Seanad debates
Wednesday, 26 May 2004
Housing Provisions: Motion.
5:00 pm
Joanna Tuffy (Labour)
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I move:
That Seanad Éireann recognises, in the light of the fact that:
—in the last seven years house prices have trebled from the average price of a new house at €97,000 in 1997 to over €300,000 in 2004;
—according to local authority housing strategies, almost half of all new families cannot afford to buy a house;
—numbers on council housing lists have doubled from 26,000 in 1996 to over 60,000 now;
—there are twice as many homeless as there was in 1997;
—in relation to the 10,000 affordable houses agreed by the Government after the 2002 election that not one sod has been turned;
—the report of the Commission on the Private Rented Sector has not been implemented four years after publication; and
—the first-time buyers grant has been abolished and no measures put in place to address the disadvantaged position of first-time buyers in the housing market
the Government has failed dismally in its housing policy and should resign from office.
I move this motion on behalf of my Labour Party colleagues and fellow Senators. When I submitted this motion, in the final sentence I proposed that the Government be evicted from office. That wording has been changed, which is a pity. I have heard worse language used in the House.
The Government's housing slogan could be, "A lot said; nothing done". Shortly before the local elections of 1999 the Government made an announcement regarding affordable housing. This caused much excitement and I received many inquiries on the matter. I got the relevant documentation from the Department and forwarded it to people who were interested. We awaited this great new initiative. In fact, no action followed the announcement until last year when three affordable housing units were built in Lucan. This was the first delivery of affordable housing in Lucan under the 1999 initiative. I accept that the local authority shares responsibility for the provision of affordable housing but the local authority in my area is controlled by Fianna Fáil, as are councils in many areas, so that party bears a dual responsibility. Affordable housing is being provided in Lucan this year but the provision is limited. Only 33 houses are being built in Lucan at present and they are taking a long time to build.
Sustaining Progress promised 10,000 affordable housing units but nothing has come on stream in that regard. It was a mere promise. Promises of this sort are simply spin, designed to get the public and the media excited for a short while, but very little comes into effect.
In Dublin, 50% of new families can no longer afford to buy their own house. The Government has made provision for 20% of all new housing development to consist of affordable or social housing. Local authorities have imposed lesser requirements and the Government has even allowed developers to buy their way out of these reduced planning conditions.
Within the lifetime of the last Government, the Minister for Finance did a U-turn with regard to the capital gains tax provision which forced developers to build on re-zoned land. Last year, the Government abolished the first-time buyer's grant. While the amount of the grant was small it gave first-time buyers some advantage over other players in the property market. Unlike buyers who are moving from a previous home, first-time buyers have no equity in a house which they can use in buying a house. Investors can often use tax breaks and incentives to write-off the full price of a house. The abolition of the first-time buyer's grant showed where the Government's loyalties lie, despite its protestations to the contrary.
The All-Party Committee on the Constitution, of which I am a member, recently produced a report on property rights. The Taoiseach made a major media announcement of his referral of the question of property rights to the committee. The report has been published but I see no sign of Government action on it. Will this report join so many others on a shelf somewhere?
This motion points to the Government's failures. A similar motion tabled by my Labour Party colleagues in the Dáil this evening sets out what the Government needs to do in this regard. I ask the Minister and Government to make a radical intervention in the housing market instead of making announcements and holding press conferences.
Members will be aware from the All-Party Committee on the Constitution report that there is no impediment, legal or otherwise, to the introduction of legislation to cap the price of building land. Other measures can also be taken in that regard. A great deal of work went into that report. It includes inputs from across the political divide and contains a substantial section on the dynamics of the property market and the legal basis for taking action on the housing crisis in terms of the price of land. There is no reason the Government cannot come forward with proposals to introduce such a measure.
The report also mentions the capping of the price of land. The Taoiseach recently referred to a clause in the report which states the cost of housing is not primarily influenced by the price of land. It is important the Taoiseach does not misunderstand what the word "primarily" means in that context. The All-Party Committee on the Constitution received advice from many experts. The price of a house may affect the price of land but the price of land then determines the price of housing and other land. That is the reason the capping of the price of land is an important measure. It would put in place a check to prevent developers making enormous profits from ever increasing land prices.
Many other measures could be put in place. The Labour Party manifesto points out that the number of council houses built in the lifetime of this Government is paltry compared with the number built by Labour or previous Fianna Fáil Governments when in office. South Dublin County Council built approximately 600 council houses in the past five years. There is an ever increasing number of people on that council's housing list.
Noel Ahern (Dublin North West, Fianna Fail)
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Why did they not build them?
Joanna Tuffy (Labour)
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That is a question which Government must answer. South Dublin County Council is controlled by Fianna Fáil. The majority of members are Fianna Fáil councillors.
Noel Ahern (Dublin North West, Fianna Fail)
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That is news to me. I am delighted to hear we have such influence in that part of the city.
Joanna Tuffy (Labour)
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Fianna Fáil is in the majority on most councils. The Government needs to do more than provide county councils with money to deliver council housing. Much more needs to be done. Councils must also receive back-up in terms of resources to deliver such houses.
One of the Government's most promising provisions was the Planning and Development Act which required developers to provide a certain amount of social housing. However, the Government has not held firm in that regard. It is unable to stand up to developers and the type of people who attend the Fianna Fáil tent at the Galway races and to make them understand that this is a permanent provision on which they will have to deliver.
Michael Kitt (Fianna Fail)
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One can get into the Galway races for €15 via the normal entrance.
Paddy Burke (Fine Gael)
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Please allow Senator Tuffy to continue without interruption.
Michael McCarthy (Labour)
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That applies to Fianna Fáil politicians from Galway.
Joanna Tuffy (Labour)
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I call on the Government to act upon the All-Party Committee on the Constitution report and to take whatever action is necessary in that regard, including the introduction of a cap on the price of land, the building of the promised 10,000 affordable houses so people do not have to wait ten years for a house as was the case for many people in the past and the introduction of measures to ensure developers are forced to pay extra tax if they hoard development land.
I also ask that the Government do something for first-time buyers who are greatly disadvantaged in the housing market. The Government took away from them the one provision which provided them with a little help in acquiring a home.
Michael McCarthy (Labour)
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I second the motion. I welcome the Minister of State to the House and look forward to this debate. I served for four years on a local authority the majority of members of which were Fine Gael, Labour and Independent councillors. The housing record of that local authority was somewhat exemplary when compared to South Dublin County Council's record.
When I entered public life at the age of 22, some five years ago, one of the single biggest issues primarily affecting young people was housing. Many classes of people are included in the bracket of those finding it difficult to obtain housing of some description, including those with means and, unfortunately, many of those without means. This is particularly true of young people living in areas of west Cork such as Schull or Goleen, areas of high tourist attraction in which real estate is more expensive. Young people in those areas are faced with having to pay from €300,000 to €350,000 for a house. That is beyond the threshold of many young couples and results in a huge demand for local authority housing.
Many good schemes are being administered through the affordable housing scheme, such as the serviced sites scheme. It is a good scheme whereby the local authority subsidises a serviced site, accepts applications, interviews applicants, assesses the applications on merit and then releases the sites for a nominal fee to the applicants. That scheme has provided many young couples in my constituency with a home. It has allowed them, within financial reason, to build a home for themselves. It is a good scheme on which I would like to see more emphasis in terms of national Government policy. Often, there is a category of people in the middle which is considered too well off to qualify for council housing and who cannot afford to build a house of their own. In that regard, this scheme works quite well.
The Government, under Sustaining Progress, is committed to building 10,000 additional affordable houses each year. That commitment was a fundamental aspect in the negotiation of a very difficult deal and was a particular requirement of trade unions which represent so many workers. Unfortunately, to date not one block has been laid and not one sod has been turned.
Michael McCarthy (Labour)
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That is the position even though the Government which gave a specific commitment on this issue to one of the strongest organs of representation in the country. It is disappointing because there is a great deal of merit in that concept.
In the past couple of years, in particular the past seven years which correlates with the term in office of the current Fianna Fáil-Progressive Democrats Government and its predecessor which was not as mean, house prices have increased by nine times the rate of inflation. That is worrying. In 1997, people could buy a house in Dublin for between £90,000 and £98,000. Now, the minimum price is €300,000 to €350,000. That creates enormous difficulties and great social problems. History has recorded that people went out to work early in the morning and returned well after midnight. That was part of the Industrial Revolution, a damning indictment of any society. Yet, in the post Celtic tiger era things are pretty much the same. Young couples are getting out of bed early, dropping children to childminders, if they can get one at an affordable rate, or family relatives at 6.30 a.m. or 7.30 a.m. and are not returning until late in the evening. That is just to provide a basic standard of living. The bulk of the effort is put into paying a mortgage. What kind of society allows that to happen?
