Dáil debates

Wednesday, 16 November 2005

12:00 pm

Photo of Dick RocheDick Roche (Minister, Department of Environment, Heritage and Local Government; Minister of State, Department of An Taoiseach; Wicklow, Fianna Fail)
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I welcome the opportunity for this debate on housing issues. Housing is as important to the modern dynamic Ireland at the beginning of the 21st century as it was to our newly established State with its burden of urban slums and rural deprivation in the early years of the last century. It has always been a central plank in Fianna Fáil policy and is also central to my Department's mission.

Good quality housing comes from good housing policy and good quality housing supports social stability, promotes social inclusion, is fundamental for family life, is critically important in providing shelter and security for older people and is a key element of social capital. Good housing is the bedrock of good communities. A home is more than four walls; it is a place of shelter and comfort where people can grow and develop and make the most of life's opportunities, a haven where we overcome life's traumas and savour its triumphs.

Given our high rate of home ownership, it is clear that the people view having a home as an important stake in the community and in determining civic values. Apart from the social dimension, good quality housing is also fundamental to our economic progress. Housing as an important element of our national infrastructure has a key role to play in maintaining our competitiveness. It is even a factor, for example, in inward investment decisions as a quality of life indicator. For all these reasons and many more, we must provide housing in Ireland that is of a quality and value fully comparable with the best in the developed world.

In progressing Ireland's development since taking office in 1997, the Government has paid particular attention to housing. Taking 1996 as the point of reference, the country's population has grown by an unprecedented 8%. The response in housing supply has been even more dramatic. Over the past ten years 500,000 houses, almost one third of Ireland's housing stock, have been built. Any objective commentator would regard this as a remarkable level of achievement.

I wish to give the House a brief outline of the other achievements. The supply of housing has been transformed since 1997. Last year almost 77,000 units were completed, double the level achieved in 1997. Our rate of house building at 19 units per 1,000 of the population is almost four times the western European average. Housing supply in the greater Dublin area which averaged about 9,000 or 10,000 units per annum in the late 1990s has increased to almost 17,000 last year.

The Government has introduced adjustments to the tax regime to assist the first-time buyer and has introduced a broad range of targeted schemes to assist those seeking affordable housing. It has increased investment in social and affordable housing. Since 1997 the needs of 86,000 households have been met through various social and affordable housing measures.

The Government has concentrated on improving quality as well as quantity. Major funding has been devoted to regenerating run-down estates. For example, Ballymun is among the largest regeneration projects under way in Europe. The central heating programme introduced last year is making huge improvements to people's lives, particularly for pensioners. This scheme has been well funded and I am particularly anxious, as Deputies on all sides of the House would be, that good value for money is obtained from that scheme.

In overall terms, the quality of Ireland's housing stock is very high. The majority, 92%, of households surveyed during the national survey of housing quality for 2001 to 2002 expressed satisfaction with the general condition of their accommodation, their area and their neighbourhood.

These achievements did not just happen by accident. Government actions over years have supported the strong increase in overall housing supply and increased construction employment. Current policies have built on good foundations.

Housing policy has been always a central plank of Fianna Fáil policy. In recent years, our policies have done the business. When the National Economic and Social Council undertook its analysis and review of the Irish housing sector in 2004, it concluded that the general thrust of housing policies is correct.

In terms of housing output, Ireland has had rates of house building not seen anywhere else in Europe in recent years. To put the scale of activity into perspective, three out of every ten homes in Ireland have been built within the last ten years, nearly 500,000 units in all. Output in 2005 is likely to be broadly in line with 2004. This exceptional rate of house building in Ireland has been facilitated by improvements made by this Government in the planning system and substantial investment in infrastructure in recent years. Increased output has brought greater stability to the housing market. The general consensus among commentators is that current prospects for stability in the housing market, with balanced sustainable growth, are good.

A strong housing market has a positive effect on the economy as a whole, not just through its contribution to gross domestic product but also through its influence on construction employment and its knock-on effect in other economic sectors. I remind the House that 77,000 new home units were brought on stream last year. This has been a major boost to a series of industries besides building and construction. It has certainly given a boost to the furniture industry and the furnishing business.

