Tom Morrissey (Progressive Democrats)
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I thank the Minister of State at the Department of the Environment, Heritage and Local Government, Deputy Noel Ahern, for coming to this House to address this matter on the Adjournment. With regard to provisions for social and affordable housing, it is time to consider the progress made on the delivery and implementation of housing units under Part V. The original Part V provisions introduced in the Planning and Development Act 2000 did not make lands for which planning permission was granted before housing strategies were adopted subject to the current Part V. However, all lands for which planning permission has been sought since then have been subject to Part V. For that reason, we can expect a lot of houses to become available from this year.

Against that background, I would like the Minister of State to address a number of issues, one being the one size fits all approach to the drawing up of individual strategies by local authorities. While there will always be a need for social housing nationwide, the need for affordable housing is not significant in large parts of the country but is probably most acute in certain locations such as Dublin and parts of Cork and Galway. Where local authorities do not identify a need for affordable housing this should be fully reflected in their housing strategies. It is important that local authorities do not over-estimate the demand for affordable housing and thereby increase their landbanks.

Many builders find that the interpretation of the provisions of Part V of the legislation vary considerably throughout the country. Why is this the case? Furthermore, is it not the responsibility of the Department of the Environment, Heritage and Local Government to issue clear guidelines on how the provisions can be interpreted and implemented? Considerable time and energy are being expended on negotiating agreements between builders and local authorities to such an extent that the implications for the delivery of some social housing units could be cause for concern.

Reaching agreement on the rate struck for the purchase of social and affordable housing units by the local authority and the passing of those units on to approved tenants seems to be a contentious issue. I have heard that an agreement on the price of a three bedroom, semi-detached house on the market for €300,000 can vary by as much as €50,000, with the builder asking a price of €250,000, a discount of 17%, and the council offering it to a tenant for €200,000. There are many examples of this practice throughout the country. In some premium locations, the difference in price can be much greater. We have expensive social and affordable housing units in the docklands area and in other premium locations in Dublin. The question must be asked as to whether such housing provision in those areas represents the best use of resources.

The eligibility criteria for such housing is also a matter of concern. To be eligible an applicant must meet certain criteria. Where there is excess demand for affordable housing units in some premium locations, or in specific locations where there is a requirement for social housing, how can we ensure the allocation of such units is transparent? Dún Laoghaire-Rathdown County Council introduced a lottery system. I heard of a case where a single person was offered an apartment in an urban area outside Dublin and refused it because he wished to be allocated a three bedroom house so he could rent out two bedrooms. Is that person acquiring an affordable house or becoming a landlord? I would like the Minister of State to address that question because many of these units will come on stream in the foreseeable future, which is noteworthy. I would like the Minister of State to address the points I raised.

Noel Ahern (Dublin North West, Fianna Fail)
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I thank the Senator for raising this matter.

Part V of the Planning and Development Acts 2000 to 2004 is fully operational and all relevant residential planning applications are now subject to a Part V agreement. Apart from the provision of housing units to the local authority on-site or off-site, an agreement under Part V may provide for a range of other options. Notwithstanding the availability of these options, my Department's stated preference, which has been communicated to local authorities, is for the provision of housing units, whether on-site or off-site.

Under Part V agreements with developers, a total of 809 affordable housing units and nearly 500 social housing units have been acquired by local authorities up to the end of June. Approximately 1,500 units were in the course of acquisition and approximately 2,500 units were earmarked for acquisition on foot of Part V agreements with developers. In addition, 17 land transfers to local authorities have been completed involving 14 hectares, a further 169 partially or fully-serviced sites have been transferred to local authorities and voluntary housing bodies, and more than €18 million has been received in payments in lieu and under the withering levy. It is clear that there has been activity in all the city and county councils under some of the options available for complying with Part V.

While this is significant progress, this output must be viewed in light of the fact that there are many developments, to which pre-Part V planning permissions apply, still being built. That might be the situation for some time, particularly in the case of some of the large developments for which planning permission has been granted for a ten-year period. Part V does not apply to developments consisting of four or fewer houses, or for housing on land of 0.1 hectares or less or on unzoned land. Unlike the position in Dublin, much of the land surrounding smaller country towns and villages is unzoned. Therefore, the planning permissions granted to the builders of small developments would not include a Part V content because such developments are built on unzoned land. That is the practice and custom in those areas. Accordingly, Part V does not apply to a considerable element of housing output in many counties. However, more and more permissions for residential development with a Part V agreement are commencing and I am confident that output and activity, as indicated previously, is now firmly on a upward spiral.

We envisage that some 6,000 social and affordable units will be delivered under Part V between 2005 and 2007. Additionally, payments in lieu, which are ring-fenced for housing capital purposes only, together with land and sites accruing from the take-up of the alternative options, will further supplement the overall provision of social and affordable housing.

I remind the Senator that Part V is not the sole mechanism for the provision of affordable housing. He referred to the strategies of local authorities. If there is not a need for affordable housing units in a local authority area, that authority should not provide such units, rather it should concentrate on the provision of social housing units. Such an authority might make such affordable housing units super-affordable, so to speak, and offer an incentive to local authority tenants who, if offered a super-affordable housing unit, could become a homeowner rather than a person on the local authority housing list. It is a matter for local authorities to decide that matter.

Since the introduction of the Part V provision, some 4,000 housing units have been provided under the 1999 affordable housing scheme. Furthermore, substantial progress continues to be made under the affordable housing initiative. More than 70 sites have been identified on State or local authority lands. In accordance with Sustaining Progress, these sites and the output from Part V have a potential yield exceeding 10,000 affordable housing units, meeting the target proposed by the parties to the pay agreement.

The various affordable housing schemes are all contributing to the Government's strategy for social and affordable housing and will deliver substantial output over the coming years. We estimate that more than 12,000 units in total will be delivered from all the affordable schemes between this year and 2007.

Part V is now fully operational in all local authorities. However, some further operational issues, for example, direct sales of Part V affordable units by developers to eligible applicants nominated by local authorities and the standardisation of the costs of Part V units, are being considered by officials in conjunction with other interested parties, including the Irish Home Builders Association.

I agree that one hears complaints that there is a delay in a local authority buying units from a developer and a delay in the local authority selling them on to the client. We are examining how that can be streamlined. It is only the local authority which can decide who is eligible for such a housing unit. We are examining the possibility of putting in place a system to break the logjam, whereby a client could obtain a document from the local authority indicating that he or she has been approved in accordance with the criteria laid down and the client could then buy the unit directly.

I am satisfied that Part V is contributing significantly to the provision of social and affordable housing going forward. Its operation is kept under continuous review and this will continue. We have issued detailed guidelines, although there may be some slight difference in their interpretation in terms of how such schemes are operated locally.

The final say as to how the developer pays the dividend, whether in cash or with sites, is for the individual local authority manager. Housing is a very important part of the local authorities' function and we have to give them some power, but within very strict criteria and guidelines. The guidelines are very thorough and detailed. I accept that different managers might see the issue slightly differently and one hears of cases of varied interpretations. However, it is beginning to settle down. Developers who fought against it very strongly now accept that it is the law of the land and it will be a major contributor to social and affordable housing as time goes on. Obviously we are watching the situation closely but we are not considering any overall change to the system at this stage. We are considering some of the ideas from the Irish Home Builders Association regarding direct sales and are examining a number of other teething problems that have arisen.