Quality of life is an issue of concern to people. One of the most fundamental rights in this country is the right to own one's home, the right to have a house. A worker working 16 or 18 hours a day, all daylight hours, to provide means to pay for that home, is a sign something is seriously wrong. It affects family and social life and is a shocking indictment of any society.
There are ways to deal with this issue. The All-Party Oireachtas Committee on the Constitution worked very hard and delivered a fine report on house prices. I ask the Minister of State to state the Government's intentions regarding the report. We have a duty to our fellow citizens to ensure that the report, which addresses these issues in an appropriate manner, should be implemented in full. The Kenny report published a number of years ago made some similar sweeping recommendations. It is important these reports should not gather dust on a shelf but are read and implemented and have a meaning for people. An infrastructure should be put in place to ensure that young people can be housed.
On the question of the administration of schemes there is an unhealthy discrimination against the single applicant, in particular the single male. I am aware it is down to the local authorities and the decision-making powers lie with the county manager. The Minister of State can do little about the matter but it should be examined. A good scheme existed in my home town, Dunmanway, whereby the county manager decided that eight two-bedroom bungalows would be allocated to single, elderly applicants, slightly older adults, to be politically correct. It was a good scheme. People who had been on the waiting list for eight or twelve years were finally accorded their one objective in life. They were people who could not afford to buy or build and were living in very bad conditions of accommodation. They were finally allowed a house. This decision was as a result of much debate and ongoing begging and beseeching on the part of the officials. An infrastructure should be put in place to ensure equity in the allocation of housing units.
The bulldogs of greed and bastions of selfishness, the greedy developers, are holding onto prime development land. That is one of the significant contributing factors to the escalation of house prices in this country in recent years. A select number of people have this land and are effectively sitting on it. It affects supply and demand, which impacts on house prices.
There has been good co-operation between the Minister of State's Department and voluntary housing associations. A good number of schemes have been produced by voluntary housing organisations. Subsidised land or land purchased by the Department is handed over to them and they build houses at affordable rents. There may be issues in individual areas but, generally speaking, it lets the local authority off the hook. There should be a combined housing policy between voluntary housing associations and local authorities. The local authority in my area can look at the list, vet the candidates and agree the allocation of such houses. It sometimes allows the local authority to concentrate less on a particular type of applicant, knowing that the voluntary housing association may look after that category of applicant.
Noel Ahern (Dublin North West, Fianna Fail)
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What is wrong with that? It is allowing people to get involved in the community.
Michael McCarthy (Labour)
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I agree there is nothing wrong with it but it should not allow local authorities off the hook from looking at the particular type of candidate directed towards the house in the affordable housing scheme. There are significant differences regarding allocations, in some cases they are huge. I appeal to the good conscience of the Minister of State to, for God's sake, stop allowing this situation where house prices are crippling people. He should think of the many thousands of people who are going to the polls on 11 June who are living in sub-standard accommodation and who can barely afford rent in some sectors. Some have been deprived of their rent allowance by the Minister of State's ministerial colleagues. I ask the Minister of State to vote for this motion with his colleagues on this side of the House.
Michael Kitt (Fianna Fail)
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I move amendment No. 1:
"To delete all words after "Seanad Éireann" and substitute the following:
"acknowledges the achievements of the Government in
—increasing housing supply as the key response to the broad range of housing needs and demand;
—achieving the 9th successive year of record housing completions involving the addition of 68,819 new houses in Ireland in 2004;
—continuing to develop measures to address affordability;
—increasing the share of the housing market going to first-time purchasers and introducing a number of measures to support first-time buyers;
—bringing forward the Private Rented Tenancies Bill 2003;
—putting in place a strong social and affordable housing programme involving investment of some €1.8 billion in 2004;
—progressing the commitment in the Sustaining Progress partnership agreement to the delivery of an ambitious scale of affordable housing through the Affordable Housing Initiative and Part V of the Planning and Development Acts 2000 to 2002 and to reviewing the effectiveness of programmes designed to assist low income groups, including those with social and special housing needs;
—introducing and resourcing an Integrated Strategy on Homelessness; and supports the continued actions by the Government to increase housing supply, and focus public expenditure on responding to the needs of low income households and those with special needs through a broad range of targeted initiatives."
I welcome the Minister of State to the House and congratulate him on his work. He is Minister of State with special responsibility for housing, among other responsibilities. He has been doing a very good job in achieving a record level of housing output and it is very evident if one drives around rural Ireland, which is the area I know best. I hope the Government continues to build on that success. The Minister's draft guidelines on one-off housing have been very helpful and have helped local authorities to develop county development plans in the confidence there will be sound and more realistic policies for those who wish to build houses in rural Ireland.
The amendment to the motion states that 2003 was a very successful year for housing output with 68,819 housing completions, an increase of 19.3% on 2002. Housing output in Dublin has reached record levels with 14,394 built last year. In the greater Dublin area, the figure was 22,852 units. Since 1997, over 356,000 houses have been built nationally. I hope the focus of the Government will remain on continuing the highest possible level of housing supply because the demand is very strong. By doing so, the Government will bring moderation to the rate of increase in house prices.
I have a particular liking for the programme of serviced land initiative. This initiative and the more efficient use of housing land can help to achieve the desired result of more houses. Two villages in County Galway, Kilkerrin and Dunmore, which is a town rather than a village, have been included in the Minister's programme for serviced land initiative funding. The tenders are already with the Department of the Environment, Heritage and Local Government. I hope that under the new design-build-operate system, those schemes will be up and running before the end of 2004. This initiative, together with the rural towns initiative, will ensure the infrastructure is in place to create more housing.
One of the biggest problems in towns is the lack of sewerage facilities. If more sewerage schemes were built in small towns and villages at a cost of between €1 million and €1.5 million, a relatively small amount, we would have infrastructure for housing. Similarly, improvements are required in water schemes in some towns where water supply is not adequate.
The rate of house price increase referred to by previous speakers remains a problem although it has moderated since the late 1990s. Six years ago, in 1998, house price increases peaked at 40% per annum. The Government is seeking ways to improve the situation. I am encouraged by the various schemes introduced by the Department of the Environment, Heritage and Local Government, including the social and affordable housing schemes, for which I hope funding will be maintained. I understand the needs of 13,000 households will be met under the schemes compared to 8,500 in 1998. We need strong social housing programmes to meet the needs of those unable to provide for their housing needs from their own resources. In 2003, local authorities completed or acquired almost 5,000 units.
We need to support the voluntary and co-operative housing sector which provided 1,360 units in 2002, a record output for the sector. In 2003, its output continued with more than 1,600 units provided, more than double the output of 1997. Just before Christmas 96 houses were completed in Tuam in the biggest ever scheme, consisting of a mix of a council social scheme and a voluntary scheme. While I was glad this very nice estate was completed in good time, I noted with interest that the 48 local authority houses were allocated before Christmas, whereas five or six houses on the voluntary side have not yet been allocated. It is difficult to understand the reason for this and I have tried my best to find out. While the postal strike in Tuam probably did not help, it is now late May and we must ensure the remaining houses are allocated.
I commend the Office of Public Works on the considerable work it has done with regard to land in the ownership of State bodies. It has identified many areas of land which could be used for housing, one of which is on the Finglas Road in Dublin. The health boards have land in areas outside Dublin and some Land Commission land is still available. The possibility of providing housing on State lands needs to be examined.
The Residential Tenancies Bill before the Dáil will result in a major improvement in the current position by placing the Private Residential Tenancies Board on a statutory footing. I hope the legislation will be enacted before the summer. I also welcome the Government's action on homelessness.
Traveller accommodation has given rise to considerable difficulties and I do not underestimate the challenges in this area. I ask the Minister to promote the Traveller accommodation programme more vigorously and ensure more units are built.
Sometimes repairing houses is as important as building them. It might not sound as good if the Department was to state it had repaired 68,000 houses — it would prefer to say it had built 68,000 homes — but let us not forget that we need to repair houses for the elderly and people with disabilities. I hope the Government will do so.
James Bannon (Fine Gael)
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I fully support the motion. Only the week before last, I and my party called for the resignation of the Minister for the Environment, Heritage and Local Government due to the appalling waste of public money on the electronic voting fiasco.
Rory Kiely (Fianna Fail)
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We are not discussing electronic voting. The Senator should confine his contribution to the issue of housing.
James Bannon (Fine Gael)
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I support the Labour Party's call on the Minister to resign as he and the Government have failed miserably to produce a sustainable and viable housing policy. The Minister and the Minister of State, Deputy Noel Ahern, arrogantly wasted money, which would have gone a long way in the area of social and other housing, on a white elephant.
