Tuesday, 19 April 2005
Social and Affordable Housing: Motion.
That Dáil Éireann:
—the average house price in Ireland now stands at €255,776, an increase of €18,000 in one year;
—the price of an average house has increased from an average of €75,000 in 1996;
—42,500 people aged over 30 now live with their parents according to Census 2002;
—only 315 affordable housing units have been acquired under Part V of the Development Act 2000;
—over 100,000 individuals are on local authority housing waiting lists;
—there are 5,581 homeless people in Ireland living in 3,773 households; and
—the significant policy change that occurred with the transfer of responsibility of the housing needs of those on the rent supplement from health authorities to local authorities;
bearing in mind the response of the Government to this escalating crisis has been the:
—abolition of first-time buyer's grant;
—increasing of VAT rates on houses;
—imposition of development levies;
noting that moves in the recent budget on stamp duty have not been enough to move first-time buyers out of the stamp duty net, calls on the Government to:
—implement a package of proposals to help first-time buyers including an SSIA-type deposit savings scheme;
—arrange for a Dáil debate on changes to the rent supplement;
—meet its NDP targets and election promises on social and affordable housing; and
—convene a crisis meeting of the social partners to address the issue; and
condemns the Government for its failure to provide young people with decent, affordable housing.
From the perspective of society, in particular our young people, there is nothing more important than a house of one's own. Since the foundation of the State a house of their own has been an achievable objective for each generation of young people. This was something to which they could always aspire, whether it was local authority housing, now called social housing, whether with assistance from their family they could build their own home on a family site, or whether they could enter the housing market and buy a house with a mortgage raised on their income, normally 2.5 times the combined income of the couple. A house of one's own was a reasonable and achievable aspiration. As Ireland grew in confidence and ability and as our education system improved there was a significant improvement in living standards. Young people and young families were at the heart of our society.
In the past five to seven years this has changed. Between 1998 and 2003, the cost of a house rose by an amazing 81%. People who have a home that has risen in value by 81% in five years think this is great and this is an investment for their future and their family. However, the reality is that for young people the ideal of purchasing one's own home and starting a family is no longer achievable. This puts pressure on the system and drives people out of the housing market into rented accommodation. It drives them onto local authority housing lists when they would prefer to build their own home. In particular, it demonstrates the inability of this Government to value young people.
When the late Pope John Paul II came to Ireland he said: "Young people of Ireland, I love you." He concentrated people's minds on young people and their future. As politicians we hold the fort for the next generation. We prepare the ground for future families and give our young people a chance to move on in life, to form their families and purchase their homes, or we ensure that the local authority assists them in that purpose or supplies homes for them. This resolution is about the failure of this Government to value and honour or to give the commitment, care, concern and dedication that young people need to achieve their dreams.
Until now we have had the highest percentage of home ownership across Europe. We are the world leaders in giving security to our families and young people. However, this generation of Fianna Fáil politicians is not helping. The problem with this Government is that it has been in power too long and no longer cares that the goal of achievement of all families and young people is no longer possible.
I have spoken to many young people who want to buy their own home but who cannot afford to do so because, while their income can sustain the mortgage, they cannot provide the large deposit. Many of them borrow from their parents and try to pay them back or they borrow from the credit union and put it down as a car loan. They cannot be transparent with the building society about where they are getting the money because if they are they will not get their mortgage or with the credit union or they will not get their loan. They are in a serious bind, a result of the policies of this Government.
Reports in the newspapers that the rate of increase in house prices is slowing down sound good. The Government should not take comfort from the statistics released earlier by the ESRI, which highlight a slow-down in the rate of house price growth. The institute shows house prices increased by 7.5% compared with average inflation of 2.1% and an increase in average industrial earnings of 5% in 2004. Notwithstanding the moderation in house prices, young people are not better off as they still cannot afford to bridge the gap between their savings and income and the deposit needed to buy a house. The Government's amendment is proof enough of that as it concentrates solely on money spent rather than outcomes delivered.
Everything is not all right. Ireland continues to endure a housing crisis. I welcome last week's initiative by the Minister for the Environment, Heritage and Local Government to assist people in rural Ireland in building their own homes and I will not pour cold water on his plans in that regard. However, the SACs are an issue of contention in the proposed regulations. It is all very well for those of us residing on the east coast to say SACs should not be built on and they are sacrosanct because there are fewer such areas in the region. However, significant tracts of land — square miles rather than square metres — in other parts of the country are designated SACs. The bottom line for Fine Gael is that young people living near SACs should have the capacity to build on their own lands, particularly when they have no other choice.
The greatest problem facing young people is the complete and utter failure of the Government to get to grips with the housing crisis. Its laissez-faire approach to rocketing house prices has made Opposition Members sick as we witness the knock-on effects of its right wing policies. The average price of a new house is €256,000. Many people cannot afford to buy their own homes and the number aged over 30 who still live with their families has increased significantly over recent years. That is indicative of the lack of Government interest in them. More than 50,000 families are on local authority waiting lists. A national assessment is being conducted by local authorities of these lists. Between 1998 and 2003 the number of people waiting for social housing increased by 60%. In 2003, 18,000 more families were on the list than in 1998. I contacted officials in a number of local authorities earlier this week and they expect a significant increase when the updated figures are published later this year.
Government policy on social housing has been a serious and abject failure. I am fed up, as are my colleagues, with our clinics full of people who seek social housing but who have no hope of being approved. While I welcome the changes made to the rent supplement scheme, which provide for pilot areas in Drogheda and a number of cities where local authorities will be proactive in providing rented accommodation at a reasonable price for young families, one must be in receipt of supplementary rent allowance for 18 months to avail of the scheme. The poorest people who would take rented accommodation if they could get it, therefore, cannot even be considered because they must be in receipt of the allowance for 18 months before they can get into the game. That is not good enough.
The scheme has a number of positive provisions, which I have measured against certain indices. It is socially just and could make a positive contribution, but the poorest in our society cannot avail of it. That is where the Government's policy has been an absolute failure. If the Minister of State does not believe that, he should visit my clinic or those of other Opposition Members. Almost 6,000 people are homeless or living in bed and breakfast establishments throughout the State. While the changes to the rent supplement scheme will facilitate people to move out of bed and breakfast accommodation, and the policy thrust in this regard is positive, not enough is being done for the homeless.