Between April 1994 and December to February 2005, construction employment grew from 92,000 to 233,000, representing a cumulative growth of 155%. More recent figures suggest even further growth in this area. The house building industry has made a considerable contribution to this growth. The residential construction component of total construction output grew from 51% in 1994 to 65% in 2004. These are not just blank statistics. There are 240,000 people working in the construction industry and this means 240,000 wage packets and secure work at home for people who previously would have been forced to go abroad. It is a remarkable turnaround in an industry which Deputies on all sides of the House will wish well.

The gross value of housing output was slightly in excess of €18 billion last year, the equivalent to 14% of gross national product. In 1994 housing output represented just 7% of GNP, but GNP has grown rapidly during the period 1994 to 2004 and doubling the housing output in GNP terms is therefore all the more significant. With our population forecast to grow to 5 million by 2020, the importance of the sector is set to remain robust.

On the issue of housing affordability, in analysing the housing boom, the National Economic and Social Council commented that given the remarkable strength of demand, a significant increase in house prices was inevitable. Supply is the key to responding to this unprecedented demand. Supply and demand is not rocket science. This Government has placed a strong focus on policies to boost supply. It is not often acknowledged that house price increases have moderated greatly since annual house price inflation peaked at a phenomenal 48% in 1998. By comparison, house prices rose in 2004 by about 11% over 2003. This is not an issue which should be treated with complacency and it should continue to concern us, but it is a significant change. It is incumbent on Deputies on all sides of the House to work to reduce house price inflation, especially at the point where people enter the market for the first time. Most commentators predict further price moderation this year.

The overall trend in affordability of rents in recent years has been generally positive, particularly having regard to improvements in net income. Recent reform of landlord-tenant legislation should help promote investment and professionalism in the sector and enhance its attractiveness as a housing option. This option is underdeveloped in Ireland compared with other European countries.

The Government has been particularly concerned to improve access to affordable housing. We have promoted a range of schemes for low-income households in recent years such as the shared ownership scheme and the 1999 affordable housing scheme. Over 20,000 households have availed of these schemes since their inception. The various affordable housing schemes, including Part V and the Sustaining Progress affordable housing initiative, will deliver substantial output over the coming years. Over 12,000 units in total will be delivered from all the affordable schemes between 2005 and 2007.

The Affordable Homes Partnership, established by the Government, will also add impetus to the delivery of affordable housing, particularly in the greater Dublin area. Although the partnership was only established last August, it has made significant progress in the short intervening period under the stewardship of its chairperson, Mr. Des Geraghty, and a dynamic board. I have considerable expectations for the Affordable Homes Partnership. By bringing a particular focus to a specific part of the market, really significant advances can be made.

Earlier this month, the partnership placed advertisements inviting expressions of interest from parties capable of providing and developing land, mainly for affordable housing. Once the six-week period for submissions has passed, the partnership will give early and careful consideration to the proposals received, with a view to identifying those lands that are suitable to be advanced quickly.

The Affordable Homes Partnership is also giving early attention to the potential for land swaps. The aim is to build on the highly successful Harcourt Terrace pilot project undertaken earlier this year. The result of that exercise is that 193 families in the South Dublin County Council area are to get access to homes at affordable prices, within a significantly shorter timeframe than traditional delivery mechanisms could have achieved.

If Members, and particularly spokespersons, have not already had the opportunity to do so, I highly recommend that they call to South Dublin County Council headquarters to see the quite remarkable work it is doing in marketing affordable housing and in providing a one to one advice consultancy for people in the system. It really is worth seeing. If other councils were to follow the initiative of South Dublin County Council it would have positive effects.

In effect, under the Harcourt Terrace deal a building which was little more than a shed on less than half an acre of land was traded for 193 affordable homes, which is a very good deal by any objective reckoning.

Today the partnership published advertisements commencing the next land swap project. That project will involve a property at Broc House in Nutley Lane. It is being offered in return for turn-key affordable housing. A series of further swap projects on similar lines will be brought forward in the months ahead.

NESC suggested that Part V was "the single most important policy development in recent decades". This innovative legislation will make a substantial contribution to the delivery of social and affordable housing output over the coming years. It also has provided a basis for better social integration and that is a side of Part V which has not received sufficient attention. The social integrational impact of Part V, properly operated by local authorities, will be an aspect on which we will look back in the years ahead as good.

The number of units delivered through Part V arrangements is dependent on the level and commencement of private sector residential development and, crucially, on the nature of the agreements entered into. As members of this House will know, Part V requirements do not apply to all residential developments.

