Former council houses being leased back to local authorities by large investors shows the "insanity" of Ireland's current housing system, Sinn Féin's Eoin Ó Broin says.
He says it's also "absolutely absurd" that some tenants can be evicted from their rented properties so that can happen.
He was speaking after the Business Post reported today that second-hand homes in some old council estates are now being leased to South Dublin County Council at an estimated rent of €1,500 a month, for use as social housing.
However, the local authority has no option for purchase the homes once the 25-year lease expires.
Speaking to Gavan Reilly on On The Record, Deputy Ó Broin says it highlights the flaws in the current housing system.
He said: “It just confirms the insanity of our housing system. The taxpayer pays to build these homes. Council tenants are able to purchase them - that’s a good thing and I support it - but at a future point in time they can sell those properties in the market.
“They can be bought by institutional investors… and the investors lease them back to the local authority at exorbitant prices for 25 years, and the State never gets to owe them.”
The Sinn Féin housing spokesperson said local authorities aren't allowed to buy those homes, under a rule introduced by the last Government.
He noted those rules were amended last year - so local authorities can buy some vacant properties for the purpose of housing people in long-term emergency accommodation.
If a tenant who buys a council house later decides to sell it, Deputy Ó Broin believes that house should have to be sold back to the council.
He explained: "Given that person would have bought it a substantial discount, they should sell it back to the council at the discount rate - obviously index-linked for inflation."
A similar debate has recently arisen over the sale of affordable homes by their owners.
It recently emerged that a home in the estate built by the Ó Cualann Cohousing Alliance in north Dublin was on sale on the private market.
The Irish Times reported this week that the house has sold for over €300,000 - 90% above its original price less than four years ago.
Deputy Ó Broin has frequently voiced his support for the Ó Cualann housing model.
He said those behind the development did want a mechanism to prevent such sales, but they were met with resistance from banks.
However, he believes there is a solution to prevent similar things from happening in the future.
He observed: "[With] all such affordable homes - delivered by cooperatives, approved housing bodies, local authorities - when the person purchases it, they should purchase the house, not the land. The land should remain in public ownership.
“The two covenants would be: you get to live in that house as long as you want, and you get to pass it to your kids and grandkids... but you cannot sell that house into the private market and you cannot rent it into the private market.
“If you want to sell it, you should be allowed to do that: you sell it to another affordable purchaser, at the future affordable purchase price.
“Not only does the first buyer never get to make that windfall game, but over time we would build up a stock of privately owned, tradable but permanently affordable homes.”
He said the current problem is not just the 'windfall gain' made by the individual seller, but also that affordable homes are only 'affordable' for the first purchaser.
He explained: "That should be an affordable home to every future purchaser.
“We have a limited amount of public land… it makes no sense where you’re selling a home on that land to allow for the possibility in the future that goes onto the private market.
“Keep those homes permanently affordable for future generations.”