Michael Finneran (Roscommon-South Leitrim, Fianna Fail)

I am pleased to have this opportunity to address the House. I wish to use my time to outline recent developments in regard to housing policy. In particular, I wish to update Senators on the progress we are making on implementation of the programme and policy reforms set out in the housing policy statement, Delivering Homes, Sustaining Communities, which was published early last year.

The policy statement set out a vision to guide the transformation of the housing sector over the medium term by delivering more and better quality housing responses and by doing so in a more strategic way, focused on the building of sustainable communities, in particular.

We are now working on the implementation issues which need to be addressed if we are to transform the housing environment to meet the challenges arising, many of which are identified in the policy statement. I am pleased to say that substantial progress has been already made.

Recent guidance documents produced by my Department, such as Quality Housing for Sustainable Communities, published in March 2007, and draft Guidelines on Sustainable Residential Development in Urban Areas, have focused on the process surrounding the delivery of quality housing for sustainable communities and the promotion of better place-making through the delivery of quality neighbourhoods and homes. These documents form part of a suite of guidance which my Department is developing to promote quality in housing and neighbourhoods.

Part of this new approach is to ensure that all new developments and urban design frameworks are socially, environmentally and economically sustainable. The key is to provide high quality environments that meet the needs and, as far as possible, the preferences of residents and to foster the development of sustainable communities through improved settlement patterns and better use of our resources in terms of the consolidation of our urban centres.

Apart from looking at urban design and context issues, our quality agenda is also much focused on the quality of individual homes. In that context, it is very important that we constantly strive to improve the energy efficiency of our buildings. Against the ever growing threat of global warming, we must seek to minimise our harmful emissions as much as possible. The residential sector's energy-related CO2 emissions represent 27% of total energy attributable emissions. It is a huge figure. That is why, in full compliance with the priorities which were identified in the programme for Government, my colleague, the Minister, Deputy John Gormley, introduced new Part L building regulations at the end of 2007 which require new buildings to achieve a 40% reduction in energy consumption and a 40% reduction in related CO2 emissions from the start of this month. For the first time, there is a mandatory requirement that new dwellings should have a minimum level of renewable energy sources. These measures represent very significant advances towards the achievement of much improved environmental sustainability in our housing developments.

I now turn to the range of housing supports available. The policy statement and the National Development Plan 2007-13 reflect the strong commitment to expand the provision of social and affordable housing contained in the social partnership agreement Towards 2016. The impact of the record levels of investment this Government is committing to these housing programmes is already evident. Last year more than 13,000 social and affordable housing units were delivered and, overall, the needs of almost 18,300 households were met through the broad range of social and affordable housing programmes. That represents a very significant increase of 24% on the level of needs met in 2006 and is a great tribute to the way in which local authorities and voluntary and co-operative housing bodies have stepped up to the mark.

The funding provided for housing programmes has been increased again in 2008 with some €2.5 billion available to local authorities and the voluntary and co-operative sectors for their activities. This will allow for the commencement of a significant number of new social housing units, further progress under regeneration programmes and the completion of a large number of units under both the local authority and voluntary housing programmes.

The level of delivery under Part V is experiencing a surge in 2008. My Department is liaising closely with local authorities and the voluntary and co-operative housing sector to ensure that available resources are appropriately targeted in order to ensure that this Part V bulge can be accommodated. More broadly, given the well flagged more constrained current state of the public finances, there will be a need for all of us to explore new ways to fund and deliver housing programmes making optimal use of the available resources to meet the range of needs which exist.

The Government's commitment to social housing is not only focused on the process of building and managing social housing but rather looks to the wider context and the imperative of developing stable, sustainable communities. A key element in this new perspective is recognising and delivering on the need to redevelop and regenerate large, primarily mono-tenure local authority estates which are experiencing high levels of social and economic disadvantage. My Department is supporting a very ambitious regeneration programme, with projects across the country receiving funding and support to develop more sustainable communities through a combination of social and economic initiatives as well as by regenerating the physical environment of the estates concerned. Overall, the funding available for regeneration projects in 2008 has been increased by 28% to €121 million.

Our approach now builds on the Ballymun regeneration experience with, for example, the Limerick regeneration agencies very clearly looking beyond the renewal of social housing to the wider social and economic impacts.

Senators will be aware of the difficulties which have emerged in regard to a number of public private partnership housing regeneration projects in Dublin. However, I can assure them that Dublin City Council, the lead authority on these projects, is actively pursuing the options for moving forward these projects and my Department is actively engaging with the council in that regard. As has been already stated by the council, meeting the accommodation needs of affected residents is of the utmost priority and will remain so.

Moving on from social housing, I have no doubt the House welcomes the fact that the supply of affordable housing has consistently increased in the past few years. From about 2,000 units in 2004, delivery reached almost 3,600 units last year and further expansion is envisaged under the National Development Plan 2007-13.

The Government believes that home ownership should be available to as many people as possible where this is their preferred option. Building on the general policy framework set out in Delivering Homes, Sustaining Communities, the Affordable Homes Partnership was requested to examine ways to enhance the delivery of affordable housing. The report, prepared on foot of its study, was published in April 2008 for public consultation and my Department is also consulting with the social partners in regard to the report's recommendations. The report suggests some improvements in aspects of programme delivery and recommends a new product to replace the existing range of schemes. We will give careful consideration to the results of this consultation process in deciding on future directions in relation to affordable housing.

While the main housing supports provide a range of approaches to meeting mainstream housing needs, the Government is very much aware of the critical role that the adaptation grant schemes play in meeting special housing needs within a broader continuum of care for older people and people with disabilities.

