John Paul Phelan (Fine Gael)

I welcome the Minister of State, Deputy Noel Ahern. I am glad to have the opportunity to speak on housing. I do not disagree with much of what Senator Ormonde said. While progress has been made, to borrow a phrase, there is a lot done and a lot more to do on the housing market. I recently attended a presentation which outlined some astonishing figures on housing production in this country. It blew my mind when I heard some of the figures for the rate of building taking place at the moment. We are all familiar with the vast new developments that are taking place. Apparently last year and into this year the rate of house building is 21 units per 1,000 people as opposed to the European average of four per 1,000, which is a significant difference. People have asked whether this is sustainable into the future. In the long term it would not be sustainable at that rate.

However, we have a problem with our housing stock which is considerably lower than that in our European neighbours. Senator Ormonde is correct in saying that we are playing catch-up on them. Last year we produced approximately 83,000 or 84,000 housing units and the figure is likely to be much the same this year. It is clear that the demand for housing is still very strong even though this year's census found that many houses are unoccupied. I am particularly familiar with new developments in my area that have not been occupied having been bought by investors. There is no demand for rental accommodation in certain parts of the country. While this may not apply in some of the larger urban areas, in some smaller towns the rental market is under severe pressure.

A particular bugbear of mine is the continued lack of planning for the necessary services and infrastructure in some massive housing developments. I am referring to developments of a few hundred homes, with no consequent provision for the increased demand for schools. In many parts of the country schools are already under pressure. When planning permission is given for a development with a few hundred housing units, the Department of Education and Science is slow in granting necessary funds to ensure that schools, which are often already overcrowded, are provided with suitable extensions. In a school in my area the multi-purpose room is used as three classrooms and it has no playground because it is occupied with prefabs. It is on the outskirts of New Ross which has had significant development in recent years. Other services have not received commensurate funding to ensure they can keep pace with the development. The Government has failed miserably in this regard over the past five to ten years.

I agree with Senator McCarthy's point about planning guidelines, especially for one-off rural housing. As a former member of a local authority, it was always my understanding that the councillors were responsible for drawing up policy. I still have serious questions about the implementation of that policy by some local authority planners. Councillors put great effort into drawing up local authority development plans and quite often the spirit of what the councillors intend when drawing up the plan is not implemented by the planners, which is unacceptable. The councillors are responsible for setting policy in the county development plan and it is the duty, responsibility and job of the local authority planners to ensure that policy is implemented and not the policy they might want to implement themselves. That is not happening everywhere and it needs to be reviewed.

Another bugbear of mine is with the concept of vernacular design. It is right and proper that new developments are in tune with what already existed. However, in my part of the world, south County Kilkenny, planners demand smaller windows in one-off rural houses because they believe this is part of the vernacular design tradition in the area. Small windows were traditionally installed in rural houses because people did not want to be fleeced by the window tax introduced by the British authorities when they were in control of this country. Now, 100 years later, local authority planners demand small windows because all the older houses had small windows. That is not acceptable because a case could be made for the energy saving potential of large windows in southerly facing houses. Perhaps planners should study history as well as urban design.

Senator McCarthy referred to development charges. In County Kilkenny, one would be lucky to pay €6,000 in development charges and it is more usual that €8,000 to €11,000 is levied on relatively modest homes. In parts of the county, people cannot get potholes filled on the roads because the local authority is not in a position to do so, yet they are forced to pay development charges before they can lay the first block in their own homes. In many rural areas, no noticeable service is provided in return for a development charge. If somebody receives a service, such as a water or sewerage connection, a development charge should be levied but it is not acceptable to make people pay money for nothing.

The development charge, on top of the abolition of the first-time buyer's grant, means in effect that people in counties Carlow and Kilkenny are paying €10,000 more than before, not to mention the ever increasing cost of housing construction. In 2002, total revenue from housing related taxes was approximately €3 billion. Last year, that figure increased to more than €7 billion, which represents a substantial proportion of the total tax revenue. Reform is needed on that issue.

I have become very annoyed by the way in which local authorities calculate differential rents. I was recently contacted by an elderly widow in County Kilkenny who earns €190 per week, out of which she pays an excessive €30 per week in rent. Differential rents are based on guidelines introduced by the Government in 2002 and 2004 but, because it is not incumbent on local authorities to enforce the guidelines, some are doing as they please. Many local authorities request copies of P60s or base retrospective assessments for rent arrears on overtime payments, which has a detrimental effect on those who wish to avail of tenant purchase, affordable housing or shared ownership schemes and creates difficulties in terms of having essential maintenance work done on houses.

The 2002 guidelines strongly suggested that banded income categories and applicable rent fractions tend to create the potential for poverty traps and high marginal rates of rent, and recommended that local authorities should move away from differential rent to a set percentage or simple fraction calculation. Such reforms have not yet been introduced in my area, although they may be in place elsewhere. Many people in local authority housing, particularly those in receipt of social welfare payments, are losing chunks of their increased benefits to local authorities once differential rents are recalculated.

Rent calculations seem to vary according to the time of year in which the rent review is conducted. For example, fuel allowance is assessed in some parts of the country, even though it is only paid over a part of the year. That is not fair to applicants. I am aware of a man who was paid on a monthly basis but whose income was divided by four and assessed at €309 per week. However, when the correct calculation was done by multiplying his monthly rate by 12 and dividing that figure by 52, his weekly income was €280. When we appealed his case, a couple of euro was taken off his rent. Clearly, significant problems arise with regard to how local authorities calculate differential rents.