Manifesto promises of more houses and a reduction in waiting lists are a distant memory. This disaster has been met by a Government response, which included the abolition of the first-time buyer's grant, an increase in VAT on housing, development levies and so many taxes and charges that much of the price paid for a new house goes directly to the Government. The statistics provided by the Construction Industry Federation are staggering. The federation estimates the tax take from a house worth €300,000 in Dublin comprises VAT of €35,000, site tax of €30,000, labour taxes of €29,000 and profit taxes of €11,000. The Government is taking €110,000 out of a house buyer's pocket, which is appalling, particularly where first-time buyers are concerned.
Fine Gael is convinced its three-point plan will help young people save for a deposit, buy a house and repay a mortgage. First, we will introduce a house deposit savings scheme, similar to the SSIA scheme, to help young people saving for a deposit for a new home. This is the key to enabling them to bridge the gap between their savings and the deposit they need to buy a house. The SSIA scheme, which is popular and important, will reach fruition in the next two years. Why will the Government not introduce a similar scheme dedicated to first-time buyers? It would be socially just and would help them to achieve the dream of their lives to buy their homes.
We should cherish our young people, especially those who wish to purchase their own homes. Now is the time to do so. Fine Gael has costed a savings scheme to which it is committed. Under the scheme, first-time buyers would receive €1 for every €3 they save provided those savings are used for a deposit on a house. No tax on interest would apply. The recipient must demonstrate regular monthly savings for a minimum of two years and the scheme would operate for both new and second-hand houses. This is a serious initiative which must be implemented now because we should no longer keep these people waiting. Young people need to be offered hope that they can realise the dream of their lives. There is nothing more important than concentrating on this issue. Fine Gael is determined that this will happen.
Fine Gael will abolish stamp duty on second-hand homes valued at up to €400,000 bought by first-time buyers. The move in the last budget was welcome — it was Fine Gael policy — but it is an inescapable fact that it did not lift first-time buyers in Dublin out of the stamp duty net. Fine Gael also proposes to front-load mortgage interest relief for first-time buyers on the first seven years of the life of a mortgage, thereby giving them the help they need when they need it most. Those measures would cost approximately €50 million in the first year, and we are prepared to commit that money. It must be done, since it will make all the difference to society.
That is the core. One could waffle here all night and talk here, there and everywhere, but unless one puts money into the pockets of young people who want to buy their own home, one is not taking them seriously or giving them the honour and respect that we as a society want to accord them in order to encourage them.
There is nothing more important to say about Ireland than that we have had the Celtic tiger. Now we are moving into the second phase. Many people from different countries wish to come into this economy, learn about it and be part of it. We have never been so wealthy or had so much money. Our coffers have never been so full. People in this country have a wonderful opportunity regarding education, since we have the most educated young work force. However, we are really letting our young people down in a big way if we squander society's wealth. Who is making off with it? It is the big builder, the profiteer and the developer when the young people should be enjoying the benefits of this building boom.
More legislation is needed, and there are issues regarding the Kenny report of some years ago on building land. The All-Party Committee on the Constitution is examining the cost of building land and whether we require reform. There are many arguments and debates but only one fact: that we are not doing enough. The Government has been shameful in its neglect of young people. When the Minister knocks on the doors in a year or so, he will find that out. We are absolutely committed to our point of view and policy.
I am very pleased at the opportunity to say a few words on this important motion and congratulate Deputy O'Dowd on tabling it.
Nothing takes up so much of our time as getting people into houses — whether by loans, planning applications, social and council housing or whatever — at our constituency clinics. It is therefore good to have this motion tabled to bring our views and those of Members to the Minister. He should look on this motion as an opportunity to see what is happening to people throughout the country. It varies from area to area. In my constituency each week, there is nothing that I have to deal with as much as planning applications.
In the run-up to last week, we heard an announcement regarding planning. I do not want to pour cold water on it, since I welcome an initiative by anyone to ameliorate a very complex and difficult problem. However, when it comes to allowing people to live in rural Ireland, last week's document contained very little that would change anyone's life. I have discussed it with planners in several counties, particularly those outside Dublin and the east. In my part of the world, neither the people nor the planners involved locally see any great change.
The failure of the proposal to address the cluster issue in planning — allowing young people to live in their own houses in rural areas- was a missed opportunity. If there is anything in need of examination by planners, local authorities and the Department, it is cluster-type development. There is great potential to allow more people to live in rural communities. There are a great many families, including farmers and people in cottages with half an acre or an acre of land on which two or three members could live in a cluster-type development. I am deeply disappointed that it was not dealt with in the proposals.
I also want to mention the difficulty of people on what can be regarded as very good wages and in good jobs in getting onto the housing ladder and getting their deposit together, something that Deputy O'Dowd has pointed out. I commend the proposals that he has brought to the House. Action is needed on behalf of those people. Only last Sunday in my area a new housing development was being opened and advertised for sale, with an open day from 2 o'clock until 4 o'clock. A number of young people were walking around those houses. When I spoke to them, they said they wished they could manage the deposit. That was their genuine worry.
I know the Minister would like to help, but he must do something that will assist those people I met last Sunday in Dundrum, County Tipperary, looking at a €325,000 house. Others were viewing three-bedroomed houses in Tipperary town, which would cost in the region of €200,000, asking where they would find the deposit. That is crucial if we are to move and allow more people to get onto the housing market. The abolition of the first-time housebuyer's grant was not a good move.
One of the things that frustrates me and every young person trying to buy a house is the level of development levies, charges and VAT — all taxation, no matter how one looks at it — they have to pay. I would like to see published the actual tax that everyone paid, whether it be VAT or levies to a local authority, when the lists are published of how many houses have been built in south Tipperary, north Tipperary or Wicklow. The figure must be frightening. It is probably available, but I would like to see it highlighted, since it is time to show people the double taxation. We need more relief and support for those who are paying such colossal figures because of house building.
