Seán Sherlock (Cork East, Labour)
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I raise this issue because a meeting of the northern committee of Cork County Council took place yesterday at which a decision was announced to dispose of up to 106 affordable units, under the auspices of Cork County Council, 51 of which are to be disposed of through local auctioneers and the remaining 55 through the social leasing schemes announced by the Minister of State at the Department of the Environment, Heritage and Local Government, Deputy Michael Finneran, some time ago.

I am concerned that these houses will not sell on the open market. There is not a snowball's chance in hell that they will sell on the open market. There is an over supply of affordable houses within local authorities and, particularly, within the northern division of Cork County Council. I am sceptical about any attempts by Cork County Council to use the social leasing scheme because that will come under the ambit of the housing associations. Anybody who takes up residence in any of those 55 houses which come under the social leasing scheme will never have an opportunity to purchase those houses. Any person who may be on an affordable housing list and who may be eligible for financing will not consider going down that road if it means that for the duration of that lease he or she cannot own the house. I am also of the view that the 51 houses it is proposed to sell on the open market will not be sold.

I propose that there must be a greater degree of flexibility on the part of the Minister when dealing with local authorities in respect of housing issues. If the 106 houses to which I refer were advertised as rent-to-buy type lettings, they could then be occupied, which is extremely important. After two or three years, the occupants could then decide whether they wished to purchase those houses.

In one estate in the Mitchelstown area there are 20 houses, ten of which will be disposed of through the social leasing scheme while the other ten will be disposed of through the affordable housing scheme. For every day these houses remain unoccupied, problems arise in the estate to which I refer. If its is left to auctioneers to try to sell these houses in a market in which no one is buying, I contend that they will remain unoccupied for some time.

I put it to the Minister of State that a degree more flexibility and lateral thinking would provide people who are living in the area with the opportunity to rent those houses. They could do so through the social housing schemes or through a rent-to-buy scheme, under which they could eventually decide to buy if the opportunity arose. This would constitute a more common-sense and practical approach to dealing with the issue of unoccupied houses in certain estates.

John Moloney (Laois-Offaly, Fianna Fail)
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I am taking this matter on behalf of the Minister of State at the Department of the Environment, Heritage and Local Government, Deputy Finneran. I thank Deputy Sherlock for raising this important issue and I welcome, in particular, support for the temporary use of unsold affordable units to accommodate households in need of social housing.

In the first instance, it should be recognised that there will always be a certain level of stock of unsold affordable units on hands at any given time, whatever the prevailing housing market conditions. The slowdown in sales of affordable housing has moved in step with the process of correction in the wider housing market. Prices of affordable homes provided by local authorities under the various affordable housing schemes, including Part V, were typically priced at around 25% to 30% lower than market prices. As market prices fell - in some areas they fell rapidly - this differential has been eroded or cancelled completely. This, coupled with the very strong surge in delivery of affordable units in 2008, particularly under Part V, resulted in a significant increase in the stock of affordable housing units for sale by local authorities.

Early in 2009, it was estimated that approximately 3,700 units were available for purchase. However, by that time the Department of the Environment, Heritage and Local Government had already begun working with local authorities and the affordable homes partnership to ensure that effective measures were in place. Last April, the Minister issued comprehensive guidance to local authorities which provided them with a wide range of options to ensure that unsold units would be brought into effective and early use.

While the priority was still to sell affordable homes to eligible purchasers, in circumstances where this provide to be impractical in current market conditions, housing authorities were asked to undertake a comprehensive evaluation of the options for dealing with these properties, including their deployment for social housing purposes where appropriate and having regard to the principles of sustainable communities. Specific options put at the disposal of authorities in this regard include the sale of units under the incremental purchase scheme, use of the units to provide social housing supports for an initial period of five years or, in exceptional circumstances, the transfer of unsold affordable units into permanent social housing stock.

Since that guidance was issued, considerable progress has been made on both sales of affordable homes with, despite the difficult economic and banking climate, over 1,300 affordable homes sold in the first nine months of 2009, and the deployment of a further 1,300 unsold affordable homes for other purposes, including temporary use under the social leasing or rental accommodation schemes. As a result, the number of units on hands has now come down to just over 1,000. This excludes those which are in the process of being sold or which have been earmarked for use for other housing purposes. Local authorities with remaining stock on hands - including Cork County Council with a total of 135 units remaining unsold - are actively considering the options available to them to bring these units into use as soon as possible. The Department of the Environment, Heritage and Local Government is also considering the feasibility of introducing a rent-to-buy scheme in a small number of local authority areas.

The comprehensive range of options introduced last year has achieved considerable success. The immediate focus for affordable housing is on carrying forward those measures to ensure the most effective deployment of the remaining unsold stock. This will continue to be informed by the need to match existing vacant stock with the needs of those requiring housing supports, whether affordable or social.