Alan Kelly (Tipperary North, Labour) | Oireachtas source

I move amendment No. 2:

To delete all words after “Dáil Éireann” and substitute the following:“notes that the economic downturn and contraction in construction activity, which began in 2008 and continued for a number of years, have created a significant shortfall in housing supply generally, including social housing;

recognises the high priority which the Government has afforded to increasing housing supply, including through its Construction 2020 strategy;

acknowledges the Government’s on-going commitment to ensure that a full range of options is available to distressed borrowers and to keep as many people as possible in their homes;

welcomes the decisive action taken by the Government in relation to mortgage arrears, including the package of measures announced in May 2015 to provide additional support to early engagement borrowers, raise awareness and improve take-up of insolvency measures, improve the operation of the Courts Service of Ireland and the support available to borrowers through this process, and improve schemes to try wherever possible to keep people in their home, including changes made to the mortgage-to-rent scheme to enable more properties to qualify for the scheme;

recognises that social housing is a key priority for the Government and, in particular, welcomes the:

— additional €2.2 billion in funding announced for social housing in budget 2015;

— Government’s Social Housing Strategy 2020, published in November 2014, targeting the provision of over 110,000 social housing units in the period to 2020, through the delivery of 35,000 new social housing units, at a cost of €3.8 billion, and meeting the housing needs of some 75,000 households through the housing assistance payment, HAP, and rental accommodation scheme, RAS, to address the needs of all households on the housing waiting list, with flexibility to meet potential future demand;

— implementation of the HAP scheme, a key component of the Social Housing Strategy 2020, which is also progressing at pace, with almost 4,000 households now in receipt of HAP across the 13 local authority areas involved, and the intention to expand the operation of the scheme to a further cohort of local authorities in the coming months;

— significant progress made in bringing vacant local authority housing stock back into use, with over 2,300 vacant units funded in 2014 and a further 2,500 units targeted for 2015;

— enhanced role for approved housing bodies, AHBs, in the provision and management of new social housing under the Social Housing Strategy 2020;

— important contribution made by the National Asset Management Agency, NAMA, in the delivery of social housing, sourcing almost 1,400 houses and apartments for social housing use by local authorities and approved housing bodies and investing some €40 million in making these properties ready for social housing;

— recent amendments made to the Part V of the Planning and Development Act 2000 mechanism by the Urban Regeneration and Housing Act 2015, which will mean that in future, the focus of Part V of the Planning and Development Act 2000 will be on the delivery of completed social housing units; and

— innovative funding mechanisms provided for in the Social Housing Strategy 2020, including the progress being made on site selection under the proposed €300 million programme of investment in social housing via the public private partnership model, which is expected to deliver 1,500 housing units;

welcomes the multi-stranded Government response to the homelessness issue, in particular the:

— key measures identified in the Government’s implementation plan on the State’s response to homelessness, May 2014, and in the action plan to address homelessness, December 2014;

— whole-of-Government approach to dealing with the complexity of homelessness, involving all key State agencies concerned, including the Departments of the Environment, Community and Local Government; Social Protection; Health; Children and Youth Affairs; the Health Service Executive; Tusla, the Child and Family Agency; the Irish Prison Service; and local authorities;

— supports provided for the critically important role performed by non-governmental organisations, NGOs, working with homeless persons and helping to deal with the multi-faceted issues that homeless households face;

— increase of over 20% in funding provided for homeless services in 2015, and the commitment of the Government to provide additional funding, where necessary;

— excellent work being done through the tenancy sustainment protocol operating in conjunction with Threshold in Dublin and Cork, with over 1,200 of the 4,000 cases supported with increased rent supplement limits arising from engagement under this protocol arrangement, with active plans to extend the protocol to Galway city; and

— proactive approach being taken to the exploration of further steps to fast-track the delivery of additional social housing to meet the needs of homeless households, including through a programme of modular housing;

notes the important role that the private rental sector plays in the overall housing market, with approximately one in five households now privately renting their homes, and in that regard:

— acknowledges that the continued increase in rents is a cause for concern, with the latest Private Residential Tenancies Board, PRTB, figures showing that housing rents were 6.4% higher in the second quarter of this year, while apartment rents increased by 7.6%;

— accepts that a shortage of housing supply is at the heart of rising rents and that the Government is addressing this on a number of fronts, including through its Construction 2020 strategy;

— acknowledges that the housing supply shortfall will take time to address fully but welcomes the signs of recovery, particularly the increase in the number of house completions in 2014 to 11,016 units nationally - an increase of 33% on the 2013 figure - and the 16% increase in completions in the first seven months of 2015 compared to the corresponding period in 2014; and