Another issue is people trying to secure a council house. Since I first became a member of a local authority in 1991, the numbers on the housing waiting lists of the four local authorities in my constituency have increased every year. That is not good in a country where unemployment has come down so drastically and there are so many people working. Local authorities are slow, and assessing whether people qualify and putting them on an approved or emergency list is also slow; they must wait a long time. It is totally unfair and unjust in this day and age in one of the wealthiest countries in the world that we must say to those people that they may not get a house and that they have to wait so long. The entire system of allocating houses needs to be improved drastically. If one walks into a bank or building society tomorrow morning, one will be given a loan within 24 hours if one qualifies for it. It is deplorable that up to seven years can pass from the time one completes a housing application form to the time one is given a house. It is one of the most inefficient uses of public money in the State. As members of the Committee of Public Accounts, Deputy Rabbitte and I should bring to the attention of the committee the deplorable slowness of local authorities in assessing the needs of individuals. This matter needs to be addressed because it is of significant concern.
I would speak at length about a substantial number of other issues if I had the time to do so, but I think time has caught up with me.
I was enjoying Deputy Hayes's animated contribution. I proposed the abolition of the first-time buyer's grant during previous debates in the House. I suggested that it would be appropriate in the context of a front-loaded mortgage system, at a time when most first-time buyers were buying second-hand homes. Such people were not benefiting from the grant. If the grant had been index-linked at the time of its abolition, it would have been worth approximately €13,000. The grant was originally introduced to boost the building industry. During the most recent debate on the matter, I noticed that the Minister of State's speech writers had selected parts of a contribution I had made. I hope he will refrain from quoting selectively from me this evening. If such comments are contained in his script, I am sure he will ignore them.
I would like to speak about the new guidelines for one-off rural housing. I have said to the Minister, Deputy Roche, that I cannot understand how he succeeded in giving everybody the impression that houses could be built easily on the basis of a document that was welcomed by the vice-president of An Taisce. Given that the policy he has introduced satisfies those on both extremes of the argument, it is clear that one group of people has been misled. Many people who have been refused planning permission or have had to withdraw planning applications, but now think they will succeed in being granted planning permission if they resubmit their applications, have been misled on this occasion. I regret to advise such people that they will not be successful.
I have to hand it to the Government, the acceptance of the recently published guidelines means that it has succeeded with a fantastic con job. As someone who is heavily involved in one-off rural housing, I believe that the problems associated with such housing are often misrepresented and overstated. The vast majority of people in rural areas are granted planning permission. Most planners agree that such people should be allowed to build houses in local rural areas. Everybody believes that people from the countryside should be granted planning permission in such areas — it is as popular as apple pie and ice cream.
Difficulties can arise when an applicant wants to build a house on top of a hill, for example. In such circumstances, it often seems that the local authority and the planning officials want to bury the applicant before he or she dies. A conflict often arises in such instances, but there should be a happy medium. The matter was addressed in County Wicklow when the county's development plan stated that while views and prospects should be taken into consideration, they should not be considered to the exclusion of social or economic needs, other than in the Wicklow Mountains National Park. The national park covers an area of 41,000 acres, but there is a target of increasing its size to approximately 60,000 acres. The natural heritage section of the new planning document, which deals with views and prospects and matters like ridge lines, retains the existing policy in that regard. I am sure the planning authorities will use the document to refuse planning permission in rural areas.
I acknowledge that there is no easy solution when people living in towns want to move to a location in the countryside that is half a mile or a mile away. The Government has created the impression that people will be able to do so under the new guidelines, but I will wait with bated breath to see whether that is actually the case. When the authorities in County Wicklow sought to address this aspect of the matter by zoning small areas of land near crossroads, churches and schools for the construction of between five and ten houses, they put some very restrictive conditions on those who wanted to build in such areas. If one wishes to get planning permission in such areas, one has to be a permanent native resident of the locality, which is defined as any area within 8 km of the site. The scheme has not been successful, unfortunately, because sites in the areas in question became as expensive as serviced land when the expectations of landowners increased.
My opinion of the document is that the proof of the pudding will be in the eating. I regret to say that I am confident that many of the difficult cases I have encountered — I acknowledge that they are difficult to solve — will not be addressed. The biggest fault I have with the Government is that it has increased expectations in this area.
While some people claim that the new document is innovative, I am critical of its introduction of the concept of exceptional medical reasons for granting planning permission. That provision will be open to wholesale abuse. All Members of the House have encountered people who have had to relocate as a consequence of medical difficulties. The provision made in the development plan for such people will open the system to wholesale abuse. Those who should not be granted planning permission, but are granted it because of misinformation on the planning file, often encounter as many difficulties as those who are not granted planning permission. I ask the Minister of State, Deputy Noel Ahern, to bear that in mind.
I welcome the timely motion before the House. During the local government election campaign, Fine Gael produced an excellent policy that involved the establishment of a savings account for first-time buyers. It makes sense to front-load the provision of mortgage interest relief. It can be done within the funding that is provided under the relief at present. When one has been paying one's mortgage for seven or eight years, one faces a straight run and one's economic burden starts to decline in comparison to earlier years. I ask the Minister of State not to quote me out of context when I state that mortgage interest relief should be stopped after ten years. It should be front-loaded so that individuals benefit significantly from it during the first ten years of mortgage payments and not at all thereafter. The funding that is spent on helping people who have been making mortgage payments for ten years should be used to subsidise those in the first tranche.
Officials in County Wicklow have sought to overcome the difficulties associated with development levies. I understand where the Government is coming from in this regard. I do not like to hear the Minister for Finance or other Government spokespersons extolling the virtues of this country's tax rates of 40% and 22%, while ignoring the stealth taxes they are charging in many other areas. We imposed a low levy on houses in County Wicklow, but the local authority overcame that by using section 48 of the Planning and Development Act 2000, which provides for the imposition of an additional levy in exceptional circumstances. Levies of between €20,000 and €25,000 per house in a development are being charged. People do not realise they are paying such moneys as well as VAT and other taxes.