Jerry Cowley (Mayo, Independent)
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The Minister has one minute remaining.

Photo of Dick RocheDick Roche (Minister, Department of Environment, Heritage and Local Government; Minister of State, Department of An Taoiseach; Wicklow, Fianna Fail)
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Clearly, they do not apply to planning permissions given prior to Part V coming into operation.

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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I wonder would the House agree to let the Minister complete his contribution? In fairness, it is an important debate.

Jerry Cowley (Mayo, Independent)
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Continue, Minister. Time is moving on.

Photo of Dick RocheDick Roche (Minister, Department of Environment, Heritage and Local Government; Minister of State, Department of An Taoiseach; Wicklow, Fianna Fail)
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I thank Deputy Gilmore.

Taking account of these exclusions, it is estimated that the maximum level of total supply that would attract a Part V obligation is between 10% and 12%, or roughly 7,000 units at current total housing output levels. An agreement under Part V may include options other than the provision of housing units, and Members would be aware of that detail. I mention this detail because there have been attempts to distort the factual position regarding Part V. In fact, I listened to somebody — not a Member of this House, I hasten to add, but a person from an NGO — state recently that there were about 80,000 houses built last year and that should mean 20,000 under Part V. Clearly, the spokesperson in question was not good at mathematics and obviously had a poor understanding of the meaning of Part V.

It will take a number of years for Part V to fulfil its potential. As I have stated, planning permissions pre-dating Part V must be built out, including some major developments with ten-year planning permissions. Nevertheless, Part V output is gathering momentum. By the end of June 2005, 1,294 housing units were acquired under Part V arrangements, comprising 485 social units and 809 affordable units. Over 700 social units and almost 1,500 affordable units are in progress and some 2,500 units were earmarked for acquisition at end of June 2005. The transfer of 17 pieces of land and 169 partially or fully serviced sites has been effected. Over €18 million has been received in payments in lieu and under the withering levy. These moneys are ring-fenced and must be expended on housing capital projects, a matter on which I, and I am sure Members, feel strongly.

There is a need for a broad range of mechanisms to respond to the diverse range of housing needs. Since 1997, the social and affordable housing needs of some 86,000 households have been met through various measures. The Government's continuing commitment to the delivery of strong social and affordable housing programmes is evidenced by the record levels of funding we are committing to these measures. This year the total housing provision, Exchequer and non-Exchequer, will be over €2 billion, which is more than double the 2000 spend and more than five times the 1995 spend. Over 13,000 households throughout Ireland will be assisted through various social and affordable housing measures this year. This is a sizeable increase in the numbers of individuals and families benefiting from the investment put into place by the Government.

I am strongly committed to ensuring the resources set aside by Government help the maximum number of households. Local authorities have a key role in delivering on this objective. Housing is a local issue, and rightly so. Local authorities must respond to the nature and extent of local need by devising and implementing appropriate programmes within the resources made available. Some are more successful than others in this, particularly in their own social housing programmes.

To create a strong framework for delivery, we have required local authorities to put in place five-year action plans to ensure a more holistic and integrated approach to social and affordable housing provision. We have also introduced multi-annual capital envelopes to support these plans. As a result of these measures, activity on social housing has increased, with some 10,000 houses in progress by the end of June last. Some authorities that comparatively lagged behind over the past ten years are now showing signs of substantial progress. There are still some local authorities that need to improve their performance. I will continue to monitor progress and will make available, particularly to local councillors, an indication of where individual councils stand.

Improving services requires both investment and ongoing reforms to ensure resources are applied in an efficient, effective and equitable way. Some challenges for the future and issues needing consideration were raised by the National Economic and Social Council report. We are developing further responses to NESC and I propose to issue a new statement on housing policy soon that will set further directions for the medium term. In the meantime, we made important advances on the new initiatives announced in June, including the establishment of the Affordable Homes Partnership.

My focus will build on the achievements to date and continue to promote housing supply at levels required to meet demand, to supply record levels of affordable housing, to modernise and develop the private rented sector, to roll-out a strong programme of investment in social housing and to improve service and performance.

