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

I smile to myself when I hear many of the things that have been repeated over and over - I am sure the Cathaoirleach Gníomhach does likewise - with regard to the obstacles facing people who are in need of homes. These people have various income levels. We have listened to people rightly say that on the one hand there are people whose income is too high to qualify for local authority housing and too low to qualify for a mortgage. They are certainly encouraged or even forced to rent, in many cases from funds that are in the market and come between the potential tenant or first-time buyer and the seller of the property in order to provide property that they, in turn, will rent to people who have no other way or means of being housed.

I want to give an example of the experience some of my councillors and I have had in the last ten or 15 years. We identified developed private sites as a way of ensuring that houses were made available within the prescribed income limits at the right price. We discovered, in the first instance, that we had to compete with the AHBs, which were able to purchase a private site for €1 each. That still applies, I understand. We, on the other hand, formed a co-op and arranged for the loans in each case to be dealt with by the local authority or bank depending on what was the most appropriate. When they were approved, we then had to include the cost of the site, which for us was €25,000 per site versus €1.

We got a price from a good builder who did the job. At the end of the day, we were able to bring in 96 houses priced between €140,000 and €160,000. Admittedly this was ten or more years ago but it was a massive difference between that and the houses that were already for sale. When the keys were eventually handed over, the potential market price was €410,000 on average across the board. It was proven beyond a shadow of a doubt that it was possible to provide houses at a competitive price within the market and having regard to the market and ensure that a group of people was protected in some way to enable them to compete in the marketplace. It should also be noted that when the crash came - it came very quickly, for different reasons - not one of those houses went into negative equity. The one thing they had in common was that none of them ever went into negative equity. The price they came in at was at least 35% to 40% lower than the price at which the local authority was able to provide houses at affordable rates. It proved beyond a shadow of a doubt that it could be done and it was done.

Some of the bureaucratic nonsense that went on with the shared ownership loans was removed. The shared ownership scheme was a good idea. It gave people a chance to get on the housing ladder at an earlier stage. Everything was fine until somebody in their wisdom decided that it would be necessary to increase the rental part of the purchase price on an annual basis to the extent that it could increase by 40% over an eight- to ten-year period. This was to discourage people and squeeze them out of that market. Many people were squeezed out of their houses and the houses had to be repossessed. The scheme had been a good one in the beginning but it was tampered with. There were lots of people who found themselves in that income bracket through no fault of their own and it enabled them to get on the ladder and get a house that was and still is permanent. Funnily enough, very few houses in that scheme have fallen into the market since then.

The Department introduced something else, namely, the clawback. This involved subsidised private sites, as they were called at the time. A condition was imposed to the effect that a clawback was to apply in the usual way. We know how it works. Why was it necessary to penalise a group of people who had tried valiantly to compete in the marketplace and provide themselves with a home at no cost to anybody else? They all got mortgages. At the time, people suggested that this should not be happening because the people were getting free houses. They were not getting any free houses. They got their mortgages in the normal way as people did over the years through the local authorities and the banks.

An applicant for a council loan has to have a refusal from a bank or a building society - possibly one or two refusals - to be considered. A housing authority is not a bank. It has a responsibility to house the people in its administrative area by two means - through the allocation of a local authority house, or through the allocation of a loan to enable that person or family to get a house for themselves by way of that particular loan. Thousands of people have been facilitated in that way over the years but it has become more restrictive simply because it is more beneficial to funds - some of us would call them "vulture funds" - to zoom in on the market, grab up completed developments and then decide to sell or let them. This is crazy. Nobody believes this is the right way to go about it and it is not. Please abolish the bureaucracy. I agree fully with the previous speaker's comment about reducing the number of pages.

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