I would like the Government to have the courage to state that its policy is to impose the form of tax I have mentioned. In such circumstances, members of local authorities would be much more reasonable in their implementation of that policy. The Government is happy to take the credit at national level for a tax rate of 40%, while local councillors take the hit for the high levies which have resulted from its policies.
I assume the Minister of State realises that the Government needs to examine the eligibility and qualification criteria for the affordable housing scheme because there are many anomalies in the system at present. Many people are told they do not qualify because their wages exceed the threshold for the scheme, even though some of those who qualify, particularly in the greater Dublin area, cannot produce the money to meet the cost of the house.
A directive issued in 1994 by the then Department of the Environment stated that houses should not be built within 50 m of a landfill site because of the dangers of gas etc. I estimate that between 15 and 20 vents from an illegal landfill are as close to houses in the Woodleigh estate in Blessington, County Wicklow, as I am to the Minister of State, who is sitting across the floor of the House. Waste has been lying in the illegal landfill for a couple of years and nothing is being done about it. I am glad that Fine Gael proposes to table a motion asking the Minister to use his powers under section 60 of the Water Management Act 1996 to direct the relevant authorities to remove that waste.
I commend Deputy O'Dowd for proposing this worthwhile motion. I wish my colleague from the Gaeltacht well.
Tá lúcháir orm deis a bheith agam labhairt ar an rún tábhachtach seo, a bhaineann leis an fhadhb tithíochta ar fud na tíre. Ba mhaith liom tréaslú le mo comhleacaithe, an Teachta O'Dowd, a chuir an rún tráthúil atá á phlé againn inniu os comhair na Dála. I mBunreacht na hÉireann, aithnítear an chlann mar an rud is tábhachtaí sa tír. Aithnítear an chlann mar an rud is tábhachtaí sa tír seo. Níl aon rud níos tábhachtaí le clann sláintiúil, folláin, sonas a bheith ag duine ná teach maith a chur ar fáil di. Sí an teip is mó atá orainn le blianta anuas, go speisialta ó tháinig an tíogar Ceilteach chun cinn ná go bhfuil teip orainn sin a dhéanamh. Mar a dúirt an Teachta O'Dowd, i láthair na huaire tá 100,000 sa tír nach bhfuil ar a gcumas tithe a chur fáil dóibh féin. Tá siad ag fanacht le tithe agus ar liostaí feithimh na gcomhairlí contae agus na n-údarás áitiúil, cuid acu le blianta fada. I dtír shibhialta, Chríostúil, ní rud maith sin. I dTír Chonaill, tá 3,000 ag fanacht le teach úr agus tá an figiúr sin ag méadú bliain i ndiaidh bliana.
Tá athscrúdúá dhéanamh ag na comhairlí contae agus na húdaráis áitiúla ar na liostaí sin agus tá súil agam nach iarracht é seo an liosta a choinneáil síos. Caithfidh na daoine atá ag fáil na bhfoirmeacha iad a líonadh agus a chuir isteach gan botún mar ní chuideodh sin lena gcás.
Bhí traidisiúin láidir i gcónaí ag muintir na Gaeltachta a dteach féin a chur ar fáil. Is cuma cén ceantar Gaeltachta a dtéann duine ann, tá tithe ansin agus go minic, thóg na daoine iad féin iad agus bhí siad an-bhródúil astu. Bhí muid i gcónaí buíoch don Stát agus do Roinn na Gaeltachta a chuir deontais ar fáil san am a chuaigh thart. I láthair na huaire is fiú €5,100 é sin. D'iarrfainn ar an Roinn sin a ardú ach cionn is nach bhfuil deontas de chineál ar bith in áit ar bith eile sa tír, tá sé níos deacra an cás sin a dhéanamh.
Tá sé uafásach go gcosnaíonn teach anseo i mBaile Átha Cliath €300,000. Cén áit gur féidir le daoine óga atá tar éis pósadh theacht ar airgead den chineál sin? Cé go bhfuil 80,000 teach tógtha sa tír anuraidh agus i mbliana, tá an-chuid de na tithe sin ag dul go daoine nach é an chéad teach dóibh é. Tá siad ag dul go infheisteoirí, daoine le hairgead mór ar chúis amháin nó ar chúis eile, agus in ionad an t-airgead a infheistiú i ngné eile d'eacnamaíochta na tíre, tá siad ag infeistiú i dtithe agus trí nó cúig tithe acu cheana agus iad ina milliúnaí nuair nach bhfuil daoine óga nach bhfuil ábalta tithe a cheannach.
Tá cuid mhór den locht agus an freagracht ar an Rialtas agus na polasaithe a lean sé le seacht mbliain anuas. Is cuimhin liom deich mbliain ó shin, b'uafásach an praghas ar theach sna Stáit Aontaithe nó i Mór-Roinn na hEorpa. Anois, áfach, cuireann sé alltacht ar dhaoine go bhfuil luachanna na dtithe sa tír seo i bhfad níos airde ná mar atá siad sna tíortha sin. Tá botún eacnamaíoch déanta agus is cinnte nach bhfuil an Rialtas ag déanamh iarrachta é a cheartú.
Tá go leor seandaoine sa tír ina gcónaí leo féin agus fonn orthu obair riachtanach deisiúcháin a dhéanamh ar a dteach. Nuair a chuireann siad iarratas isteach, tá an t-airgead gann agus bíonn siad ag fanacht leis na blianta fada leis an obair iontach tábhachtach seo a dhéanamh ar na tithe. Is ceart don Aire Stáit agus an Rialtas a dhíriú isteach ansin agus tuilleadh airgid a chur ar fáil sa dóigh is go mbeidh sé ar chumas na ndaoine seo essential repairs, disabled persons repair grant agus housing aid for the elderly a fháil, rud nach bhfuil ag tarlú.