Rory Kiely (Fianna Fail)
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The Minister should note that we are discussing housing.
James Bannon (Fine Gael)
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The current Government should be ashamed of its record on social housing. It has continually failed to meet its commitments to social housing under the national development plan, leaving more than 60,000 people on local authority waiting lists and at least 5,000 people homeless, sleeping in bed and breakfasts and on our streets. Time and again, on the Order of Business and other occasions, I have pointed out that within a radius of 200 m of the House one will see people sleeping in alleyways and on the street. This is a major blight on the record of the Minister and the Government.
According to the St. Vincent de Paul Society, the age and gender of people who are becoming homeless has substantially altered in recent years, with more women and young people seeking advice. There has also been an increase in the number of two parent families experiencing homelessness, indicating that the direct structural effect of the price of accommodation on homelessness is increasing.
In line with the Government's shameless and relentless targeting of the less well-off in our society, house buyers who have already lost the first-time buyer's grant now face punitive levies, which result in many of them being priced out of the housing market. This problem is evident irrespective of location and is being raised continually on our canvass for the local and European election campaigns.
To paraphrase the well known saying that an Irishman's home is his castle is to present a picture of permanence and prosperity. For many in the rental sector, however, their accommodation is far from a castle and they are far from having security of tenure. In many cases, they are subject to the whims and financial greed of some unscrupulous landlords, mainly supporters of the Fianna Fáil Party. I note the presence of Senator Brennan who recently left the Fianna Fáil Party because he could not put up with its cronyism.
Rory Kiely (Fianna Fail)
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We are not discussing the Fianna Fáil Party. The Senator should confine his comments to the motion.
Rory Kiely (Fianna Fail)
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The Senator must speak to the motion and I will correct him if he chooses not to, which is what I am doing. He is wasting his own time by not speaking to the motion. That is the position.
James Bannon (Fine Gael)
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Those at the mercy of the private rental sector have suffered the effects of a system in chaos, which is still not regulated 100 years after the rights of tenants on the land were first established. It is a blight on the Government's record. Those trying to get a foot on the property ladder are finding it impossible because of stealth taxes imposed by the current Fianna Fáil led Government. Approximately 45% of the cost of a house now goes to the Government in tax revenue.
The Fine Gael Party has a radical plan to help 70,000 first-time buyers, those who have been crippled by the exorbitant taxes imposed by the Government, to make home ownership a reality. These plans will result in first-time buyers benefiting from the abolition of stamp duty on second hand homes up to the value of €400,000. This will mean that a first-time buyer purchasing a second hand house costing €350,000 would save approximately €14,625.
We have proposed an SSIA type scheme to help young people who are saving for a deposit for a new home. Under this scheme, first-time buyers will receive one euro for every three euro saved, provided these savings are used to purchase a house. No tax on interest will apply and the potential house purchaser will be required to show regular monthly savings for a minimum period of two years. The scheme will be applicable to both new and second hand houses. A frontloading of mortgage interest relief will help the buyer in the early years of mortgage repayments, giving first-time buyers help when they most need it.
As Senator McCarthy stated, since the Government parties took power, the price of a home has trebled from an average price of €97,000 in 1997 to more than €300,000 currently. This has resulted in home ownership becoming impossible for many young people who find getting a foot on the property ladder beyond their financial limits. The Government has consistently failed to tackle the housing crisis and has shamefully reaped a taxation windfall from the surge in new house prices. The Government netted more than €5 billion from taxation on new homes in 2003.
Fine Gael is committed to bridging the affordability gap, which is preventing people who have incomes from owning their own homes. Innovation, not taxation, will help to realise the dream of home ownership. A string of broken promises has followed the 2002 general election. The Government promised 10,000 affordable houses but has not delivered one.
The Taoiseach stated at the Fianna Fáil Ard-Fheis that developers who hoarded land would be dealt with through legislation and other means. These are empty words, given that Fianna Fáil cronyism has resisted all attempts to free up land. The construction industry has strong friends in the party and the undisputed riches amassed by "rezoners" and speculators have been added to by the party halving their capital gains tax liabilities while young people struggle to pay a mortgage. Land owning friends of Fianna Fáil continue to hoard land banks without fear of action by the Government.
I would like to highlight the alleged shameless remarks of the Minister of State regarding the disabled person's grant scheme, which is a worthy scheme.
James Bannon (Fine Gael)
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The Minister of State has raised concerns among people with disabilities who need financial assistance to adapt their homes. He is reported to have said the disabled person's grant scheme was in need of reform because "some counties approve too many grants." What does he mean by this? Does he mean some grants should not have been approved?
James Bannon (Fine Gael)
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I am entitled to conclude. The Chair interrupted me.
Rory Kiely (Fianna Fail)
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The Senator had eight minutes. He is out of order.
James Bannon (Fine Gael)
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The Chair interrupted me unfairly. I am entitled to my time. Is this dictatorship at its best?
Rory Kiely (Fianna Fail)
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I ask Senator Bannon to withdraw that remark.
James Bannon (Fine Gael)
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If it suits the Chair, I will withdraw it.
Noel Ahern (Dublin North West, Fianna Fail)
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I am pleased to address the House in support of the amendment. I would like to set out, once again, the main elements of the Government's approach to housing and update Members on the positive effects this approach is having.
A similar motion is being debated in other House later. I thank the Labour Party for giving the Government and myself an important opportunity two weeks prior to the local and European elections to outline the positive progress we have made. Our record is second to none and my contributions to both debates will demonstrate the Labour Party motions were not well thought out. I am heartened that the party used Private Members' time in both Houses to raise the housing issue. I feel good because if this is the most significant issue its members have encountered on the doorsteps, things much be much better than a number of commentators thought. This is a positive motion by the party.
Housing remains at the top of the Government's agenda. Despite unprecedented demand for housing, fuelled primarily by rapid economic growth and demographic changes, we have a proud record of achievement in delivering housing across a broad spectrum of housing needs. The Government is focused on maintaining a high level of housing supply to meet the strong demand and to moderate house prices in this way.
The economy has been booming for the past seven or eight years. The recent census data highlighted a population increase of 8% or 270,000 between 1996 and 2002. The population has not increased to that extent in any other country in the world. A negative side effect of the booming economy has been the return of many emigrants while the number of family units increased by 14% during the period of the census. A greater number of housing units are needed in comparison to ten or 20 years ago but this would be the case even if the population was not increasing.
Rory Kiely (Fianna Fail)
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The Minister of State, without interruption.
Noel Ahern (Dublin North West, Fianna Fail)
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There is evidence that measures introduced by the Government to boost supply, including significant investment in infrastructure, improving planning capacity and promoting increased residential density, are having a positive effect. Last year was the ninth consecutive year of record house completions with 68,819 units being built, an increase of more than 19% on 2002 and more than 10.5% in the Dublin region. However, figures do not always convey the context.
Rory Kiely (Fianna Fail)
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The Minister of State, without interruption.
Noel Ahern (Dublin North West, Fianna Fail)
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The number of house completions hovered around 25,000 in the 1970s, 1980s and early 1990s. A total of only 22,000 were built in 1993. An increase from 22,000 completions to almost 69,000 is incredible.
James Bannon (Fine Gael)
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In 2002, 10,000 affordable houses were promised but the Minister of State has not delivered a single brick.
Rory Kiely (Fianna Fail)
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The Minister of State, without interruption.
Noel Ahern (Dublin North West, Fianna Fail)
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The EU publishes an index of the number of new houses built per year per 1,000 head of population. Ireland is at the top of the league with 17 new dwelling units per 1,000 head of population annually. Portugal builds under ten while the UK builds one and Sweden builds three annually. We are miles ahead of every other member state because housing output has been enormous. We are racing to stand still because of the significant demand that has resulted from economic expansion and the return of large numbers of emigrants who left when the country was not doing well 20 years ago. Those who left were in their early 20s and lived in their parents' homes prior to emigrating. They then returned with families in need of new homes, resulting in significant pressure on housing. However, the increase in housing output has led to great progress in this regard.
The rate of house price increase is a problem. However, affordability is also a problem. Affordability comprises price, income, tax and interest rates. The cost of a house may have increased by 300% in ten years but one must examine what percentage of a couple's net disposable income was spent on mortgage repayments in the early 1990s compared to 2004.
I accept that house prices have increased and that houses are less affordable than they used to be, but it is very marginal. The problem is worse in Dublin than it is in the rest of the country. While house prices may have risen by 300%, the affordability index indicates that this does not mean they are three times less affordable.