The Government has a strong record on housing. We will not merely rest on our laurels. There is no room for complacency. We will press ahead with existing and new programmes to provide the best housing responses to Ireland's dynamic economy and society. That is a challenge for my Department. It is a challenge for the agencies associated with my Department. It is a challenge for us all. We are making available the resources to ensure the sector continues to develop and with the help and support of local authorities, and local authority members, we will achieve the kind of outcome we all seek.

I thank Deputy Gilmore for his consideration.

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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I listened with interest to the Minister's speech and I will be happy to take him up on his invitation to visit South Dublin County Council's headquarters. Perhaps he will be kind enough to visit my clinic on Friday morning where he will hear a very different tune to the one he hears in the council's headquarters. He will hear the stories of people in extremis who are looking for housing but cannot afford it.

A significant effort is required, by way of Government policy, to address the case of people whose marriages have broken down. I refer in particular to males in their 50s who have left the family home. Many of them are in poor or declining health and are living in very poor circumstances with no possibility of ever getting a home from their local authority. The needs of separated or single males in their older years who have nowhere to go and find it very difficult to bring about significant improvements in their living conditions are increasing and are not prioritised.

Photo of Dick RocheDick Roche (Minister, Department of Environment, Heritage and Local Government; Minister of State, Department of An Taoiseach; Wicklow, Fianna Fail)
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I agree with the Deputy in that regard — he made a very good point. We should consider the issue at a meeting of the Joint Committee on Environment and Local Government.

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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A twin-track approach is required in the case of families that have broken down. I stress that males in particular suffer from the problem I outlined.

Government policy is forcing people to sell their homes. The Minister may not be aware that, in the former North Eastern Health Board area, people who have to enter nursing homes do not have the income to pay the fees being demanded and, as a consequence of this and decisions of the Health Service Executive, they are forced to sell homes in which another family member is living. I am dealing with a couple of cases of this kind, one of which involves a person who has been living in the family home for at least seven years. The need to sell family homes means the people living therein are placed on the local authority housing list. This is a shame and a sham. I ask the Minister to request the Minister for Health and Children to examine these issues because they are real and are creating enormous stress for families.

The Minister did not address the questions of where and how local authority houses are being built. I read a press release by the Minister that stated that high-density housing was the way to go. It is regarded as the answer to everything. I do not know if it is, but if we are to have high-density developments, they should be built to a high standard in a high quality environment.

Despite what An Bord Pleanála says, we will have 17 or 20 storey buildings around the country. It is critical that the quality of the environment in which they are to be constructed is very high, especially if families are living in them. It is all very well building a new shopping centre or apartments, but we really must consider the quality of the environment in which they are located. Otherwise children will have nowhere to go and will be forced to walk the streets. If we are to have high-density developments, we should attract designs of the best quality and reward and encourage those responsible. Design competitions, which ought to be run, if they are not run already, should be used in this regard. I fear, however, that there will be high-density buildings of poor environmental quality, with the consequent problems.

The Minister made a speech in August on what local authorities are doing throughout the country in respect of rezoning land. He was correct to question the location of houses being built in terms of the national spatial strategy. Government policy is forcing people to move increasingly far from the city of Dublin, where they might otherwise live, to build, buy or rent homes. Government policy, including the national spatial strategy, has failed because people are moving to locations as near to Dublin as possible. Developers are buying up land and building the homes, but they are developed in an absolute wasteland. As we noted from the by-elections in Kildare and Meath, many thousands of people are living in new housing estates in communities that have no facilities, recreational amenities or national schools. They have absolutely nothing. If the Minister's national spatial strategy were working, those communities would be developing in the growth centres that were identified, and, as he knows, in some others that were not.

One cannot have a national spatial strategy that does not work, nor can one have a decentralised State office in every small town and community in the country. Government policy is not working, people are living in poor accommodation with no facilities and commuting times are getting longer. Before the Minister entered office, were commuters from the north east or his area in Wicklow getting up earlier than they are now? People are getting up earlier to get to work from their housing estates with no facilities. The Minister's policy is just not working — he has not got it together and it is an absolute sham and a shame.

Photo of Dick RocheDick Roche (Minister, Department of Environment, Heritage and Local Government; Minister of State, Department of An Taoiseach; Wicklow, Fianna Fail)
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The Deputy might have a word with the lads down in Laois.

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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I will have a word with them everywhere because this is an issue for us all. I have no difficulty doing so. I had a word with them in County Louth and everywhere else.

