Thursday, 22 September 2022
Saincheisteanna Tráthúla - Topical Issue Debate
Across the State, tens of thousands of homeowners, private and social housing tenants, are living in defective buildings with defective blocks and pyrite in the foundations but also many with fire safety, water ingress and other structural defects. All those people are waiting very anxiously on next week's budget announcements to see what, if anything, the Government has in store for them. Sinn Féin will continue to make the case for the need for substantial amendment to the defective block remediation legislation as well as a significant increase in funding for those homeowners. However, what I want to talk about here is the working group on defective housing.
Only last week, myself and my colleague, Deputy Ó Snodaigh, met a very large number of residents in a residential development in Park West in Deputy Ó Snodaigh's constituency and on the boundary of mine. They are apartment owners, the overwhelming majority of whom bought homes in good faith, who are now facing bills individually of €60,000 to €70,000 each to remediate that property. Those people, like tens of thousands of others across the State, definitely need a remediation scheme and it needs to have significant funding in addition to whatever funding is provided for pyrite and defective block schemes. That scheme also needs to be retrospective for those homeowners who, whether under pressure from insurers or fire safety officials, have had to remediate their properties or parts of their properties to date. There will also be a need for some sort of interim measures for those who need to urgently need to remediate their properties now.
Sinn Féin's strong view is that the best way to do this is to take the pyrite resolution board that is currently in place and expand its terms of reference so that homeowners affected by Celtic tiger-era defects, which they did not cause, can immediately apply to that body. It is almost finished its work in terms of pyrite. The Government estimates that there are a few hundred homeowners left. That way, rather than setting up a new grant scheme and having to go through the whole process again, we would take the structure that is there and give it additional funding. Crucially, the advantage of doing that would be that it would not be a grant scheme like we have in Donegal and Mayo and now Clare and Limerick. Those schemes are not fit for purpose. Given the complex nature of multi-unit residential developments and the fact that they are not individual owners with an individual discrete unit but an owners' management company with collective ownership of the shared areas, an end-to-end scheme managed by the Pyrite Resolution Board, albeit probably renamed, would be an eminently sensible way to do that as well as reducing the costs ultimately to the Exchequer as well.
I am keen to hear from the Minister of State. I know he will not tell me what is in the budget - I am not asking why he cannot answer that particular question as somebody else can do that - but I ask that he would at least give us some sense of what has happened since the working group's report was given to the Government in the summer of this year. What is the Government's thinking on how to deal with this?
I can attest - Deputy Ó Snodaigh would say the same - to what I heard from the homeowners we met last week. I meet homeowners like these from throughout the country, from counties Clare, Donegal and Mayo as well as from across Dublin and the commuter belt counties. In some cases, they have been waiting for 15 years to get some indication of whether there will be any scheme at all. They did not create these defects. They bought homes in good faith. While they share the view of many of us that in the first instance the developer responsible should foot the bill, for many reasons in many cases it is not possible to pursue the developer. The Statute of Limitations may have been exceeded. The developer may no longer be trading or has created a new designated activity company, trading under another name.
I ask the Minister of State to outline where the Government is at. Can we expect some form of scheme to be in place from 2023 to give these homeowners the much-needed respite they rightly deserve and desperately need?
I am happy to provide an update on the working group. I acknowledge the considerable challenges and stress this has placed on families. I acknowledge the difficulties that homeowners and residents of many apartments and duplexes are facing, and the stress that is caused when defects arise in their buildings. The Deputy will be aware that there have been many incidents of failures and non-compliance concerns coming to light in apartment buildings built during the building boom. The Minister, Deputy Darragh O’Brien, has repeatedly said that this is a nettle which the Government needs to and will grasp, and that the Government is committed to helping affected homeowners.
One of the first tasks of the Minister, Deputy Darragh O’Brien, following the formation of the Government was the establishment of an independent working group to examine defects in housing under the chairmanship of Mr. Seamus Neely, the former chief executive of Donegal County Council. This followed a commitment in the programme for Government to examine the issue and bring forward reforms. This commitment was further supported by actions contained in Housing for All.
The group’s terms of reference were focused on fire safety, structural safety and water ingress defects in purpose-built apartment buildings, including duplexes, constructed between 1991 and 2013. The Minister, Deputy Darragh O’Brien, received the report of the working group at the end of July.
