THE GOVERNMENT WILL support legislation being brought forward by the Social Democrats to end the practice of long-term home leasing deals with cuckoo funds, rather than buying social or affordable homes.
The legislation, drafted by Social Democrats Housing spokesperson Cian O’Callaghan, will be debated today in the Dáil, with Taoiseach Micheál Martin saying that the government will not oppose the bill.
It comes after Labour’s Housing spokesperson Rebecca Moynihan said yesterday that if Housing Minister Darragh O’Brien doesn’t reintroduce his 2019 bill to block cuckoo funds, that Labour would reintroduce it word-for-word.
“Last week, the carnage being caused by cuckoo funds was put into stark relief when one fund block-purchased 135 family homes in Kildare,” said O’Callaghan.
“Since 2018, investment funds have spent €4 billion on residential property in Ireland. Ordinary buyers, who have to scrimp and save for years for a deposit, cannot compete with these multi-billion-euro funds.
When funds buy these homes, they turn them into rental properties. Often, they are leased to the State, for social housing, at exorbitant rents. The State pays the mortgage in these deals, while the cuckoo funds keep the homes.
O’Callaghan says that while a measure was taken to allow councils to continually add to their housing stocks by being able to buy 10% of new housing developments, this was quietly amended to facilitate more long-term leasing deals with investment funds.
According to O’Callaghan, rather than buying the properties, councils are entering into long-term leasing deals with “eye-watering rents” for up to 30 years. At the end of this period, they would have to return the properties to the investment funds.
While O’Callaghan has welcomed the government’s support of his bill, he regrets that the government has taken so long to get to this point.
It comes as Minister O’Brien received cabinet approval for his Affordable Housing Bill on Tuesday.
Several aspects of the bill have received criticism, including its shared equity scheme for first-time buyers.
Caps for affordable housing will be introduced, with prices as high as €450,000 in areas like Dublin City and Dún Laoighaire, with the lowest price caps set at €225,000 for Cavan, Donegal, Leitrim, Longford, Mayo, Monaghan, Sligo and Tipperary.
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