Cian O'Callaghan TD

Affordability must be linked to income and ability to pay

The absence of a definition of affordability is a major gap in the Affordable Housing Bill, according to Social Democrats Housing Spokesperson Cian O’Callaghan.

“It is remarkable that the Government’s Affordable Housing Bill has come to the Dáil this week without even a basic definition of what an affordable home is.

“Without an agreed definition of what an affordable home is, the Minister’s work is almost meaningless. What does he mean when he talks about affordable housing? Does he mean a home that is truly affordable for people on average incomes? Or does he mean a small discount on unaffordable market prices?

“Internationally, an affordable home is one that costs 30pc or less of take-home income. To date, the only definition of affordable housing offered by the Government has been one based on a discount off market prices. This is a fundamentally flawed approach. Affordability should not be measured against prices in a broken and dysfunctional housing market. Instead, affordability must be linked to income and ability to pay.

“It is time for the Minister to set out clearly what he means when he talks about affordable housing. How much should a decent home cost someone on an average income? People have had enough of the bluff and bluster.

“Judging by the contents of the Affordable Housing Bill, it seems the Government is more interested in providing a subsidy to developers than making homes genuinely affordable.

“Instead of reducing costs to make housing more affordable, the cornerstone of the Government’s affordability plans, the Shared Equity Scheme, focuses on increasing household debt. This is the wrong approach.

“It was reported earlier this year that an apartment that cost up to €500,000 would be classed as affordable by the Minister. The Government is living on another planet if he thinks €450,000 for a home in Dublin – and €400,000 in Cork and Galway – is affordable. It simply is not.

“There is another way. Using the Ó Cualann model, the Government could build homes on state-owned land and sell or rent these at cost. These would be truly affordable homes that would cost about €250,000 to buy for those on average incomes. It is beyond time the Minister signed up to this version of affordable housing.”

6 July, 2021


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