Ciarán Cannon (Progressive Democrats)

I welcome the Minister of State and I thank him for his contribution. As he pointed out, we have seen a significant change in the dynamic associated with affordable housing in our local authorities. As public representatives, we have all worked with couples, tried to get them on the affordable housing list and to have them included in allocations in recent years. Now, the exact opposite applies and the Minister is asking local authorities to show great energy and imagination in the marketing and sale of affordable homes. There has been a turnaround in our fortunes.

I concur with the suggestion by a number of Senators, including Senator Butler, that we should consider allocating a proportion of the houses in question to social housing. The private sector's intent in proposing the rent-to-buy scheme was to generate cash flow for private developers to allow them to keep up with interest payments and so on. We should consider generating a cash flow for local authorities, which have invested a significant amount of money in providing affordable housing. Perhaps they were unable or unwilling to track affordable house prices downwards to match private sector prices. As Senator Butler pointed out, so-called affordable houses are considerably more expensive than houses in the private market. Previous speakers suggested that we must remove some of the constraints applying to the scheme. For example, few people are able to pay the significant deposit required. Flexibility in exiting the scheme must be examined.

My primary reason for contributing to this debate is to discuss a policy paper given to me by a friend in Galway, a lady with a fantastic entrepreneurial track record. She works towards the intersection of the social and economic regeneration agendas. She has much experience of such work in the UK, but she is now living in Ireland. She submitted the paper to me several weeks ago, but I have been awaiting an opportune time to discuss it. I will provide a copy to the Minister of State and his official.

The policy ties directly into what we are trying to do in terms of affordable housing. It has the added benefit of generating activity in the small to medium sized construction sector. She proposes the establishment of an independent, not for profit company to take possession of partially developed housing estates, which can primarily be found in small provincial towns and villages where, perhaps unwisely, a large number of estates were developed. There have been cases of vandalism and squatting. The potential for social unrest in such areas is significant, as the estates are effectively boarded up and surrounded by chain-link fences. There is no opportunity to see them develop in the near future.

The lady is adamant in pointing out that the agency would have a finite life and would not become another pointless quango wandering on for years without end. She suggests that it would buy semi-developed schemes from banks and developers and that each scheme's value should be based on the locality's average household income. As such, it would be real affordable housing for those in the area. The site's value would be the residual value of the cost to construct and manage it, which would be paid to the developer or landowner. The rest of the value would be written off and would constitute the private sector developer's contribution. The capital investment that he or she would receive would not realise what he or she previously considered to be the development's potential, but it would provide an "out".

The agency would be established as a not for profit, independent company that would be well governed, accountable to its stakeholders and extremely transparent. It would be small, lean and effective. It would also have a finite life. It would intend to deliver four main outcomes, those being, to finish and sell semi-developed private housing stock, to provide to targeted groups affordable housing based on what local people can achieve through their incomes, to create employment in the small to medium construction sector and to prevent ghost estates from turning into areas of anti-social behaviour. There is considerable potential for such behaviour. For example, some estates in Gort, Loughrea and Athenry are boarded up and fenced off and there is no sign that anything will be done with them in the near future. The agency would buy semi-built estates from the banks that repossessed them or from developers who are under severe financial pressure and do not have the resources to finish them.

This policy paper is worth considering. The agency could undertake a wider agenda. For example, the Homes and Communities Agency in the UK is based on a similar concept but operates on a larger scale. It is a direct arm of the British Government and has an annual budget of £15 billion. Several times, it has stepped in to partner with failing developers on key schemes.

If the proposed agency is to work, it must be established quickly. It could undertake one or two pilot projects. It needs to be independent, have key stakeholder involvement and Government backing and operate with a minimum of staff. It would be unlikely to remain intact after two or three years, as its approach would be unnecessary after the market started to readjust. It is likely to play an evolving role in the same sector. If not, it could be wound up.

We should explore this policy and I would be grateful to the Minister of State and his official were they to take the time to assess its impact. While some of its elements might not work, I am confident that the lady proposing it provided a considerable degree of detail. From her ten-year experience of creating similar agencies in the UK, she is confident that it would work. I suggest that the Minister of State and his official examine the paper and, if possible, revert to me.