Housing Minister hits back at critics

With the housing crisis on the public’s mind, The Liberty heard from Minister Darragh O’Brien (Fianna Fáil) about his programme to help people buy homes.

The Minister for Housing, Development and Local Government, Darragh O’Brien, told The Liberty that people who are worrying about buying a home “are my absolute priority”.  

“I believe in home ownership as a just and honest aspiration for people to have, and it is an aspiration that should be supported by the Government,” he said.  

Research from the Economic and Social Research Institute (ESRI) shows that four in 10 renters wish to buy property but lack funds for a deposit and sufficient income for a large enough loan. 

“The Central Bank were talking about some of the risks with shared equity in general if you don’t focus it at the right people.”

Darragh O’Brien, Minister for Housing, Development and Local Government

Minister O’Brien defended his Affordable Housing Bill against a series of criticisms.  

In late March, The Irish Times reported that doubts were being raised by the Central Bank about part of the bill – the ‘shared equity’ scheme, which would allow the State to take on a 30 percent stake in the homes of eligible first-time buyers. 

The Central Bank was concerned that the Government’s new shared equity loan scheme for struggling homebuyers would boost demand but not supply and could raise house prices, the newspaper reported. 

This followed similar comments from the ESRI in February. It said that increasing purchasing power while supply is constrained would raise house prices.

“This static approach does not take into consideration the fact that the housing supply is so constrained in Ireland and increasing purchasing power for households (through a loosening of credit constraints by a shared equity scheme) will very likely lead to higher house prices,” the ESRI said. 

“The Central Bank has been working with us right through,” Minister O’Brien told The Liberty. 

“They were talking about some of the risks with shared equity in general if you don’t focus it at the right people,” he added.  

Similarly, he insisted the ESRI were not critics of the scheme but “pretty much said the same thing – talking about what could happen if you didn’t have parameters around the scheme to make sure it targeted the right people.”

“What’s affordable in Dublin is different from what’s affordable in Kerry, or Mayo or Cork.”

Darragh O’Brien, Minister for Housing, Development and Local Government

The Minister said a similar shared equity scheme was in use in England, where a number of people who could have bought a house without the scheme had used the scheme to do so. 

This would not be “permitted in our scheme”, he said. 

The scheme had been worked on and improved by his department, he said. Regional price caps were to be included in the shared equity scheme.  

“What’s affordable in Dublin is different from what’s affordable in Kerry, or Mayo or Cork,” he said. 

Political opponents of the scheme had “criticised the scheme before even seeing it”, he added. 

“My view is unequivocal, that I believe in home ownership and I think that people should have the right to own their own homes should they wish to, at an affordable rate. And Sinn Fein and the Left don’t believe that – they would rather have a much-expanded public housing scheme.”

The Minister said he is optimistic that the latest changes to the bill will help it pass the Oireachtas by summer. 

“We will have people in affordable rental homes and in affordable purchased homes this year,” he said. 

With or without legislation, there are significant challenges ahead for the construction sector to meet the demand for housing.  

Minister O’Brien acknowledged that the shutdown, until recently, of all but the most essential construction work would cast doubt on his Christmas forecast of 24,750 homes both private and public built by the end of 2021 – pledged in an interview with The Irish Sun.  

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Photo courtesy of Minister O’Brien in Wicklow construction site early last year

“We estimate that we will need 33,000 homes a year, both public and private to meet demand,” he said. “Last year we hit 21,000. It will take us a few years to get to the 33,000 needed but that is where we need to be getting to and delivering every year. 

“Every week (of construction work) that is lost, it’s 800 homes not being built.

“The year is not lost,” he said. “People have to work harder and longer.” 

Covid mitigation measures for construction were continually being looked at by the department, the Minister said. 

Reopening of construction “was not a given – and we had to push very hard to make sure we could open the sector back up on a phased basis.”  

The next step, he said, was to encourage more housing to get built, faster. “Now that they are open, some of the measures in relation to legislation we are bringing forward are very much supply-side measures which would help the sector increase its output,” he said. 

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