— notes that the regulation of rent raises many complex economic and legal issues and that in any consideration of such measures, it is critical that they are balanced and have the desired effect on the rental market, while being fair to landlords and tenants alike;

notes, in respect of rent supplement, that:

— the scheme plays a vital role in housing families and individuals, with the scheme supporting approximately 65,000 recipients at a cost of €298 million in 2015; over 13,700 rent supplement tenancies have been awarded this year, of which almost 4,300 are in Dublin, showing that landlords are accommodating significant numbers under the scheme;

— a review of the rent limits undertaken by the Department of Social Protection earlier this year found that the impact of increasing limits at a time of constrained supply will increase costs disproportionately for the Exchequer with little or no new housing available to recipients; and

— continued flexibility will be applied through the national framework for tenancy sustainment for both existing customers of the scheme and new applicants, under which a tenant’s circumstances are considered on a case-by-case basis, and rents can be increased above prescribed limits as appropriate; this flexible approach has already assisted approximately 4,000 households throughout the country to retain their rented accommodation;

welcomes the additional safeguards included in the Land and Conveyancing Law Reform Act 2013 which already provide the Courts Service of Ireland with a very broad margin of discretion when dealing with repossession applications in respect of principal residences;

notes that the extension of the living city initiative beyond the original pilot cities of Limerick and Waterford, to also include the cities of Dublin, Cork, Galway and Kilkenny, followed from a comprehensive, independent ex-ante cost benefit analysis, in line with the Government’s commitment to evidence based policy-making, and that this initiative is targeting particular areas of these six cities which are most in need of regeneration, and is available to owner occupiers and certain commercial premises only; and

welcomes the steps taken in 2015 to centralise the funding for domestic violence services under the aegis of Tusla, the Child and Family Agency.”

I thank the Deputies for proposing the motion and I welcome the fact that Members have raised the issue of housing and homelessness again. I understand their concern in highlighting the challenges faced in dealing with these complex issues and the legacy of under-supply. It gives me the opportunity to reiterate my, and this Government's, commitment to tackling these difficult and significant challenges. I fully acknowledge the importance of dealing with housing and homelessness. It is my number one priority as Minister. It is something I am personally committed to and we are doing our utmost to tackle it through massively increased funding, a number of key policy and legislative responses and, most importantly, through direct action, which I will outline to Members.

Increasing the supply of housing is an absolute priority for this Government, myself and the Minister of State, Deputy Coffey. We have prioritised the economy and employment, and breaking the 10% unemployment target is a great success. However, to sustain this and to remain competitive, it is accepted that we must rapidly increase the supply of housing to meet current demand. One thing is certain - we are not returning to the boom-bust cycle that beset the property and construction sector in the past. We cannot go back to the artificial and unsustainable property bubble that has contributed to the problems of the residential market in Ireland today, which is not operating at equilibrium, with demand far out-stripping supply. This Government is committed to resolving the problems in the housing sector. That means every household in Ireland will have access to secure, good quality housing suited to their needs at an affordable price in a sustainable community. Clearly, that will not happen immediately and will take time, but the Government is absolutely determined to deal with this crisis in as short a time as possible.

The root cause of the current social housing crisis is without doubt the policy decisions by previous Fianna Fail Governments to cut massively the construction of social housing and effectively to privatise the provision of social housing through the explosion in the use of rent supplement, which was of significant benefit to their property developer friends. When this toxic combination of lack of social housing supply, lack of construction activity and a system of providing social housing through using private rented accommodation was confronted with rapidly increasing rents in recent years, the result is the homelessness crisis which this Government is now doing its utmost to deal with. The State, through this Government's Social Housing Strategy 2020, has returned to its central role in the provision of social housing through a resumption of building on a significant scale, putting in place financially sustainable mechanisms to meet current and future demand for social housing supports and to ensure value for money for the taxpayer, while respecting, to the greatest extent possible, the preferences of individual households.

While jobs and recovery are the best ways to help people to meet their housing needs, the Government is committed to helping those who cannot support themselves and has set out a plan of action to do so under the Social Housing Strategy 2020. In addition, we have supported that by committing a mixture of capital and current funding of €2.2 billion for social housing in budget 2015 and have committed €2.9 billion in capital funding to 2021 under the capital plan. These are not vague references to using the Ireland Strategic Investment Fund to invest in social housing, such as those that have been put forward from some quarters, but solid, direct, straight financial commitments.

