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

Like other Members I am delighted to have an opportunity to speak on this particularly important legislation. I was almost moved to tears when my colleague, Deputy Lahart, waxed lyrical on the entire subject. He missed out on one aspect, although I thought he was about to come to it. He did not claim responsibility for the fine summers we had over the years but he claimed responsibility for everything else. I mean that in the best of ways. I was reminded of a line in a poem which states:

And even the ranks of Tuscany

Could scarce forbear to cheer.

As the Ceann Comhairle and I well know, having served together on the same local authority, we learned most of what we learned about housing at the coalface. A number of aspects need to be set straight. Incidentally, I felt that Fine Gael was being held responsible for everything bad that happened, not by Deputy Lahart but by other speakers who seem to think they would not expect Fine Gael to be involved in anything other than what helped the larger householder or the more affluent sector of society. I would remind people there was a housing crisis in the 1970s and Fine Gael and the Labour Party between them in government resolved that problem. There was a housing crisis in the 1980s and again they resolved that problem, so they are not without some experience in dealing with the housing issue.

Over recent years a new issue has arisen in respect of housing. The young generation have been excluded from the housing market by one means or another. Various reasons have been put forward for that, and I disagree with my colleague, Deputy Lahart, on this one. The Kenny report is meant to be the be-all and end-all of everything. It is not because there were a number of reports around that time. There was the Kenny report, the Myles Wright report and the McKinsey report, all of which attempted to deal with the same area. The Myles Wright report was the one that proposed to develop a number of towns, including a number in County Kildare, to draw the population away from the Dublin area. The other one was the two cities report which developed Tallaght as it is today. It provided housing for a large number of people who would not have been housed otherwise. It was the manner in which it was done that caused the greatest angst. The other one was the Ballymun housing solution, which again was in response to a crisis. The solution removed one crisis and replaced it with another, so to speak, by virtue of plunging into something that was not too well investigated.

I believe the Minister is trying to do the right thing and I hope it is the right thing. I have some concerns about it because I have had the same conversation with Ministers for housing of all parties over the past 20 years.

It is about trying to make housing affordable and to bring it within the reach of a new generation and within the reach of people who would not be catered for by the local authority housing system, which, incidentally, does not exist any more anyway, in order that they might be able to buy houses for themselves for now or for their lifetimes, depending on what they want. I disagree strongly with the notion that rental accommodation was an answer to the problem. We all have had experiences over the past five or ten years of people promoting what they wanted to promote at a time because it suited them, and fellas coming on "Morning Ireland" to say that they were in favour of renting and that it was much better because one did not have an investment in bricks and mortar. It was all rubbish. The Ceann Comhairle and I know it was rubbish because there is nothing as good for the individual as to be independent. The independence starts, rests and remains with the ownership of the individual's house. They then control that house. They control when they can come and go. If they are not able to pay for it, they know beforehand. One thing is certain: it is in their hands, and they relish that and will always do so. I therefore do not accept the notion that Irish people are "preoccupied" with the notion of home ownership. They are right to be so. Home ownership is their right, and no system should exclude them from that right.

A strange thing is happening now. We are back to where we were in the sense that a young person now deciding to buy a second-hand house - or any house, for that matter - will be asked to make an offer. As the market is tested over the following week or ten days or so, that price will escalate by up to 20% or 25%, which is a massive leap. That means the deposit which was required in the first instance is no longer relevant and the person has to wait or wait for more so he or she is still in the market. However, as other speakers have suggested, paying €450,000 for a two-bedroom house is absolutely ridiculous, and there is no sense in trying to justify it on any grounds, whether the house is in a trendy place, for want of a better word, or whether the purchase is made out of necessity. It should not be. Another issue arises from that: how does one climb down from a position of overpriced houses to reasonably priced houses without people going into negative equity subsequently? This issue has been dealt with before - well, it has not been dealt with but people have suffered it. People's houses have been repossessed because they were in negative equity. Some of the same institutions are coming back still for the rest of it and the customer, of course, is always wrong.

I mentioned the Kenny report at the beginning because I have been interested to see whether land at an affordable price is the determining factor in the cost of housing. The answer is that it is not. In order to prove this, along with a number of our councillors, I formed a group a few years ago that had the opportunity to acquire serviced sites. The approved housing bodies could buy the sites for a single euro. We discovered when we tried to do so that it was not on; we had to pay for them. We paid either €20,000 or €25,000 per site - I cannot remember which - with ten sites to an acre. For the acre, €250,000 was not too bad. It was not a site for nothing anyway - that is for sure - and we built the houses. I have spoken to the Minister previously about this. The strange thing about it was that we got a price from a builder to design, put in the earthworks or whatever the case was and deliver, which he did. The day the keys were handed out to the loan applicants the houses ran from €140,000 to €170,000. This was 2008 so not a million years ago. On the market at the same time the same houses were being marketed for €410,000. Therefore, somewhere along the way there is a markup that people do not seem to see and that we cannot seem to nail down. I know where it is, of course. Everybody jumps on the bandwagon, everybody gets their 5% or 10%, everything costs more and, as a result, there is a markup that everybody has to get and suddenly the house is priced out of reach.

