‘We have empirical evidence to show that this scheme does not work’ – Opposition call on Housing Minister to scrap ‘reckless’ proposed shared equity scheme
The Opposition have called on the Housing Minister to scrap the “reckless” proposed shared equity scheme in the Government’s plan for cheap homes.
This comes as the Irish Independent revealed that the Central Bank has doubts about the scheme in the Affordable Housing Bill, proposed by Minister for Housing Darragh O’Brien.
Sinn Féin housing spokesperson Eoin Ó Broin has called for the shared equity scheme to be scrapped completely from the Bill while it undergoes pre-legislative scrutiny in the Oireachtas Housing Committee.
He said that he wasn’t surprised “at all” to hear that the Central Bank has serious concerns over the scheme.
“We have empirical evidence to show that this scheme does not work and could be very dangerous,” he said.
“We know from the Celtic Tiger if you increase mortgage credit into the market it increases house prices. Fianna Fáil, when they were last in Government, very regularly ignored the advice of experts and regulators.
“Darragh O’Brien is behaving exactly like his predecessors did when they were in Government.”
He said that the scheme will have “negative consequences”.
“This is not an academic matter. This is about the single biggest purchase of a single person or a couple, buying their home,” he continued.
“For the Government to act in such a reckless way, not only potentially pushing up house prices but straddling some working people with an unsustainable level of debt, it’s just reckless in the extreme.”
Labour’s housing spokesperson Senator Rebecca Moynihan also called for the Housing Minister to either reform the scheme or “scrap it completely”.
She said that the Government had a “Trumpian” response to the Economic and Social Research Institute (ESRI) warning on Tuesday that it may hike house prices.
“The reaction of the Government this week, by this Trumpian, coordinated attack on an independent institution showed a lack of willingness to engage on the real detail of the scheme and it’s very, very concerning.”
Ms Moynihan said that the Minister is ignoring “all independent advice” and said that “shoving money to developers” is not going to solve the housing crisis.
Meanwhile, Social Democrat housing spokesperson Cian O’Callaghan said that if the shared equity scheme is scrapped from the Affordable Housing Bill, it should not be revisited.
“€75m has been allocated for that scheme but it should be transferred directly into building cost rental homes,” he told Independent.ie.
He also raised concerns that the Central Bank is the second body to raise concerns about this scheme, after the ESRI warned that it may hike house prices.
“We now have multiple credible sources raising very strong concerns that the scheme could push up house prices. It’s very worrying that the Minister is not listening to these concerns,” he said.
Speaking on RTÉ’s Drivetime, Minister of State for Local Government and Planning Peter Burke said that the shared equity scheme is “only one piece in all our armour” to try and increase affordable and social homes in the Affordable Housing Bill.
He said that if the shared equity scheme is looked at “in isolation” he can see how there may be “concerns”.
“If you look at this proposal in isolation, yes you can see how people would be concerned about the demand side, but there are 23 heads of the Bill and 20 out of the 23 deal with other measures to increase supply outside of that scheme,” he said.
He said that the Government is engaging with the Central Bank and the Department of Public Expenditure and Reform, who has also raised concerns about house price hikes in relation to the scheme.
“They’re engaging to ensure that this proposal will be passed, it will be passed with the approval from the Central Bank and the Department of public Expenditure and Reform,” Mr Burke added.