Mick Wallace (Wexford, Independent) | Oireachtas source

We have a serious problem in Ireland that is leading to a whole range of other problems, namely, ghettoisation. This issue has never been addressed. The purpose of Part V provision was to address ghettoisation.

Deputy Cowen mentioned that 15,000 units were delivered under Part V, one third of which - 5,000 - were social housing units, with the remainder being affordable housing units. During the five years in question between 55,000 and 75,000 units per annum were being built in this country. This means approximately 400,000 units were built, only 5,000 of which became social housing units, which is a pretty poor offering. There were many reasons for this, including loopholes in the legislation which allowed developers to buy their way out of meeting their obligations. When I raised this issue with the Minister of State on Committee Stage he told me that provision under Part V was ring-fenced. I have taken another look at the Bill. In regard to whether it will be impossible to have a development that does not include social housing, the answer is "No." We will still have developments that contain no social housing. While developers will not be allowed to buy their way out of meeting their obligations, they will be allowed to provide housing somewhere else in lieuof that obligation. This does not address the issue of ghettoisation. It means that a developer seeking to build in Ballsbridge could seek to provide the necessary units somewhere else. This leads to ghettoisation. It is a case of allowing people who are better off to live together and the poor people to live together. The number of problems that arise because of ghettoisation is frightening. How one does in life and how things fall for one is determined to a great degree by where one lives.

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That factor determines life opportunity. It determines the quality of the transport and other amenities of which one can avail. I am not saying that people living in poor areas never have access to good transport but, generally speaking, those living in better-off ones have available to them a better transport system as well as more social amenities and a better selection of schools to which to send their children. They probably have more shops to choose from close to where they live because it is easier for retailers to do business where people have more money. Major associated problems develop out of ghettoisation. It creates an underprivileged class, which leads to drug problems and crime.

Another serious consequence of ghettoisation is poor housing. Like all the other things I mentioned, poor housing has outcomes and they are not very good ones. People who live in good housing have better outcomes. It was very disappointing that even where social and affordable housing was delivered under Part V, the developer or builder - it was often the same person - was allowed to put different material into those units from what was being used in the units that were put on the private market. It is very sad that this was allowed. Most people will agree that inequality is at a greater level now than it was 20 years ago. It is a primary responsibility of any Government to challenge inequality and any increase in it. Moreover, any Government that is serious about challenging inequality will certainly tackle the blight that is ghettoisation.

The point has been made that it is not as if it costs nothing for the builder-developer to provide social and affordable units. In fact, because of the way in which the scheme is framed, that is not completely true. Builders were offered their build costs plus 15% under the provisions, but were not given the value of their site purchase. If, say, a builder paid €100,000 per unit for 30 units, which amounted to €3 million for the site, he or she did not get €100,000 per unit back from the local authority in respect of the social and affordable element. What happened was that the value of the site land was based on an agricultural value, which was a major problem. It is my strong view that developers should be given their site value in order to make it bankable. Very often, smaller players could not bank it if they had paid a lot of money for a site. Some people paid up to €230,000 per unit for apartment sites in 2006. If they had delivered social and affordable units on that site, they would not have got their €230,000 per unit back. As I said, it was worked out on an agricultural value formula. They would have got 15% profit on the construction costs, but they would have lost out on the supply of the units. That should not have been allowed to happen. Of course, when the formula was designed, it was not envisaged that site values would ever reach such crazy highs. That is what happened, however, with the result that the State allowed developers to get out of their obligations when they claimed social and affordable housing would not fit on a particular site or would not work alongside expensive apartments for private sale. What we had, as a result, was a continuation of ghettoisation.

Last summer, when Kennedy Wilson got planning permission to build 164 apartments on the Clancy Barracks site, it told the planners the site was not suitable for social housing. The outcome was that there is no social housing on that site. We need to think again about how the system should work. No site should ever again be developed in this country that is exempt from including an allocation of social housing. I do not care where it is, in any part of this city or any part of the country, every development should have its quota of social or affordable units rather than allowing them to be moved elsewhere.

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