When there is a booming economy, as we had in recent years, demand for houses always increases. When there is a recession, which often happens, usually when Fine Gael and Labour are in power, there are lashings of houses.
James Bannon (Fine Gael)
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The Minister of State is very hypocritical this evening.
Noel Ahern (Dublin North West, Fianna Fail)
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There are always plenty of houses during recessions and there are plenty of bargains if one has the money.
James Bannon (Fine Gael)
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I will bring the Minister of State to elderly people living in sheds. He has cut the disabled person's grant.
Rory Kiely (Fianna Fail)
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Allow the Minister of State to continue.
Noel Ahern (Dublin North West, Fianna Fail)
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The point I have made is that 270,000 people have come into the country in recent years. This has put pressure on the supply of houses. I believe it was said in the Dáil last night that many 31 year olds are living at home with their parents who cannot get rid of them because they cannot afford to buy a house. Twenty years ago, they were not living with their parents because they were not in the city. They were in America, Australia or elsewhere. Meaningless statistics are now being circulated, indicating that there are more 31 year olds living at home with their parents. That is the case, but are their parents not delighted that they are in the country, given that they could not have afforded to stay here 20 years ago?
Market commentators including the Central Bank are predicting that, over the coming years, the greater balance in the housing market due to increased supply will have a dampening effect on house prices. We are committed, through various measures, to boosting the supply and ensuring that demand for houses is met in a sustainable manner.
James Bannon (Fine Gael)
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When will the Minister of State deliver the 10,000 affordable houses that were promised in the run-up to the last general election?
Noel Ahern (Dublin North West, Fianna Fail)
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The Labour Party mentioned the abolition of the first-time buyer's grant. Its abolition demonstrates that the Government is prepared to take difficult decisions for the public good and to ensure a sustainable match between Government sources and expenditure.
James Bannon (Fine Gael)
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It squandered €60 million in taxpayers' money on e-voting.
Noel Ahern (Dublin North West, Fianna Fail)
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The first-time buyer's grant was of great benefit when it was first introduced. It is gas that even people at political level said it was not worth a damn and was only going into the builders' pockets, yet people screamed when it was abolished. However, we still do much for first-time buyers.
Maurice Cummins (Fine Gael)
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Tough decisions are geared only towards one section of the community.
Noel Ahern (Dublin North West, Fianna Fail)
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The mortgage allowance was extended to seven years in the budget 18 months ago.
James Bannon (Fine Gael)
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The Government introduced development charges that affect every young person building a house. They are paying over €7,000——
Rory Kiely (Fianna Fail)
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Senator Bannon should recognise that he has already spoken and allow the Minister of State to continue without interruption.
Noel Ahern (Dublin North West, Fianna Fail)
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There are stamp duty exemptions for new homes and there is a staggered system for stamp duty on second-hand homes. The rent-a-room scheme, which allows an owner-occupier earn up to €7,620 per annum tax free, was introduced. There is a site subsidy for affordable housing. Those who received the first-time buyer's grant of €3,800 felt it was of great benefit, even if it involved using it for curtains and carpets. Almost as much is being spent nowadays on site subsidies for affordable homes.
Maurice Cummins (Fine Gael)
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Did the Government build any of them yet?
Noel Ahern (Dublin North West, Fianna Fail)
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This initiative is much more focused in that it is targeted at those of a particular income bracket. The first-time buyer's grant was all over the place and one got it whether one was a normal working-class person, a co-applicant as one of a couple or a high-flying barrister. The site subsidy for the affordable homes, which is now costing over €20 million per year, is much more focused and is targeted at those who are under pressure and in a particular income bracket. I am very pleased at the way in which it is working out.
Noel Ahern (Dublin North West, Fianna Fail)
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However, the Government continues to provide for the first-time buyer. In budget 2003 we targeted the relief, as I stated. Moreover, data available to my Department also shows that first-time buyers continue to have a significant presence in the housing market. The Central Statistics Office states that over 50% of house purchasers since 1996 were first-time buyers. This is still regarded as a huge percentage.
The Government has not been found wanting in responding to increasing levels of housing need. Social and affordable housing output has expanded very significantly. Last year saw the delivery of the highest level of output under the range of social and affordable housing measures for over 15 years. The social and affordable housing needs of in excess of 13,600 households were met. The number of families or persons on the housing list is 48,000 and doubling it will not make it real.
Noel Ahern (Dublin North West, Fianna Fail)
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The figure of 48,000 is official. The needs of 13,600——
James Bannon (Fine Gael)
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The Minister of State is inviting comment.
Noel Ahern (Dublin North West, Fianna Fail)
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——of these were met last year.
The budget, Exchequer and non-Exchequer, for social and affordable housing in 2004 is €1.884 billion, which represents an increase of 5.4% on the previous year. Inflation is running at just 1.7%. This additional funding will allow us to consolidate the very significant progress made in recent years and to maintain a very high level of commitment to social and affordable housing.
On the provision of local authority housing, the Government has been very conscious of the increased level of social housing need. As I stated, the last official figure for those on local authority housing lists was 48,413. I agree with Senator McCarthy that if one analyses those on the list, one will find that 32% of them are single. Some 30% more are lone parents with one child and the remaining 40% comprise traditional families. When one considers the numbers, one is not comparing like with like because one would not have had this many single people on the list in the past. They would not have been eligible. Until about ten years ago, the only single people that were ever eligible were senior citizens. Now, however, we allow others on to the list.
I agree that local authorities are very slow to adapt to the new circumstances. They will talk to one and tell one the make-up of the list, yet they will send in their plans for 20 new houses and revert back to the same traditional 20 three-bedroom semi-detached houses. Local authorities look at the list and know who is on it. The plans that are submitted should have regard to local need and should not just refer to traditional three-bedroom semi-detached houses.
As I said, 32% of those on the list are single, many of whom are men, including separated men. We are not catering adequately for them. We are inclined to allow the private rental market look after them. Local authorities should be more innovative and recognise what is at stake. I agree with the Senator's point in this regard.
I have asked local authorities to put in place five-year action plans covering their full range of housing programmes. These plans, to be agreed with my Department, will ensure that a fully strategic approach is taken by local authorities and ensure that they avail of the certainty provided by multi-annual expenditure programmes. Last year, local authorities, on their own, completed or acquired 4,972 housing units. This is an indication of how they have successfully accelerated their programmes to meet existing demand.
Furthermore, the voluntary sector was mentioned. In this regard, over 1,600 units were provided last year. Many of these concern some of the newer, bigger housing associations, but about half of them are very small housing associations from around the country which are providing for the elderly and those with special needs. They are receiving a grant of 90% or 95% from the Department and they are doing some very useful work. This allows local communities do their bit to help the elderly or those with special needs.
The affordable housing scheme is working. Over 9,500 households have benefited from the shared ownership and affordable housing schemes in the past four or five years. This number is increasing as more affordable housing units come on stream as a result of agreements under Part V of the Planning Act.
However, no magic wand can be waved to give a quick response on the housing issue. Senator Tuffy mentioned the 1999 local authority scheme. Last year more than 1,500 people got affordable homes under that scheme. It takes a couple of years to get anything done on housing. However, that is now very valuable.
I have been around the country and was in Westmeath a few weeks ago where the best of affordable three-bedroom houses were selling for €122,000 to €125,000. Even three miles from here in my constituency in Finglas, two or three weeks ago I opened some affordable sites, where a number of small infill units on local authority land were selling for €150,000 to €200,000, which represents very good value. The same is true of South County Dublin and Fingal. These houses are for people earning less than €32,000 per annum.
Work is progressing on the new affordable housing initiative under Sustaining Progress. The Government made two announcements in July and December 2003. There is no point in people trying to make every number sound big and trying to claim these announcements were made two years ago or were in our programme for Government when they were not. In July and December last year we released various tracts of State land in Dublin, Kildare, Meath, Cork and Waterford. With these sites and what will come under Part V of the Planning Act, the sites announced to date will give 6,100 affordable units. However, they will take time to come on stream.
James Bannon (Fine Gael)
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Fianna Fáil did not mention that in its manifesto in 2002.
Noel Ahern (Dublin North West, Fianna Fail)
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Any builder in the midlands, or wherever the Senator comes from, will tell him these cannot be built overnight.
James Bannon (Fine Gael)
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Fianna Fáil lied to the people in 2002.
Rory Kiely (Fianna Fail)
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The Senator should allow the Minister to continue uninterrupted.
Noel Ahern (Dublin North West, Fianna Fail)
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It takes a while for a developer to complete building on a site. It is not true to say no sod has been turned. The Taoiseach was in Finglas a month or six weeks ago to turn the sod on a site that will contain 166 affordable units, based on the terms of Sustaining Progress.
