New legislation that would force developers to set aside a third of new development land for homes for first-time buyers is to be introduced in the Dáil next month.
The new Bill from Fianna Fáil would operate on a similar basis to Part V provisions which stipulate that 10 per cent of all new homes are set aside for social and affordable housing.
The proposal from housing spokesman Darragh O’Brien is also expected to form part of Fianna Fáil’s general election manifesto.
Fianna Fáil has claimed so-called “cuckoo funds” – large investments funds that buy whole estates or developments – have an unfair advantage over those who want to buy their own homes.
Mr O’Brien will introduce his Planning and Development (Amendment) (First Time Buyers) Bill in the Dáil in September and says it is designed to “level the playing field for first time buyers”.
Mr O’Brien, a Dublin Fingal TD, said it should also apply to the purchase of developments by the State and approved housing bodies (AHBs).
‘Bulk buying’
While it aims to prevent “bulk buying” of developments, exemptions from the 30 per cent rule will be allowed for apartment blocks and housing estates that will be built for rental purposes “which would otherwise not be built”.
Mr O’Brien said this could apply in city centres and for apartment blocks built, for example, beside office developments.
Councils will be required to review their individual housing strategies and set out how many rental units will be needed over a five-year period.
“This will allow developments such as Clancy Quay (a Dublin development from investor Kennedy Wilson) to proceed if they are in line with the council’s housing strategy,” Mr O’Brien said. “However, it will prevent developments that are not earmarked as just build to rent from being bought up by institutional investors when they go to market.”
Fianna Fáil says its Bill will amend Part V of the Planning and Development Act 2000.
In recent months, Tánaiste Simon Coveney has said “having large funds competing with individuals is something we need to move away from” primarily through increased supply.
Government sources have previously argued about 40 per cent of the value of the institutional investment last year was for planned developments rather than houses now on the market.
“Much of this new supply would never be delivered were it not for such deals,” one source said.
It was also argued that such properties would not be available to first-time buyers “in the first place”, but are an addition to supply for such buyers.
“A blend within schemes is good and while build to rent is not the panacea to the housing crisis, it certainly is part of the solution to satisfy the demand for rental stock and ease pressures.”
‘Rapidly expanding’
Mr O’Brien said real estate investment trusts (Reits) and Irish real estate funds (Irefs), while currently a small part of the housing system, are “rapidly expanding”.
“Reits currently own 3,005 apartments worth some €1 billion, primarily concentrated in Dublin.”
A failure to act, he said, “means waiting for the horse to bolt before closing the stable door”.
“This Fine Gael Government has created a bonanza for institutional investors and we want to redress that balance. The best way to secure housing is that people have an opportunity to secure their homes.”