Michael McCarthy (Labour)

I welcome the Minister of State, Deputy Batt O'Keeffe, and welcome the fact we are debating this important issue. I thank the Leader for arranging the debate. It is opportune that we discuss an issue as critical as housing, particularly in light of the report of the all-party committee on private building land and the more recent and more important report of the National Economic and Social Council, Housing in Ireland: Performance and Policy. Having perused that document in great detail, I believe it raises a number of important issues and says exactly what needs to be said about the current state of housing. It gives a clear indication of the direction policy should be moving. We could learn much from the recommendations of that report.

The NESC report urges the Government, social partners and others involved in this area to take action along three lines of policy, namely, the provision of social and affordable housing, the need for integrated sustainable neighbourhoods and active land use management. In highlighting the issue, the NESC described what needed to be done as "a major national challenge which bears comparison with other great challenges that Ireland has faced and met in the past half century". That is significant and spells out the extent to which this issue poses challenges, as well as the opportunities that may arise in dealing with those challenges. Despite the serious difficulties we experienced in regard to economic activity, emigration and unemployment, particularly in the 1950s, the challenge posed by housing today is put on a par with these issues. It is amazing that the NESC proposes the same course of action to deal with the issue of housing.

After almost nine years of rule by the same Government parties and several years of major economic activity, the country is now awash with money and there is great opportunity in terms of expenditure. Senator Scanlon referred to various local authority schemes. In the past, the money was not available for these schemes but, thankfully, it is now available. This gives us real impetus in terms of how to progress a particular argument in favour of this issue or how various methods or proposals would be used in terms of trying to allay further decline in this area. Thankfully the money is there. A great number of negative effects have surfaced as a result of economic activity. For example, there are now twice as many homeless people as there were nine years ago. More families have been evicted in recent times than under British rule during the land war in the 19th century. That is an amazing statistic. We have seen the highlights and the reports, but these issues do not make the headlines. They do not make nice reading and do not sell newspapers. Therefore, not as much attention is paid to them in print or on the air as to other issues.

We are now living in a society which has pushed generations of people into the commuter belts. We have created a new type of urban living, where people leave their homes early in the morning, get caught in gridlocked traffic and are out all day trying to earn the money to pay mortgages, etc. It is an anti-family existence.

We have all passed through villages that used to have a small petrol station, shop and community fibre, but this is no longer the situation. There are literally blocks and blocks of apartments and houses on display and this has created a new type of pressure on people. All of this has come about at great expense, ultimately to family life. The quality of life is dying out and that is the major issue. Younger people in particular have been pushed into these commuter belts, away from the supports they are used to and that are needed, in many cases, in terms of the particular forms of child care required.

That is an enormous cost to society, regardless of the economic benefits. The Minister of State, Deputy Batt O'Keeffe, is well aware of the house price problem, because he is a Corkman. I was in Kinsale last Monday on a leaflet drop. There are now at least three housing estates which were not there three years ago one of which is a fine development. When one considers the debate as regards unfinished housing estate developments, this is one which, thankfully, is finished to a high standard. However, houses in the front row are now costing €580,000 per unit.

As one passes further west the prices go down, but there are generations of people in that town who cannot afford to either buy or build. There are people earning relatively good money who are living in very poor accommodation, namely, apartments owned by those who have invested down through the years. Such people, in terms of paying rent, running cars and coping with the normal costs that affect those in their particular category, are now faced with spiralling house prices. At one time one could nearly buy a small village for €580,000.

That type of money is amazing. We are living in an area with all the benefits and attractions in terms of tourism and it is the place to be during the summer period. However, the reality is that there are people in those towns who will never even aspire to owning their own homes. Significantly, there is a major shortage in terms of the provision of affordable and social housing that could allay that problem.

Were it not for the manner in which the former Minister for the Environment, Heritage and Local Government, Deputy Cullen, dealt with the issue, we could have had almost 80,000 extra units to deal with this growing problem. Instead, he gave them back to the developers. It meant there would be more and more young people on housing lists, which have doubled in recent times.

I take the point which was very well made by Senator Scanlon as regards the criteria that are applied in terms of getting someone onto a housing list. We all know of people on housing lists who need to get a council house, and why they are on the list. However, others are on the list because the scheme they want to apply to or avail of requires that their application for a house is submitted to the local authority. This is an administrative bureaucratic measure which creates a smokescreen and muddies the issue. It tends to hide the real number of people who are on the housing list to be housed, and not to satisfy a level of bureaucracy that applies as regards the administration of a different scheme by the local authority. That is a point worth making.

The answers to the questions I raised are no mystery. In the past eight and a half or nine years, instead of pursuing policies that can allow people to own their homes at affordable prices, this Government has been intent on stimulating the property market, rubbing shoulders with the developers and speculators and forgetting about those who really suffer. Those suffering are younger persons with housing needs who are now being asked to pay exorbitant amounts of money to own their own homes. Ireland has one of the highest rates of home ownership in Europe. It has been a strong tradition that a person grows up, receives his or her education, becomes employed, starts earning, settles down and buys a house. It is one of the first steps that any young adult will take in this country.

