Ann Phelan (Carlow-Kilkenny, Labour)
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I am grateful to the Ceann Comhairle for the opportunity to raise this important topic. Historically, one of the prime responsibilities of a local authority was to house people who, through no fault of their own, could not afford to rent houses and apartments in the private sector and get their feet on the property ladder. Owing to the economic slowdown, the local authorities cannot afford to pursue traditional methods of servicing their obligations. In the past they used their land stocks, built houses appropriate to their needs and were then in a position to allocate them to those on their housing lists.

I realise the needs of each local authority differ but, recently, because of the lack of capital funding, they have all become reliant on the private sector to provide the housing they need. The situation has even changed drastically since I was a member of Kilkenny County Council. The rental accommodation scheme, RAS, has helped enormously in providing social housing for local authorities and housing agencies. Given the current economic situation, this is likely to continue for some time.

The property tax has been brought in by the Government to try to make local authorities more self-sufficient and less reliant on funding from central government in order that they can look after local issues with local money and, in some ways, to replace the old rates system. Today, local authorities, housing agencies and approved voluntary bodies do not have the funds to deliver the level of service they once did and, as a result, they are in danger of failing in their obligations, which may leave them open to legal challenges. We are once again experiencing a mismatch of housing need and housing stock. These bodies cannot access the capital they need and the Department of the Environment, Community and Local Government does not have the funds required under the traditional capital assistance scheme or the loan and subsidy grant scheme. In addition, the leasing initiative combined with the capital advance leasing facility, CALF, scheme, are not providing the finance for all the voluntary bodies.

The result is that all the agencies and the local authorities themselves are reliant on the private sector to provide the housing units that are needed. The proposed transfer of the RAS to local government will only increase this reliance on the private sector. It is also worth noting that what used to constitute a family home years ago has changed significantly. Many families live in flats and apartments and there are many single parent families. There is no one size fits all scenario anymore and this provides a greater challenge.

Property charges will have to be paid by everyone, including those who engage with the county councils to make housing available.

This brings me to the nub of the problem. We must incentivise landlords, who prefer to rent in the private sector. The introduction of the property tax is bringing this issue into sharp focus. Landlords prefer to rent to private tenants so that they can increase rents and offset them against their incomes. When this is not possible, landlords simply rent in the private sector and will not engage with local authorities. I am trying to be proactive and deal with this issue before it becomes a crisis.

This week, my office took a huge number of calls from people who cannot get housing. Some are not earning enough to rent in the private sector but are earning too much to qualify for rent allowance. This situation is getting worse and is causing great stress to people. We must start acting now.

Jan O'Sullivan (Limerick City, Labour)
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I thank Deputy Phelan for raising this matter and for her proactive approach to it. As she, rightly, points out, the pressure on housing budgets means that we must do more with less. Capital budgets for housing have been decreasing over the past five years.

The Government's housing policy statement, published in June 2011, reaffirms our focus on meeting the most acute needs of households applying for social housing support from within the resources available. Our social housing programme is framed in a manner that optimises the delivery of social housing and the return for the resources invested. We are tailoring the use of available Exchequer supports to prevailing conditions and exploring the full range of solutions to address housing needs. Delivery is being significantly facilitated through more flexible funding models such as the rental accommodation scheme, RAS, and leasing, but we are also developing other funding mechanisms that will increase the supply of permanent new social housing.

Deputy Phelan has correctly highlighted the challenges faced by local authorities in accessing appropriate properties with which to address social housing need in their areas. Traditional models of large-scale local authority social housing construction are, unfortunately, not feasible in the current economic circumstances, which is why the housing policy statement recognises that the approved housing body sector must play a key role in addressing social housing need.

The Government is committed to exploring and developing such funding mechanisms as will increase the supply of new social housing. Such mechanisms will include options to purchase, build to lease, and the sourcing of loan finance by approved housing bodies for construction and acquisition. The Deputy referred to the CALF scheme, for example, on which we are working with the voluntary approved housing body sector.

In this regard, I am conscious that the move from capital funded programmes of construction and acquisition by approved housing bodies to more revenue funded options presents challenges. I am therefore developing an enabling regulatory framework for the sector that will provide support and assurance both to the sector itself and to its external partners as it takes on the expanded role envisaged for it by Government and will underline its status as a viable and attractive investment opportunity for financial institutions.

My Department is actively working with the sector on the development of a voluntary code which I expect most bodies will endorse. This code, which I hope to launch in the coming months, will serve as a learning opportunity for the sector and for my Department as we develop a longer-term statutory framework that will best support the enhanced role of approved housing bodies. I am satisfied that the widened range of schemes to facilitate social housing delivery and the innovative approach being adopted will enable us to maximize the delivery of social housing within the very burdensome current financial constraints.

The importance of a housing sector built on the pillars of choice, fairness and equity across tenures, is central to the approach being taken by the Government to the housing sector. Providing local authorities and approved housing bodies with a suite of options that can be tailored to meet different categories of housing need is central to the Government's policy approach. I recognise that much of the Government strategy involves the voluntary housing sector but much of it depends on the co-operation of private landlords. The issue the Deputy raised is one I am conscious of. We want to do whatever we can to ensure that we have the co-operation of private landlords through the leasing programme and RAS. Although not directly under my Department, rent supplement is also a major area where housing is provided by the private sector. I am working with the Minister for Social Protection to transfer responsibility for that to my Department and to local authorities.

Ann Phelan (Carlow-Kilkenny, Labour)
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I thank the Minister of State for her response and for being proactive on this issue. I am pleased she is so aware of the difficulties that exist. We must incentivise private landlords to remain engaged with local authorities so that a crisis does not develop.

Many young people who are setting out in life, who may have just got their first job and are trying to establish a family home often find they cannot afford to rent accommodation. They may be a little over the income limit for rent allowance and in danger of becoming homeless. This situation seems crazy when there are so many vacant houses. Will those houses be delivered to local authorities? I hate to think we will continue into the future unable to match our housing stock to our housing needs. Housing policy must be based on housing need.

I thank the Minister of State. I am pleased with her answer and I am delighted to hear she will proceed with this.

Jan O'Sullivan (Limerick City, Labour)
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There is always a balance to be struck between incentivising private landlords and being prudent with public money. We must get that balance right.

Deputy Phelan referred to vacant houses. We are working with NAMA to acquire properties that can be used for social housing through that agency. We are making some progress on that now. There were some delays but NAMA has now set up what is called a special purpose vehicle to speed the transfer of properties. That will not solve the entire problem but it will contribute to the solution.

We must continue to use the mechanisms available to us. I hope the time is not too far away when capital budgets can be built up again and we can return to the more traditional method of allocating funding to local authorities to provide directly for the housing needs of citizens. At present, we must prioritise the most needy. They are people with disabilities and people who are elderly or homeless. Those are the public housing priorities at present. We must use these various methods.

Deputy Phelan is describing a real problem which she has experienced in her constituency and which other Deputies have experienced in theirs.