Eoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

I thank the House for this important opportunity to update Members on housing and related matters. In view of the time available, I will not address every single issue in housing but I look forward to coming back to any questions Members have.

The top-line figures for house building are going in the right direction. Planning permissions for 20,776 homes were granted to the end December 2017, up 27% year on year. Commencement notices for over 18,500 new homes were submitted, an annual increase of 41% in the year to the end of February 2018. BER figures show that 2,367 housing units were built during the first three months of the year, an increase of 45% on the same time last year, not including self-builds. ESB connections in 2017 totalled just under 20,000, an annual increase of more than 30% in the year to the end of February 2018. Since early 2014, this has increased by 128%. Finally, registrations have increased to 9,521 units, which is 46% up on the 12 months to February 2017.

The growing numbers show that house building and supply are moving in the right direction, rapidly and dramatically on a year-on-year basis. Growing employment in the construction industry is further evidence of increased confidence and buoyancy in the housing sector. Employment levels of skilled tradesmen in the construction sector was estimated at 83,000 in the first quarter of 2017, which is up by 14% on the same period in 2016. The volume of production in the residential construction sector has been growing at an annual average rate of 22% since its low point in the fourth quarter of 2012. In the fourth quarter of 2017, volume increased by 16.3%. The Central Bank, in its quarterly bulletin for the first quarter of 2018, forecasts that both housing and non-residential building should continue to recover strongly. For 2018 and 2019, according to the Central Bank, residential construction investment is expected to increase strongly, with approximately 23,000 and 27,000 new homes being built, respectively.

The building of local authority homes is increasing rapidly and the target for the 2018 build is 4,696 homes, which is more than 50% higher than the 2017 target. This will increase again in 2019 to 6,385 units, a further 30%, and continue to grow to a target of 8,907 in 2021. The social housing build programme is ramping up, as is evident in the fourth quarter of 2017 construction status report. At end-2017, 2,512 homes were completed, 3,650 were under construction and 1,912 further homes were about to go on site, with the remainder progressing through the various stages of planning, design and procurement. Whether it is social housing homes, forecasts from the Central Bank or notices submitted to my Department and local authorities, the statistics show a dramatic increase in the number of homes being built across the country.

We also provide ongoing social housing supports in the rental sector and almost 26,000 households had their housing needs met last year, with 100 households having their housing needs met every working day in 2017. A further 18,000 households are targeted for support under these schemes in 2018. The figure for last year is made up of rental accommodation scheme, RAS, numbers, housing assistance payments, HAPs, builds, acquisitions, leasing, voids, regeneration and all the different delivery streams we have for house building and social housing in the State.

On the whole, there is no doubt that all the evidence points to real progress in terms of housing delivery. Most important, last week we saw a significant reduction in people sleeping rough of 40%. Last November there were 184 individuals sleeping rough and now there are 110.This reduction in people sleeping rough, in many ways our most vulnerable people who are homeless, is welcome. It follows the dedicated and compassionate work of the Dublin Region Homeless Executive, working with our partner organisations to increase the services available in the Dublin region. There is still more to do because we still have many people sleeping rough on our streets. Many of those accessing homeless services have complex needs and require other supports, notably health supports, to assist them to exit our homeless services. Housing First is best international practice for getting people out of homelessness. That is why earlier this year I appointed a national director for Housing First and increased its funding allocation. I thank Mr. Bob Jordan for the excellent work he has done so far this year. He is delivering results, and pilot programmes are now being progressed in other parts of the country, including Cork, Limerick and Galway. My Department is also leading the homelessness inter-agency group which involves a range of Departments and the NGO sector. This process is showing a number of inter-agency issues which need to be addressed to tackle homelessness more effectively. I will bring forward policy proposals upon receipt of the first report of the inter-agency group which I expect later this month from the group’s independent chair, Mr John Murphy.

