‘Risks return to failed housing policies of the Celtic Tiger era’ – Housing Minister urged to scrap shared equity scheme in housing plan

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Dublin City Council Fine Gael councillors have written to the Housing Minister urging him to scrap the shared equity scheme in the Government’s affordable housing plan.

he nine Councillors sent the letter to Darragh O’Brien yesterday, calling for the €75m allocated to the shared equity scheme in the Affordable Housing Bill to be diverted to “direct delivery” of affordable homes.

They warn that as a “demand-side measure”, the shared equity scheme risks a “return to failed housing policies of the Celtic Tiger era”.

The councillors also wrote that reducing VAT on new homes could be a “much more effective use” of taxpayer funds than the shared equity scheme.

“We need to explore ways to keep construction costs down and reducing VAT on new residential homes could also be a measure that would be a much more effective use of taxpayers’ money than your proposed policy,” the letter reads.

The letter is signed by councillors Ray McAdam, Danny Byrne, Anne Feeney, Declan Flanagan, Terence Flanagan, James Geoghegan, Paddy McCartan, Naoise Ó Muirí and Colm O’Rourke.

Cllr McAdam also works as a parliamentary assistant to Finance Minister Paschal Donohoe.

Cllr Geoghegan said that as there have been warnings from the ESRI, the Central Bank and the Department of Public Expenditure and Reform that the scheme could hike house prices, the councillors are concerned that those fears are “not being listened to”.

“The minister’s policy seems a little bit like back to the future, where we’re making things up on the fly and then ignoring concerns that have been raised by external bodies and just ploughing onwards as if their opinions don’t mean anything,” he told Independent.ie.

“We’ve seen what’s happened in the past where you pursue policies and ignore the external warning signals, that’s exactly what happened in the Celtic Tiger era.”

The letter also gives an example of how the €75m could be repurposed, as there are currently 4,000 homes within Dublin City Council which have been earmarked for affordable purchase or rental.

The councillors state if the site services fund for each of these homes is increased from €50,000 to €100,000 per unit, it would mean a three-bedroom family home would be available for the price of €250,000, or to rent at just above €1,000 a month.

“We want to see that the money is spent in the best way possible and we do think that if the minister increased a subsidy for affordable homes that would actually deliver more affordable homes in our city.

“That’s the crux of it. It’s not about being in opposition or being in Government, it’s about considering what’s taking place, who is making these criticisms and question whether the money can be better spent elsewhere.”

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Source: Irish News