The social housing strategy is about building sustainable communities. The strategy is a comprehensive response to the need for social housing and targets the provision of over 110,000 social housing units to 2020, through the delivery of 35,000 new social housing units and meeting the housing needs of some 75,000 households through the housing assistance payment and the rental accommodation scheme. This will address the needs of the households on the housing waiting list, with flexibility to meet potential future demand.

Of course, all the commitments made in the strategy, both in terms of targets and funding availability, must materialise in new projects. This is the surest way that our citizens will see we are delivering on our promises. I have made the funding available and have ensured that allocations and project approvals have been made. Following on from the strategy, I announced provisional funding allocations totalling €1.5 billion for all local authorities to meet an ambitious delivery target of 22,882 social housing units to 2017. To date in 2015 some €493 million has been allocated to local authorities and approved housing bodies for the construction and acquisition of over 2,900 units. In addition, over €91 million worth of housing investment across a range of housing schemes to bring vacant social housing units back into productive use and to improve housing for people with disabilities, as well as retrofitting homes to improve energy efficiency, was announced in May last.

All of the details on a local authority by local authority basis can be found on my Department's website. I urge all Deputies to be aware of and familiar with the targets, projects and funding for their areas and to work with and support their local authorities to ensure early advancement and delivery of these projects. Local authority elected councillors have a key part to play in ensuring social housing is delivered. The Part 8 process under the planning Act is an important local government function relating to enabling public participation and consultation in the development of local authority projects, including in the social housing arena. The Part 8 process can be conducted within a four month timeframe, but can sometimes take five to six months or more for larger or more complex proposals. I am examining the scope to streamline further the consultation process for the advancement of social housing projects, balancing both delivery and the need to get the public's feedback on projects that will be in place for a long period of time.

The funding provided to bring vacant and boarded-up social housing units back into use is a notable example of the social housing strategy's focused approach, which is needed as we move forward. There has been significant investment to tackle the issue of boarded-up units and to get them tenanted. This is delivering results. Over 2,300 units were delivered in 2014 and another 1,135 units have already been delivered in 2015. There will be more. Given the success of the programme and the high demand for social housing, I have recently made funding available for an additional 1,447 eligible units. This is in addition to the 1,000 target set out in the strategy.

However, I have been clear in my message to local authorities that they must in the first instance work towards minimising the number of their homes that are left vacant and require refurbishment, by applying good management practices to their housing stock for the benefit of those on the social housing lists.

Local authorities will not find me wanting when it comes to funding to assist them in delivering as many voids as they can possibly turn around. All of these measures will provide real homes for real people. In addition, I am glad to note that real jobs will be created and sustained as a result of this investment throughout the country, given that all 31 local authority areas were included in the announcements.

Another area of progress on the supply side includes the development of a significant public private partnership project for social housing. The model to be employed is new to the social housing area and has been very successful in the education and health sectors. Work on the PPP is at an advanced stage and is being carried out by my Department and other relevant stakeholders. This will bring 1,500 social housing units on stream. Work has also commenced on the development of the strategic housing fund, with €400 million of public investment which will channel private finance to approved housing bodies for the acquisition and development of social housing. I expect this to bring 2,000 social housing units on stream. The housing assistance payment, HAP, is a key component of the social housing strategy and is progressing at pace. There are now some 4,000 households in receipt of HAP across 13 local authority areas.

NAMA continues to play an important role in the delivery of social housing, having delivered almost 1,400 houses and apartments to local authorities and approved housing bodies for social housing use. NAMA continues to work closely with my Department, the Housing Agency, local authorities and approved housing bodies to ensure that its commitments on social housing are delivered. As regards delivery of social housing in the coming years, NAMA is committed to and is firmly on track to deliver 4,500 new residential units in the greater Dublin area by the end of 2016. It is worth noting that, in 2014, NAMA funded more than 40% of total new housing output across the four Dublin local authorities.

While the activity in terms of social housing supply is clear, delivery takes time. We are doing everything in our power to increase the pace of delivery, given the low base we started from, but it is a challenge. The overall lack of supply in all housing has put extreme pressure on social housing and the private rental market, manifesting in a very serious homelessness issue. A range of actions is being taken to secure a ring-fenced supply of accommodation for homeless households and to mobilise the necessary supports in order to deliver on the Government's targets. These measures have been identified in the Government's implementation plan on the State's response to homelessness of May 2014 and in the action plan to address homelessness of December 2014.