As Senators are aware, in order to facilitate the continued independent occupation of their own homes by older people and people with disabilities, and following a comprehensive review undertaken by the Department, a revised framework of adaptation grant schemes to assist older people and people with a disability with their accommodation needs was implemented in November 2007. The revised grant framework streamlines the administrative and operational procedures governing the schemes, provides a more targeted and integrated response to the housing needs of older people and people with a disability and ensures the most efficient and cost effective outcomes from the funding available. These new grant schemes are proving popular. This requires local authorities, in operating the schemes, to prioritise applications in order to ensure the available resources are targeted at those in greatest need. The Department will watch activity under the schemes in each local authority area and, in the event of underspends by some local authorities, will reallocate these resources to other authorities later in the year.

On the issue of disability, the Department is leading the development of a national housing strategy for people with disabilities. The strategy, which will be developed by the end of 2009, will support the provision of tailored housing and housing supports for people with a disability and will have particular regard to adults with significant disabilities and people who experience mental health issues.

We have also convened a cross-departmental team on sheltered housing. In conjunction with the office of the Minister with responsibility for older people, we will develop a policy governing sheltered housing provision for older people over the course of 2008 and agree local structures and protocols for integrated management and delivery of housing requirements and the provision of care.

The new homeless strategy is being finalised and I expect it will be published shortly, following resolution of a number of outstanding issues, including the availability of funding for care costs in certain homeless facilities. This is being pursued as a priority by the relevant Departments and agencies. The new strategy will set out a vision to address adult homelessness over the next five years, underpinned by a detailed programme of action. It builds on the commitments in Towards 2016 and the programme for Government. Key objectives are to eliminate long term occupation of emergency homeless facilities and the need to sleep rough by 2010 and to prevent the occurrence of homelessness as far as possible.

Effectiveness in the implementation of the new strategy will be a priority. The strategy contains both national and local actions related to its strategic aims. An implementation plan setting out detailed timelines and lead roles for the range of actions is being developed under the aegis of the cross-departmental team on homelessness and will be finalised following publication of the strategy. There will be a strong focus on maximising efficiency and value for money from the significant funding which the State is providing to address adult homelessness.

This year the Department is providing some €53 million to fund accommodation related costs, while the Government has provided approximately €33 million for funding care and health services through the HSE. A value for money study and an evaluation of homeless services in Dublin are currently under way and their findings will be critical in the drive to maximise efficiency and value for money, including avoidance of duplication, more streamlined and integrated services and rigorous assessment of what services are required.

It is important that we provide a robust legal base for the broad housing reform programme. A draft Housing (Miscellaneous Provisions) Bill will be submitted to Government shortly, for approval to publish. The new legislation will give effect to the range of reforms, outlined in Delivering Homes, Sustaining Communities, aimed at improving services and their delivery. The reform programme includes new provisions on the assessment of social housing needs, updated management and control powers and a statutory basis for housing action plans. The Bill will also broaden choices available to those seeking social housing, by providing a more developed legislative basis for the rental accommodation scheme and expanding paths to home ownership through the new incremental purchase scheme. I look forward to a thorough examination of all the proposals in the Bill as it passes through the Oireachtas and believe it will be recognised as a major contribution to the reform of the social housing sector.

It would be remiss of me to conclude without making reference to the current state of the housing market. Our housing market has slowed down significantly since its peak in the second half of 2006, following a decade of unprecedented demand for and supply of housing. Key factors in this long growth phase were national demographic changes, particularly the large population cohort in the key household formation age group between 25 and 34 years, easier access to credit, historically low interest rates and increased levels of disposable income. From its 2006 high point, housing output has dropped substantially, due initially to a doubling of interest rates between December 2005 and June 2007, which, combined with high prices, caused affordability to deteriorate.

Since then, global developments, both in the general economic environment and financial markets, have had an impact. American and international financial exposure to sub-prime liabilities led to a credit crunch that has spread around the globe and negatively impacted on the cost and availability of inter-bank financing. This has had an impact on retail lending, and banks, it would appear, have become more cautious in their approach to lending, whether for development or mortgage purposes.

It is important to have a clear historical perspective in looking at the Irish housing market and to recognise that housing output rose well beyond what would be warranted on the basis of underlying long-term demand. The Department has estimated that a sustainable long-term housing requirement of 60,000 to 65,000 units per annum is realistic. Therefore, it is clear that the 2006 output of more than 90,000 houses was unsustainable. There is still significant underlying demand for housing where prices have adjusted to reflect current market conditions, although this is dependent on access to credit. It is also important to note, notwithstanding last week's ECB interest rate increase, that there has been an improvement in affordability in recent months, as a result of increases in mortgage relief and disposable income and reductions in average house prices.

The effective demand for housing in the market at any given time is affected by many short-term factors, such as the cost and volume of lending, price expectations, confidence, etc., and, therefore, can vary significantly from the anticipated longer-term underlying housing requirement. However, the Irish housing market is generally considered fundamentally sound and likely to be underpinned on a long-term basis by strong underlying demand. While the market is currently experiencing difficult times, I expect that in the short to medium term we will return to a more stable and sustainable market. The continued prudent approach to managing the economy and public finances which has been the hallmark of this Government will be crucial to the achievement of this objective.

The programme of work which I have outlined and the policy reforms now under way all serve to underline the Government's commitment to meeting a broad range of housing needs. I assure Senators that I am committed to driving the housing agenda forward positively within the resources available. My core aim will continue to be to address real needs and to do this in a way that builds sustainable communities and develops places where our people will want to live and work, now and in the future.