I thank the Chairman for his remarks. I wish to read an introductory statement into the record, after which I would like to take questions and deal with some of the areas the committee wants to focus on. My statement is pretty general. From my perspective, in terms of the interaction with this committee, I would like to listen as much as contribute. However, I will be as upfront and open as I can be in answering any questions that members may have concerning our thinking or approach to date.
I have already met directly some members of the committee from different political parties to try to explain the approach we are taking towards housing which I regard as a national emergency, particularly in some of our larger urban centres.
We can go into some detail later on regarding our thinking to date and when we will launch a formal response to that in the context of the action plan for housing, which will be launched later this summer.
I thank the committee for inviting me to address it today and I look forward to the discussion. I will introduce the Department's officials accompanying me. They are Ms Bairbre Nic Aongusa, assistant secretary; Ms Maria Graham, assistant secretary; Mr. Niall Cussen, principal planning adviser; Mr. Barry Quinlan, principal officer; and Mr. Brian Kenny, who has a specific focus on homelessness. I commend the committee on its work to date. In a very short period of time, the committee has consulted with a vast number of key stakeholders and experts in housing and homelessness and I look forward to its report in due course.
Housing is a priority for this Government. I was appointed as Minister with specific responsibility for housing, planning and local government to focus intensively on the challenge of tackling the housing crisis. I have recently been joined by the Minister of State with responsibility for housing and urban renewal, Deputy Damien English. We have been tasked with preparing an action plan for housing within the Government's first 100 days working with our Government colleagues and key stakeholders. Importantly, the action plan will build on the work already carried out or under way and will draw on the important work carried out by this committee. The plan will include actions to expedite and boost supply of all types of housing, particularly social housing, in the immediate, medium and long term with a long-term view.
While it is important to boost housing supply for everyone, the action plan will focus in particular on those experiencing most difficulty in accessing housing and rental markets. The Minister of State and I have initiated some early intensive engagements with people who have been working in the housing and homelessness areas for many years to discuss the broad approach and housing action plan and to develop a common understanding of the housing situation at present. I am firmly of the view that the position can only be described as an emergency, particularly in our key urban centres of Dublin and Cork. It is impossible not to be affected by the experiences of families and children in long-term emergency accommodation. My resolve is very strong in terms of finding a way to positively affect the plight of many families that are currently in totally inappropriate accommodation. This needs to change but we need an infrastructure change and an approach change to make that happen.
Today presents an excellent and timely opportunity for an informed discussion about the diagnosis of the key challenges, particularly in housing supply, and the actions required to be taken urgently. In terms of my approach, I want to prepare a plan to which Members of the Oireachtas and key housing stakeholders can subscribe. I believe that if we work together in a way that can tackle emergency conditions, we can and will turn around the situation focusing on actions we can take in the short and medium term. I can promise that members will not find me overly party political on this issue. If people have sensible suggestions, we will listen and try to respond. We are not going to agree on everything so let us not pretend we will but I do think we can agree on a lot that can move the process forward. We will take the recommendations that come from this committee very seriously and assess them. All the decisions we take will be outcome-focused. My only interest here is to try to get a property and housing market moving, to try to make sure we have an ambitious social housing programme that we can deliver and to look at the multitude of sectors that are impacting negatively on the housing market with a view to trying to bring about better outcomes.
Housing lasts for generations and takes a long time to put in place, which is why our current difficulties go back to how construction and the house-building sectors collapsed during the downturn and have really struggled to recover since. The way the residential sector operated with the banking and lending sectors in the past led to many of our problems and we cannot go back there.
Once the economy collapsed, Ireland simply stopped building houses, private and social, for the best part of the past ten years, apart from finishing some schemes and one-off housing. This lack of supply of housing in the right locations is a critical factor underpinning the current crisis. Just over 12,600 housing units were completed last year, almost half of which were individual one-off houses. Many of the remaining number were
the result of completing unfinished housing estates. Approximately 25,000 housing units per annum must be constructed to meet the need and it must be ensured that these are in the right locations and are the right type to meet our evolving household formation and demographic patterns. My view is we need to go well beyond 25,000 units for a period if we can. It is accepted by most that a country with Ireland's population needs to build 25,000 housing units of the right size and in the right locations annually but because of the dramatic deficit of the past decade, we need to go well beyond 25,000 if we can get there and we need to sustain that for a five to ten-year period to address the deficit of the past ten years before we can create a more normalised housing market.
Furthermore, many of the active sites in the Dublin area are delivering housing at prices which are not affordable for the majority of first-time buyers. Approximately 40% of people in the market for a mortgage cannot get finance for a house priced in excess of €300,000. No house is being built in Dublin for less than €300,000, which means that no houses are being built for 40% of the house buying market. That is only one of many structural problems in the housing market that needs to be corrected. It is not easy to correct given the cost of building a house and, in particular, the financial arrangements many builders and developers have entered into in terms of site costs and so on. Perhaps that is something we can discuss later.