There is no point building houses where there are no facilities, nor is there any point in councillors rezoning land if there are no facilities for the houses to be built thereon. There is no point in the Government having a national spatial strategy that lacks direction. This is the reality. I face this problem throughout the country. We in Fine Gael make it crystal clear that there is a need for a proper policy. The Government must lead by example — that is what Fine Gael will do.

The reality is that the Minister's record in Government has been an appalling failure. In 1996, the average price of a house stood at the equivalent of €88,000 in Dublin and €75,000 elsewhere. Today the average price for a house is over €250,000 and the average in Dublin is €356,220. Where in the name of God are people getting the money? Those people who can afford to borrow are borrowing to the hilt. Recently, financial institutions have been saying they will grant clients loans to buy houses, amounting to €350,000, for example, on which the clients have only to pay the interest. People in partnerships are in extremis trying to get the money to build their family homes. The reality is that the market keeps meeting the demand but the prices keep increasing.

People are now obtaining mortgages they will never be able to pay back. They are borrowing in a climate in which interest rates are about to increase. One might believe an increase of 1% is not very much, but one should remember it is not so long ago since mortgage interest rates were 15% or 16%. The Minister and I remember this. The reality is that there are unacceptable developments in the economy. The Minister's policy is not working and the pricing of houses has gone out of control.

Let us consider the figures, two of which are good. It is excellent that 250,000 are working in the construction industry. I welcome this, but if one ascertains who is buying the homes being constructed, one will note that a very significant number of buyers are buying second homes. Those who want to buy their first home cannot enter the market. We now have, for the first time, a generation of young people on normal incomes, such as teachers, nurses and gardaí, who cannot afford to buy their own homes. The Minister has not addressed that and is not addressing it through the policy he has outlined today.

Fine Gael has identified key ideas that ought to be acted upon, particularly in respect of first-time buyers. Government policy should address their needs. All stamp duty payable by first-time buyers on properties valued at less than €400,000 should be abolished. The Government moved some of the way towards achieving this in the budget of last year, but the stamp duty exemptions have not kept pace with the increase in house prices. While there has been a reduction in the stamp duty payable, it is still significant. The Estimates are to be published next week and if the Minister has done his homework — he generally does it reasonably well — he will increase the threshold beyond which stamp duty is payable.

Many people are talking about special savings incentive scheme accounts and all the money that will be in the economy next year. Clearly the Government needs a strategy to put some of the money coming on-stream into pension funds. Fine Gael believes a special scheme ought to be introduced for first-time buyers only. I put this to the Minister in parliamentary questions time and again. Fine Gael, if in power, would create a fund equivalent to the special savings incentive scheme, such that first-time buyers could benefit therefrom. It would be significant and helpful to them. We will make it easier for house buyers in that for the first seven years of their mortgages, they will have the interest benefit. These are some of the issues we think important. The failure of the Government has been unacceptable. It has failed to meet its commitment on social housing in the national development plan and the VAT rate on all houses has increased.

A critical issue, on which I intend to focus during parliamentary questions on 27 November, is that of the serious inequity in development levies. The principle of local authorities charging such levies is a good one. The difficulty is that there are significant differences between counties, for example, the Minister's county of Wicklow and County Donegal. Development levies are used as an income source for local authorities rather than for meeting real operational costs. They are a real issue for first-time buyers building single rural houses. The Minister should direct local authorities to address the problem. He should meet county managers and local authority members to explain what is occurring throughout the country and to ask them to make the charge fairer and more equitable. It is not equitable at present; it is seen as an extra and unfair tax which, rather than affecting developers, particularly affects those trying to build their first home.

The Minister must consider the issue of social housing on which his policy has been a failure. One of the problems is that the relevant statistics are not available. A national inventory of housing needs began last March. It is now November, yet the facts and figures are not available. If we are to plan properly, these figures must be available annually. One of the causes of this problem is that applicants had to fill in a 20-page form.

Photo of Dick RocheDick Roche (Minister, Department of Environment, Heritage and Local Government; Minister of State, Department of An Taoiseach; Wicklow, Fianna Fail)
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In two volumes.

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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That was a serious mistake. One almost had to state what one had for breakfast. However, the serious issue is that local authorities and the Government cannot plan. The budget is approaching but the Government does not have the necessary facts and figures and does not know its own needs.