James Bannon (Fine Gael)
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Has the Minister of State gone outside the Pale yet?
Noel Ahern (Dublin North West, Fianna Fail)
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I was down in the Senator's county a while ago.
Noel Ahern (Dublin North West, Fianna Fail)
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Does the Senator not remember me? He was very nice to me the day he brought me down.
Rory Kiely (Fianna Fail)
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The Minister of State should continue and he should be aware that he has only five minutes left to speak.
James Bannon (Fine Gael)
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We would look after the Minister of State if he came with a chequebook.
Noel Ahern (Dublin North West, Fianna Fail)
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Work on the site in Finglas with the 166 affordable units, based on the terms of Sustaining Progress, has started and I look forward to seeing that progress. Shortly we will seek expressions of interest for the development of the sites at the Jamestown and Infirmary Roads in Dublin. It takes time to plan and deliver housing. I assure the House that we are fully committed to delivering on the initiative and will continue to work to maximise output from the various projects being progressed.
Very good work is being done to address the issue of homelessness. In 1999 we provided approximately €12 million to address this issue and this year we will provide €51 million. I believe Senator Bannon is from Longford where I opened a homeless unit for 21 people. Only one person stayed the night we were there, but that is beside the point.
James Bannon (Fine Gael)
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The Minister of State must come in the dark of the night.
Noel Ahern (Dublin North West, Fianna Fail)
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The problem is worse in Dublin. Some 1,000 additional emergency beds have been provided in recent years. The problem is no longer with emergency beds, as beds exist for anyone who wants one. The bus run by the city council goes around every night and homeless people are offered such beds. Depending on the weather many people will take the bus one night and not another. The challenge now is to move people out of such emergency beds and into transitional accommodation and then into local authority or independent living houses.
Many people can get their lives together and live in such houses if given a second chance. However, some of them who have addiction problems and others who, sadly, have mental health problems need a form of sheltered accommodation and would not be able for a house or a flat even if given one. However, if we continue with the level of funding aimed at homelessness, we could move many of them back into good independent living accommodation.
The private rented sector was mentioned. Report Stage of the Residential Tenancies Bill 2003 will be taken in the Dáil shortly and I hope it will be taken here in a few weeks. I accept this has been a long time coming and that tenants have had a bad deal for many years with little protection from the law. However, the Bill is very balanced and, after six months as a tenant, gives the right to a four-year lease. It will allow tenants and landlords to go to the new private residential tenancies board rather than the expensive route through the courts. I expect that Bill to come before the House in a few weeks and I would greatly appreciate Senators' co-operation on that matter as it has taken a long time to pass through the Dáil.
We will spend €1.88 billion this year. We are doing our very best on social and affordable housing. If we can maintain the level of house construction — private, social and affordable — in the region of 60,000 to 68,000 for a few years, we should be able to meet the demand that exists. However, it very much depends on how the economy performs and whether more people come into the country or whether we revert to what happened in previous eras when half the people emigrated in their early 20s. The demand for housing and the general economy are linked.
I thank the Senators for the opportunity to debate this. I realise that prices remain high. However, based on the percentage of income used to pay mortgages, houses are affordable. I agree there would be many tears if interest rates went back up to the levels they were ten years ago and it bothers me that the dividend from much reduced interest rates has not been passed on to buyers. The builder or developer has taken that entire dividend. Based on the report of the All-Party Committee on the Constitution, we must look at the land issue. We have had the Goodbody report and the National Economic and Social Council——
James Bannon (Fine Gael)
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The Minister of State has been talking about that for three to five years and has done nothing about it. It is in his court to deal with it.
Noel Ahern (Dublin North West, Fianna Fail)
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I find it sad that when I try to give information, people do not hear. Some 68,819 houses were built last year, which is an enormous amount.
James Bannon (Fine Gael)
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The Government is cutting the disabled maintenance grant. Where are the social houses that were promised?
Noel Ahern (Dublin North West, Fianna Fail)
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We are spending €1.88 billion, an enormous amount, and I want to keep that going. The needs of approximately 13,000 people on the housing list will be met this year. If we can maintain that for a few years, we will break the back of the problem.
Rory Kiely (Fianna Fail)
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I ask Senator Bannon to desist from interrupting, which does not project a good image of debate in this House.
Maurice Cummins (Fine Gael)
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I congratulate the PR people in the Department of the Environment, Heritage and Local Government, who are doing an excellent job in painting a good picture of the policies the Government is pursuing. However, even they cannot cover up the policy failures in the housing area. It is not possible to make a silk purse out of a sow's ear.
Maurice Cummins (Fine Gael)
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I am referring to housing. The abolition of the first-time house-buyer's grant set out the stall for the Government. I heard the Minister say that Governments must make tough decisions. However, the Government always seem to make the tough decisions that hit the poor and vulnerable, and those trying to get on the housing ladder. Those are the types of tough decisions the Government has made. The cuts in social welfare payments and the first-time house-buyer's grant show the types of people the Government is targeting.
We should also consider the development levies now charged by local authorities. That is another nail in the coffin of young people trying to put a roof over their heads for the first time.
The Government increased VAT charges on houses which places another burden on hard-pressed young people who are trying to put a roof over their heads. The Government favours developers and speculators with an array of tax incentives rather than first-time buyers, which it appears to have deserted. Fine Gael has outlined a comprehensive and realistic policy which is targeted at first-time buyers and other housing matters.
Maurice Cummins (Fine Gael)
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Senator Bannon has outlined realistic policies, the implementation of which would make a real difference to people by helping them to buy their first homes. Fine Gael is often accused of not having policies of its own, but we have policies in this area which are realistic and would prove helpful. I hope the Government will adopt some of them.
In 1996, the last full year during which Fine Gael was in office, the average price of a house in Dublin was €88,000. Nationally, the average price of a house was €75,000. Today, the average price is €304,000 in Dublin and €236,000 nationally as outlined in the housing statistics bulletin.
Noel Ahern (Dublin North West, Fianna Fail)
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It is a question of interest rates. The key is affordability.
Maurice Cummins (Fine Gael)
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It is beyond me how young peoples can afford mortgages in this day and age. Even if both partners work, it is difficult and sometimes impossible for many to purchase a property. This is a damning indictment of the policies the Government has pursued.
The Minister of State said that funding in the homelessness sector had increased from €12 million to €51 million, which is welcome. However, our policies are still failing. We have only scratched the surface in terms of tackling homelessness. As has been stated, one need only walk 40 m or 50 m from the gates of Leinster House any night of the week to see people living rough and sleeping in doorways. I ask the Minister of State what the Government is doing about it.
Noel Ahern (Dublin North West, Fianna Fail)
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A bus comes around for them.
Maurice Cummins (Fine Gael)
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The housing statistics bulletin for 2003 states there are 5,600 homeless people. The Simon Community, which does wonderful work, claims this figure is a gross underestimation.
Maurice Cummins (Fine Gael)
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It is an absolute disgrace that in spite of the unprecedented boom and growth the country has experienced, there are twice as many homeless persons as there were in 1997.
James Bannon (Fine Gael)
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It is another example of neglect by Government.
Maurice Cummins (Fine Gael)
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The Government has failed miserably to address housing supply. In the 2002 programme for Government, which seems to be ignored wherever possible, there is a commitment to assisting the voluntary housing sector to ensure that 4,000 accommodation units per annum are provided. As the Minister of State said, just over 1,500 units were provided in 2003.
Noel Ahern (Dublin North West, Fianna Fail)
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The figure increases every year.
Maurice Cummins (Fine Gael)
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It was another lie and another broken promise. The programme for Government was probably the most deceitful document ever inflicted on the people. It surpassed even the 1977 Fianna Fáil manifesto which plunged the country into near bankruptcy.
Noel Ahern (Dublin North West, Fianna Fail)
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The supply of accommodation units increases every year. The Senator should look at the graph.
Maurice Cummins (Fine Gael)
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The 1977 manifesto and the 2002 programme for Government are much of a muchness and a disaster for people on low incomes.
Maurice Cummins (Fine Gael)
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The Government's social welfare policy features 16 cuts which hit the same people. The Government prefers to look after developers and the people who benefit from tax incentives.
Noel Ahern (Dublin North West, Fianna Fail)
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I would not know. I have never met any of them.
Maurice Cummins (Fine Gael)
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Minister, a wide range of measures is required to address the affordability gap.
Rory Kiely (Fianna Fail)
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It is the Chair you should be addressing rather than the Minister of State.
Maurice Cummins (Fine Gael)
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As long as people listen to what I have to say, I do not mind whom I address. The affordability gap prevents double-income couples buying their own homes. We must find innovative ways to tackle supply and demand issues. We require proper planning and priorities to be laid down to tackle the housing crisis. The Government is stale and lacks a clear policy to tackle these problems.
