Brian Stanley (Laois-Offaly, Sinn Fein)
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2. To ask the Minister for Environment, Community and Local Government if he will alter the new tenant purchase scheme to include Part V housing to change the terms of the scheme regarding sale price and market value and to factor in the length of the tenancy. [44252/15]

Brian Stanley (Laois-Offaly, Sinn Fein)
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My question pertains to Statutory Instrument No. 484 of 2015 on the sale of local authority housing. I raise this issue with the Minister of State because of my concerns regarding the new scheme. First, a person who is a tenant for just one year can purchase a house at a discount of 60%. While a person on an income of €15,000 can purchase a house, will he or she be able to maintain it? The purchase price can be pitched at 50% of the replacement value of the house or the market value, and that is a major concern. There is a huge shortage of council houses and the housing stock is too small.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Thank you.

Brian Stanley (Laois-Offaly, Sinn Fein)
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The National Economic and Social Council, NESC, stated in 2005 that we need 200,000 houses-----

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Deputy, this is only an introduction to your question.

Brian Stanley (Laois-Offaly, Sinn Fein)
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-----and we have just over that amount.

Paudie Coffey (Waterford, Fine Gael)
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The new incremental tenant purchase scheme for existing local authority houses will come into operation on 1 January 2016. It will apply to all local authority houses, other than excluded dwellings, on which I can expand later.

The provisions of Part V of the Planning and Development Act 2000, as amended, are designed to enable the development of mixed tenure, sustainable communities. Part V units are excluded from the tenant purchase scheme to ensure that units delivered under this mechanism will remain available for people in need of social housing support and that the original policy goals of the legislation are not eroded over time.

The market value of a local authority house will be determined in the first instance by the local authority. Where the tenant does not agree with the local authority valuation, it is open to him or her to have the market value determined independently. Under the new scheme, discounts of 40%, 50% or 60% are available, linked progressively to the income level of potential purchasers. The determination of discounts based on income is a fairer and more progressive method than discounts based on length of tenancy. Once the house is sold, the local authority will place a charge on the house equal to the discount given. The charge reduces to nil over a charge period of 20, 25 or 30 years. If the house is resold within the charge period, the local authority must be offered first refusal to buy back the house and the tenant purchaser must pay back the value of the outstanding charge on the property to the local authority.

I do not intend to re-examine these measures, which are fundamental to the design of the scheme. However, I will be keeping the operation of the scheme under review.

Brian Stanley (Laois-Offaly, Sinn Fein)
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This scheme is potentially very dangerous because local authorities do not have a large housing stock, numbering only 110,000 units at present, with a further 30,000 social housing units under the control of the approved housing bodies. There is an enormous shortage of local authority housing. My party is not opposed to a tenant purchase scheme but we believe that any such scheme must be progressive. The previous scheme had both strengths and weaknesses. Part V units are being excluded from the new scheme arbitrarily and the Minister of State's explanation for this does not hold water. A tenant who has been in a dwelling for only one year could get a 60% discount while another tenant who has been living in a local authority house for 40 years who has a gross income of €30,000.01 would only be entitled to a 40% discount. There is no recognition of the thousands of euro paid in rent over the years.

The old scheme was better in that there was little incentive to buy early. Tenants moved in, got well settled in an area and a community formed before the houses were sold off. A quick sale is not a good thing in this context.

Paudie Coffey (Waterford, Fine Gael)
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With all due respect to the Deputy, I am a little confused because on the one hand he is saying that he is in favour of the tenant purchase scheme while, on the other, he is arguing against it.

Brian Stanley (Laois-Offaly, Sinn Fein)
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I am in favour of a good tenant purchase scheme.

Paudie Coffey (Waterford, Fine Gael)
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I am a little confused as to the Sinn Féin position on this issue. The Deputy's question asks that the Government extends the tenant purchase scheme to Part V dwellings. The importance of integration in communities has been debated and agreed in this House, as has the importance of the provision of social housing. During a recent debate in this House, Sinn Féin argued that we should retain 20% of social housing in private estates but now Deputy Stanley is arguing that the 20% should be sold or at least be available for sale.

Brian Stanley (Laois-Offaly, Sinn Fein)
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That is not what I argued.

Paudie Coffey (Waterford, Fine Gael)
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That is, in effect, what the Deputy is arguing and I am somewhat confused by the Sinn Féin position on this issue.

Part V housing is excluded from the new scheme, as are houses that were specifically designed for occupancy by older people. The latter are excluded because the State must retain that housing stock. Part V units are excluded for integration reasons.

Brian Stanley (Laois-Offaly, Sinn Fein)
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The Minister of State is deliberately trying to skew what I am saying. Of course we want estates to have 20% social housing and people to be given the option to buy. Only a limited number of people would be able to buy Part V units because most could not afford them. Offering a house for sale to someone who has only occupied it for a year and who has an income of €15,000 will cause problems. That person will not have the money to may repayments on the purchase or to maintain the house. The Government is creating a problem in that regard. Furthermore, the quick sale of houses will diminish the social housing stock.

The old scheme operated over a ten year cycle and the Minister of State's predecessor improved on that by extending the cycle to 15 years, with a 1% discount per year. That was a more progressive scheme. Sinn Féin is in favour of a tenant purchase scheme but it must be progressive. The problem with the new scheme is that it incentivises a quick sale and does not encourage long-term, stable tenancies. The incentive for long-term tenancy has been removed. Furthermore, units will be sold to people who may not be able to afford to make the repayments or maintain their houses.

I am not picking an argument with the Minister of State. I am trying to be constructive because I see a problem down the line. What is more, Fine Gael councillors in my own county and the two neighbouring counties are not happy with the new scheme either.

Paudie Coffey (Waterford, Fine Gael)
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I totally respect that Deputy Stanley is trying to be constructive in raising this issue.

Brian Stanley (Laois-Offaly, Sinn Fein)
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We need to hear from the councillors on this.

Paudie Coffey (Waterford, Fine Gael)
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That said, I am a little confused as to the Sinn Féin position and I mean that genuinely. On the one hand, Deputy Stanley is saying that he supports the scheme, but he argued previously that we should not allow the purchasing-----

Brian Stanley (Laois-Offaly, Sinn Fein)
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I support a tenant purchase scheme, but not this one.

Paudie Coffey (Waterford, Fine Gael)
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The Deputy may have certain expectations based on the older scheme but I would argue that this is a more progressive scheme because it is based on income.

Brian Stanley (Laois-Offaly, Sinn Fein)
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The scheme will allow people on €15,000 to buy a house.

Paudie Coffey (Waterford, Fine Gael)
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The more income there is in a household, the lower the discount. That makes the scheme progressive. Deputy Stanley is arguing that the scheme should be based on the duration of a tenancy but in that scenario, a very high earner with a long tenancy could get a far greater discount than others. The new scheme represents a more balanced approach. We are excluding Part V units because we need to retain social housing in some private estates to encourage integration. There are other exclusions, including units designed for elderly people, group traveller housing and units designed for people with disabilities.

Brian Stanley (Laois-Offaly, Sinn Fein)
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I support those exclusions.

Paudie Coffey (Waterford, Fine Gael)
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I welcome the fact that Deputy Stanley supports those exclusions.

In general the new scheme has been welcomed. As I said earlier, we will continue to keep it under review. The scheme will kick off on 1 January 2016 and let us see how it goes.