John Perry (Sligo-Leitrim, Fine Gael)

This is an important Bill. A great deal of money is given to people who buy houses either through 100% finance or through the section 23 provision. It is difficult to raise a family in a dwelling of 600 sq. ft. In fact, very few of these apartments are designed and built for families. They are totally inadequate. There are no facilities for children to park their bicycles and no amenities in any sense.

While management companies are welcome, they fail in their obligation to look after children. There is heavy occupancy of apartments at present but it will be hard for young couples to rear children there. There is an obligation on management companies to provide services that facilitate families. The developments in Dublin are not geared towards families but towards people who can get 100% finance.

Deputy Connaughton is correct that when people sign for the mortgage, the insurance policy and the stacked up costs, they are so delighted to get the money they feel they are getting it for nothing. Interest rates are low at present. However, although the interest rate has reduced, it has been replaced by the principle, in that an apartment that was previously €200,000 is now priced at €250,000. The auctioneering company could probably change that too. Auctioneers are part of the cycle. There is no control on auctioneers or how one buys an apartment. Management companies can charge €1,200 to €1,500 a year and the person has no option but to sign up for this. All they might do is shampoo the carpets. They seem to do nothing else.

Section 23 was proposed to encourage development and, in the context of the seaside resort scheme, the section was extremely relevant in Sligo. Developers built houses and it was a cash rich enterprise. The State also got a ball of money. Development is a cash cow. A total of 80,000 homes are being built per year so billions of euro are coming to the State from the development sector. The economy is being driven by the housing sector. It is regrettable that a sector that is so beneficial to the economy is so unregulated in every sense.

Vulnerable people are locked into a mortgage agreement that must be paid. They point to an interest rate of 3% or 4% but the principle must also be repaid. They are also locked into an insurance premium to guarantee the mortgage and into a management contract to maintain the open spaces in the development. Consider what the developers get from this. It is a safeguard. If there are snags such as cracks in the walls, the management company does the work that initially should have been done by the contractor who built the apartment. In effect, the management contract is paying for the maintenance of the hallways, alleyways and open areas. That is regrettable.

The tax taken from this sector is unbelievable, particularly when one considers the scale of development. The apartments look fantastic in the short term but wait for five years. Every business needs a complete refit and redesign after seven years. Look at these apartments in seven years when section 23 runs out. What will happen? The developer will be gone, lost in a series of companies that will be untraceable. Nobody will take responsibility. Will the State or the local authority take responsibility? I doubt it.

Somebody must pay. The State must get involved. There must be protection for tenancy agreements. People are renting apartments from landlords who might have a total of 20 apartments. The landlord is in it for speculative reasons. He is getting the tax write-off. In effect, the State is financing these apartments, even though the regeneration has been very welcome. The Minister, however, has a responsibility to ensure there is a contract so people can know exactly what they are getting involved in. The management companies must be regulated and work by a constitution. There should be uniformity of discipline throughout the State.

I wish to refer briefly to the draft plan for the Cranmore regeneration project in Sligo. This estate consists of 511 houses. The houses were built in five phases between the early 1970s and 1985. Approximately 50% of these homes remain in public ownership and the area has a population of 2,500. Two thirds of the residents of Cranmore are aged under 35 years and unemployment in the area can be as high as 70%. The regeneration project is due to cost €26 million.

This is one of the big estates that were poorly built in the 1970s and 1980s and nothing has been done with them since then. Among the proposals contained in the draft plan is the development of quality housing in the area. This includes the refurbishment and redevelopment of some existing houses as well as the demolition and replacement of others. The Cranmore regeneration project intends to provide quality recreational space and a new centre block with a multi-purpose hall. This is most important.

It is important to provide children's amenities, playgrounds and multi-purpose halls. Otherwise, there will be a massive problem with the young population who will be completely disillusioned. The State is failing in its responsibility to provide this service. It is imperative the concerns of Cranmore residents in Sligo are taken on board as the regeneration plan for the estate gets under way. The Minister has been discussing this with the borough council. I urge the Department to progress this project as quickly as possible. The plan is on the Minister's desk and the Minister of State with responsibility for housing has viewed the area. Support is necessary.

When discussing the regeneration of regions and the housing stock of the country — 80,000 homes have been built in the past year — there is a massive responsibility to get high density housing right. There is now a ratio of 16 houses to the acre. It is critical that a concrete jungle is not being built without amenities for children. They are the next generation. There are single parents and demographic difficulties in every region, town and village. We welcome the boom in the economy and how noticeable it has been in the housing sector but the crisis facing the economy is the huge level of dissatisfaction with, and the lack of responsibility of, contractors who fail in their obligation to include amenities.

These developers are multimillionaires. This is not speculative development but speculation by developers. Given the amount of high density apartment blocks being built, it has been a major mistake not to have a legal framework in place that would obligate developers to fulfil their social obligations. There is great social anxiety at present and the Celtic tiger has generated that to a huge extent. It even extends to coastal communities which have been equally propelled by tax breaks. I urge the Minister to do the decent thing and seriously consider accepting this Bill. If he does, he will deal with a significant issue that faces huge numbers of the population in Dublin and throughout the country.

See this speech in context