Maurice Cummins (Fine Gael)
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The Government's housing policy record is absolutely deplorable and can only be considered an attack on the poor and the middle classes. People buying holiday homes and investment property appear to be a greater priority for the Government. There were 26,000 people on the housing list in 1996. The Minister of State says there are now 40,000 people on the list, but my figures indicate there are up to 60,000. This is the result of the Government's policies.
There is quite a number of areas I would like to address, but time does not permit. The remedial works scheme is in place to benefit run down housing estates but we have been waiting in Waterford for finance for a number of projects. While the projects which have been completed over the years are a credit to everyone involved, we need more money to deal with remedial works.
Noel Ahern (Dublin North West, Fianna Fail)
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Are the plans in yet?
Maurice Cummins (Fine Gael)
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The plans for estates in Ballybeg, Lisduggan and Larchville are before the Minister of State and the money is needed. If we get the money, we will do the work.
The Government was remiss in attacking local authority policies. The local authority on which I sat for 20 years had useful, innovative policies at all times to accommodate people on the housing list. That has been the case with the majority of local authorities. The policies the Government is adopting are doing nothing, especially for people who are trying to get on the property ladder for the first time.
Cyprian Brady (Fianna Fail)
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I second the Government amendment and welcome the Minister of State. I was delighted to see his personal involvement in the pulling down of the Ballymun flat complex where he wielded a sledgehammer.
Cyprian Brady (Fianna Fail)
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It is a flagship project and a fine example of the success of the Government's housing policy.
Cyprian Brady (Fianna Fail)
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Fine Gael would rather talk about anything but housing. The Minister of State has pointed to some of the causes of the problems in this area. There is unprecedented demand for housing, the population has increased and demographic changes have occurred. The change in people's incomes must be taken into account as must interest rates and the choices people make now. We must also consider the changing nature of what constitutes a family. Senator McCarthy mentioned single people. There are changes happening with which we must keep up. The Government has been successful in accomplishing this through huge investment, as the Minister of State has pointed out.
This is the ninth successive year of growth in the housing industry. I see it every day in the area of Dublin in which I work. Dublin's north inner city in particular has seen unprecedented building of social, affordable, sheltered and private accommodation. There is a complete mixture across the board. The Minister of State is particularly aware of the Respond housing co-operative at the East Wall where some 150 units of social and affordable housing have been developed. The St. Pancras development turned the blackspot at St. Joseph's Mansions in the north inner city into a flagship project. People come from all over Europe to see it and Dublin City Council uses it as a model.
The supply of housing influences prices. During the period of exceptional growth which this and the previous Governments presided over, demand has grown almost in direct proportion to the increase in people's spending power. Low taxes, low interest rates and almost full employment are bound to put pressures on the system. Previous speakers mentioned the 1980s. I bought a house in 1980 and my wife and I both had to work to be able to afford it. In fact, I had to take a second job. Things have not changed. Some studies have shown that when incomes, tax rates and inflation are taken into account, house prices have remained the same in relative terms. The Opposition appears to disregard this point. Even now, first-time buyers account for a sizeable proportion of the housing market.
We come from a culture in which home ownership has always been important, but that is changing. The most startling figure in the Central Statistics Office survey shows that 62% of home owners owe nothing on their houses. They own their houses fully. Why is it a surprise, when there is such growth in the country, that people are looking for investment properties? With 62% having no mortgage on their houses, why would they not do so? This phenomenon should not be a surprise to anybody.
The Minister of State also pointed out that the supply of building land and the identification of sustainable sites is crucial for the future. This has been taken into account. He also mentioned the all-party committee and the suggestion regarding compulsory purchase orders plus 25% on land. I endorse this move.
If Senator Bannon had been at the meeting of the Joint Committee on the Environment and Local Government yesterday he would know that the three groups representing the homeless which attended, including the Homeless Agency, the Society of St. Vincent de Paul and Threshold, congratulated the Government on its policies and strategy. They said they are working to reduce homelessness. The most startling change that has taken place, particularly now that there are many voluntary housing organisations, is that these groups are now considering prevention of homelessness and working on the end of the cycle of homelessness, in which people can move on to permanent sustainable housing, whether provided by the local authority or privately. There is now much co-operation among local authorities, health boards and the private rental sector. The Residential Tenancies Bill will be warmly welcomed by all the voluntary agencies.
The statistics of the Homeless Agency indicate that more than €60 million has been spent in this area. In 2000, we spent €8 million on homelessness in general. We will spend €24 million in 2004. That is a massive increase. Even the voluntary agencies involved must accept that the strategy that is being followed, while it will be reviewed, has to a large extent worked. The ultimate aim of the strategy was to eliminate homelessness by 2010. All the agencies involved accept that we have made major progress in this area. There is more work to be done at the beginning and the end of the cycle, but these problems are being tackled.
Listening to some of the comments made earlier, one might imagine that developers are invaders from outside the country——
Cyprian Brady (Fianna Fail)
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——who are coming over the walls or swimming across the sea to rape and plunder the country. In many cases these developers are indigenous people. Often they are private citizens in rural areas who have done well and decided they want to get into this area. We hear evidence of the hypocrisy of some members of the Opposition when they object strongly to one-off housing and at the same time complain that there are not enough houses. I commend the Minister, who is doing an excellent job, and wish him all the best.
John Paul Phelan (Fine Gael)
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I support the Labour Party motion. I am glad to have the opportunity to discuss this important issue in the Seanad this evening. I was surprised by many of the contributions from those on the Government side, particularly that of the Minister of State. I did not realise he was as out of touch as he is clearly. I listened to his attempts to explain, incredibly, that the affordability gap is not as bad as people think. The Minister should try to explain that to a young couple, in this city or elsewhere, who are working every hour God sends to provide money to pay a mortgage so they can get onto the property ladder. Their recreational time with their families has been dramatically cut over the past five or six years. The Minister should explain to them that the affordability gap is not as dramatic as people think. He has clearly lost touch with the real world. The big issue about which I hear on the doorsteps during the local election campaign is the affordability of housing.
I am one of those who intends to buy a house over the course of the next few years. There are thousands of people, however, who are not as fortunate and do not hold a position that enables them to afford to buy a house. The Government, over the past seven years, has failed miserably in every attempt to make housing more affordable. It has intervened in the market in several different ways and each intervention has failed. The problem has got worse rather than better. When the Minister of State claims there is no affordability problem, he is clearly wrong. If he does not understand and accept that, he should not be in his current position.
I am delighted to support the Labour Party motion. Housing is the single biggest issue that affects younger people. I am conscious of the fact that over the past few months, local authorities the length and breadth of the country have raised development levies across the board. This is a further tax on people who are trying to provide their own homes.
Noel Ahern (Dublin North West, Fianna Fail)
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The councils are not doing it.
John Paul Phelan (Fine Gael)
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A few months ago when the issue of development charges first arose, I listened in absolute amazement to the Minister, Deputy Cullen, say that this was an attempt by the Government to get something back from the developers and invest it in local communities. Was he seriously suggesting that developers would end up out of pocket, that they would not pass on these charges to the people buying the houses? It does not make sense. If the Minister expects people to believe that, he is sadly mistaken and this will be made clear to him in the near future.
A scandalous situation has arisen over the past few months. In my county of Kilkenny, development charges have increased from €1,200 per house to anything from €5,000 to €8,000 per house. That is a significant new tax on people who are trying to provide their own homes. It has been implemented in Kilkenny, and most other parts of the country, by local authorities controlled by Fianna Fáil. In Carlow the levy has been increased to a level that is lower than the old scheme in Kilkenny, but the Carlow council is controlled by Fine Gael and the Labour Party with the help of a few other people. If this can be done in County Carlow, why can it not be done in County Kilkenny?
Other speakers mentioned the abolition of the first-time buyer's grant. In the overall context this was not a large amount of money, but many people used it to defray costs and to help furnish their houses. At the time of its abolition the Government used the excuse that this money was simply going into the back pockets of developers and that taking the grant away would not affect buyers, but it clearly has done so. We have not seen the knock-on decrease in the cost of new homes that we would expect if we followed the Government's logic.
As a younger person who is in the process of buying a new house, I represent a sector of society that has been completely neglected over the past seven years. In that period the cost of an average house has more than trebled. There has been no recognition by Government, either locally or centrally, of the problem faced by that sector of society. I am very pleased that the Labour Party tabled the motion, which I support. I wish sincerely that the Minister of State and Government Senators would open their ears and minds and accept there is a significant problem. Instead of making grand statements and big promises about 10,000 affordable units, which they did prior to the last general election, they should get down to the nitty gritty of providing real comfort for people who are trying to get their foot on the first rung of the property ladder.
