Oireachtas Joint and Select Committees

Wednesday, 12 December 2018

Joint Oireachtas Committee on Housing, Planning and Local Government

Rebuilding Ireland: Minister for Housing, Planning and Local Government.

9:30 am

Photo of Eoghan MurphyEoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

I thank the Deputies for their questions. Deputy O'Dowd referred to the changing nature of our towns and villages and he is absolutely right about how we need to rethink that whole area. That is why in talking about rebuilding our housing sector, we are not talking about recreating what was there before. We need to build a new one. That means more people living in towns and centres and a greater commitment to compact growth, which we have through Project Ireland 2040 and Rebuilding Ireland. We changed the regulations to allow people to convert accommodation above shops into as many as nine homes - no more - without the need for planning permission. That also applies at ground level. A consultation was done on this, which has concluded, and a document will be published shortly to give people greater guidance on doing that.

The repair and lease scheme has been one thing we have tried to pursue to get derelict buildings in town centres back into use. In our urban fund, which was launched recently, approximately 27% of the first round of €100 million was used for those integrated projects to bring about living in town and village centres again. We have a process under way to CPO properties to sell back into private ownership. A couple of pilots are being looked at around that. Certain villages or towns are not going to have the retail focused high streets they had in the past due to the way the economy has changed. As such, there are properties which could and should be used for housing because the infrastructure is already in place and due to the benefits that come from that kind of community living.

On CPOs more generally, our vacancy teams are in place. Vacancy rates are not as high as previously thought and we have much better information now thanks to the recent Indecon report. However, our local authority teams are identifying vacant units and we have a number of pilots under way in six local authorities. They are now starting to drill down into what is actually vacant as opposed to what appears to be vacant. We want them to move towards CPOs on those properties or to at least get into that process. We are awaiting advice from the Attorney General on a more enhanced CPO process, again around that private side. The Department of Justice and Equality is leading on reform of our CPO law more generally based on the recommendations of the Law Reform Commission.

I refer to land debt. We did this previously with the first phase of the land aggregation scheme, or LAGS. Deputy O'Dowd might not know that we have written to Louth County Council specifically on the land debt issues it faces to see what we can to do ensure they do not impact on its ability to deliver housing. We have problems in some local authorities where the land that is subject to debt and repayments with interest is not suitable for housing, which is a tougher nut to crack.

However, we are examining potential ways in which we can look at that.

The local property tax review has been completed on our side in terms of allocations to local authorities and we are just waiting to complete the second item of work, which relates to the work we are doing with the Department of Finance. We will see houses that have been built in recent years that are not liable to the local property tax, LPT coming into that net, which will mean we will be able to increase allocations to local authorities based on new criteria that have been designed. We will announce that when we are ready to go with the second piece of the LPT.

Regarding gas boilers, €35 million has been allocated to be spent on energy efficiency this year. If Louth County Council has a particular problem regarding boilers and their replacement, it should contact us directly. We should be replacing boilers when they need to be replaced and not waiting unnecessarily for the passing of two or three weeks. In terms of budgetary limits in a year, capital ceilings and so on, that type of spending is done year on year and it is important we are not in breach of those. The replacing a few gas boilers would not involve a great deal of money and I am sure it is something that could be done. I would ask Louth County Council to contact us directly on that and Deputy O'Dowd might be able to facilitate it in that respect. I do not know why it has not contacted us if this is as much of a concern as the Deputy has made it out to be.

Regarding the rent Bill, I acknowledge the Deputy has welcomed that we are going to introduce new criminal sanctions but also administrative sanctions so that the RTB can move directly to sanction rogue landlords whom it finds to be in breach of their obligations.

On Deputy Barry's question on affordability, one of the points I was keen to stress in my opening statement - it was shorter than I would have liked just for the sake of not boring everyone with too long a statement - is that this week we have published the first two lists of sites we are moving on with in terms of affordability. We know the sites in terms of table A that are agreed in principle to be developed for affordable housing and the number of homes that can be derived from that in terms of subsidised housing schemes. We have a second table of sites we are working on with those local authorities and we have every other local authority doing an economic assessment as to how they will deliver and take advantage of the fund we have in place. More generally speaking in terms of affordability, we know that one in two first-time buyers in the 12 months up to June bought their homes for less than €250,000. We know that affordability is not an issue in every part of the country, a point to which, I believe, the Deputy alluded. That does not mean we cannot have subsidised housing schemes under the serviced sites fund being delivered in many more local authorities other than Cork and Dublin. That is why we have the second table and the reason we are asking other local authorities to do their own economic assessments.

The €50,000 figure is an average amount. Not every home on a site will require €50,000 worth of infrastructure works to be done to open up that site for delivery. What we are talking about in this context is, if a local authority has its own land and owns it, the cost of contracting a person to build a house on that site. Obviously, the local authority does not build directly in terms of having its own builders hired directly to it. What are the ancillary costs of servicing that site in terms of facilities and works, such as different types of infrastructure, for example, an entrance road, roads within the site, lighting, water and wastewater? Will a housing body be involved? More than likely it will, and there is the matter of managing aspects of that. What is the value of the land? If the land is at market value, that value and the amount that goes into servicing the site can be discounted from the final delivery price.

We have put in place certain caps to provide that the discounted price can be no more than 40% of the cost of the house. The local authority takes it equity share, which has to be repaid because this is a co-operative approach whereby the local authority and the purchaser come together to buy the house and part of the mortgage is parked in terms of the local authority having it, and that has to be repaid over time. That will then give us the price of the house in terms of what the person buying it is going to pay. It is not a case of taking account of the market value of a house in, say, Dún Laoghaire and discounting a few thousand from the price. That is not the way we are doing it. We have also put other caps in place in terms of-----

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