My local authority tells me there has been a significant increase in the number of people on the local authority housing list, which is the area of greatest need. As the Minister has not done his homework or got his facts right, this debate is taking place in a vacuum. He does not know where he is going and cannot tell us the facts. Fine Gael will ensure that everybody knows the figures, whatever they are. To inform this debate properly, we should have the figures but we do not.

These are the main ideas I wish to bring to the Minister's attention. I look forward to debating the many aspects of this issue. The Minister is not doing his job and has been a failure on the provision of social and affordable housing. That is not a legacy I will have when I am in the Minister's position. In the short time the Minister has left in office——

Photo of Dick RocheDick Roche (Minister, Department of Environment, Heritage and Local Government; Minister of State, Department of An Taoiseach; Wicklow, Fianna Fail)
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Hope springs eternal.

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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Spera in Deo.

Photo of Dick RocheDick Roche (Minister, Department of Environment, Heritage and Local Government; Minister of State, Department of An Taoiseach; Wicklow, Fianna Fail)
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The Deputy said it with a smile.

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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I expect that things will change, as they must. I look forward to the debate.

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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I welcome the fact that the Dáil is at long last having a formal debate on the important issue of housing. Since the publication in April 2004 of the report of the all-party committee on building land, and more particularly since the publication a year ago of the National Economic and Social Council report, Housing in Ireland: Performance and Policy, I have, on behalf of the Labour Party, sought a debate in the House on the unmet housing needs of tens of thousands of people. It is a measure of the Government's disinterest in housing and its indifference to people in poor circumstances who cannot afford today's high house prices that this debate has been delayed for so long.

In November 2004 the NESC published a major report, Housing in Ireland: Performance and Policy. It urged the Government, the social partners and others involved in housing to take action along three inter-related lines of policy: the provision of social and affordable housing, the need for integrated sustainable neighbourhoods, and active land use management. The NESC described what needed to be done as, "a major national challenge which bears comparison with other great challenges that Ireland has faced and met in the past half century". In other words, the NESC put today's related housing, planning and neighbourhood problems on a par with the economic crisis which faced Ireland at the end of the 1950s, and it suggested that the priority for policy and the level of effort required to resolve these problems are on the same level as the efforts which eventually and successfully addressed the country's past economic, employment and emigration difficulties.

This paints an entirely different picture of the housing challenge facing this country than the complacent, self-congratulatory tone of the Minister's speech.

Photo of Dick RocheDick Roche (Minister, Department of Environment, Heritage and Local Government; Minister of State, Department of An Taoiseach; Wicklow, Fianna Fail)
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It was factual.

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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I am disappointed that the Minister referred only in passing to the NESC report and made no reference to the all-party committee on building land.

The NESC report did not surprise the Labour Party. For the past eight years we have argued that the Government's housing policies, if they can be described as such, should be changed. Nearly eight and a half years after the Fianna Fáil-Progressive Democrats Government came together in 1997 and after a period of unprecedented economic growth and revenues, several questions must be not just asked but answered. Why are twice as many people homeless? Why is there double the number of applicants on local authority waiting lists? Why have more Irish families lost their homes through eviction under this Government than did so under the British during the land war in the 19th century? Why are young working people unable to purchase a home reasonably close to their family and their work, especially in the major urban areas? Why has a generation been driven out into the commuter belt, with all the consequences for traffic, child care and personal relationships?

The answer to all these questions is that the Government, instead of pursuing policies aimed at providing homes for families and working people, has instead stimulated and stoked a market for property which has increased house prices, made the larger urban areas virtually unaffordable and increased the burden which must now be borne by the taxpayers in addressing the housing needs of our people. The Minister in his speech focused on housing as an economic activity, which is important, rather than dealing with it as a social and human need.

In the early years of rising house prices, the Labour Party argued for intervention in the housing market and was told by a succession of Ministers that housing should be left to the market, that supply would increase and that this in turn would meet demand. Supply has increased, which is welcome. However, house prices are now three times what they were eight years ago, and despite all the talk about prices stabilising, the latest official figures from the Department of the Environment, Heritage and Local Government show that the annual percentage increase in new house prices is 11.8% nationally, 7.4% in Dublin, and just over 10% for second-hand houses, or three to four times the rate of inflation. Indeed, the Bank of Ireland stated this week that house prices will rise by 10% this year and that rents are beginning to rise again.