The content of this report confirms what we already know, which is that there is a significant and widespread issue with defects in a large number of apartments and duplexes that were built during the Celtic tiger years.
The working group estimates that of apartments and duplexes or associated common areas constructed between 1991 and 2013, the number that may be affected by one or more fire safety, structural safety or water ingress defects is likely to range between 50% and 80%. This equates to between 62,500 and 100,000 apartments or duplexes.
In addition, the working group estimates that the average cost of undertaking the remediation of defects is likely to be approximately €25,000 per apartment or duplex. This translates into a potential overall total remediation cost ranging from approximately €1.56 billion to €2.5 billion.
The working group concluded that there is no single cause of defects. They tend to arise due to a variety of design, product, inspection, supervision and workmanship issues, occurring either in isolation or in various combinations.
The working group made recommendations on the planning, prioritisation and resourcing of all remedial works. It identified approaches to fire safety protection, inspection and certification. Where necessary to enable continued use of affected buildings, interim measures should be carried out, pending the implementation of full remedial works.
The working group’s recommendations along with the evidence gathered and options for potential supports contained in the report will be of considerable assistance in informing the Government's next steps.
Taking into account what has been learned through the development and operation of other schemes such as the pyrite remediation scheme and the defective concrete blocks scheme, the Minister, Deputy Darragh O’Brien, will now, in consultation with Government colleagues, develop a plan to address the situation in which many homeowners find themselves through no fault of their own. The Minister looks forward to keeping the House informed of developments in this regard.
I thank the Minister of State for telling me what the report published two and a half months ago said. There were ten paragraphs in his speech. There was half a paragraph containing one sentence in response to the question I asked. I hope after next week's budget announcements homeowners will be somewhat the wiser as to the Government's intentions.
One of the issues constantly raised by homeowners and their representatives through the Construction Defects Alliance and the Apartment Owners Network is the anger that those responsible are not contributing anything. If a redress scheme is announced in the budget, it will rightly be primarily funded by the Government, but we need to make sure industry pays.
Two companies were responsible for defects in the apartments and duplexes in Belmayne in north County Dublin. Kitara still trades. Stanley Holdings was reconstituted and the directors of that are now the directors of Cairn Homes, one of the largest home builders in the State. Much to the anger of homeowners in Belmayne, Cairn Homes is building a huge new residential development with significant support from the State on the land directly beside them. Homeowners do not understand why individuals or companies who in the past were responsible for defects get significant support, planning permission, State aid and support from NAMA to build homes and make enormous profits. Michael Stanley of Cairn Homes is a case in point.
I welcome that in reply to a parliamentary question in July, the Minister for Finance, Deputy Donohoe, indicated to me that the Government is considering imposing a levy on industry to ensure it pays its fair share. My strong view is that it should be euro for euro because the Government has a responsibility for decades of light-touch regulation. For every €1 the State pays for remediation, €1 should come from industry.
I also hope the Government will support my sentiment that developers that continue to trade either as individuals or as companies should be brought to bear. For example, the homeowners in Belmayne who are facing substantial costs to address defects should not only get support from the State and industry but also from those individuals and companies who are making enormous profits despite the fact that in a piece of land next to where they are building homeowners have been left with defects for over a decade and a half. Can the Minister of State give me any update on the attempts being made by the Minister, Deputy Donohoe, to get industry to make a contribution? While I know the Minister of State cannot tell me what will be in the budget, will homeowners be any more enlightened next Tuesday than they will be after his intervention here this evening?
Like the Deputy, I welcome the proposal from the Minister, Deputy Donohoe, on the levy. In reference to defective concrete blocks, the Minister, Deputy Darragh O’Brien, referred to the responsibility of industry regarding the costs of these remediation schemes.
On behalf of the Minister, Deputy Darragh O’Brien, I thank the members of the working group for the work they undertook in preparing such a comprehensive report in a tight timeframe. I assure the House of the Minister's commitment to resolve these issues.
The Deputy is correct that I cannot anticipate what might appear in the budget in this regard. However, the Minister, Deputy Darragh O’Brien, has given a commitment to work with the homeowners to try to resolve these issues in a manner that is just and sustainable for the affected homeowners. I take on board the point the Deputy made on the pyrite remediation board. I assure the House that the Minister is determined to resolve these issues. A significant number of properties are affected by these serious issues. The Government is determined to try to resolve them on behalf of the homeowners.