Allegations that the Affordable Housing Partnership amounted to the "new brown envelope" for developers have been described as "grossly unfair".
The chairman of the Affordable Homes Partnership, Des Geraghty, defended its "call for land" scheme against suggestions that it was actually encouraging land speculation.
The scheme was set up in November 2005 to persuade landowners to make available unzoned land which could be suitable for the development of affordable housing. To date 12 sites have been short-listed as possibilities for development.
Labour Party Senator Joanna Tuffy told the Oireachtas Committee on the Environment and Local Government that the scheme was having the opposite effect of what was intended - it would promote speculation and increase house prices.
She cited the example of a 400-acre site in Lucan which is currently zoned as high amenity but could now be rezoned for affordable housing.
Ms Tuffy said the developers had tried unsuccessfully on seven occasions to have it rezoned and if it was now rezoned for affordable housing it would make them millions because houses would be sold at between €280,000 and €315,000.
She stressed there was nothing illegal in such activity, but affordable housing amounted to the "new brown envelope" because it was being used by developers to get land rezoned which otherwise would not be developed for housing.
Mr Geraghty said the wider community would benefit from the rezoning because 70 per cent of it would have to be for affordable housing. While affordable housing was expensive, it was still on average €100,000 cheaper than houses sold on the open market.
In a letter to the Cathaoirleach of the Seanad, Senator Mary O'Rourke, which Ms Tuffy referred to at the committee meeting, Mr Geraghty described an earlier allegation that the Affordable Housing Partnership was the "new brown envelope" as "inappropriate".
"I refute this suggestion and regret such an insinuation against the Affordable Homes Partnership, its staff and board," he wrote.
