last year has put a further frightener on the new Coalition, with Opposition parties accusing the Government of misleading the public with their promises that up to 40,000 homes would materialise.
A senior source said that particular belief, which was repeated inside and outside of the Dáil, was a “genuine” one founded upon predicted trends for the final eight weeks of last year. Ministers expected “record completions” in the last quarter of the year, but, simply put, those predictions were wrong. With last year’s target missed, a further shadow is cast across the Programme for Government promise to build 300,000 homes by the end of 2030.
There is further pressure on the rental side, too, after Mr Martin said the Government would explore an alternative to the existing rent pressure zones between now and the end of the year when they are due to expire. “We have time to see if we can develop an alternative system which protects renters, but also enables people to have a clear, stable environment in which to invest,” Mr Martin told the This Week programme on RTÉ Radio 1 last Sunday.
Social Democrats TD Rory Hearne described this as a “Valentine’s card to the investor funds, with a note inside that reads, ‘We’re getting rid of the rent caps for you. Let it rip with the rents'.”
One alternative being given serious consideration is a new “reference rent” system, something which was proposed by the Housing Commission last year. This would involve a benchmark rent being set in different areas of the country and would mean that rent would not rise more than a certain percentage point above that set reference rent.
Not everyone in Government is fully enthused by this possibility, believing that the system could be overly complicated and that the removal of the rent pressure zones could leave renters facing some very difficult circumstances. A review of the existing rental measures is under way.
A more fundamental question facing Government now is whether to go back to the drawing board on housing, with a radical shake-up of policies, or whether to continue with existing schemes.
Government sources confirmed there is no intention to remove the existing schemes that form the central plank of the housing plan, such as First Homes Scheme and Help to Buy, but instead the plan may be to make building far more attractive for the private sector.
Those decisions, whenever they come, will not be without controversy.
One senior Government source acknowledges this but says: “young people just want to see the houses built. They want us to get on with it. There are ways to do this without going back to what was seen in the past.”