Budget 2015 confirmed €55.5 million in section 10 Exchequer funding for homeless services managed by housing authorities, an increase of over 20% on the amount made available for allocation in 2014. I might point out that the figure proposed by both Sinn Féin and Fianna Fáil last year was the sum total of zero, hardly appropriate for the current situation. The Government is fully committed to prioritising homelessness, not just through increased funding for homeless services but by also exploring innovative options for addressing emergency accommodation needs, such as the potential for modular housing to be used. Indications are that all key stakeholders reacted positively to the recent Dublin City Council modular housing demonstration project and I have asked the city council to develop the proposal further as regards unit numbers, costs, timescales and so on. It is envisaged that significant progress will be made on this initiative in the coming months.

These plans represent a whole-of-Government approach to dealing with homelessness. The implementation of measures identified in these plans is being overseen by a group of senior officials drawn from key State agencies dealing with homelessness and the associated issues of housing, welfare, health care and many other issues. The issues surrounding homelessness are multifaceted and, as such, require a multi-agency approach. I note the very important work carried out by NGOs in this regard. Preventing more people falling into homelessness is clearly an urgent objective and requires a range of actions and for various stakeholders to contribute towards homelessness prevention. In this regard, the tenancy sustainment services funded by many housing authorities, the public awareness campaign being implemented by the Private Residential Tenancies Board and the Department of Social Protection's interim tenancy sustainment protocol and national tenancy sustainment framework are all working to keep people out of homelessness. Ultimately, supply is the answer but while supply is being ramped up in the interim, I am examining any and all potential solutions. I will ensure that if changes to planning and procurement procedures are required, they will be made.

While the Government recognises its key role in terms of social housing and has returned the State to its correct position in the context of supply, it is very important to view the housing market or housing system in its totality. In this regard, the Government recognised the need for a significant increase in market housing. In response to the challenges faced in this area, the Government's Construction 2020 strategy, which was published in May 2014, clearly set out a cross-Government plan of action to address issues in the property and construction sectors, in particular, to ensure that any critical bottlenecks that might impede the sector in meeting the forecasted residential demand are addressed. The Minister of State, Deputy Coffey, has been given special responsibility for housing, planning and co-ordination of the Construction 2020 strategy. Under Construction 2020, we have targeted a return to a sustainable proportion of GDP for the sector, that is, 10%, from the low of 5% in 2012, an increase in construction jobs by up to 60,000 and an increase in output to the 25,000 houses required annually. In terms of meeting the 25,000 housing target, while we are coming from a very low base, it is moving in the right direction. We are moving from 8,000 house completions in 2013 to 11,016 in 2014. At the end July, we were at 6,745 units, an increase of 16% on the first seven months of 2014. Importantly, planning permissions granted are seeing significant growth. In the first half of 2015, planning permissions were granted for 6,165 houses and apartments, representing a 92% increase compared with the same period of 2014. Of that, 3,987 units, which is 64% of planning permissions granted, were in the greater Dublin area of Dublin, Kildare, Meath and Wicklow.

In order to stimulate housing supply, the Minister, Deputy Noonan, is implementing a number of key policies and initiatives, such as the introduction of the real estate investment trust, REIT, tax regime encouraging large-scale investment in the commercial and residential property markets, which is vital in regard to removing much of the overhang of half-completed properties, particularly throughout the greater Dublin area. There was also the launch in May of the Living City initiative, which is a targeted tax incentive to bring life back into the heart of the historic city centres of Limerick, Waterford, Cork, Galway, Kilkenny and Dublin. We have also extended the home renovation incentive to rental properties, thereby incentivising the upgrade of the housing stock.

While there are signs of increased output of housing, it does take time and the under-supply is affecting the market. The Government is, therefore, examining additional measures to increase supply even further. In this regard, it is important that any measures taken have the desired impact and represent value for money for taxpayers.

As housing issues go, rising rents are most definitely a concern and giving certainty to tenants - and indeed landlords - is something I want to do. According to the most recent PRTB statistics published last week, on 23 September, we are seeing significant increases in rents both in Dublin and nationally. Ultimately, a shortage of supply is at the heart of rising rents. It is impossible to divorce the two but the Government is addressing this on a number of fronts. As I mentioned, Construction 2020 in particular is aimed at addressing supply issues. Of course, I acknowledge that increasing supply to predicted requirements will take a number of years to have full effect so, in the meantime, a balanced set of measures is required. Regulation of rent raises many complex economic and legal issues and we have to be satisfied that any measures proposed are balanced and have the desired effect on the rental market, while being fair to landlords and tenants alike. I have been clear in my intention with regard to rent certainty. Ultimately, any decision in regard to rent certainty is a matter for Government. I will be bringing forward proposals to the Government for consideration in the very near future.

