Wednesday, 21 November 2018
Tenant Purchase Scheme
I thank the Minister of State at the Department of Housing, Planning and Local Government, Deputy English, for coming to the Chamber.
I would like him to outline the Government's plan to amend the tenant purchase scheme thus allowing Part V tenants an opportunity to buy their properties if they so wish. Most people, where possible, would like to own their own home and a home is also a very important asset for families. Amending the tenant purchase scheme would facilitate a positive transfer of wealth to a section of society that does not have that opportunity too often. Under the tenant purchase scheme, Part V houses are excluded. I believe the provision discriminates against the people who occupy such properties. There are approximately 4,000 Part V houses in the entire country. In County Monaghan there are 154 Part V properties out of a total housing stock of 1,550 units and the figures are similar for County Cavan. In my travels I have spoken to a number of young families who are heartbroken because a clause prevents them from buying the Part V properties in which they live. They dream of owning a home. Unfortunately, their dream is out of reach and will never be realised due to the way the scheme is currently designed.
From the State's point of view, it is difficult to understand why the Part V provision preventing the purchase of a home has been included. The sale of Part V properties, like other council properties, will generate much-needed revenue for the State and mean that the State is no longer responsible for their maintenance thus saving money. The moneys that accrue from sales that are part of tenant purchase schemes should be ring-fenced and given to the local authorities concerned and where the sale occurs.
In summary, I want to give the people who live in Part V houses hope that some day they will fulfil their dream of home ownership, which is currently out of their reach. I earnestly ask that the Government amends the condition in the Part V regulations that prevents people from buying their homes. The removal of the condition will allow people an opportunity, if they wish to avail of it, of investing in a property that can be their own home. Many of them have spent money on home improvements and they dream of ultimately owning those homes. I ask that the condition that forbids people from purchasing is removed so that they can, if they so wish, purchase their homes like other people do under the tenant purchase scheme.
I thank the Senator for raising this issue. It is an important issue, which has been raised at council meetings around the country and by colleagues of the Senator in this House.
The new tenant incremental purchase scheme for existing local authority houses came into operation on 1 January 2016. The scheme is open to eligible tenants, including joint tenants, of local authority houses that are available for sale under the scheme. To be eligible, tenants must meet certain criteria, including having a minimum reckonable income of €15,000 per annum and having been in receipt of social housing support for at least one year. The terms of the scheme involve discounts of 40%, 50% or 60% off the purchase price of the house, linked to tenant income. On the sale of a house under the scheme, the local authority will place an incremental purchase charge on the house equivalent to the discount granted to the tenant. Generally, the charge withers away over a period of 20, 25 or 30 years, depending on the discount involved.
The provisions of Part V of the Planning and Development Act 2000, as amended, are designed to enable the development of mixed-tenure sustainable communities. Part V units are excluded from the tenant incremental purchase scheme 2016 to ensure that units delivered under this mechanism will remain available for people in need of social housing support and that the original policy goals of the legislation are not eroded over time. The continued development of mixed-tenure communities remains very important in promoting social integration. There is a concern that if people were able to buy out all the Part V houses, they would not be used again for social housing, which would defeat the purpose of what we are trying to achieve with the Part V mechanism, which is social integration. Having said that, we are conscious that there are many people, with probably hundreds in counties Cavan and Monaghan as well as in my own county of Meath, who would like the option of buying a house and who did not realise the option would not be there. Following consultation with colleagues of the Senator and others around the country, we committed to examine the issue to see if we could find a solution but our desire is to continue with mixed communities and the social integration that goes with that. We do not have a magic solution but we are looking at it because this issue causes concern for people. Not everybody would avail of the option but they would like to have it.
Local authorities may also, within the provisions of the regulations, exclude certain houses which, in the opinion of the authority, should not be sold for reasons such as proper stock or estate management, such as in the case of houses for elderly people, in particular bungalows. It is a matter for each individual local authority to administer the scheme in its operational area in line with the overarching provisions of the governing legislation for the scheme, and in a manner appropriate to its housing requirements.
In line with the commitment given in Rebuilding Ireland, a review of the first 12 months of the scheme’s operation, including the issue raised by the Senator, has been undertaken. The review has incorporated analysis of comprehensive data received from local authorities regarding the operation of the scheme during 2016 and a wide-ranging public consultation process, with submissions received from individuals, elected representatives and organisations. The review is complete and a full report has been prepared, setting out findings and recommendations. I hope to publish the review shortly, following consideration of a number of implementation issues arising.
Clearly, the tenant purchase scheme offers tenants the option to purchase their homes, something the Government and I are supportive of as we acknowledge that people want to own their own home, if possible. It is critical, however that we balance this against the need to maintain our stock and add to our social housing stock over the coming years. We are committed to increasing the number by a minimum of 50,000 houses by 2021 under Rebuilding Ireland and we want to continue that. Any house sold through the tenant purchase scheme needs to be replaced, with the money ring-fenced and put back into housing.
Not everybody will wish to purchase their own homes, but for those who does it is heartbreaking that they are not allowed under current regulations. I know of a couple of cases in County Monaghan where there are Part V houses in a development alongside local authority properties. A person in, say, No. 5 may be allowed to buy out their house but somebody in No. 12 might not, and that is unfair.
I welcome the fact that the review will be published shortly. The Minister of State might outline a date for when it will be published and when he hopes to be in a position to act on its recommendations. It would be interesting if the Department could carry out a survey of how many people in Part V developments, of which there are 4,000 in total with only 160 in Monaghan, would be interested in purchasing their home. It may not have the effect on the social mix that the Minister of State suggests.
We have committed to completing and dealing with the report in this quarter but it may be in the new year as some legal issues have to be sorted out. Once it is published, we can make decisions and we will do so early in the new year because it is an important area. I do not promise the full solution sought by the Senator but we are trying to find one that solves the issue as it relates to Part V houses. Not everybody will want to avail of it and we will consider that aspect of the issue as well.
We need a tenant purchase scheme that works for everybody. The current scheme does not work for everybody and the generous discounts need to be examined as well, as we have to make sure we use taxpayers' money wisely. The social housing build programme had a budget of €2.4 billion and next year an additional 10,000 social houses will enter the system. This year it will be more than 8,000 and we want to get to the magic number of at least 10,000 per year. Beyond 2021, we have committed resources to build 12,000 social houses per year, which will also give us scope consider issues under the tenant purchase scheme.