Ireland: Joe Higgins denounces €53m haul on land speculation

Joe Higgins, member of the Irish Parliament for the Socialist Party (cwi Ireland) denounces €53 million haul on land speculation. Transcript of the debate at Leader’s Question Time.

Dáil Éireann (Irish Parliament), Leaders’ Questions, 14th December 2004

Joe Higgins (Socialist Party):

What is the Taoiseach’s view of the purchase of 11 acres of building land in south Dublin for €32 million and its resale for €85 million a few weeks ago, a breathtaking speculative profit of €53 million after just four years? As a result of this speculation by a cabal of wealthy legal business and medical personnel, the site price for each one of the 478 apartments will average €200,000 before a single brick is laid on top of a brick. This means that young working people who are first-time buyers will spend 20 to 30 years under huge pressure to make draconian repayments on massive loans so that a few pillars of the establishment can reap obscene wealth and swan around in Barbados, buy villas in the Mediterranean or do whatever the fruits of their greed lead them to do. Does the Taoiseach find it perverse that pillars of the establishment who indulge in this orgy of speculation, which intensifies the misery of those suffering from the housing crisis, should be lionised in sections of the media as canny businessmen and the like? Would it not be more accurate to describe them as anti-social parasites who prey on the community?

Does the Taoiseach think it appropriate that a person up to his neck in such speculation should be appointed by Ministers to be chairman of the Irish Aviation Authority and the National Pensions Reserve Fund, which are two State bodies? Is this not a fundamental conflict of interest between the community and private greed? It may well put the management buy-out controversy at Aer Lingus in the shade. That is just one example in Dublin. Speaking to Independent Deputies in Clare, Mayo, Cavan-Monaghan, Galway and Tipperary, exactly the same thing is happening elsewhere. Is this not a glaring and shameful failure by the Taoiseach to have stood by for seven and a half years while a handful of spivs obscenely profited from a basic human need to the detriment of ordinary people? He stood with the speculators and allowed them to enrich themselves at the cost of ordinary people, which is shameful. At this late stage, can he offer any words of comfort to those young people needing and hoping to purchase a home?

An Ceann Comhairle (Chair):

I suggest to the Deputy that he be a little more temperate in describing people who are not in a position to defend themselves in this House and who are identifiable outside the House.

J. Higgins:

I would be very happy to debate publicly with any of them at any time and to give them the right to reply.

An Ceann Comhairle:

It is not right to use the House to speak of people who——

J. Higgins:

That is my view of them.

The Taoiseach (Prime Minister, Bertie Ahearn):

The Deputy has raised a number of issues, including social and affordable housing and speculators. The Government has been working on policies on all fronts. We are now in a position where 30,000 houses are being built every year. We have got the supply side of housing in order, where 80,000 houses are now being built. It took a few years to complete the planning and development issues, serviced land initiatives and other initiatives, and we are now building an enormous number of houses. This year in the range of 450,000 houses will be built. The vast majority of these houses are going to young people, people who are able to buy in the areas where they wish. Depending on the areas, prices and demand vary, and we have continued to press for that.

On social housing, we are delivering the highest level of local authority completions and on affordable housing we have provided over 10,000 sites. The report was issued yesterday on the housing initiative. Local authorities will provide houses built by private builders without land costs to assist young people in getting houses at prices that are at a more attractive level. Those criteria have been agreed under the special initiative of social partnership. We already have the Oireachtas committee report and the NESC report will be published this week. We said we would examine what else can be done about speculative land on the basis of these reports and whether that could be done through legislation. That will help somewhat.

However, we now have the highest rate of private house building in the European Union. It is far higher than the rate in the UK. Changes in costs, supply and demand will follow. We cannot regulate the prices. I agree that prices are expensive in some areas. Yesterday, I saw that a garage is for sale for €15 million. Houses are very costly in some areas. We will have to try to continue to provide for the demand.

I do not believe the points made by the Deputy are fair to the people in the business. If people were sitting on land banks, the point arises, but in many cases it is straightforward construction of new homes, which we need to provide accommodation for young people.

J. Higgins:

Am I correct that the Taoiseach has no problem with a group of business people purchasing land speculatively, sitting on it for four years without lifting a finger or adding to the wealth or well being of the community and then selling it for a profit of €53 million? That is fine as far as the Taoiseach is concerned. That is shameful. It explains the fact that the Taoiseach has not lifted a finger to control the price of building land in seven and a half years.

Will legislation ever be introduced to control the price of building land or will the Taoiseach allow this type of obscene speculation to continue? Will he compound it, given that the Tánaiste has ordered a review of land held by health boards with a view to selling it on the open market? The State is proposing to cash in on the speculation as well. What is the Taoiseach’s legislative intention with regard to controlling the activities of speculators and giving some comfort to those who will have mortgages around their necks for most of the rest of their days if this continues?

The Taoiseach:

There has been a range of measures to improve supply in the market. These have included serviced land initiatives and providing the necessary infrastructure. As a result, 450,000 houses have been built in a relatively short period. Obviously, there are cases where building land changes hands and is left dormant. However, reports in the Department of the Environment, Heritage and Local Government show that it is not as common as it was previously. Nobody likes it that speculators can acquire valuable land and get astronomical prices for it. Neither I, Deputy Higgins nor any other Member supports that. Whether it can be legislated out of existence is a matter which has been debated extensively in the Oireachtas committee report, which includes some suggestions in this regard. We will also shortly see the conclusions of the NESC report.

The Government will continue, in whatever way it can, to provide affordable housing. The Tánaiste has allocated a large amount of land towards the provision of more than 10,000 sites. This will help the people who are not among the 80,000 to 90,000 people per year who can buy houses – an enormous number – to get affordable housing. There is also the voluntary co-operative housing sector, which is growing rapidly, as well as our social housing programme. We will continue to work on these areas.

We look forward to receiving the NESC report and, taking it in conjunction with the Oireachtas committee’s report, we will take the necessary legislative action on that basis.

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