Aideen Hayden (Labour) | Oireachtas source

I welcome the Minister of State, Deputy Ann Phelan. This Bill is one of several measures being introduced with a view to stabilising rents and boosting supply in the housing sector. Increasing rents have led directly to an increase in the numbers, including the numbers of families, experiencing homelessness. In this context, I welcome the passage through the Dáil of the Residential Tenancies (Amendment) (No. 2) Bill 2012 and hope to see it signed into law shortly. The Bill before us contains measures to improve the supply of housing, particularly in the rented sector. We all agree that supply holds the key to solving many of the difficulties we face in the area of housing and homelessness. There are two aspects to the legislation. The first concerns the implementation of guidelines relating to the Planning and Development Act 2000 and the second is to do with strategic development zones, SDZs. The SDZ provisions are progressive and will have a distinct impact in terms of facilitating a more efficient planning process. In addition, they will fast-track the provision of modular housing, which is very welcome. There are many anxious families waiting to move into those units.

I have some concerns regarding the provisions in the Bill relating to national standards. As a member of Dublin City Council's strategic policy committee for seven years and as chairman of Threshold, the issue of improving apartment standards was something for which I campaigned for years. In 2006, 78% of all units built in the Dublin region were apartments. The occupants of those units were not the type of people the glossy brochures were aimed at, namely, double-income couples with no children who would spend most of their weekends on city breaks. In fact, the purchasers of the apartments were often single parents with children. It became obvious that significant parts of the inner city of Dublin were rapidly deteriorating into slums which bore some resemblance to those that existed in the 1930s and 1940s.

There is no doubt that the standards which were introduced, both the national standards and the specific standards introduced by Dublin City Council, were introduced for very good reasons. This Bill strengthens the national standards and provides that individual local authorities will not have the right to deviate from those standards. Like Senator Keane, I have concerns that this might infringe on the rights of local authorities to determine policy for their own area. Moreover, I am not convinced that the harmonisation of standards across the country is a good idea even though it might look like such in the first instance. In Dublin, for example, where we have people living in high-demand and high-density areas and where, in some cases, apartment dwelling is the only option - as opposed to semi-detached homes or self-built dwellings - higher standards are necessary. For increasing numbers of people, rented housing and apartment living are a lifelong reality. In the coming years, we will see more and more people living in rented accommodation for the rest of their lives. Already, one in five families is living in rent accommodation.

The Bill proposes to reduce the minimum size of a one-bedroom unit in a context where more than 60% of households will be either one or two-person households. In other words, we are looking at a significant number of people living in one-bedroom units. I accept that the original Dublin City Council proposals had too few single-person units and also too few family units. However, there needs to be a recognition of the significant percentage of people for whom a one-bedroom apartment will be their permanent accommodation. A reduction in the minimum size from 55 sq. m to 45 sq. m should be compared with a national average of 50 sq. m in the UK and a German average of 60 sq. m. Another issue to consider is that there is a question mark over the costings. I have spoken to a number of people in the construction sector and they point out that an apartment which is 20% smaller will not be 20% cheaper to build. In fact, the estimation is that the reduction in build cost will be some 5%. There is a question mark over who will win in that particular scenario but it has been suggested it will be the developers. How can we ensure any savings that are made by easing the standards in respect of apartment size will be passed on to the consumer?

The Society of Chartered Surveyors Ireland recently conducted a survey among its members to ascertain the relative significance of different aspects of building costs. The survey found that the most significant factor was bank finance, with 35% of respondents identifying it as the number one constraint. Insufficient profitability was highlighted by 27%, while 17% identified the availability of mortgage finance as the main issue. Land costs are clearly also a significant constraint. We are in a situation where the equity gap for developers is in the region of 40%, which means many are forced to access very expensive mortgage finance.

I accept we are in desperate times and we arguably need desperate measures. However, we must ensure any changes we make are kept under review, particularly in very dense urban areas where there is a high proportion of apartment developments. While I do not particularly favour the change being made here, I support it in the same way I support anything that can move matters forward. I fully appreciate the Minister's bona fides in bringing the proposals to the House. I reiterate that we must ensure any savings made are passed on to consumers. Price is determined by supply and demand but we need measures to ensure there are benefits for people.I suggest we consider legislation with policy interventions to manage the price of development land. We cannot afford a repeat of what happened between 1998 and 2006, when the cost of land rose to over 60% of the overall cost of a development. We must ensure affordable credit, particularly for developers who are prepared to engage in providing lower-priced housing developments.