Joanna Tuffy (Labour)
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The Minister has the details of my question. I ask it because I want to establish the up-to-date position regarding the implementation of Part V of the Planning and Development Act 2000 and how many affordable houses are being delivered on the ground, particularly how many planning permissions have been granted for affordable housing. I did not agree with the amendment to Part V as set out in the Planning and Development (Amendment) Act 2002 and I am concerned about how this is affecting the provision of affordable housing.

It is important to monitor what is happening in regard to the provision of affordable housing. As the Minister of State will be aware, the price of housing continues to increase. In my estate, the price of houses has increased by approximately €100,000 in the past year, which is not sustainable. As this means that first-time buyers are being left behind, it is important that as much affordable housing as possible is coming on stream.

Noel Ahern (Dublin North West, Fianna Fail)
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I thank the Senator for raising the matter which affords me an opportunity to clarify certain misconceptions regarding output from Part V of the Planning and Development Act. I am happy that Part V is now fully operational in all planning authorities. The provision of homes for first-time buyers and young families under Part V is gathering momentum. Figures for last year indicate that just under 1,400 social and affordable housing units were delivered to local authorities. This is more than double the output for 2004, when the figure was 600, which was the best up to that point.

In addition to the number of negotiated units, 38 land transfers to local authorities were completed up to the end of last year, involving some 20 hectares. A further 213 partially or fully serviced sites were transferred to local authorities and voluntary housing bodies. More than €24.5 million has been received in lieu of land and houses, and a further €5.5 million was received under the withering levy, which was part of the change in the legislation. This output reflects the use of the various flexible options now available to satisfy Part V obligations. Further evidence of this increased activity is that at the end of 2005, 2,500 units were under construction, and a further 3,500 were proposed under agreements reached with developers. It is envisaged that more than 8,000 social and affordable units will be delivered under Part V over the next three years.

There is a tendency to suggest that all housing output in the State is subject to Part V, which is not true. For instance, it is estimated that just over 10,000 units of the total housing output of 81,000 last year were subject to Part V. It is important to note that Part V is restricted to land zoned for residential use, or a mixture of residential and other uses. Therefore, not all housing developments are subject to Part V. While all the land around Dublin and the major urban cities may be zoned land, land around many smaller towns and villages throughout the country where housing developments take place has historically not been zoned, and Part V does not apply in these cases.

To further illustrate this, from last year's total output of 81,000 units it is estimated that approximately 20,000 were one-off units, 8,000 were built under social and affordable schemes and a further 40,000 or more were exempted as they were smaller developments of under four units, or less, or built on unzoned land, or with planning permissions granted prior to the introduction of Part V. The remainder of just over 10,000 units of the total housing output would have been subject to Part V.

The provision of Part V units is dependent on the level and commencement of private sector residential development and the nature of Part V agreements entered into. Output is now beginning to gather momentum as much of the residential building coming through in recent years was on foot of planning permissions which predated the Planning and Development Act and did not have a Part V requirement. Increasingly, this will no longer be the case. If the Senator or anyone else reads the newspapers and looks at showhouses this week-end, they will find that many of the houses for sale are the product of planning permissions granted before the Act came into place. The normal timespan is five years, but in some instances some of the big developments would have obtained ten year planning permissions.

There was a certain degree of stockpiling of permissions prior to the introduction of Part V. Many of the houses that are currently for sale do not have a Part V content because the planning permission was granted prior to the Part V legislation being introduced. However, this will no longer be the case. I am confident that the full benefits of Part V will be seen in the not too distant future, perhaps next year or the year after. Some people who find the arithmetic to be simplistic believe that 81,000 units divided by 20% should result in so many Part V units. It will never mean that applying this kind of simple arithmetic will add up to the Part V contribution. Anyone who thinks it is the case is wrong.

Part V is not intended as the sole mechanism for the provision of social and affordable housing units. The local authority direct build programme, together with the voluntary and co-operative programme and the various affordable housing schemes, continue to be the major contributors to social and affordable housing output. It is worth mentioning that approximately 13,000 households were assisted through the full range of social and affordable housing measures in 2005. I believe this should be nearer to 14,000 households this year. I issued figures last week which indicated that the output of local authority housing last year was the highest in approximately 20 years. While output in 1960s and 1970s was higher, the output last year was the highest for approximately 20 years, which is significant. The budget this year for social, local authority, voluntary and regeneration schemes is €1,400 million, which is a lot of money.

I wish to refer to the amendments made to Part V of the Planning and Development Act 2000 and contained in the Planning and Development (Amendment) Act 2002. Apart from enabling approved voluntary housing bodies, as well as local authorities, to provide housing more efficiently and effectively, the amendments were designed to ensure that the Part V objectives set in regard to the provision of social and affordable housing were easier to meet. The changes introduced to assist in meeting Part V obligations came about as a result of an accepted need for the introduction of some flexibility for all stakeholders.