I move amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:
acknowledges the achievements of the Government in,
—increasing housing supply as the key response to the broad range of housing needs and demands;
—ensuring that over 500,000 houses, equivalent to one third of Ireland's total housing stock, have been completed in the past ten years;
—facilitating the tenth successive year of record housing completions through the addition of 77,000 new houses in 2004 and establishing Ireland in the lead position within the EU in the provision of new houses;
—strengthening and extending social and affordable housing programmes, for which €2 billion is available in 2005;
—bringing forward five-year housing action plans by local authorities for the period 2004 to 2008 to co-ordinate, accelerate and bring greater integration to action on housing at local level, with particular reference to social and affordable housing measures;
—prioritising and advancing the special initiative on housing and accommodation under Sustaining Progress which will deliver more than 10,000 affordable houses through the affordable housing initiative and Part V of the Planning and Development Acts 2000-2004; — ensuring through the housing forum an effective engagement with the social partners;
—enhancing tax allowances to assist first-time buyers;
—improving the operation of the private rented sector through the introduction of new legislation and the establishment of the Private Rented Tenancies Board;
—introducing the rental accommodation scheme to provide improved and more secure arrangements for SWA rent supplement recipients with long-term housing needs;
—developing and implementing an integrated strategy on homelessness, effective programmes for Traveller accommodation and an expanded role for the voluntary and co-operative housing sector; and
supports the Government in its further actions, which will be informed by the recent comprehensive NESC analysis of housing, to ensure continued good housing supply, increase the quality and affordability of housing and respond to the needs of low income households and those with special needs through a broad range of targeted initiatives.
Housing is a vital social infrastructure, sustaining family and community life. Access to good housing is essential to support our mobile, dynamic and growing economy. Housing is of huge economic significance in Ireland today — last year it accounted for 13% of GNP and employed at least 120,000 people.
The importance of housing in Ireland is not set to diminish. Our population is forecast to grow by a further 500,000 over the next ten years and possibly to 5 million by 2020. Suitable housing options and solutions must be provided for a population which is growing rapidly both through natural increase and migration and in which the household forming age group is also increasing. We must improve the affordability and quality of housing, regenerate run-down urban areas, break cycles of disadvantage, assist with disability requirements and address the special needs of Travellers and the homeless.
For these important reasons, housing has been high on the agenda of the Government parties since taking office in 1997. At that time, annual housing output was running at just 38,000 units and new house price inflation stood at 17%. It was clear that housing supply needed to be greatly accelerated and an increase in supply has been the key element of Government policy since. The national development plan set a target that 500,000 new houses should be provided nationally over the ten year period 2000-09. Over the first five years of that plan, to end 2004, 306,000 new houses, 61% of the target, have been delivered. Almost one third of the Irish housing stock has been provided in the past ten years. We are building at a much higher rate than our EU partners, with over 19 houses per 1,000 people, five times the British rate.
Does this achievement deserve credit and recognition? Outside observers consider that it does. Ireland's performance demonstrates that we have an adaptable and dynamic construction industry that has hugely increased its output. In the early 1990s, fewer than 22,000 houses were being built each year. Now 77,000 are being built annually. People abroad see Ireland as dynamic in terms of house building and the Government has put enormous resources into this area.
Fine Gael, however, cannot see success in any of this, it can only see the negative. Would Fine Gael prefer if Ireland was at the bottom of the housing league in the EU? Does successful achievement of housing targets embarrass the party? We are prepared to act in an inclusive way if Fine Gael wants to be part of this because when it was last in power, the supply of housing was increasing a little from the low figures of the early 1990s.
The motion suggests, as if it was something new, that we should convene a special meeting of the social partners. I do not know where the Deputy is getting that from because the Government has no problem in engaging fully with the social partners on housing issues. We have been doing it for years. Housing is one of the special initiatives under Sustaining Progress. Has the Deputy not heard of that? Does he not know we have the housing forum, which I chair and which meets on a regular basis? That is a dedicated mechanism for engaging with the social partners on the initiative and on all aspects of housing. It gives the social partners the opportunity to make an input at policy level. I am satisfied these arrangements give us effective engagement with the social partners and allow for good and meaningful input by them to the development of policy.
Action on housing has been developed by the Government in recent years against a background of unprecedented demand arising from our substantial economic progress and demographic and societal changes. The last census returns indicate that our population increased by 8% in a six-year period from 1996 to 2002. That is an extraordinary increase in the population of the whole country, not just the Dublin region. It is even more significant when one considers the 18% increase in those six years in the numbers of what we regard as the key household formation group, those aged between 25 and 34. That is an incredible figure.
The motion refers to the fact that more people over the age of 30 are now living at home with their parents than was the case previously. That is true but 20 years ago they were not living with their parents.
I understand the point the Deputy is making. I know some people who would like to buy their own homes are still living at home, and I might be facing that myself, but the key issue is that 20 years ago they were not at home. They were not in the country as they had to emigrate.
Let us talk facts and be sensible about the issue.
Hard effort over a number of years involving a range of different measures has turned the tide back on scarce housing supply and unacceptable house inflation. We are now seeing greater moderation as housing supply responds to demand. The figures published today are heartening and the general view of people who make these forecasts is that this year increases might be 7% or 8%. Perhaps that is still too high but compared to the position in recent years, we are making progress and we have done that by maximising supply. The only real action we can take is to maximise supply and that is what we have done.
What we have done has not happened by accident. Much energy has been spent in increasing the supply of serviced land for housing and ensuring the planning system operates in full support of housing policies. In that context, my Department has issued planning guidelines on residential densities and design and, more recently, on sustainable rural housing. I thank the Deputy for his favourable comments on those areas.
One of the central roles of Government is to facilitate the provision of housing and our record speaks for itself. The recent national survey of zoned residential land indicates there is a satisfactory stock of serviced land available throughout the country. At the end of last June there were 12,500 hectares of serviced, residentially zoned land with an estimated yield of over 367,000 units, which is about five years' supply at current levels of output.
One of our concerns in recent years has been to increase output in the Dublin metropolitan area because for most of the 1990s, particularly in the latter part of the 1990s, housing supply in Dublin was about 9,000 or 10,000 new units per year but last year we achieved almost 17,000 completions in Dublin, which is up approximately 80% on the figure five years ago. That is fully in line with the ambitious projections of the regional planning guidelines for the greater Dublin area. If we can sustain that level in Dublin, and I accept there has been a problem price wise and supply wise in Dublin which has been slower to respond than other parts of the country — last year's figure was very pleasing — we will bring the same supply to Dublin as we did to other regions.
