Michael Finneran (Roscommon-South Leitrim, Fianna Fail)

I thank the Minister of State, Deputy Andrews, for sharing time with me.

The Government is on the right path to steer this country successfully through the national and international financial crisis. I have previously outlined to the House the Government's intentions in the various strands of the housing programme. I would like to focus today on the new proposal I announced recently on the long-term leasing of social housing units. Local authorities can and must be used as the real generator of economic recovery within the State. One of the ways that local authorities can do this is through long-term leasing of housing. I want to encourage local authorities to enter into long-term leasing arrangements, from ten to 20 years, to obtain properties to meet social housing need. I will provide moneys under the social housing investment programme for this purpose.

I intend to allocate €20 million to local authorities to enter into long-term leases in 2009. This €20 million would allow local authorities to provide at least 2,000 units and perhaps up to 4,000 units, through leasing arrangements this year. The same moneys would allow us to purchase something of the order of 100 properties. There is, therefore, a major difference between what we can provide in the leasing programme, as opposed to a building programme. This will obviously help meet housing needs, which rose by over 30% between 2005 and 2008.

This approach has been considered for some time in the context of providing a flexible response to changing housing needs, as part of the Government's policy of sustainable communities. The rental accommodation scheme, which is proving very successful and which has contributed to transferring over 18,000 households with long-term housing needs from rent supplement over the past three years, already uses availability agreements with private landlords to provide social housing.

If the general idea of meeting social housing need through leasing has been around for some time, then the current situation, in which there are a considerable number of unsold vacant and unfinished houses around the country, provides the opportunity for local authorities to obtain a sizeable volume of housing units at very good value for the State. Local authorities will be directed to seek properties that are compliant with current sustainable housing policies. In other words, the only properties used will be those in the right places, with the correct tenure mix and of the right design and quality to meet the housing needs concerned. I reject any suggestions that long-term leasing arrangements are a quick fix solution and I expect that the State will get very good value for accommodation in the current market. There has been an increase in housing need and this initiative will help housing authorities get more households off their housing waiting lists.

The local authority is the landlord under leasing, though sometimes it may enter into an agreement with a voluntary body to manage and maintain the house. It is a long-term lease only and the property owner will not be responsible for dealing with the tenant or maintaining the property. The private owner is the landlord under the rental accommodation scheme, which is generally under a short to medium-term agreement, while the housing authority makes the property available for social housing.

From the tenant's point of view, there will be little difference from the current situation. The local authority, or possibly a voluntary body, will be the landlord. The differential rents scheme will apply as normal, the house or apartment will be of good quality and meet all the necessary standards. The housing authority will assume responsibility for meeting the social housing needs of the household as is the case at the moment. The only difference is that the tenant will not be in a position to buy the dwelling concerned.

The move to avail of long-term leasing to provide social housing should not be viewed in isolation. The recently announced incremental purchase scheme will provide the opportunity for the household in the leased property to move house and purchase a dwelling, availing of the relevant subsidies and discounts. Under the incremental purchase scheme, the State will build social housing as normal but will set aside an amount for purchase. This is a very attractive scheme and will provide good opportunities for all social housing tenants, including those in leased properties, to purchase a new property at substantial discounts. The State will continue to build and purchase social housing as at present but over time the composition of the housing stock will change to allow for a greater number of leased units.

The State will be able to achieve genuine value for money through this initiative. This is because of the supply of vacant properties on the market, and because the State is able to take more than one unit and get even better value for money. The State can also take the risk and responsibility for ensuring that the property does not become vacant for long periods. In other words, it has a flow of households with housing needs to use up the supply.

The affordable homes partnership and the relevant local authorities are now about to engage in a significant marketing campaign to sell available homes. Consideration is also being given to alternative mechanisms for deploying, for other housing purposes, any affordable houses or apartments that ultimately remain unsold, including the possibility of introducing a deferred purchase scheme. This is being considered in order to ensure that unsold units are deployed in the most efficient and effective way.

Through the local authorities, my Department and the Government are facing up to the financial realities in which we now find ourselves, and are responding in creative ways which still allow us to make significant progress in meeting housing needs.

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