The continued presentation of families to emergency accommodation is a source of serious ongoing concern for me. I am pleased that we have been able to exit so many families from hubs and hotels. The reasons behind the homeless figures are complicated but are linked to the collapse of our house building sector and the severe supply shortage associated with that collapse. The staff in my Department and across the system, in local authorities and NGOs, are putting in a huge amount of work to help people and families in homelessness. Last year, more than 4,700 adults exited homelessness. Of the more than 100 families who presented in Dublin in February, only 20 were accommodated in hotels. During 2017, more than 2,000 families left hotels for sustainable tenancies and the majority of those families into homes. I saw this incredible work first-hand during the severe weather events in January and February of this year. During that time, the people dealing with homelessness were in work helping to provide emergency shelter. I pay particular thanks to our partners in the NGO sector who, with the Dublin Region Homeless Executive and the Department, do so much to help prevent people from entering homelessness, provide supports for those who are in difficulties and help us to exit people into sustainable long-term accommodation. The emergency response was extraordinary and I have no doubt that lives were saved on our streets as a result.

While homelessness is often the worst manifestation of the housing challenge, the underlying issues of housing are supply, access and affordability. That supply shortage cuts across the entire housing system into social housing, starter homes, affordable rental options and larger family homes for trading up, not to mention smaller apartments for singles and couples that are desperately needed throughout the country. In terms of understanding where the Irish housing system is currently and the progress being made to get it where it needs to be, it has to be put in some context where we have come from. What we are seeing today are the symptoms of one the last legacies of the economic collapse. As we know, that collapse was closely linked to a property bubble and related credit issues within our banking sector. As a result, those sectors were severely impacted. The result was that residential construction collapsed by 90%, only a handful of social and affordable homes were being built, virtually no starter home estates were being built, there were unfinished housing developments that had to be knocked down and employment in construction fell by two thirds. The residential construction sector in Ireland was deeply impacted and it was clear that it would take a major concerted effort over time to rebuild it. Importantly, Rebuilding Ireland, built upon the work carried out by the special Oireachtas committee on housing and which was the subject of very broad stakeholder consultation, is in place and is showing the results, some of which I have alluded to.

The building of new social housing by local authorities and approved housing bodies is ramping up dramatically, as I have said. These numbers do not include new builds under Part V, voids, acquisitions or long-term leases, so the actual stock of new social housing coming on stream is larger again. Roughly 7,000 new homes in all in 2017 were delivered into the social housing stock for local authorities to take people off the housing lists into both local authority homes and housing body homes. With the additional funding I secured last year, we have increased the overall level of ambition under Rebuilding Ireland in the period to 2021, rebalancing delivery more towards construction projects. Overall, the Government has committed €6 billion to support the accelerated delivery of 50,000 additional social housing homes by the end of 2021, through building 33,500 new homes, acquiring 6,500 new homes and leasing 10,000 new homes under the various programmes. In addition, the housing assistance payment and rental accommodation scheme will continue to play an important part in meeting social housing needs.

In terms of housing supply more generally, the Government has undertaken a co-ordinated set of targeted actions aimed at encouraging arid incentivising house building at scale again. For example, we have the approved investment of €200 million in key enabling infrastructure to open up strategic public and private sites for early development; updated, streamlined and de-risked the planning and regulatory regime to progress major house and apartment developments; approved arrangements for development finance to be made available to house builders; and put in place a help to buy scheme to help first-time buyers with their deposit. After a lot of hard work there are really encouraging signs that home building is recovering. All supply indicators are showing encouraging trends, as I stated at the outset.

