Eoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

I very much welcome this budget. I hope that people can recognise all the good it will do in helping people out of homelessness and into new social housing homes, in supporting people in to rented accommodation and in removing significant obstacles to getting more homes built, more quickly and at more affordable prices. Any new home built, be it by the private sector or through social housing provision, any new home brought on to the market from vacancy and any new site developed relieves pressure in other parts of the system. Our constant focus has to be on the supply of new homes.

In total, my Department’s Vote for 2018 will be €2.394 billion. Within that, housing is far and away the biggest programme. All told, €1.9 billion will be available for housing next year, an increase of €600 million, or 46%, on this year. This investment is directly aimed at addressing Ireland's housing shortage and homelessness crisis. It represents an increase of 62% on the capital side to build new homes and 35% on the current side - more than €760 million - to support homelessness, as well as supporting people into new social housing tenancies.

Looking beyond 2018, I have secured an extra €500 million for capital investment in social housing in the years 2019 to 2021, which will allow us to increase the Rebuilding Ireland social housing target from 47,000 to 50,000 homes, the figure recommended last year by the Committee on Housing and Homelessness. This is new money that was not in Rebuilding Ireland to date and which will deliver more social housing homes. Because of the changes I announced at the housing summit in September, the stock of homes that will actually be built directly by local authorities and approved housing bodies will also increase.

We will almost double our social housing output next year in terms of direct build, moving from 2,000 homes this year to 3,800 homes next year. In 2015 this number was less than 500 homes. Some Members across the House would like people to believe that simply because I announced this four weeks ago, it means that no new social houses will be built next year over the number that was intended. This is nonsense; it is disingenuous and is from people who should know better. Some Deputies in this House cannot welcome the extra capital that is being provided for social housing in Rebuilding Ireland that was announced yesterday, even though they looked for it. Some Deputies in this House cannot welcome the new focus on direct building in that programme, even though they called for it. I welcome the constructive engagement from Fianna Fáil, whose members rightly say that this has gone beyond party politics and who are focused on practical solutions instead of populism.

The budget for local authorities will increase by more than 100% next year to enable them to meet their targets. When we add in Part V homes, vacancy conversions, acquisitions and long-term leases 7,900 new homes with all the security and affordability that social housing brings will be created. Will this alone solve our waiting list problem or meet all of the needs of our people? No it will not. That is why those building figures will increase again the next year and the year after that and the year after that. We will get to 10,000 new social housing homes being added into the housing stock. We cannot do it next year but we may be able to get there by 2020. This is something when one looks back to what was being delivered as recently as 2015. The work and investment that the Government is putting in to social housing is working and the last two years are proof of that.

With the new capital investment thanks to a growing economy, we can now do more. That economy is growing in spite of every vote taken against that recovery. These were votes taken by those in opposition who now criticise us forcefully for not doing more. They voted against recovery and against job creation and now they may vote against building new houses. Until we have those houses built, we will continue to support people into rented accommodation through the housing assistance payment, HAP, system. This budget effectively doubles to over €300 million and will support 17,000 new tenancies next year. I thank the Independent Alliance Members for their contributions to that programme.

Taken together with our build, leasing and acquisition targets, every working day of the week next year 98 new households will be supported through social housing supports. This is an increase from 80 every working day of the week this year. This would not be possible were it not for the priority the Government places on housing our citizens who need our help the most. It is homes that our homeless people and families need; one home for one family. Until we have those homes built, we will increase our expenditure to €116 million next year for homeless supports and we will continue to roll out our hub programme. We will move more and more families out of hotels and bed and breakfast accommodation into more suitable and ultimately more secure and sustainable accommodation. Thankfully the number of those who are homeless is comparatively low in Ireland when one looks at some of our peers. This is a good thing. It is also good that our people demand more of us and that they do not accept even that comparison. People want us to invest more and we are investing more.

Just as significantly as this increased Investment and these new builds for next year, budget 2018 removes the remaining significant obstacles to building more homes, more quickly and at more affordable prices: by investing more in direct house building by the State as I outlined; by removing the capital gains tax incentive to hold on to residential land; by escalating penalties for land hoarding; by introducing new affordability measures; and by providing a new, more affordable finance vehicle for builders up and down the country.

As we build more homes, we must ensure that a new supply is delivered at more affordable prices. We know that progress is being made when it comes to building more homes, but a generation of people are being locked out of the housing market. Some affordability measures are already under way and are working well, such as the An Bord Pleanála fast-track planning process, which removes time from the process of house building and therefore removes cost. Another measure was the rent cap introduced at the beginning of this year, which thus far has shown a capping of inflation below 4%, which is a big decrease when compared with the increase of more than 8% last year. New areas will enter the rent pressure zones each quarter where necessary.

Earlier this week I gave the go-ahead for 18 of the 34 contracts to be completed under the local infrastructure housing activation fund, LIHAF. This fund will open up landbanks to support 20,000 new homes. On 70% of the sites involved, there will be homes coming in at prices below €320,000. Other sites will have specific affordability carve-outs at lower amounts. Last week I announced a move to new planning guidelines to allow for more affordable apartment development for city centres, an example of which is the removal of the car parking space requirement, which is a significant cost to development.

We can, however, do more and we must do more. A new entity announced yesterday by the Minister for Finance, home building finance Ireland, HBFI, will provide finance at commercially competitive rates to developers with sites ready to go but who are experiencing difficulty in obtaining funding. A second LIHAF infrastructure fund of €50 million will unlock even more sites, more quickly and at affordable prices. As members are aware, LIHAF 1 was well over-subscribed, so we can expect a second LIHAF call to be answered very quickly.

A new fund of €25 million will be provided over 2018 and 2019 to unlock local authority-owned land specifically to deliver affordable housing on those sites using models such as co-operative housing that have already proven to be successful but are now needed on a much greater scale. My Department is currently drawing up the criteria for access to this scheme, to be announced In the coming weeks, along with further affordability measures. The combination of the capital gains change and the more than doubling of the vacant site levy to 7% will tackle the problem of land hoarding and will release more land for building. More supply means more homes and that means more affordability. Any new home built, whether private or social, takes pressure off other parts of the system. The vacant sites levy increase of 7% from 1 January 2019 is a significant escalation and it will help to unlock new land.

With regard to vacant housing, vacancy teams in the local authorities are working to identify vacancy hot-spots, with the cities due to report in a couple of weeks, and the rest of the rest of the local authorities by December. It is worth noting that as we have drilled down into the numbers of vacant housing, the true level of vacant homes in high demand areas looks to be far lower than previously thought. Nevertheless, the budget announcement regarding tax deductibility for pre-letting expenditure incurred in bringing vacant housing back into use for rental purposes is welcome. We also are considering other measures to address vacancy, including some important changes to the repair and lease scheme. These will be announced shortly under a vacant homes package.

Budgeting is about choices. Government is about taking responsibility and making decisions. In budget 2018, we have made the right choices and we have taken decisions when it comes to increasing our State building programme, supporting homeless people and ensuring that more homes can be built, more quickly and at more affordable prices. Additional money has been made available for regeneration, disability services, the elderly, Traveller-specific accommodation, pyrite remediation and climate mitigation. My departmental colleagues, the Ministers of State, Deputies English and Phelan, will elaborate on some of these other funding priorities across my Department’s broad policy remit. We are making progress when it comes to house building. We are making progress, albeit very slowly, in helping people and families who are homeless into more suitable, sustainable and secure accommodation. That progress should be welcomed. The budget should allow us to make greater progress next year in meeting these essential needs of our population.

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