Cyprian Brady (Fianna Fail)

I welcome the Minister of State to the House. I also welcome the opportunity to debate the housing issue again. We had such a debate some time ago during which I pointed out that our accommodation culture in Ireland over many generations has been one of home ownership. That is changing, however. The days of a young couple starting off and saving for a few years with the ultimate aim of leaving their parents and buying their own home are changing. We are increasingly moving towards what is seen as a European model of accommodation. For many years, long-term leasing, lettings and rentals have been the norm in countries such as France, Germany and Holland. We are slow to change here, however, and while that culture is changing it will not happen overnight. It will take a long time for such a change to take place.

As the Minister of State has pointed out, we are trying to keep pace with dramatic changes in demand for housing, which have taken place in a relatively short space of time. According to all the forecasts, this phenomenal growth will continue. This year alone, we could reach 90,000 new housing units. There has been a year-on-year increase in housing of up to 10% for the past few years and that trend is set to continue. The value of 90,000 new housing units to the economy will be €31.5 billion or approximately 23% of our gross national product. That is a huge figure.

Some 264,300 people are employed in the construction industry, which is a massive chunk of employment. Anything we can do to sustain that can only help. While all the forecasts are that this growth is set to continue, it does bring problems. Nobody is saying we do not have such issues to face. This Government and its predecessor accepted at an early stage that the key to the issue is supply. The Government has taken a number of successful measures in recent years to tackle the issue of supply.

The previous speaker referred to the recent census. From April 2005 to April 2006, our population increased by 104,100. To counter that we have produced up to 90,000 jobs to cater for these people. As has been pointed out, the population growth is accounted for by a mixture of inward migration and other factors. We have taken measures to cope with that situation but it still represents a phenomenal number of people in a relatively short space of time. Any measures we take will need time to come into effect. A number of programmes and schemes to which the Minister of State referred, such as Part V of the Planning and Development Act, will take time to come into effect but we are seeing those effects now. The figures speak for themselves.

People's incomes are rising and young people currently earn much more than they used to. Their expectations are also rising and, therefore, the days are gone when a couple might put a deposit on a house and save up to buy furniture. In the past, they may have had very little when moving into a house but today their expectations are different. Young people expect to move into a fully furnished house or apartment. If they have young children they expect to have crèche facilities and access to education. We have to cater for those requirements but it will take time to implement that process.

A number of measures have been suggested to deal with the stamp duty issue, particularly for first-time buyers. Changes in stamp duty have helped to slow the market but supply is the key issue. Any measures the Government can take should be targeted at that area. A number of changes have taken place, including the affordable housing schemes which have been mentioned.

In my constituency of Dublin Central, affordable housing schemes and particularly Part V of the Planning and Development Act, which includes social housing, have proven to be extremely effective in dealing with what had been a neglected area for years. Dublin's inner city has been transformed beyond all recognition in the past ten years. One only has to drive down the north or south quays to see the changes that have occurred. Coupled with those changes, there has been an increase in employment, investment and an improvement in educational facilities, which is leading towards a very sustainable community in that part of the city. There are still social issues that must be dealt with but dramatic changes have taken place in that area in past ten years. These changes are the result of policies which enabled and encouraged people to invest in the area coupled with the State agencies developing the infrastructure, encouraging more people to move into the area and investing in this community.

I recall in the late 1980s when I bought my first house, in which I still reside, the affordability of a mortgage relatively speaking was probably more or less the same as it is now for first-time buyers. At that time interest rates ranged from 15% to 17% and incomes were much lower than they are today. Therefore, in terms of percentages, the relative affordability of taking out a mortgage in the late 1980s early 1990s could not be far from what it is today.

Expectations rise in tandem with incomes. People are no longer happy with a basic house with four rooms and no other facilities. They want more. That is understandable and something for which we must cater. From that point of view, we are victims of our own success which has been achieved on foot of the policies adopted by the Government over the past ten years. This economy did not improve by accident or as a result of external factors. Decisions were taken in the early 1990s to tackle the major deficit in proper housing facilities, especially local authority housing, the quality of which suffered a major decline under successive Governments.

As the Minister of State mentioned, we made mistakes in the past. I recall going to Cherry Orchard in the early 1990s when there was no public telephone box, shop or other facilities but there were thousands of houses. When I went there in 1991 or 1992, the first public telephone box had been provided. The policy decisions taken by local authorities and central government at that time would now be viewed as mistakes. We have gone a long way towards rectifying those mistakes by investing in local authority areas. I have seen the improvements in the quality of local authority housing in the past ten years. Gone are the days of the flat complexes with boxes built upon boxes. We now have state-of-art quality housing. Some of the best quality housing in Dublin city is in the Dublin City Council area. There are a number of duplex developments throughout the city which are highly prized.

Another aspect of our being victims of our own success is that tenants can no longer afford to offer to buy the houses they rent from the city council because the price of them is too high. This is another issue that must be tackled, possibly at local authority level. Dublin City Council is examining this issue and has set up a review group on it. When investment and resources are put into an area, they can make a major difference.

Planning issues are a factor in the supply of housing. Land banks and serviced land were referred to. We have taken huge steps towards increasing the supply of serviced land. The Minister of State mentioned the recent announcement regarding a 0.2 acre site at Harcourt Terrace. While that site would have accommodated only 30 units, with the exchange of that site some 195 homes were built in Tallaght, Lucan and Clondalkin and 195 families have been housed. Other sites are coming on stream. The Department is considering the development of serviced sites throughout the country in various local authority areas which are under-utilised. These could be used to address housing needs.

The main issue raised with me in my advice centres is housing, particularly social and affordable housing. Major strides have been made in such provision. We can continue to streamline the system and make it easier for people to apply for such housing. The majority of these developments will come on stream over the next 18 months and this will have a major impact in Dublin, especially on the north side. I congratulate the Minister of State on the policies being pursued and hope they continue to be pursued.