Bernard Durkan (Kildare North, Fine Gael) | Oireachtas source

I have listened with interest to the contributions of other speakers as, unfortunately, I was otherwise engaged. I welcome the Bill, as the purpose for which it is introduced is important. Members on both sides of the House have made reference to its purpose. It goes without saying that in the past the NTMA showed that it could perform miracles with the responsibility thrust upon it, even though at times very difficult tasks were given to it.

We should mention the origins of the agency. The NTMA was originally invented to pay for the 1977 Fianna Fáil general election manifesto, which after two and a half years thrust the country into a very serious financial position. The NTMA was subsequently set up to cater for and manage that debt - to rearrange investment in such a way as to be of benefit to the economy. It did so admirably and is to be lauded for what it has done.

A number of issues now present themselves to the Government. Without doubt, at this time there is a dearth of available resources to invest in anything. I will not go back and rehearse what we have discussed before and suggest it was the fault of somebody else. I do not mind whose fault it was, nor does it matter at this stage. The Government must run the country, meet its requirements and commitments in a way that was never asked of any previous Government without money. On top of this, when the Government took office, it had an annual revenue deficit the likes of which had never been known since the foundation of the State. It is a miracle that the country did not collapse and implode entirely, with everything going down the tubes, because that is what seemed likely just two and a half years ago. A lot of work had to be done, as a result of which we arrived at the situation in which we now find ourselves.

The housing issue that has been referred to is of critical importance. It is not something that has just loomed on the horizon in the past year, two years or five years. It has been on the horizon for several years and every local authority knew there was no investment in replacement housing, as a result of which eventually the entire rental market fell into the hands of the private sector. There is nothing wrong with this, except that there is no control over the cost to the tenant or the leaseholder in any part of the country and markets determine the burden on the householder.

Reference has been made to the approximately 100,000 families on the various local authority housing lists. They are all dependent on renting houses in the private sector supported by the Department of Social Protection to the extent of €450 million per annum. That is a recurring event each year and has continued for at least ten to 15 years. Unfortunately, nobody is willing to stand up and accept responsibility for what happened over that period. What happened was that the temporary solution to the country's housing problem became the permanent solution. In other words, temporary leasing and rent support became the replacement for what used to be the building of a reasonable number of local authority houses.

I remember when most local authorities, certainly those in the greater Dublin area, built approximately 400 to 500 houses per annum and also offered local authority loans to another 400 to 500 people. That amounts to 1,000 families each year catered for by the local authority system. It was deemed to be much more effective and efficient to have the housing issue catered for by the voluntary sector, with which I have no problem. The only problem is that nothing was done in that sector either. Ironically, the voluntary sector had some considerable advantages over the local authorities. I do not know if it was through negligence, but the local authorities allowed matters to slip from their grasp. It is for them to answer, but the net result is that the people have nowhere to go. It is the most appalling problem I have ever experienced. It is not just me; I know every Member of the House is aware of this.

People have not referred to the fact that approximately 30,000 other families are also renting private property. These are families who do not qualify for local authority housing in the ordinary way because their incomes are too high. However, lo and behold, what has happened? Rents have increased - in some cases by 50% or 60% in the past 12 months. As the Acting Chairman knows, this applies throughout the greater Dublin area and into adjoining counties. In many cases, it is worse in the adjoining counties than in Dublin city. Approximately 150,000 families are now dependent entirely on the whims of the market on the extent to which their investment in housing will depend. That is wrong and very unsatisfactory.

In many instances, banks are exerting huge pressure on landlords to either increase rents or evict the tenants and replace them with people who can afford to pay. For a number of years we have been encouraged to believe we should be leasing or renting residential properties as opposed to purchasing them. The move in this direction is a colossal and fundamental mistake. Traditionally, Irish people have always wanted to own their properties. They see them as an investment in their futures or those of their families. The land war was fought over people's right to own their own place. Why was that? It was because they had for too long been moved around from pillar to post at the whim of investors, landlords or whomever else. There are many dutiful landlords throughout the country who look after their tenants very well. They are happy to have good tenants who will look after their properties and pay reasonable rents for them. Unfortunately, not all landlords fall into this category. There have been many instances in the past year in which tenants have been asked to vacate properties with 24 hours notice, which is illegal. As a result, a huge number of people have been placed in jeopardy and a great deal of hardship has been suffered by many. All of this was unnecessary.

