Tom Hayes (Tipperary South, Fine Gael)
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Question 8: To ask the Minister for the Environment, Heritage and Local Government the number of local authorities that have reduced affordable housing prices in line with the market fall; the way he will instruct other local authorities who have not reduced prices; and if he will make a statement on the matter. [2537/10]

Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
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The provision of affordable housing, including setting of the sale price, is primarily a matter for individual housing authorities. The sale price of an affordable home is determined largely by its cost. Where authorities consider it appropriate in the context of reduced open market prices and the continuing need to ensure value for money outcomes, they have the option to reduce the sale price of any affordable house by further subsidisation utilising Part V moneys, clawback or other internal capital receipts on hand. My Department issued comprehensive guidance to local authorities in April 2009 outlining a range of measures that could be considered in dealing with the build-up of unsold affordable homes.

Local authorities were advised that in cases where they believe price is the main factor inhibiting sale and where there would be a prospect of achieving a sale if additional discount was provided, they should consider the option of further discounting. My Department does not collect information on the number of cases in which local authorities chose this option because it is for local authorities themselves to decide, given their unique position to make judgments on market conditions in their respective functional areas, the most appropriate option to be pursued in individual cases.

Terence Flanagan (Dublin North East, Fine Gael)
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I thank the Minister of State for his reply. It is disappointing he did not intervene or listen to what Fine Gael had to say about Dublin City Council reducing its affordable prices last year. He should have issued a directive to other local authorities to do likewise. There is now a situation where they have a glut of affordable housing on their books and it will be a long time before they get to sell those properties.

Does the Minister of State agree that the affordable housing partnership has not performed since it was set up in 2005 and that it has been a complete waste of taxpayers' money? The Minister of State said that more than 1,300 social and affordable housing units were provided last year but this is only a drop in the ocean. Much more needs to be done and should have been done over the years. Will the Minister of State comment on this and on the fact his policy has failed to link social housing with the private market? Clearly, the private market has not delivered.

Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
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I reject the claim made by the Deputy on this matter. There is not a glut at this time. As I explained in an earlier question, our local authorities have been innovative and in the first nine months of 2009 they were successful in selling 1,300 affordable homes, which is a success that should not go unrecorded. In addition, I have taken 1,300 units into long-term leasing. At this time, there are fewer than 1,000 units on the books of all local authorities and I am told the local authorities are quite confident of further sales in this area. On the suggestion of a glut, I am not in a position to direct local authorities to reduce their prices as I do not have the authority. The local authorities entered into negotiations and made contracts with developers.

I do not have the figures for every year but they were made available in an earlier question. I will supply them, but I assure the Deputies that the number of affordable homes provided has been considerable. The affordable homes partnership continues to play a supportive role with local authorities in the area of marketing and there is a special website for this purpose. People can also buy direct from the local authority and the affordable homes partnership has contributed in a positive way to making homes affordable.

Brendan Howlin (Wexford, Labour)
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A number of Deputies have indicated. I will allow extra time for this question but I ask everybody to be brief.

Ciarán Lynch (Cork South Central, Labour)
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The Minister of State said that in April 2009 he gave directions to local authorities-----

Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
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I did not give directions.

Ciarán Lynch (Cork South Central, Labour)
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-----regarding the disposal of what was becoming a bottleneck in the affordable homes sector, with some 3,000 properties held in stock at the end of the year. The Minister did not speak about discounting prices in April because I raised the issue with him and was told he had indicated to local authorities that they should do anything but drop the price. The current difficulty arises from the fact that local authorities are locked into a contract with developers made at the height of the property bubble.

Brendan Howlin (Wexford, Labour)
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Can the Deputy ask a question?

Ciarán Lynch (Cork South Central, Labour)
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The Minister of State said local authorities could not take the hit when they reduce the price of a property by finding money from somewhere else. However, local authorities should go back to developers so that the latter can take their share of the hit. The Minister of State seems comfortable with developers holding onto agreements made at the height of the property bubble and holding local authorities to ransom.

