Government 'considering possibility' of savings scheme to fund housing, says minister
A State-led savings scheme to help finance housebuilding across the country is being considered by Government, the housing minister has confirmed.
In a significant change of policy, James Browne is examining the possible introduction of a scheme where the public could invest savings, with funds going towards the construction of homes.
'It is something we're looking at. We have to be very careful what it looks like, how it's funded,' Mr Browne said.
In an interview with the Irish Examiner, Mr Browne confirmed that alongside a possible savings scheme, the Government will press ahead with changes to rent pressure zones, will expand renters' rights, and is looking to extend the remit of the Land Development Agency.
The Housing Commission has called on the Government to consider establishing a private savings fund. The Social Democrats recently suggested any scheme should have 'favourable interest rates' and no deposit interest retention tax applied, with funds raised to be channelled to agencies like Home Building Finance Ireland.
Taoiseach Micheál Martin previously poured cold water on this idea, claiming the Social Democrat's plan might deliver housing funding, but would not help deliver properties in the short-term.
Mr Browne described the Social Democrat's proposal as an special savings incentive-style account, which he believes would have been 'criticised by the same party' had Government brought it forward.
While he has been cautious about the scheme, he confirmed work is under way to see if it would work.
However, he said it would not provide the level of finance to meet the amount of private monies needed for housing.
It might deliver a certain amount of it, it might be welcome. It will not come anywhere near the level of finance that we need.
'We need that international finance and that is a challenge.'
He said the model being examined at present is the French 'Livre A' and how it can be used, but it would take a 'lot of preparation".
On rent pressure zones, Mr Browne said changes would be made to the system given they are 'significantly inhibiting' the delivery of apartments in Dublin.
He said the 2% rent pressure zone cap is providing 'uncertainty' to international investors.
'They [international investors] won't even look at Ireland as long as that uncertainty is there, because they could find themselves making a loss,' Mr Browne said.
He said the Government is looking at ways of ensuring developers come in and deliver apartments and can make a yield on their investment, but not make 'any kind of excessive profit'.
Mr Browne said the Land Development Agency should continue with its focus on social and affordable delivery, but there is room for a 'private element' as well.
'It all has to be about unlocking homes for people where they need them,' he said.
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