The Government has intervened in the housing market on a few occasions but only to give a leg-up to investors and property speculators. The abolition of the first-time buyer's grant distorted the market against the first-time buyer. The reduction in stamp duty for investors did the same. The halving of capital gains tax for the sale of development land and the range of urban renewal incentives for new building were aimed at supporting the property market rather than providing homes for those in need. The only significant measure which might have assisted first-time buyers was Part V of the Planning and Development Act 2000, which required up to 20% of development land to be set aside for social and affordable housing, but that measure was botched in its implementation. First, it was delayed and did not take effect until 2001. All unbuilt planning permissions were due to be subject to the 20% rule, with effect from the end of 2002, but builders and developers engaged in special pleading and the Government effectively handed back 80,000 affordable sites to the builders in amending legislation from that time.

According to the Department of the Environment, Heritage and Local Government, over 300,000 dwellings have been built in the State since Part V became operational in 2001. To take up the Minister's challenge about mathematics, if we assume that 50% of all the houses and apartments built since 2001 were on small sites or on unzoned land, or were one-off dwellings — therefore Part V would not apply to them — there remain 150,000 dwellings to which the 20% rule should have applied and should have generated in the region of 30,000 social and affordable dwellings.

Photo of Dick RocheDick Roche (Minister, Department of Environment, Heritage and Local Government; Minister of State, Department of An Taoiseach; Wicklow, Fianna Fail)
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What about the pre-planning? The Deputy has got it wrong.

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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Instead, according to a reply given by the Minister and repeated in the House today, only 1,294 dwellings have so far been produced under Part V, or just 4% of the potential number which could be provided. The failure of Part V to deliver on its potential can be explained by the fact that the Government never wanted it to work. It has delayed its implementation. It has riddled it with loopholes and out clauses and made its administration unnecessarily cumbersome for applicants and developers.

Indeed, the Minister is now raising another possible out clause. I saw recently that he is talking about developers being able to exchange their Part V commitments in return for sites for school buildings. It has more to do with facilitating the developer than providing for the educational needs of our people.

Photo of Dick RocheDick Roche (Minister, Department of Environment, Heritage and Local Government; Minister of State, Department of An Taoiseach; Wicklow, Fianna Fail)
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How could a right man be so wrong so often?

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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The Minister is talking about himself.

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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Part V has been a failure to date in the areas where it is most needed, the affordability blackspots where working families cannot afford to buy from their own resources.

Photo of Dick RocheDick Roche (Minister, Department of Environment, Heritage and Local Government; Minister of State, Department of An Taoiseach; Wicklow, Fianna Fail)
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The Deputy is the only Member of the House who does not understand it anymore.

1:00 pm

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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My constituency is an example, where the local authority recently advertised a new affordable housing scheme offering one-bedroom units at €200,000, two-bedroom units at €230,000 and three-bedroom units at €300,000. By any standards these are not affordable prices for working families on low incomes. While I welcome the establishment of the affordable homes partnership and wish its chairman, Mr. Des Geraghty, every success in its efforts, I do not want to see it being used as a means to drive working families out of city centres or areas where there are high property prices, as a type of social cleansing tactic on the part of the Government.

The story on the direct provision of social housing is even worse. NESC estimates that 73,000 additional units need to be provided between 2004 and 2011. That translates as a social housing output of between 10,000 and 11,000 units per year for the next seven years. In recent years total social housing output, that is, local authority construction and dwellings provided through the voluntary and co-operative sectors, have been running at about 4,000 to 5,000. This year, however, for the second year running the numbers are down. The number of local authority houses completed in the first six months of 2005, at 1,376, is 14% less than the number for the same period in 2004, and the 2004 output was down almost 22% on 2003.

Looked at over a longer time period, the picture is even more depressing. In the national development plan, the Government committed itself to provide an additional 35,500 local authority dwellings between 2000 and 2006. Up to the end of June this year, it delivered 19,660. With 18 months to go to the end of the NDP, 45% of the promised council houses have yet to appear.