It has been the Government's long-standing concern to expand the supply of and improve access to affordable housing. Almost 10,000 households have been assisted through the 1999 affordable housing scheme and the shared ownership scheme since 2000. Those figures are broadly in line with the NDP targets. The implementation of Part V of the Planning and Development Acts 2000-04 is designed to extend this process further. Despite the negative comments one hears, Part V is now gathering momentum and is set to make a major contribution to the delivery of social and affordable housing in the coming years.
Up to the end of last year, it is estimated that approximately 800 social and affordable units have been acquired by local authorities through Part V arrangements. In addition, there have been nine land transfers to local authorities and almost seven hectares and a further 150 partially or fully serviced sites have been transferred to local authorities and voluntary housing bodies. In addition, approximately £10 million has been received in payments in lieu and under the withering levy. These are very substantial moneys which are ring-fenced for further development of social and affordable houses. We are confident that approximately 6,000 units of social and affordable housing will be delivered through Part V arrangements between 2005 and 2007.
Prices have been mentioned. Deputy Hayes talked about houses in Dundrum for €300,000. They are not starter homes.
I know that. That makes it worse because unless the houses in Dundrum, County Tipperary have got very dear all of a sudden, a house on sale for €325,000 or whatever must be much more than a starter home. While I know the average prices, it is a fact that many houses in the Dublin area are still coming out at well under €200,000——
In my constituency in Finglas, we have had different schemes where houses were €175,000 and €195,000. There have been different affordable schemes under the 1999 scheme in all these areas, even in Dublin, and it is important to say that. Each year over 2,000 of these houses are being provided and they are being bought. It would be great to have more but they are being provided and they are meeting the needs of people in a particular income bracket.
Sustaining Progress adds to the range of measures designed to extend and promote affordable housing. Approximately 70 sites have been identified and the planning and projects are now getting under way. These projects and activity under Part V are capable of achieving over 10,000 housing units, which is the target agreed with the social partners.
As well as assembling the lands, the Government sponsored legislation last year, which went through the House just before Christmas, to facilitate lending institutions in providing mortgages for affordable housing clients.
I was pleased to hear that the first product had been announced by Bank of Ireland and will be extended through its branch network shortly. We expect other financial institutions to provide mortgages to people buying affordable housing. Under the arrangements put in place, such mortgages will equate to 97% of the purchase price of an affordable house under the relevant scheme. This important provision will avoid the problem of deposits to which Deputy O'Dowd referred. Availability of finance and new housing legislation will allow for the direct sale of Part V affordable housing units by builders and developers to eligible persons nominated by planning authorities. This process will ensure a more efficient and effective process for builders, local authorities and customers. We expect to deliver approximately 12,000 units of affordable housing over the next three years from the various affordable housing schemes.
Increased housing output provides greater opportunities for first-time purchasers by delivering more affordable homes through the market. In addition, the stamp duty changes announced in the budget have helped to open the second-hand market to first-time buyers by providing savings of up to €12,000 in some cases. Deputy O'Dowd referred constantly to the first-time buyer's grant which was €3,800, but other measures we have introduced, including the stamp duty changes, have saved many people money. The mortgage allowance was improved and extended to seven years while many of the people in affordable homes are receiving site subsidies of up to €38,000. As significant provisions have been made in recent years for first-time buyers, we should not concentrate constantly on what was a relatively minor measure. Information available to the Department suggests that first-time purchasers took out approximately 40% of all mortgages issued last year, which indicates that they are key players in the first and second hand housing markets. We should not fool ourselves. The active interventions of the Government ensure that more and more of our younger people are realising a wish to own their own homes. While I accept that some people in their 30s are still at home, one meets many people in their mid-20s who are buying their own homes.
The Government's commitment to housing is demonstrated by the resources we have committed. This year alone, we are spending €2 billion on housing measures, which is double the sum spent a mere five years ago. We are providing €840 million for the local authority construction programme, which is an increase of approximately €100 million since last year. The funding will facilitate approximately 5,500 housing starts by local authorities in 2005. We are also spending approximately €190 million on remedial works and regeneration schemes, the largest of which is taking place in Ballymun.
A great deal of work is being done to improve the quality of people's accommodation. Last summer, I was pleased to announce the new central heating programme for local authority houses, for the first year of which we provided €12 million. Just under 3,000 households were provided with central heating under the programme, 80% of which is funded by the Department and 20% by local authorities. We increased our allocation this year from €12 million to €30 million. The scheme is very popular among local authorities and while they have to provide 20% of the funding, the bids are in and great progress will be made in this and the next couple of years. Approximately 45,000 local authority houses do not have central heating, which is why the measure will greatly improve the quality of life and accommodation of many people.
Deputy McGinley mentioned the disabled persons and essential repair grants scheme. We are providing approximately €70 million under the scheme this year. Approximately €45 million has been provided for Traveller programmes, which is an increase of approximately €10 million since last year. We expect an expanded output in the voluntary and co-operative sector this year also.
Since the Government took office in 1997, the housing needs of approximately 86,000 households have been met through the provision of local authority housing, vacancies arising in existing houses and output under the social and affordable housing schemes. The needs of approximately 13,000 people on the waiting lists will be met under various measures this year. It is also expected that a significant number of the households currently in private rented accommodation will transfer to the new rented accommodation scheme. When we announced the scheme last July it did not attract a great deal of interest, but people at public representative level are taking more interest in it as it is being rolled out. Under the scheme, local authorities will assume responsibility for accommodating supplementary welfare allowance recipients of 18 months or more continuous duration. We set this period as we felt that when someone has been in receipt of rent allowance for 18 months, he or she has a long-term need. People with short-term needs will continue to be the responsibility of the Department of Social and Family Affairs.
It is estimated that approximately 58,000 people are in receipt of rent allowance, up to 30,000 of whom will form the target group for the new scheme. Over a couple of years, they will move from the current system to the local authority scheme which will allow them to have their long-term housing needs addressed. People in receipt of rent allowance have always been worried about the expiration of leases but the new scheme will provide them with long-term security. We have set a target of September 2008 for completion of the implementation of the new arrangements, which will begin on a phased basis. All local authorities are due to begin to implement the arrangements at different stages this year.