If ordinary people are spending more of their income on rents and mortgages, that leaves less for many other demands of life. This is affecting the economy but, most important, their quality of life. It also puts many working families in a more perilous financial position and, for some, at risk of homelessness. If the current supply trends are allowed to continue and key decisions are not taken quickly, it could take another ten years for the market to right itself and for supply to meet our needs. Such a scenario and the related impact on people's incomes and lives is socially and economically unacceptable. That is why this is such a priority for Government. The housing situation is affecting every sector of society and putting at risk our hard-won gains in employment, recovery of competitiveness and the attractiveness of Ireland as a place to work and live. Even in the context of attracting foreign direct investment, housing is becoming one of the barriers to companies setting up and creating new workforces because of the inability to access affordable high quality homes.
With regard to solutions, it is important to recognise that we are not starting from scratch. I am on record acknowledging the work of my predecessor, Deputy Alan Kelly, particularly in the area of social housing and homelessness and I am happy to do so again. Much has been done, particularly in putting in place a €3.8 billion social housing strategy and actions on homelessness, rent certainty and private housing viability but there is a lot more to do. I will recap the key actions that have been taken. Part V has been reformed to make delivery of social housing possible and wider developments viable. Development contributions have been retrospectively lowered and a rebate scheme for housing at more affordable prices in Dublin and Cork has been put in place. A vacant site levy has been introduced, although there will be a delay in it taking effect. We can discuss later why that is necessary from a legal perspective.
New rent measures were put in place and apartment guidelines were reissued. There is some confusion about that and it would be helpful to clarify why we have made decisions in that area later on.
NAMA has outlined its programme to fund the development of 20,000 new homes and a €500 million active capital NTMA development finance package was also put in place. I am placing details of these measures on the record to outline and recognise the building blocks that have been put in place. However, the Government recognises that further actions are required to increase housing construction and create a functioning housing market. Many think that a total focus on public housing programmes will solve the situation. While I agree that we need to do a lot more on the social housing side and quickly, I do not think anyone really believes that only social housing needs to be built. We need to have a mix and a dramatic increase in the number of houses being built and supplied in the social housing and private sectors. We must also focus on other parts of housing, including doing all we can to keep people in their homes and ensuring that the rental and private housing construction markets function properly and deal with the backlog of a decade of under-supply so that people do not get squeezed into homelessness and onto social housing waiting lists when they can be accommodated through the private housing market.
The Government knows we have to get housing right and it is for that reason that I sought this portfolio. I am working very closely with Cabinet colleagues under a special Cabinet committee chaired by the Taoiseach that meets weekly. We have already met twice and we are meeting again this afternoon. The committee has met every week since the Government was formed and that will continue until we have the right action plan in place for housing. What we have focused on so far is how to more quickly tackle the issue of those living in emergency accommodation by expanding and expediting solutions. The programme of rapid delivery housing provision is being implemented to mitigate the acute issues associated with homelessness. It is my ambition to accelerate and expand the rapid delivery programme significantly.
We are also looking at accelerating the delivery of the social housing strategy. Under the Social Housing Strategy 2020, targets have been set for each local authority up to 2017. Importantly, local authorities and approved housing bodies have a strong pipeline of construction, turnkey and acquisition projects which will deliver some 3,900 homes with an approved budget cost of some €680 million. It is my ambition that the delivery of these homes will be accelerated and that the targets will be exceeded, separately increasing the overall output of private housing to meet the 25,000 units acknowledged as the likely annual supply need. In the programme for Government, the ambition is to get to 25,000 housing units by 2020. Our job is to try to get there a lot sooner than that. To achieve this, we are examining further potential barriers in terms of service, land, funding, financing and delivery mechanisms. We are also looking at ensuring that most of the additional houses and apartments are affordable and meet the needs of all sectors of society whether that is students or older persons and an increasing portion of one to two person households. Most Deputies who work at trying to access social housing for their constituents will know that people who are on housing lists on their own or as a couple face huge disadvantage because there simply is not sufficient housing stock with one or two-bedroom accommodation. Three-bedroom semi-detached houses are used to respond to the needs of families, which leaves a lot of people on housing lists for years without any realistic aspiration of getting the result they need.
We are also looking to replace the boom-bust cycle of construction on housing supply through better management of land supply and development processes. To do this, I am preparing a delivery and supply focused housing action plan. Importantly, the plan is being developed with colleagues on the Cabinet committee and will draw on the report of this committee, which, I understand, should be ready my mid-June.