The NDP also promised 4,000 voluntary sector dwellings per annum. In 2004, 1,607 dwellings were completed, less than half the rate that was promised. The targets for shared ownership and affordable transactions of the non-Part V type also were not met. The target in both cases was 1,000 per annum, and last year they came in at 798 and 869 respectively. In the Sustaining Progress national wage agreement of 2003, the Government promised 10,000 additional affordable houses on top of all the other schemes, including Part V. So far not a single one of these dwellings has been provided.

In 2004, the total social housing output was 6,117 units. This compares poorly with the private sector achievement of 71,808 units. Against a backdrop of estimated housing need among the poor, old and disabled in the tens of thousands, this is a failure on any level. Voluntary and co-operative output is in the region of 1,600 units each year. However, this is far below capacity and expectation and one must wonder why that is. Perhaps the fact that the units cost limits have not been revised since 2002 is a contributing factor. Is the Minister aware of the effect of building price inflation on the output of social housing stuck with unit costs that are already three years behind?

Perhaps another reason is the collapse of the low cost site scheme, whereby housing associations can acquire land from local authorities to build social housing. A grand total of 87 sites were made available under this scheme last year. It is fair to say that this scheme has been all but abandoned. Does the Minister have any plans to revive it or perhaps to implement the recommendations of the NESC housing report as regards active land management mechanisms?

Another area of policy which seems to be left hanging is the provision of direct access for housing associations to the Housing Finance Agency which was brought into legislation in 2002, another three-year gap in terms of getting a result. There is also a gap in the assessment of housing needs. Such an assessment was carried out by all local authorities in March this year and despite the urgent need for up-to-date data, we still have not got the figures as regards housing need.

Instead of providing applicants for social housing with good secure homes through local authorities and voluntary and co-operative housing bodies, the Government is delivering up the social housing applicants as State subsidised tenants to the private rented sector, through the rent supplement and new rental assistance schemes.

The policy of State subsidisation of rent in the private rented sector is not sustainable in the longer term. It makes little sense for the Government to subsidise some rents by up to €952 per month, when the same amount, and in some cases less, would pay the mortgage on the same property. The rent supplement scheme is now acting as a new poverty trap and a disincentive to work. Rent supplement is generally available only to those who are on social welfare payments and tenants lose it if they take up work, or if partners decide to live together and one of them takes a job. This needs to be remedied urgently so that people do not lose rent assistance if they return to work.

There is the danger of a new type of "ghettoisation" as considerable parts of new apartment developments are turning over almost exclusively to tenants in receipt of rent supplement and the quality and design of some of them is not suitable for family living. The housing problems facing the poorest people in society are worse now than they have been at any time in my 20 years as a public representative. Time and again the Labour Party has called for changes to Government housing policy, but to no avail. This Administration will not change its housing policy. Change will come only with a change of Government.

The challenge set down so clearly in the NESC report will not be easy, not least because policy options which would have worked seven or eight years ago, or even more recently, are not now available. The housing problem has to be addressed in circumstances where many families have committed enormous sums to purchase their homes, and in some cases are over-borrowed, and care must be taken not to expose them to further financial risk. Similarly, we must ensure that the policies pursued do not adversely affect construction activity, which accounts for a large segment of the economy.

The Labour Party's starting point is that every person has a right to a home. Indeed, we have proposed a constitutional amendment which would make the right to a home an element of the wider social and economic rights which the Labour Party believes should be guaranteed by the Constitution. The duty of Government is to ensure that every person, every family, has access to housing, at an affordable price, on tenure which is secure and is adequate to their needs. That objective can be met by a number of means. The first step is to maximise the numbers who can purchase their own homes. The NESC report identified two major problems in this regard, namely, the difficulty in assembling a deposit and, second, the problem of affordability blackspots.

The second step is to implement Part V of the Planning Act in an effective way. Part V should be capable of generating 5,000 social and affordable dwellings per annum. The third step is to reform and widen eligibility for the shared ownership and the affordable housing schemes. The eligibility and income limits need to be lifted urgently in both cases. The fourth step is to establish a national housing authority to provide support to local authorities and to help the voluntary and co-operative housing sector to meet its targets. The task of the national housing authority would be to meet the targets recommended by the NESC, specifically the provision of 73,000 additional social housing units up to 2011.

The fifth step is to replace the rent supplement, the mortgage and rental subsidies scheme, as well as the RAS, by a new housing benefit which would be related to need and affordability. The final step is to address the continuing speculation in building land through the implementation of the recommendations of the all-party committee.