We introduced legislation on the private rented sector last year, which was very important. The Act provided for a modern, efficient, user-friendly and, we hope, largely litigation free legal framework for the private rented sector. Key provisions relate to improved security of tenure, the restriction of rents to market rates, the statutory dispute resolution service through the private residential tenancies board, the creation of a registration system and clarification of the obligations of tenants and landlords. The Act has been of great help to people in private rented accommodation who will benefit further from security of tenure when they become local authority tenants. In time, they will have the freedom to work as increased incomes will not, as currently, affect entitlements to rent allowance. Such provisions will make them more secure in terms of their long-term housing needs.
We have done extraordinary work in recent years since the integrated and preventative homeless strategies were put in place. Those strategies were launched in 2000 and considerable progress has been made in regard to them. As part of the local homeless action plans, accommodation ranging from emergency hostel-type accommodation to transitional accommodation to more long-term accommodation facilities have been provided in various locations across the country.
A total of €51 million has been made available for accommodation and related services for homeless persons, bringing to €236 million the amount provided for such services since the introduction of the strategies in 2000. In addition, the Department of Health and Children provided between €20 million and €25 million per year for the same period for the care of homeless people.
Five-year action plans have been introduced in conjunction with local authorities and voluntary agencies. Multi-annual capital funding provides certainty to local authorities and allows them to plan their strategies over a five-year period. That is the way forward. Funding has been guaranteed for a five-year period. Now that most of the action plans have been agreed, local authorities have been encouraged to move ahead and begin work on the basis that the funding is in place and is secure.
The achievements I have outlined demonstrate the Government's commitment to responding to the various housing needs that exist, particularly those faced by first-time buyers and those on lower income and vulnerable groups. The Government is committed to reviewing polices as necessary. At present we are carefully examining the major NESC analysis and other reports which have a bearing on housing issues. The Government will consider shortly what new responses may be appropriate in the short and medium term in light of this examination. However, it is important to note that the NESC recognised that the general thrust of policy is well directed.
It is important that we maintain an urgent focus on delivery. This is what the Government is now doing. Through our engagement with the social partners and through local authority action plans for social and affordable housing, we are ensuring that an effective response is made to the broad spectrum of housing need. The evidence exists in terms of increased output of housing and increased social and affordable housing provision. We will continue to accord the highest priority to housing issues.
The motion before the House is rather hollow. Perhaps it was unfortunate from the Opposition's point of view that the statistics which were published today showed there was a 1% increase in house prices in three months. As I stated earlier, we expect the figure to be approximately 7.5% for the year, which is an improvement on recent years.
The Government has delivered real and coherent housing responses in the face of the unprecedented housing demand which existed due to the booming economy in recent years. As I stated, significant numbers of people in the 25 to 34 years age group are setting up home. We have not simply been addressing the specific needs of one group or one sector, we have been addressing the needs of all, vulnerable groups, Travellers, the homeless, those in social and affordable housing and people in the private market.
We are aware of the challenge that lies ahead of us. We are doing our best and have made great progress, particularly when one considers that housing output, which was not much more than 20,000 units per year, is now 77,000 units. That is an extraordinary housing output. We have reached a level where supply equals demand. I am pleased that the forecast for house price increases this year is under 10%.
I look forward to ensuring the demand for housing is met and that we continue to get good value for the €2 billion of taxpayers' money which we are spending this year in providing for those people who need help from the State through social and affordable housing, Traveller housing, voluntary sector housing and so on. We have made a great deal of progress in recent years and I look forward to continuing that work.
The Minister of State has just treated us to another typical exercise in self-congratulation in which he finished by telling us that the anticipated increase in house prices this year will be in the region of 7.5%. He congratulated himself on that fact even though the rate is three times that of inflation. It is a measure of how dislocated the Government is from the real problems of people trying to acquire housing that he believes that a rate of house price increase that is three times the rate of inflation is something about which we should be satisfied.
In my constituency in the greater Dublin area——
——an increase of 7.5% in the price of a house amounts to approximately €25,000 in the space of a year. That is not something about which the Minister of State should congratulate himself or about which he should be smug.
The contribution of the Minister of State follows a pattern to which we have become accustomed when Ministers speak on matters. They bask in the reflected glory of the economy. Everybody in the House applauds the success of the economy and wishes it to continue. Many people on all sides of this House have contributed to this success. However, the people who have contributed most are those who get up early in the morning and work long days, having left their children with a child minder in one of the satellite towns around our cities and whose labour, effort, initiative and enterprise has contributed to the economy. Ministers do those people no service when they attempt to clasp to themselves the credit for what working people are achieving in the building of this economy day in and day out.
I am pleased that 77,000 new dwellings per year are being built here. I am also pleased at the success of the construction industry, as outlined by the Minister of State. However, what I am not happy about is the failure of the Government to convert the economic success that is taking place and the record levels of house construction activity into meeting people's housing needs. The Minister of State acknowledged during Question Time last week that between 12% and 15% of the 77,000 dwellings built in the past year are holiday homes. Good luck to people who can build and buy holiday homes, but the question the Minister must answer is why housing activity for which he is directly responsible, the production of public housing to meet the needs of those who cannot afford to buy one house let alone two, is only half the level of construction of holiday homes. We are building about 5,000 local authority houses here. The number of holiday homes annually for several years has been about double that figure. That is no reflection on the construction of holiday homes, but it is on the failure of the Minister of State to produce housing to meet the needs of people in need.
Some 15 or 20 years ago a Minister could justifiably tell the House there were areas of social need that he or she would like to satisfy, but that the Government did not have the resources with which to do it. At a time when the Government has the resources and when the economy is performing as it is, with record levels of revenue accruing to the Exchequer, why is it failing to meet the needs of those who cannot afford to provide housing from their own resources? The official figures for those who are on the housing list at the moment is 48,000 families. That is based on an assessment done in 2002. It is three years out of date. A new count is now under way and we can all guess, as to what the figure will be.