However, we are fast approaching an era where a majority of younger people in the mainstream, earning relatively good money, will still not have enough to pay the exorbitant prices needed for a house. There is one critical factor in this debate. The Government of the day is the one organ responsible for subscribing to that problem and allowing a situation to develop whereby people can no longer afford to buy their own homes. It has been in office for almost nine years to deal with the issue. There is no point in realising a year and a half from a general election — somewhat like the Tánaiste on the issue of health — that this has now become a problem. The Tánaiste has been a Member of the Cabinet for almost nine years, but only now realises the extent to which the health service is in absolute chaos. This issue is somewhat similar, where Ministers start to propose what needs to be done, barely a year and a half before a general election, having spent the previous nine years ignoring the problem.

There have been conflicting views in terms of when the prices would start to drop, the crash begin or when house prices would revert to levels previously accepted as normal. Many such predictions were made, but none of that has happened. My party, particularly its spokesman on the environment, Deputy Gilmore, was very much to the fore as regards putting down solid proposals as to how this issue might be tacked. One of the proposals involved intervention. We were told by various Ministers that this was not possible, that the housing issue should be left to the market and that supply would increase and this would meet the demand. Thankfully, supply has increased and that is to be welcomed.

The Minister of State can say in his reply that we have so many housing units. One does not have to be a second Dr. Peter Bacon to realise that this country is reaching unbelievable levels in terms of housing output. However, the real issue is the number of people who are not occupying these houses at affordable prices. There is a complete lack of coherent policy as to how the Government has tackled the issue. That is the real issue, namely, affordable and social housing, and the manner in which young people are being prevented from owning their own homes.

House prices are now three times what they were eight years ago. Despite all the talk and gobbledegook about stabilising house prices, the latest figure from the Minister of State's Department shows that the annual percentage increase in new house prices is 11.8% nationally, 7.4% in Dublin and just over 10% for second-hand houses. That is enormous. For good measure, no pun intended, the Bank of Ireland states that prices will rise by 10% this year and rents are already starting to increase again. We argued for intervention in the past and we have repeatedly asked the Government to tackle this issue constructively. Unfortunately, those requests were not met by a proactive response, but rather by a type of absurd intervention.

I can recall my earlier days in this House, in late 2002, when the Minister for the Environment and Local Government at the time was Deputy Cullen. He sat in that chair and had the cheek to hand back almost 80,000 affordable sites to developers because they had embarked on a type of social pleading with him and his colleagues, more than likely at the Galway races, although we will not get into that debate.

In Christmas week almost 80,000 affordable units were handed back to developers and speculators. Some of those would have gone a long way towards sorting out the enormous housing problems in Clonakilty or Kinsale where prices have now reached unbelievable levels and where the supply of social housing is falling well behind because the local authorities have been starved of decent resources and funding to tackle the issue. Less than six months after the general election, having boasted about his exploits in Government during the previous five years, the Minister handed back 80,000 affordable sites. That was done when the Government dismantled Part V of the Planning and Development Act 2000, which was unforgivable. Eighty thousand units would have gone a long way to sorting out this mess, but they were not given to the young people who need them. Instead they were given back to the builders in Christmas week.

Next, the Minister and his foot-soldier Ministers of State abolished the first-time buyer's grant. We were told at the time by the former Minister for Finance, Mr. McCreevy, that €3,800 was not much money. It may not have been to someone like Mr. McCreevy and his colleagues in the Government, but it is a lot of money to the many thousands of young people who could have availed of the grant. That was especially unforgivable. Another great measure was to reduce stamp duty for investors, designed to put pressure on the hard pressed young couple, along with the urban renewal incentives for new buildings.

There has also been a huge increase in development charges and rural-based Members will know of this better than most. The development charges are there for the provision of public lighting, footpaths, roads and so on, yet none of these facilities have been provided in many rural areas, in spite of an increase in the charges. In one-off rural houses, this works out at around €2,500 per house, plus the cost of abolition of the first-time buyer's grant in the case of young couples who wish to build houses for themselves in rural Ireland.

Part V of the Planning and Development Act 2000 was botched in its inception, it was poorly thought out, badly introduced and abandoned in Christmas week in 2002. The Government abolished the first-time buyer's grant and increased development charges. I urge the Minister and his colleagues to take on board the recommendations of the NESC. We are 18 months away from an election and the thousands of young people in Ireland will not forgive the Government for the manner in which people have been pushed onto housing lists, pushed into poor standard rented accommodation and evicted from their houses. In the last few years, more people have been evicted from their houses under the watch of the Taoiseach and his Government than there were under British rule during the land war of the 19th century. That record is a disgrace to any politician who has the gall to knock on a door and look for a vote.