The strange thing about it - well, it is not so strange at all - is that during the crash in the economy, when house prices collapsed everywhere, not one of those house loans went into negative equity. They were still good value. They held their face value all the time. The point I am making is that we are paying too much for houses and it is caused by an ability on the part of the developer to say on the day he or she buys the site, "I can put X number of houses here, I can reduce the quality of the houses, I can have multiple houses, hubs or whatever you want to call them on the site and I can make more out of it." That is what happens. I was looking recently at a proposed development locally to superimpose three or four storeys on top of an existing development at a sensitive location in terms of traffic. That was to be the answer. The result would be 30 or 50 houses - that is what it would achieve. The fact of the matter, however, is that 30 or 40 houses do not justify the extent of the damage to be done to the environment through bad planning, so another means must be found. The point I wish to emphasise is this: even if the land were available for nothing - absolutely zilch, zero - once it went through the system it would be multiplied in price every time by everybody. As a result the price goes up again and again. Let us not forget this. We can have all the referendums we like but if we think it will reduce the price of houses, forget about it, it will not. It has nothing to do with it whatsoever but it creates the impression that it could reduce house prices. It will not. I am sure the Minister in his own heart knows this because he has been in the business a while like us and he knows full well what will and will not happen.

Some Members spoke as if it were like in the old days, when the local authorities employed plumbers, plasterers, bricklayers and so on. That does not work. That is not the way the building system works any more. The local authority needs to get capable builders in to design and build, get planning permission, provide the road structures and the services and walk off at a price, that price being known beforehand. That can be done and is being done all the time. That is the way the building industry is structured now. That is the best value for money. It does not help to go back to the old days, when the local authority was stuck with the ongoing cost of having to retain on their books a whole army of building and construction workers. It does not work that way.

We should now look at what we have. There is a difference between what we had and what we have. When the economy went down there always used to be emigration, and that in turn had an effect on the housing market because we did not need as many houses. Well, we needed them all right but we were not here to get them. We therefore have to plan for the future and plan on the basis that a successful economy that is well managed will carry long into the future an ongoing annual demand for a certain number of houses, and they need to be houses.

Another thing I want to refer to is meeting short-term housing need. I do not agree with it at all. It is a waste of money. One can put as many people as one likes into a room and put independent corridors between them or whatever the case may be and say, "This is housing". It is not housing. It is emergency housing. That is all it is for, that is all it can do and it should never be treated as anything else. If we want proper accommodation, quality housing, we need to be absolutely certain that we meet the market requirements. The market requirements are that every young person wants to have a house. They want to be able to have the key to their own door and they do not want to have somebody looking over their shoulder saying, "You should move on now. You have been independent for long enough and we will move you into something else." Every time something like that happens, we damage the structure of society all around us. We should not be doing that, encouraging it or allowing it to happen.

I will move on to how we might proceed into the future. If the Bill and the proposals work, which we will watch carefully, and we hope they will work, they will eliminate an awful lot of hardship that is being suffered right now and has been suffered for several years by one or two generations that have not been able to acquire homes of their own. Even where they did so, when the economy collapsed they found themselves and their parents who guaranteed their loans in many cases in a serious position whereby they owed money to the banks in many cases for a property that no longer existed or was worth way less than what they built it or bought it for. We need to look at that.

I also want to briefly comment on the housing bodies. We were all members of the special housing committee four years ago and we spent some considerable time looking at the ways and means of addressing this issue. At the time, I opposed the use of the approved housing bodies as a means of meeting the demand of the general housing market. I believe I was right. Without a shadow of doubt, these bodies are good in the specialised housing area. They are excellent at meeting the housing needs of people with particular disabilities or those who have been unable, for one reason or another, to get on to the housing market and who have some requirements and need some encouragement and help. Without doubt, the approved housing bodies are way beyond any credit that has been thrown in their direction over recent years. Those bodies are still in the best position to deal with the specialised areas of housing. I believe that they are.

I have gone into a number of local authorities over recent years and have asked how quickly it can build 1,000 houses. I have asked that simple, straightforward question. I have been told that it could take five years or more. That is absolutely crazy. I cannot understand it. A person can go wherever they want and request the price for the building of a bridge or a motorway - anything they want. We have seen it all over the country. It has been done successfully and projects have been delivered on time. Good and internationally accredited products have been delivered. However, we do not seem to be able to do that with houses. Why is that? Why is there that reluctance?

I have blamed various people in the past as to why it happens. I do not know whether I am right or wrong. I felt there was a reluctance in the local authorities to accept responsibility and to drive projects to achieve results. Perhaps it was true and perhaps it was not. However, until and unless we resolve that particular issue, we are not going to solve the housing problem. We need houses delivered, not on large sites but in large numbers throughout the country at the same time. That can be done. I brought various people who had the capacity to deliver that to the local authorities and to various Ministers over the years and I pleaded with them. I am still pleading at this stage in the hope that the Minister has his eye on the same target that we all have and that it is his intention to drive this thing through to achieve the result.

I wish to make a point and to issue a warning. It concerns shared equity schemes. I must say the Ceann Comhairle and I have had some peculiar experiences with these. There used to be what was referred to as the shared ownership loan system, which was the shared equity scheme at the time. The problem was that after a year or two, some genius decided to change it and add on 4% of an increase on the rental part of the equity on an annual basis. The effect of this was to drive the people out of the houses they were hoping to buy over a longer period of time and to force them into rental accommodation, which was available through the private sector because it was not available elsewhere. It was almost as if somebody had a look at the system and decided they needed to intervene because people were getting it too easy, so things should be made more difficult for them.

We also need to realise the younger generation must be given hope. We must let them know that, within a reasonable time, they can achieve their hearts' desire, that of owning a home.

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