However, there is an interesting figure in the Minister of State's contribution tonight, which gives some indication as to where it will be. He tells us that 58,000 people are currently in receipt of rent allowance. To qualify for rent allowance one has to be on a local authority housing list. Only those in receipt of social welfare, by and large, are entitled to claim rent allowance. So the 58,000 on rent allowance is only part of the story. Are we to conclude that when the numbers of people on local authority housing lists who are not eligible for rent allowance are added, the actual number of housing applicants could be as high as 70,000, as against the 48,000 we were told about, before now? No matter which way one looks at it, that is a record number of applicants seeking local authority housing. Never before in the history of the State have so many families sought housing from a local authority because they cannot provide it from their own resources.
Can somebody on the Government side explain why, when the economy is doing so well and there is so much money coming into the Exchequer and being spent on the provision of local authority housing, there is a record number of people in need of housing? The answer has to be that this is a failure of Government. This is the area of housing policy for which the Minister of State is most directly responsible and he has failed to deliver on it. It is interesting that he mentioned, in passing, the NESC report. It got two passing references in the Minister of State's contribution tonight. The NESC does not give its vote of approval to Government housing policy. In fact, on page 199 of the report where the conclusions are summarised, it is stated:
The magnitude and significance of the challenge of sustainable neighbourhoods and social balance needs to be recognised. It bears comparison with two other great challenges that Ireland faced and met in the last half century — the opening of the economy in the early 1960s and the creation of a new economy through partnership in the mid-1980s.
There is no recognition or acknowledgement of that challenge in the course of the Minister of State's entire contribution, where he says that it is "important to note" that the NESC has somehow given its approval and "recognised that the general thrust of policy was well directed". That is not what the NESC is saying. The NESC is telling the Minister of State, this House and the country that there is a very big problem with housing and its associated areas of public policy. It is saying to us that the problem is so big that it is on the scale of the economic challenge the country faced when Seán Lemass and Ken Whitaker produced the famous economic blueprints in the late 1950s and sought to implement them in the early 1960s. It also says that it is on the same scale as the related problems of unemployment, economic under development and emigration that the country faced at a time the concept of social partnership was developed, in order to turn it around, to which many people contributed. If the NESC had felt the general thrust of policy was correct, it would hardly have put it in such dramatic terms.
There were not many specific recommendations in the NESC report and I regret this. Inevitably, in a council that represents such a diverse range of economic interests, by the time a report is published, some of its punches are pulled. However, the one specific recommendation on which the NESC was agreed was that the output of social housing needs to increase by an additional 73,000 units by 2012. In other words, it needs to double. Again, there has been no acknowledgement of that, tonight, in the Minister of State's contribution.
I also found it interesting that some of the matters we were told were so essential, in dealing with the housing problem in recent years were not referred to, either. Just over two years ago the Taoiseach told us, and I agreed with him at the time, that at the core of the house inflation problem was the issue of development land and its price along with the inflation and speculation that was occurring. To address that, he asked the Joint Committee on the Constitution to examine the issues and come back with a report. That was in January 2003. The Joint Committee on the Constitution worked right through the summer of 2003, and produced an excellent report this time last year about which there has not been one word from Government since. It was almost as if it had never happened. There is not a single reference to it or to the issue of development land in the Minster of State's contribution tonight. Two years ago we were led to believe this was at the heart of the problem. That clearly has been buried as well.
Similarly, the commitment given to the social partners under Sustaining Progress, that 10,000 additional affordable houses would be constructed in the lifetime of the agreement, has not been fulfilled. Not a single house has been built and every time there is a contribution from the Minister of State or anybody else, we hear about all the sites being produced. I am coming to the conclusion that whatever the commitment in Sustaining Progress was about, it certainly was not about the provision of houses. It remains to be seen what will eventually happen to some of the sites identified. That is an area I will watch with considerable critical interest.
When the Planning and Development Act 1999 was published, I was happy the Government borrowed the idea, floated by the Labour Party, that a proportion of private development land be set aside for social and affordable housing. The headlines claimed this radical new measure was being taken by the Government to deal with the issue of housing affordability. Six years later, only 800 units have been produced under Part V regulations. Approximately €10 million has been provided to allow landowners to buy out of the withering arrangement which was supposed to give meat to the Act. The Government let landowners off the hook.
The Government's record of delivery on social and affordable housing has not been good. However, there are several areas I want the Minister of State at the Department of the Environment, Heritage and Local Government, Deputy Noel Ahern, to address when dealing with the NESC report and drawing up new proposals. A deposit support scheme needs to be introduced for first-time buyers. One difficulty faced by first-time buyers is that, whereas they can afford the mortgage repayments, thanks to low interest rates and not to the Government, assembling the deposit can be problematic. I regularly encounter people who are paying high rents, cannot assemble the deposit and, therefore, cannot buy. Often their mortgage repayments on a similar property to the one they are renting would be less than the rent charged.
The NESC report suggests developing a deposit support scheme, the guest idea, where the house buyer gets the main loan from a financial institution and the deposit through a State loan. A variation on this would be a system whereby the State would give the deposit, not as a loan but in return for equity in the property. Similar arrangements apply in the shared ownership scheme where the equity can be redeemed or bought out by the house buyer at a later stage. An SSIA scheme to allow people to save for a deposit has also been suggested. The need to enable people to assemble a deposit is the critical measure that needs to be taken to free up people who cannot get into the house purchase market.
Rent allowance is another issue that needs to be addressed. Rent allowance is, by and large, only available to those on social welfare. I know of many working families, renting privately, who are being fleeced. Recently I encountered a young family whose net monthly income is €1,800, €1,100 of which goes on rent. The family receives no rent allowance and will not qualify for a shared ownership scheme. Even if the family qualified for the scheme, house prices in the Dún Laoghaire area are beyond the maximum available. Affordable housing, because of the rate at which it is produced, is not an option. This family is entitled to some support. A housing benefit scheme or an extended rent allowance scheme must be made available. The idea of losing rent allowance when one returns to work is a disincentive, creating a new poverty trap.