I mean all stakeholders — local authorities, developers and the voluntary housing providers; it is not, as some might paint it, that we are simply allowing developers off the hook. Flexibility was needed by everybody. Where a developer makes a financial contribution to satisfy his or her legal obligation under Part V, it is a matter for the local authority to accept or reject the offer, having regard to its housing strategy and whether it constitutes the best use of the resources available to it. The developers may propose, but the local authority decides, and when making its decision is bound to consider what is laid down and is needed under its housing strategy. That point must be clear. It is not the developers who decide. Developers may offer cash or land elsewhere but the local authority makes the decision.

Where money or land is provided in lieu of housing, that can only apply for the purposes of social and affordable housing. The money is ring-fenced and is not applied towards any other general use. It could be used as a subsidy to help to supply super-affordable housing, so to speak.

I have no doubt Part V will play a major part in the delivery of social and affordable housing in the future. The delivery of units — new homes — is my preferred option when reaching agreement with developers. I have made it clear to local authorities that this is what we want. I have asked them to vigorously pursue that and will continue to follow up with them. Primarily, we want units on site, but flexibility is needed on occasion. The example is regularly mentioned with regard to Shrewsbury or Ailesbury Road, where we could have got two social units at a cost of €1.4 million each. That is ideology gone mad. In such a case it is much better to acquire other sites. Last week, affordable housing was for sale in Senator Tuffy's constituency, which was a result of the Harcourt Square land swap. I think the two-bedroom houses were for sale for €142,000 and the three-bedroom houses for €172,000.

I accept that as Senator Tuffy says, house prices have again increased. I blame the financial institutions which introduced 100% mortgages for much of the increases. All last summer and autumn I was crying in the wilderness on this matter because too much credit was being extended in the market, and credit is by definition inflationary. I am glad the Central Bank, the Financial Regulator and others have now agreed on this, now that they have evidence. They would not move on the matter last year because they were seeking evidence, rather than my hunch or feeling. The offer of 100% mortgages by financial institutions was the cause of the latest spurt in house prices and those institutions were not doing anybody any service by their offer.

In my Department and in Government we are trying to look after people in certain income brackets who are under pressure. By means of all the various affordable schemes we built some 2,900 units last year, some of which were on sale in Senator Tuffy's constituency. We must do more in this area and with Part V playing a bigger part, we plan to increase the number of affordable units to approximately 5,000 on average over the next couple of years. We might achieve 4,000 this year, 5,000 next year and 6,000 the following year but we feel we will average about 5,000 over these three years. We can only look after people under stress and pressure in that segment of the market.

Joanna Tuffy (Labour)
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The Minister of State says his preferred option is that developers would provide affordable housing rather than buy themselves out of that provision. Does his Department have any idea of how many instances in which developers qualify for the buy-out clause, and how many are providing affordable housing? It is important to know to what extent the amendment to Part V as set out in the Planning and Development (Amendment) Act 2002 is being used by developers in order not to provide affordable housing.

Noel Ahern (Dublin North West, Fianna Fail)
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I provided the figures of €24.5 million plus €5.5 million in levies. As I noted, some 1,400 affordable units were provided last year. Legally, the developer must provide houses on site or else provide houses off-site elsewhere, or sites elsewhere, or half-completed houses elsewhere, or land or cash, but if there had been no flexibility in that last year, the figure of 1,400 units would probably have increased by 20% or 25%. Accordingly, the notion that we have only 1,400 units because all the developers are buying their way out of the obligation is untrue. As I say, the number of units might have gone up by 20% or 25% — one cannot estimate an exact figure, but we looked at the possible number. The various alternative provisions for developers will die out over the next couple of years, although the cash provision option will continue.

Everybody wanted that flexibility. It makes sense when one instances Ailesbury Road, for example. We now have data from the different local authorities. One can see that some of them are accepting cash, sites or lands more than others, and one wonders why, so we are asking them why they are a little trigger-happy, using the flexibility measures more than other local authorities. As we have some data now, we can ask more questions, and are doing so.

The idea of flexibility is good. It was introduced for a purpose, not to let developers off the hook. That is not what I am about. Flexibility is sensible and wise at times and the money is ring-fenced. It is under the control of the Department, but we are responsive to any good ideas from local authorities. The money can be used for new social housing or for greater subsidies. For example, in theory, some of those houses I referred to as having been for sale last week could be sold at even lower prices, if local authorities made a proposal to the Department along those lines.