There is a need for strategic investment which must be targeted at the areas with the greatest housing need. This investment must be made in a way which would ensure there would be no recurrence of what happened during the most recent housing bubble when the collateral for properties was used as a bargaining chip between banks and between investors and the banks. As a result, there was massive inflation across the entire housing market. Residential property in this country is much more expensive than in most other European countries, which is not good. In the past the criterion which applied for those seeking mortgages was that two and a half times the income of the main earner and the entire income of the secondary earner would be taken into consideration by the banks. That criterion fell by the wayside and the banks and local authorities brought forward a new formula. I have still not discovered the nature of that formula, but suffice it to say it represented an intricate solution to a problem which there was never any intention of solving in the first instance. As a result, many borrowed huge sums and the repayments were far in excess of their ability to meet them. In that context, they committed themselves to making repayments over a period of 40 or 50 years. Some parents have since sought to rescue their children or grandchildren from their debts and consequently doubled or redoubled their debts.

Let us consider what is required for someone to repay a mortgage of €400,000. Nobody should pretend that, even now, people are not paying such amounts for properties, although I accept that there is a difference between prices in Dublin and those which obtain elsewhere. A person who borrows in the region of €350,000 to €400,000 would need an income of approximately €120,000 in order to meet his or her repayments under the old criterion to which I referred. This level of income would certainly be required by single income households. Those who are renting also require very large incomes. It is obvious, therefore, that a greater proportion of the disposable incomes of people who are buying or renting is being spent on servicing their housing requirements. Normally, the maximum repayment should be one third of the net income of the household. In some instances the amount is almost two thirds. Owing to a lack of housing, the level repayments is likely to rise further.

I cannot understand why people continually refer to slight overheating - 1% over six months - in the market. The same comments were made when the previous property bubble was about to burst. On the news each morning it used to be stated house prices had stabilised. What was not said was they had stabilised following annual increases of up to 30% or 40%. House prices were removed from the consumer price index in 1977, which is interesting. The reason they were removed was they were affecting the rate of inflation. They contributed to inflation because, as was the case in the most recent property bubble, they rose dramatically. A means must be found whereby the cost of residential property to the consumer must be reflected in some register in order that the Government of the day might be alerted to the prevailing trend.

Deputy Shane Ross seems to believe the Government should have no input in this matter. That is ironic, particularly as the Government is always blamed for deficiencies. It is extraordinary that certain individuals are suggesting the Opposition should reap the benefit of the good vibes from issues being resolved and that the Government should accept responsibility for all that is negative. That is a new one on me. The Government should have control in this matter. The fact that previous Administrations did not exercise such control is a sad reflection on what they did when they were in power.

As stated, strategic investment in housing is critically important. For several years I have been stating such investment should be made. If it is not forthcoming, much more serious issues are going to arise in six or 12 months time. This problem is not going to go away. It is not true to say we can solve it. We cannot do so. In the 1950s the population of this jurisdiction stood at approximately 2.6 million. It has, as one would expect, increased considerably in the intervening period. If the economy is going to grow and we expect - as we do - to have full employment in the future, housing that is affordable must be provided. We should encourage those who are in a position to exert control over this matter - for example, the Government - to ensure an adequate supply of affordable housing is available on the market at all times. This would benefit two groups, namely, people who would ordinarily register their names on local authority housing lists and first-time buyers. Those in the latter category would include young gardaí and nurses. The people to whom I refer must be in a position to access good quality, affordable housing as opposed to what I, for want of a better word, would describe as the high rise "compartments" that they have been obliged to purchase in recent years.

This morning the chairperson of An Bord Pleanála stated that in the future housing would be provided in high density developments of sufficient size to accommodate families. If that proves to be the case, the outcome will be interesting. We have certainly failed in this regard up to now. Some of the houses provided in the past fell far short of meeting both people's basic requirements and the relevant accommodation standards. We are all aware of countless cases in our constituencies in which what can only be described as cramped accommodation was provided for those on local authority housing lists and those on a slightly higher income level who would normally have been expected to be able to afford to purchase homes in the ordinary way.

I believe this Bill is of considerable importance. I hope it addresses the situation and I know it is intended to address the situation. Many of us in the House have made numerous requests for something like this to be done as matter of urgency. There are various ways and means of achieving the same objective. I hope this works, but if it does not work and if we cannot achieve within a short space of time the ability to house the people in the two groups to which I have referred, then we will have a disastrous situation on our hands. It does not matter two pins who is responsible for it, because these unfortunate people will be on the roadside, for want of a better description. Many of them are on the roadside at the moment.

I mean no disrespect to the Opposition, but I have listened to Members of the Opposition making points to the Ministers sitting on this side of the House as if they were directly responsible. These things must be planned five or six years in advance. Otherwise, we have to introduce emergency measures to deal with them. We do not resolve these issues overnight. We must plan in advance, secure planning permission and go through the process. Otherwise, we can use the infrastructural deficit legislation to speed things up. One way or the other, the greatest single issue facing the country at the moment, apart from our indebtedness, is the housing crisis. I believe we have the ability to resolve it and address it in the context of this legislation and I hope we do so.

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