Ireland is a great success story today, having bounced back incredibly well from the downturn. With growth of 5.6% forecast and unemployment set to reach 5.8%, the demand for housing will also grow. Therefore, while the increased activity and supply is very encouraging, it is important that we continue to drive the implementation of Rebuilding Ireland and increase housing supply. It is also crucial that the new housing is increasingly affordable and accessible to those who need it. When I took over as Minister for Housing, Planning and Local Government I initiated a review of the Rebuilding Ireland action plan. At the time, I made a firm commitment that housing access and affordability would be a central focus of my work. As supply is increasing, the Government is committed to ensuring that people throughout Ireland can access affordable housing based on their ability to pay. For households, particularly those renting in our cities and urban areas and trying to save to buy their first home, this can be a real challenge. Increasingly in our modern society, people want a choice of affordable homes to rent and buy, depending on their stage of life and circumstances. Our housing system needs to provide attractive options for both. The new affordable housing measures I signalled in January are specifically targeted at delivering more affordable homes. The emphasis is on delivering affordable homes from our State landbank in urban areas where affordability issues are greatest. Initial indications from local authorities in the main target counties highlight the potential for almost 4,000 affordable homes from their land. The target is for the delivery of at least 10,000 new affordable homes in the medium to long term.

I will be commencing the necessary legislation for the affordable purchase scheme next week, and I expect to see more local authority sites coming forward thereafter. To deliver these affordable homes, local authorities will need to maximise the potential yields from their landbank. To assist them in this, I have secured additional funding of €25 million for infrastructure on their sites to facilitate affordable housing provision. The call for proposals for this funding will issue to local authorities shortly. Additionally, as part of the budget for 2018, I announced that an additional €50 million in Exchequer funding will be available for a second local infrastructure housing activation fund, LIHAF, call. This will be subject to matching funding by local authorities, bringing the total available to €66.5 million. The criteria for the second call are being finalised and I expect to announce phase 2 of LIHAF soon. Already 30 major public infrastructure projects have received final approval under the first phase of LIHAF. These projects will activate the delivery of almost 20,000 new homes across public and private sites by 2021. More than 28%, or some 5,600 of these 20,000 new homes, will be social or affordable homes. In addition, a further 5,600 of the homes will have a LIHAF related cost reduction and another 8,800 will be sold at market rates, greatly increasing supply and with many in locations offering very good affordability.

In January 2018, I also launched the new local authority home loan. Eligible first-time buyers can now access affordable mortgages from local authorities with fixed interest rate options of 2% to 2.25% for terms of up to 30 years. Recent activity figures show the interest in the mortgage is very high, with more than 90,000 visits to the Rebuilding Ireland home loan website and 1,350 application forms having been downloaded.

A thriving rental sector is crucial in a modern and growing country such as ours. As reported recently, I am progressing legislative changes to give effect to a number of new actions. The changes will provide the regulatory framework to enhance and strengthen the powers and functions of the Residential Tenancies Board. We also need to ensure that the rental sector, especially in our cities and major urban areas, is accessible and affordable. To ensure this we need to invest in a different type of rental offering, a so-called cost rental sector, which operates between the social and private market sectors. Other modern European cities like Vienna, where I used to live, have delivered cost rental homes into the market at scale over many years, making a sustainable long-term impact on housing affordability. We know from the national planning framework that Ireland will need to provide more than 500,000 new homes to accommodate our growing population and workforce between now and 2040. We need to ensure there are enough rental options at affordable rents to make our cities attractive as places to live as well as work as we implement these plans. I am determined to deliver a major cost rental project in Dublin in the short term and then roll it out more broadly. We are learning from pilot projects which are helping to shape the model for future larger-scale versions. We are working with the European Investment Bank and other key stakeholders with a view to announcing the first major cost rental project in Dublin city shortly, with a programme of cost rental projects across Dublin and other cities to follow.

Ireland is recovering positively from the crippling economic downturn, the economy is growing and we are reaching for full employment. It is crucial that, as we grow, we match the demand for housing with supply that is accessible and affordable. By any supply measures and given our starting point, real progress is being made under Rebuilding Ireland. Of course we continue to face very challenging circumstances when it comes to increasing numbers in homeless emergency accommodation. Some additional measures will be announced shortly on that. While there are different ways to measure housing output, all indicators of home building activity are trending positively. Housing is a top priority for me and the Government, and we are determined to repair and reform one of the sectors of our economy and society worst impacted by the downturn. All efforts are now being concentrated towards increasing output, particularly in terms of affordable homes to rent and to buy.