Joanna Tuffy (Dublin Mid West, Labour)
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We need to review the whole idea of affordable housing. Affordable housing was a contract with developers and was designed to keep the bubble inflated so that house prices continued to go up. It also addressed the fact that most people could not afford to buy very expensive houses. Many people now seem to view affordable housing as no cheaper than housing sold on the open market.

Bernard Durkan (Kildare North, Fine Gael)
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Correct.

Joanna Tuffy (Dublin Mid West, Labour)
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The Government should consider using some affordable housing to allocate to people on the housing list. Local authorities moved away from providing housing and concentrated all their eggs in the affordable housing basket. It was the wrong strategy and we need to go back to providing council housing for people who need it.

Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
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I welcome the comments of Deputy Tuffy, which are very much in line with what I have put in place to make affordable housing available for social housing purposes under a number of headings. Following a number of requests from local authorities I have agreed that 200 properties should go into their stock in this way. I have also allowed 1,300 to go into long-term leasing, making a total of 1,500 to people on housing lists.

In April 2009, I issued detailed guidelines to local authorities on what they could do with their affordable homes. We have been successful in that we now have fewer than 1,000 affordable homes on our books as compared to 3,900 previously. The affordable homes partnership has played a part.

Bernard Durkan (Kildare North, Fine Gael)
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Does the Minister of State agree that many of the houses off-loaded to very vulnerable people in the middle and low income groups in the past 12 months were not at affordable prices? In fact, a debt was hung around their necks at a time when they were most vulnerable.

Does he agree that the long-term lease system is not a good one in terms of value to the consumer or the taxpayer? This is particularly the case at a time when there is an abundance of houses all over the country which are unoccupied but are in the market at prices far below those of the affordable scheme.

There are now almost 100,000 families on housing lists throughout the country, many of whom have to rely on rent support from the HSE and the Department of Social and Family Affairs.

Brendan Howlin (Wexford, Labour)
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I ask the Deputy to be brief.

Bernard Durkan (Kildare North, Fine Gael)
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This is as brief as I can be. This costs the taxpayers and the families in question up to €500 million per year. It is extraordinary that nobody has concluded that the obvious thing to do is acquire some of those houses and allocate them at rental prices, with an option to purchase them at a later stage.

James Reilly (Dublin North, Fine Gael)
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Does the Minister of State accept that 1,300 houses represents an extraordinary failure, given the fact that 100,000 people are on housing lists? It is just over 1% of the total. The term "affordable houses" is a misnomer as houses on the open market are cheaper.

Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
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The figure of 1,300 houses represents only part of the overall delivery. In 2008, we dealt with 20,230 households.

James Reilly (Dublin North, Fine Gael)
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This is 2010.

Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
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We do not have figures for 2010 but I expect the rental accommodation and long-term leasing schemes to deliver between 4,000 and 4,500. On the list available to us, which I presume is the same one as Deputy Durkan has-----

Bernard Durkan (Kildare North, Fine Gael)
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The Minister of State knows those figures are not correct.

Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
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The list is from the Custom House. It states that 20,000 out of a figure of 56,000 are already being supported by the State with rent supplement.

I do not have the figures for 2009, but I believe the figure will be approximately 19,000. We are addressing the numbers on the lists. All over the world, particularly the United States which is a very wealthy country-----

James Reilly (Dublin North, Fine Gael)
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It was.

Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
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-----there is no safety net. Our country is looked up to for the way we provided a safety net for homeless people under the rental accommodation scheme, even in the current difficulties. We are one of the few countries that have such a net. We are lucky to have had no deaths from homelessness because everybody is accommodated. There is a bed for everybody in this country and people are not on the side of the road for want of such a policy. The system may not be perfect but it addresses the difficulties people have at this time.

Bernard Durkan (Kildare North, Fine Gael)
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The Minister should see what is happening.