Michael Brennan (Progressive Democrats)
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I welcome the Minister of State. We should not underestimate what has been achieved in the construction industry in the past ten years. At a time when 69,000 houses were built, the fastest rate in Europe, one sixth of all houses and apartments were build in the past seven years. A decade ago, we were building 20,000 houses. Currently, there is a very modern housing stock, which means much has been achieved. Reference was made to local authorities at a time when we are building 5,500 units per annum while the voluntary sector is building 1,600 units per annum. Note should be taken of this.
The Minister of State has made provision for a five-year action plan at local authority level. I welcome this at a time when development charges have been introduced. It is important to ensure houses are built at affordable prices. There is a golden opportunity in this regard where development plans have been adopted by local authorities. If local authorities had the option of purchasing land at affordable prices, it would be very beneficial to first-time buyers. We also recognise that 50% of houses built since 1996 have been for first-time buyers. If there are any options, they will have to include control over the price of land. I ask the Minister of State to look at this, in conjunction with local authorities, to control the price of land within towns and villages so that public-private partnerships can meet the housing needs of all sections of the community.
Martin Mansergh (Fianna Fail)
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I welcome the Minister of State and express my respect for his commitment to this area of policy. I know from a previous capacity and having attended many meetings where housing policy was discussed what an important part of the Government's agenda it has been for several years.
There has been a certain amount of trial and error. One must decide whether the best course is to interfere with or encourage the market. The outstanding success has been the increase in output. I recall in 1981 that an output of 29,000 houses was considered a great achievement. Last year, the output was 68,000 houses. This is a huge increase, even from 1997, when 38,000 houses were built. We can see houses being built throughout the country. House ownership per se is not the sole solution to the housing problem. There has been considerable growth in private renting as an alternative option. Work must continue in this policy area. The motion gives the impression that no social affordable housing is being built, which is not true. I visited a housing estate in Carrick-on-Suir recently where I was shown a very fine affordable housing development.
While emphasis is often put on building new accommodation, it is also very important — this has been referred to by some of my colleagues — to refurbish existing housing which may be basically sound but needs upgrading. Sometimes amenities such as alleyways have been built, which create law and order problems at night. More resources should go into consolidating and improving what we have. We know from public housing which was built as far back as the 1930s — I am also talking about much more recent housing——
James Bannon (Fine Gael)
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The Government cut the disabled persons grant and the essential repairs grant in the past two years.
Martin Mansergh (Fianna Fail)
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Work is being done. To return to Carrick-on-Suir, last week when opening a very fine public housing development, the Minister announced a big refurbishment scheme for older estates. All I am doing is underlining the importance of resources so that people can be proud of where they live. Most of these houses were pretty solidly built in the beginning but some money should be spent on them. In some cases people who bought their houses will spend money on them and in other cases there will be assistance from local authorities. In either case, there should be an emphasis on improving the standard of these houses. In some cases, demolition may be necessary, as in the case of Ballymun, but in other cases, refurbishment may be just what is needed. It has a wider importance than just housing. It is also about the quality of life, law and order and simple things like public lighting in these areas. The problem is that sometimes different branches of local authorities are responsible for different aspects of housing.
This is an issue on which we need to reflect. It has become a very steep mountain for young people — I know this from my own children — to get into the housing market, which is particularly acute in the Dublin area. I do not think simplistic solutions will help. Reference was made to the first-time buyer's grant. When it was introduced in 1981, it may have provided a boost and encouragement to purchase a house. However, this had long since become absorbed in the price of the house. I heard a suggestion recently that there should be stamp duty concessions for first-time buyers. Speaking as the finance spokesperson, I would regard this as a gimmick.
Martin Mansergh (Fianna Fail)
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It appears to make houses affordable but it could easily get swallowed up in the price. The Exchequer will be poorer but buyers will not be better off.
Reference was made to development levies. We must be realistic. None of us wants to see exorbitant development levies but there are costs associated——
James Bannon (Fine Gael)
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The Government introduced them in the past 12 months.
Martin Mansergh (Fianna Fail)
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——with the building and development of housing. It is not just the house but the surrounding area, the streetscape etc. that need to be considered. Funding must be provided for this. If that is not going to be done through a development levy, could the Senator please tell the House what other form of taxation will provide the money?
My final point concerns anyone of my generation who is a homeowner. We have seen an appreciation of the value of property in the last decade that we neither want nor need. There is a redistribution of wealth from the younger generation to the older generation which does not need it. Investors are important to the market but professional people who buy property after property and collect rents they do not need drive up the price for young people. I would be happier if some of the incentives we are offering to high income people, whose tax rate has been brought down to 42%, were abolished in 2006 as has been promised. We do not need to give incentives to people to purchase more properties and artificially boost prices so that house prices are beyond the reach of ordinary people. There is a social problem and I am concerned that policy is too favourable to the possessive classes and unfavourable to those who want to get on the property ladder. We need to achieve a soft landing because if things go too far, they will fall back. How we achieve that is an issue that needs ongoing reflection and I am sure that the Government is doing that.
Paddy Burke (Fine Gael)
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I welcome the Minister. The motion says it all on the housing policy in the country. The Minister should accept the motion before him. Part of the amendment makes no sense at all. The motion states that according to local authority housing strategies, almost half of all new families cannot afford a house. Numbers on council housing lists have more than doubled from 26,000 to 60,000 families. There are twice as many homeless today as there were in 1997. That is an indictment of the Government. The Minister has the audacity to table an amendment which states that Seanad Éireann acknowledges the achievements of the Government in increasing the share of the housing market going to first-time purchasers and introducing a number of measures to support first-time buyers. What has the Government done for the first-time buyer? It has abolished the first-time buyer's grant, introduced development charges nationwide and increased VAT by 1%. Those three actions have imposed a huge burden on first-time buyers. The 1% VAT adds a huge cost to houses. The development charge can sometimes be in excess of €10,000 per house and the first-time buyer will have to pay that like everyone else in the absence of the first-time buyer's grant which the Government abolished. Can the Minister explain what the Government has done for first-time buyers? This Government has carried out a retrograde step and has drastically increased house prices for the first-time buyer.
The Minister replied earlier to Senator Tuffy to explain why some local authorities are not providing sufficient housing. He wondered why the local authority did not build more houses. From my experience as a member of a local authority, it can only build or buy the number of houses allocated to them by the Department. In some cases, that number is far too small to meet the demand from the authority's housing list. It is unfair to suggest that the local authority provide more housing when it is not allowed to do so by his Department.
Noel Ahern (Dublin North West, Fianna Fail)
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I was referring to a particular local authority.
Paddy Burke (Fine Gael)
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In some cases, the impression has been given that the blame lies with the local authorities. In most cases, the blame lies with the amount of funding and the amount of start-up houses that are provided to local authorities. The Department of the Environment, Heritage and Local Government had previously said that it would get tough with local authorities that were not providing housing in sufficient numbers and might reallocate the houses to other local authorities. I do not know of any local authorities that got reallocated extra start-up houses. The Minister cited an authority that fell short in its allocation. Was the shortfall given to other local authorities as extra start-up houses?
Noel Ahern (Dublin North West, Fianna Fail)
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I could show the Senator the figures.
Paddy Burke (Fine Gael)
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I would be delighted to see them. I am sure he has nothing to hide. I know for certain that my local authority did not get any extra start-up houses and I was involved in two developments.
Essential repair grants are causing much confusion in some local authorities, particularly the disabled person's grant. In this case, the health board carries out an assessment for the local authority and the medical adviser has to carry out an inspection. In some cases disputes occur between the health board and the local authority. The person looking for a grant is the loser in all of this. It is deplorable that health boards and local authorities cannot sort out their differences on the costs involved in the assessments of houses for those who seek a disabled person's grant. Inadequate funding is provided for essential repairs grants and the disabled person's grant. This is an area where much investment could be made as there is some housing that could be improved with a little funding and this would increase the local authority housing stock.
The Minister should accept the motion tabled by the Opposition. His own amendment should be amended to exclude reference to first-time buyers. Over the last seven years, his Government has let down those who want to buy a house for the first time. They are now paying top dollar for small houses and apartments. They scrounge and scrape to try to provide a home for themselves and their families. Their parents and, in some cases, their grandparents have to act as guarantors for them regarding the provision of a house.
The Minister of State has had two reports carried out by some eminent people but those reports did not do anything to help the housing crisis. In some respects the Bacon report was a retrograde step in that it allowed a great deal of money to go out of the country when it could have been used to build extra houses here. Some drastic action needs to be taken.