At a previous meeting of this committee my predecessor said that he favoured a Minister for housing with a broader range of powers in the areas of finance, expenditure, social protection and so on. The Cabinet sub-committee comprises the Ministers for Finance, Public Expenditure and Reform, and Social Protection and is chaired by the Taoiseach. The plan is being jointly informed and developed through the weekly Cabinet sub-committee and the senior officials group linked to it. Rather than one Cabinet Minister being given all of the powers, there is a contribution from multiple Departments and Ministers. Time will tell whether that works - whether or not we will get the buy-in we need from other Ministries. Thus far there has been an appetite across Government to ensure that we do something substantial in terms of the response needed to the housing crisis.
In regard to the immediate supply boost needed, the focus of the initial actions in the plan is to boost supply. I have asked the local authorities and NAMA for concrete proposals to boost supply in the short term on land they control or influence for all types of housing, including social housing and housing for the wider private market. In essence, we have asked local authorities to come back with emergency action plans which, I hope, we will have by the end of this week. If we have to wait until the following week for them that will not be the end of the world but we are putting local authorities under pressure to come back with ambitious plans in terms of what they can do locally with the areas and land banks they control, working with developers, NAMA and within SDZs or various other frameworks in which they operate. We will publish those plans as part of the overall action plan for housing so that people can see what local authorities have come to the table with. I think that is important. We will then help those local authorities deliver on the potential of those plans. This will involve contributions from me, my Department and, I am sure, other Departments in terms of freeing up land, removing barriers and streamlining processes and providing finance and other vehicles, some of which we may have time to talk about later.
The Taoiseach and I met with local authority chief executives on 12 May to discuss, among other things, the housing situation and, in particular, boosting supply and the future delivery and implementation of the targets set for the local authorities under the social housing strategy. The meeting provided an opportunity for a useful exchange of views and I reaffirmed my commitment and that of my Department to supporting local authorities' efforts to deliver on the ambitious targets they have been set. I also acknowledged the efforts that have been made by local authorities working in conjunction with approved housing bodies to deliver on the social housing strategy since its publication in November 2014. I outlined my ambition that the delivery of homes under each of the social housing programmes be accelerated. In that regard, I have asked all local authority chief executives for their ideas and proposals to expedite delivery of social housing. We have already received some of those responses.
In making proposals I have asked NAMA and the local authorities to consider how best to work with builders and the construction sector. For its part the Government has committed to making funding available for social housing and for infrastructure to facilitate the development of all types of housing. The Government is also committed to examining all aspects of the viability equation, particularly input costs, to help ensure that housing is intrinsically affordable to bring on stream whether for buyers or providers. We are looking at all aspects of the house delivery process from land availability to financing, planning and procurement to ensure that an appropriate balance is struck in increasing supply on the one hand while on the other hand avoiding another property boom.
I want to see proper planning such that not only are houses built but residential places of which people can be proud are created. I want to see strategic thinking and action in terms of the installation of infrastructure and amenities prior to or as places are developed. We need to learn lessons from the recent property and debt-fuelled economic crash. Given the gravity of the situation, we are happy to think radically and prepared to do whatever it takes to mend the housing system in Ireland, obviously within certain parameters.
Once the Government takes action, it will be very important that the delivery agents and construction sector respond. I will seek assurances that if we deliver, they will too. In a practical sense, that means if we are going to do something with taxation or streamlining planning systems, moving and changing processes in order to make things happen, we expect the private sector to respond accordingly. Without that assurance, we will not do it, frankly.
We are hard at work drafting the action plan and my approach is to consult broadly. I met a large number of key stakeholders already and my door is always open to anybody with good suggestions on how to boost supply. The action plan will be published over the summer within the first 100 days of the Government, and its implementation will have begun at that stage. One of the problems around the 100 day target is that it lands right in the middle of August. For obvious reasons, that poses a problem because many people are not focused on work in the middle of August. I suspect some of the people at this table will be but many others will not be. In reality, we will end up publishing our plan at the end of August and moving into September with a really proactive and aggressive work programme to implement it and ensure it works. That is the likely timing at this stage. It will lead to it being launched immediately after the 100 days are up and then selling it. We could launch it at the end of July before everybody heads off on holidays but that is not the kind of momentum we want the project to generate.
The report of this committee will form a key input and I encourage people not only to contribute to a report that could be useful for us but also to follow that with meetings with me or key officials here so we can get under the skin of some of the recommendations made by the committee. We may not be able to take some of them on board and I have not seen all the recommendations but my only objective is to get better outcomes in terms of house delivery and responding to people's dire need for State assistance, whether they are homeless now, at risk of homelessness or on a social housing list, relying on the State to deliver for them.
I could go into all sorts of reasons we are where we are today with a dramatic deficit of supply in housing and all the pressure it puts on people but to be honest, my focus is on where we go from here and the contribution I can make, along with the great team in my new Department. We want to achieve a dramatic change in circumstances around the housing market as quickly as we can. That is why we will listen to the committee and try to take on board the ideas we feel can work, engaging with it in as transparent and open a way as possible.
