The government should not have to rely on legislation, drafted by the Social Democrats, to fix our housing problems. That it does, tells its own story.
The Social Democrats are bringing forward legislation to help end the practice of the State entering long-term leasing deals with developers and investment funds – instead of purchasing social or affordable homes, according to Housing Spokesperson Cian O’Callaghan.
“Last week, the carnage being caused by cuckoo funds was put into stark relief when one fund block-purchased 135 family homes in Kildare.
“Today, in the Dáil, Taoiseach Micheál Martin said what had happened in Maynooth was “unacceptable”. Then why hasn’t he, or his government, done anything to stop it? This is a practice that has been going on for years.
“Since 2018, investment funds have spent €4 billion on residential property in Ireland. Ordinary buyers, who have to scrimp and save for years for a deposit, cannot compete with these multi-billion-euro funds.
“When funds buy these homes, they turn them into rental properties. Often, they are leased to the State, for social housing, at exorbitant rents. The State pays the mortgage in these deals, while the cuckoo funds keep the homes.
“Even a measure that was introduced to ensure local authorities could add to their permanent housing stock – part V, whereby 10pc of new developments are purchased by local authorities – has been quietly amended to facilitate long-term leasing deals.
“Instead of councils buying these properties, they are increasingly entering into long-term leasing deals, in which they pay eye-watering rents for up to 30 years – before handing the keys back to the developer or the investment fund.
“I am introducing a Bill to the Dáil, which will be debated tomorrow (Thursday, May 6), to end this practice. The Taoiseach has said the government will not oppose it and will work with me to see it enacted. I welcome this commitment, I just regret it has taken so long for the government to act.
“My Bill will help prevent the State from entering into long-term leasing deals that are causing untold damage, both economically and societally. But, there is more to do.
“These funds are omnipresent in the housing market by design, not accident. They have come because Irish governments invited them, with preferential tax schemes that allow them to supercharge their profits.
“The government should not have to rely on legislation, drafted by the Social Democrats, to fix these problems. That it does, tells its own story.
“I am pleased the government will work with the Social Democrats to pass my Bill. Now, I would like to see their Bill to scrap tax loopholes for investment funds.
5 May, 2021.