I understand the Minister will ask each local authority to put in place a five year plan but if he reads the motion before the House he will see there is no need for a five year plan. It is clear the amount of housing that is needed. A total of 26,000 housing units were needed in 1996. We need 60,000 housing units now. We do not need any five year plans to be aware of the extent of the current need for housing.
Pat Moylan (Fianna Fail)
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I welcome the Minister of State to the House and congratulate him and his Department officials on their work over the past few years regarding the development of housing.
I support the amendment. As one who served on a local authority for many years I find it difficult to read the motion. Listening to the various speakers I am conscious that no one in this House or in any local authority would say they do not want more money to build more houses, but credit is due to the local authorities and the Department for the quality housing they are building. Not only should we commend the quality of the houses being built, but also the way local authority estates are now built, with good footpaths, road and lighting. That good infrastructure did not exist in the past when many housing estates left much to be desired.
In the past, it was the norm for local authorities to build mainly three-bedroom houses but they were not suitable for the demands of single girls with one or two children. Smaller type houses were required. The Minister's Department and the local authorities set about changing that and affording those people an opportunity to acquire a smaller house more suitable to their needs.
The Minister also provided for the building of a number of houses for the elderly in our towns and villages. There is not a town or village which does not have such housing and many elderly people are still living in them. If the Minister had not taken that step and delivered that type of accommodation, those elderly people would be in various institutions throughout the country. We have to recognise that measure.
Local authorities are building houses of high quality, with central heating and double glazed windows. Those houses are on a par with any house being built in the private sector. In my own county we opened a number of estates over the past few weeks. Thanks to the Minister's help by way of grant aid, we were in a position to provide those quality houses for the tenants who were delighted to acquire them because they now have a good environment in which to bring up their families.
Over the past number of years local authorities have been in a position to purchase existing houses in estates at reasonable prices. With a small amount of expenditure they were brought up to the appropriate standard and reallocated to families.
We now have a situation where more people work. We are all canvassing for the local elections but we have to ask ourselves if we can canvass during the day, with many families out working. When we used canvass in the past very few people were out at work. We would knock on a door and a woman would come out and tell us that some members of the family were looking for jobs. That is not the case now. Young couples are now in a position to buy houses for their families and in many cases they have done so.
I hope the Department and local authorities will look more favourably on what has been going on regarding the provision of private sites. Such sites are provided at affordable prices to young people on the housing list to build their own houses. That has happened in a number of areas throughout the country but I hope that provision will be extended in our villages and towns.
The Minister has given a substantial amount of money to local authorities to provide accommodation for Travellers. There are problems in that area but a look back at the record will indicate that almost every local authority failed to spend its allocation to provide accommodation for Traveller families, whether in halting sites or group housing. We must ensure that local authorities take on that issue. It may not be popular to provide such accommodation in locations where people object to it, but local authority representatives are elected to take the tough decisions——
7:00 pm
Pat Moylan (Fianna Fail)
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——and put those families in proper accommodation. The day is gone when Travellers have to live on the side of the road and the Minister has made a good deal of money available to local authorities to address that problem.
On the Respond-type development that has taken place throughout the country, my concern is that the tenants are unable to buy those houses. There is a major movement of tenants in and out of those schemes and that must change. The only way to ensure tenants have pride in their family homes is by allowing them to buy those houses and we must change the system to allow that to take place.
The disabled person's grant is affording many people, who otherwise would be in institutions, to remain in their homes. Not much money was available to local authorities to address that in the past. We never get enough money but more people are now availing of that grant to ensure their elderly relatives can be placed in suitable accommodation or refurbish their house to enable them to stay in their own communities.
We must recognise the contribution the Minister has made regarding water and sewerage extensions in our towns and villages which allows more housing to be built and gives people the opportunity to build in those locations.
Regarding social and affordable housing, it is only now that those houses are coming on-stream throughout the country. Much of the previous housing that was built had planning permission granted and we now see the benefit of those houses for the many families who can partake in those schemes and where builders are providing houses at an affordable cost.
We hear many people complaining about the removal of the first-time buyer's grant. The first-time buyer's grant had outlived its usefulness because of the increase in the cost of houses. Very few houses in rural areas came under the requirement of 1,300 sq. ft. to qualify for grant aid. Most of them were in excess of 2,000 sq. ft. or 2,500 sq. ft. of floor area, almost double the size of what was required to qualify for grant aid.
The Opposition has hit the Minister hard in a number of areas. I was a member of a local authority which was ordered by a coalition Government, not led by Fianna Fáil, to sell land we had bought for housing in our county.
Pat Moylan (Fianna Fail)
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When Fianna Fáil returned to Government we had to try to buy back land to increase the council's stock of housing land.
James Bannon (Fine Gael)
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Was that under Jack Lynch or Charles J. Haughey?
Pat Moylan (Fianna Fail)
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A coalition Government led by Fine Gael ordered local authorities to sell off land for housing and then to put it back into housing to try to make out they were going to build more houses. Senator Bannon was a member of the local authority at that time.
Pat Moylan (Fianna Fail)
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No one could support the Labour Party motion, given the progress made and developments carried out under this Government. I compliment the Minister of State as a practical, commonsensical Minister of State with responsibility for housing. He has done more in the last few years than was done in the previous 20 years.
James Bannon (Fine Gael)
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The Government has cut the disabled person's grant.
Michael Kitt (Fianna Fail)
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The Government spent €7.5 million on services for the disabled.
Joanna Tuffy (Labour)
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The Minister of State said that one month ago, the Taoiseach turned a sod on a site on the Finglas Road. How many times will that sod be turned and in how many election campaigns?
Joanna Tuffy (Labour)
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How many times will that site be used in the future? I am reminded of the time the Minister for Education and Science came to my constituency at the beginning of an election campaign and opened an entrance to a secondary school.
James Bannon (Fine Gael)
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They even open cow sheds down the country.
Cyprian Brady (Fianna Fail)
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The Labour Party would never do anything like that.
Joanna Tuffy (Labour)
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Many projects in my constituency are being opened or launched for the second election in a row. This practice should be banned. One should only open or launch something once. I do not think someone who has been on a housing list for eight years or is falling further and further from the possibility of buying a house will be relieved to hear that the Taoiseach has turned that sod.
The Government amendment and the speech of the Minister of State have not addressed the failures pointed out in the Labour Party motion. The amendment is a work of fiction. There is no action behind the words. The Minister claims credit for the output of private houses. It is as if the Government had built the houses with the developers. The Minister of State said "we are building" so many houses per year, as though the Government and the developers are a single entity.
Noel Ahern (Dublin North West, Fianna Fail)
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The Government encourages the planning system and the servicing of land for housing.
Joanna Tuffy (Labour)
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This is, of course, the correct interpretation. It is no wonder the Government is so reluctant to take on the developers. The housing market is going along nicely and the rate of building is up, but this is little consolation to the many people who cannot afford to buy the houses that are being built.
The amendment refers to the Government's "continuing to develop measures to address affordability and progressing the commitment under Sustaining Progress". These are statements about doing nothing. The turning of a sod is a similar gesture. It is just electioneering. We need action. The Government must take on the developers and build badly needed social and affordable housing itself.
The Minister of State thanked the Labour Party for giving him an opportunity to outline his so-called progress to the electorate but at the same time he was very dismissive of the housing problem. I hope the electorate sees this for what it is. It is talk and not much more. The Government is denying many young people the basic right to provide a roof over their heads.
I hope the electorate will, in the words of my draft motion, evict the Government from office for its failure to address the housing problem.
Amendment put.
The Dail Divided:
For the motion: 28 (Eddie Bohan, Cyprian Brady, Michael Brennan, Peter Callanan, Brendan Daly, John Dardis, Timmy Dooley, Liam Fitzgerald, Camillus Glynn, John Gerard Hanafin, Tony Kett, Michael Kitt, Terry Leyden, Don Lydon, Marc MacSharry, Martin Mansergh, John Minihan, Tom Morrissey, Pat Moylan, Francis O'Brien, Labhrás Ó Murchú, Mary O'Rourke, Ann Ormonde, Kieran Phelan, Eamon Scanlon, Jim Walsh, Mary White, Diarmuid Wilson)
Against the motion: 15 (James Bannon, Paul Bradford, Fergal Browne, Ulick Burke, Paul Coghlan, Maurice Cummins, Frank Feighan, Michael Finucane, Brian Hayes, Michael McCarthy, David Norris, John Paul Phelan, Shane Ross, Sheila Terry, Joanna Tuffy)
Tellers: Tá, Senators Minihan and Moylan; Níl, Senators U. Burke and Tuffy.
Amendment declared carried.