While not under my remit, rent supplement plays a vital role in housing families and individuals, with the scheme supporting approximately 65,000 recipients. Rather than providing for a blanket increase on rent supplement limits, which will not increase availability of supply, the Department of Social Protection's preventative policy allows for flexibility in assessing customers' individual accommodation needs through the national tenancy sustainment framework. Community welfare service staff have a statutory discretionary power to award or increase a supplement for rental purposes, for example, when dealing with applicants who are at risk of losing their tenancy or in danger of homelessness. That is being done and will continue to be done. I agree with the Minister for Social Protection, Deputy Burton, on this matter: introducing a blanket increase for rent supplement will not on its own resolve the problems facing the private rental market.

Planning is a key element of the residential supply process and, as we committed, the Urban Regeneration and Housing Bill 2015 was passed by the Houses of the Oireachtas before the summer recess and the Act commenced with effect from 1 September. It contains a number of important changes aimed at increasing housing supply, including: the retrospective application of reduced development contribution charges. The new legislation will enable local authorities to retrospectively implement reductions of development charges in respect of existing but uncommenced planning permissions, with the aim of improving the economic viability of new housing development; new and clear Part V arrangements which aim to enhance the economic viability of developments, maximising the opportunity for the delivery of social housing units and securing the principle of integrated mixed tenure developments. Importantly, the practice of developers making cash payments in lieu of social housing is no longer an option under the new legislation; a new vacant site levy on lands suitable for housing but not coming forward for development. The levy will start people thinking about what they do with their sites, especially where there is significant demand.

The issue of finance is crucial and presents a significant impediment to housing supply. The Government has made a significant move to address this issue by putting in place the €500 million home building joint venture between the Ireland Strategic Investment Fund, ISIF, and KKR and things are happening on that front. The joint venture, named Activate Capital, will be financed through a €325 million investment from the ISIF - its biggest single investment to date - and €175 million investment from KKR. It will lend on a commercial basis to residential development projects, providing developers with loans for up to 90% of the total financing requirement, with the developer required to fund the additional 10%. This will allow projects that are currently stalled to move ahead, with the ISIF earning an appropriate commercial return.

Another key objective of Construction 2020 is increasing the numbers employed in the construction sector and ensuring the right skills and training are in place to deliver those 25,000 units annually. CSO figures show the construction sector grew by 18.5% in the past year and at the end of quarter 2 there were 126,000 employed in the sector. These are positive developments, but we are well aware that significant challenges remain which will take time to resolve.

A legacy of the boom years is the number of people that have struggled to meet mortgage repayments. The Government has taken action on mortgage arrears, including the package of measures announced in May 2015 to provide additional support to borrowers and to ensure that wherever possible people are kept in their home. Included in the new measures were changes made to the mortgage-to-rent scheme operated by my Department to enable more properties to qualify for the scheme. In that regard, I am pleased to report that since the package was announced, significant progress has been made and we have seen an increase in activity under the scheme in recent months. For example, from 1 July to the end of August, 11 units became fully operational and 71 units received full funding approval from my Department. During the same period in 2014, two units became operational and four received full funding approval. There are now a total of 116 mortgage-to-rent transactions completed, up from 102 in May, of which 83 are fully operational.

In addition, the Private Residential Tenancies Board, PRTB, has been advancing the voluntary code of practice in regard to tenancies affected by receivership and repossession. This is an important initiative aimed at protecting tenants who, through no fault of their own, find themselves at risk of losing their tenancy at very short notice. The voluntary code of practice is due to be considered by the Banking and Payments Federation Ireland by the end of this month, following which a broader discussion will take place between the PRTB and other stakeholders with a view to concluding the code.

The housing system in Ireland was broken. Where we had enormous supply and a totally unsustainable model, we were left with minimal supply, particularly of social housing, and pent-up demand and a major reliance on private rented accommodation. As this Governments' economic policies began to work and as more and more people took up employment here, the demand for all types of housing continued to increase. At the same time, the vulnerable in society who find it difficult to source and fund their own accommodation are becoming squeezed. The Government's response has been clear, with a plan and policies to get the construction and residential sector up and running and a funded plan to deliver the social housing units required. In the period while delivery is ramping up, homelessness is my number one priority. I am determined to try everything and anything I can do to help the people and families who find themselves in this awful situation.

I again thank Members for raising and highlighting these issues and I hope that everyone in the House can set politics aside, contribute constructively and work together on this serious issue.

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