Measures to tackle so-called “cuckoo funds” buying up housing developments from first-time-buyers will be discussed at a second Cabinet meeting on Tuesday evening.
Minsters will consider a range of measures aimed at increasing the number of properties available to the public, and limiting the amount that can be snapped up by investment funds.
The plans were pushed off the agenda on Tuesday morning at a Cabinet meeting dominated by the Government’s response to the HSE cyberattack, with a second meeting now scheduled for around 6pm.
There are two elements to the plans Housing Minister Darragh O’Brien will bring before his Cabinet colleagues.
At least 50% of homes in new housing estates will be ringfenced for first-time buyers.
In addition, a circular could be sent to local authorities preventing the sale of homes to cuckoo funds based on the density of developments.
It would mean funds would be unable to buy homes in suburban developments, where the number of homes per hectare is below a specified amount.
The measure would not prevent investment funds from bulk-buying apartment blocks, with Government arguing their investment is needed in this area. A Dail vote to adopt the measures could be held as early as Tuesday evening or Wednesday.
However, members of the Opposition were critical of the proposals.
Labour party Senator and housing spokesperson Rebecca Moynihan said the Government has to “go much further”.
She said: “It seems to be that it is only going to be targeted at first-time buyers.
“It’s not going to be targeted at people who may be trading up or may be trading down, and who want to be able to buy.
“But the main concern is, it seems to be only apartments. So there’s a different approach to the suburbs than it is to apartments.”
Rents on new builds also need to be capped as an immediate measure to tackle the activity of cuckoo funds, says @OCallaghanCian.— Social Democrats (@SocDems) May 18, 2021
Average rents in Kildare are €1,450pm - but the rent being charged by cuckoo funds, for a two-bed in new developments, is nearly €2,000pm. pic.twitter.com/Di5Kxw6Q4z
She added: “If we’re only doing this out in the suburbs, it’s a very limited intervention that’s there.
“The minister needs to go much further than what we’re seeing today. The Cabinet needs to go much further.”
Social Democrats housing spokesman Cian O’Callaghan TD called for the introduction of rent controls.
He said creating a level playing field would require “setting a rent level for new builds, much lower than the levels at the moment.”
“Ultimately you have to get the return for investors down if want to create a level playing field for first-time buyers and other purchasers,” he said.
He said there was nothing wrong with private investment into building apartments.
But he added: “The problem is them buying them out in full, and not giving people an option in terms of tenure. These proposals will do nothing to change that at all.”
People Before Profit TD Richard Boyd Barrett said he does not believe the Government has “a serious policy to address this issue”.
He said: “Simply limiting the number of houses that a cuckoo fund can buy or ring-fencing a small amount for first-time buyers is a completely inadequate response to the problems we now face.
“Cuckoo funds and the vultures need to be completely excluded from the housing sector.
“We need to absolutely ensure those same investment vehicles, those vultures and cuckoos are not allowed to get hold of the public land back, having wrecked the private housing sector.
“The last thing we need to do is allow them near the public land bank, which the Land Development Agency bill is going to allow them to do, and that will be an absolute disaster.”