I move that the Bill be now read a Second Time. It has been a significant feature of housing legislation in recent years that no change has emerged in the fundamental policy of the Housing Acts. The purpose of this Bill is to secure the continuance of that fundamental policy and to make such amendments and improvements in the provisions of the Acts as experience has shown to be desirable. The practice of bringing these Acts under review at short intervals indicates the importance which all Parties attach to housing as a major sphere of national development.
The recent debate on the Estimate for my Department will have made Deputies familiar with the level of progress achieved. At 30th April, 1956, 65 per cent. of the houses estimated in March, 1947, to be required by local authorities had been provided, including 89 per cent. of rural needs. To meet the need for 40,000 private houses as estimated in the White Paper of 1947, approximately 35,000 have been built under the Housing Acts administered by my Department. The total number of new houses provided since March, 1947, with State assistance under these Acts exceeds the impressive total of 80,500. This figure does not include houses erected by the Land Commission, Bord na Móna, the Department of Defence or houses erected by private enterprise without assistance under the Housing Acts. In the same period, more than 20,000 houses have been reconstructed by small farmers and agricultural labourers with the aid of State grants. The State and the local authorities have invested approximately £100,000,000 in housing between March, 1949, and March, 1956. As regards families still living in unfit housing conditions and unable to provide new dwellings for themselves out of their own resources, the means will be found, up to the limits of the State's resources, to rehouse them as soon as practicable in addition to the 80,500 families rehoused since 1947.
The grants payable from State and local funds to private persons and to public utility societies, together with rates remission, have been effective incentives to private enterprise to provide new houses or reconstruct existing houses. Section 6 of the Bill proposes to continue these incentives for a further period of two years to 1st April, 1958, so that there may be no retarding of these major aspects of housing progress. It is proposed also in Section 6 that the grants payable under Section 24 of the Housing (Amendment) Act, 1952, to housing authorities for the provision of houses for sale or lease to persons irrespective of whether they are or are not members of the working classes or agricultural labourers and the grants payable under Section 20 of the Housing (Amendment) Act, 1948, to public utility societies providing houses for letting to members of the working classes should be continued for a further two years.
Section 7 proposes a simplification of grant administration, by omitting the requirement that a house, when completed, must be occupied by the person who erected it. This will enable grants to be paid to a builder providing houses speculatively and selling at net prices. There will be no change in the case of a person or public utility society erecting a house, whether by contract or by direct labour; the society or person will continue to apply for and to be the recipient of the grant. Housing authorities will continue to have power to make supplementary grants to eligible persons occupying new houses.
Legislation prior to the passing of the Housing (Amendment) Act, 1948, enabled the payment of grants to builders rather than to individual house owners except in certain cases. In the conditions of the post-war years, competition for sites, materials and labour presented the possibility of a sellers' market developing in which the benefit of the housing grants might not be passed on to the purchasers of the houses. The grants were, accordingly, made payable to persons erecting houses for their own occupation and to public utility societies erecting houses for occupation by members.
Improvements in conditions facilitated a more liberal approach to speculative building and grants for purchase as distinct from erection of houses were introduced in 1950. The total production of 35,000 grant-aided houses in eight years ensures that there is now no danger that market conditions would operate to the disadvantage of the person for whose benefit the grant is intended. In these circumstances it is possible to introduce more flexibility into the administration of grants and to relieve the individual purchaser if he so wishes of the tedious and often tortuous task of complying with statutory and administrative procedure to obtain a grant which he will ultimately hand to the builder. The necessity will cease for the allocation of grants specifically for houses purchased under Section 6 of the Housing (Amendment) Act, 1950, or for houses built for letting under Section 19 of the Act of 1948 or Section 13 of the Act of 1954 but where a grant has been allocated for such houses, the time for completion will be extended to 1st April, 1957.
Provision is also included in Section 7 of the Bill to ensure that even though a purchaser of a new house is not personally the recipient of the grant in respect of the house the concession in relation to stamp duties under the Finance Acts will continue to apply to his purchase.
The installation of water and sewerage facilities in both urban and rural houses and the conservation of houses by works of repair and improvement are operations calling for high priority in a comprehensive programme. The State grant available for the combined installation of private water and sewerage facilities has hitherto been £50, which may be supplemented by a grant from local funds, and is payable only in areas in which no public water supply or sewerage scheme has been or is being provided. These conditions preclude, for example, the payment of grant for the provision of water supply alone, or, where public water supply only is available, for private sewerage system alone. It is proposed in Section 10 to remove these limitations and to make separate grants of £40 and £20 available for the separate services. This amendment provides an overall increase of 20 per cent. on the present combined grant.
The volume of repair and improvement works undertaken since grants for these purposes were introduced in 1954 has been growing steadily. There is a large stock of houses, however, particularly in the major urban areas the conservation of which is an integral part of housing policy. Some of the bigger houses could be converted into several separate dwellings of adequate standards and amenities for working-class families, a process much to be encouraged in place of the letting of rooms or so-called flats which, because of overcrowding and the neglect of property by owners, can only result in the creation at a future stage of further unfit housing conditions. That has been the history of the slums, of the Georgian houses in Dublin and indeed of houses in all big towns and cities. Housing authorities have been slow to exercise their duties and powers in regard to unfit properties but I am hopeful that they will become more active in this field of preventive housing work in future. It is proposed in Section 8 of the Bill to offer further inducement to landlords and tenants to enlarge the volume of repair and improvement work at present being undertaken by making available increased grants. The amending section differentiates such grants on a basis similar to grants for reconstruction by farmers and agricultural labourers. The maximum grant of £80 per dwelling will be increased to £100 or £120 for each separate dwelling of four, or five or more rooms, respectively, provided. The power of housing authorities to make grants of amounts similar to the State grants will continue.
The participation by local authorities in financing the acquisition of ownership of private houses dates from the introduction of the Small Dwellings Acquisition Act of 1899. The aim of this Act was "to assist persons of modest means to acquire ownership of the houses in which they lived and to do so by putting simple machinery at their disposal." The original Act has been so amended by our own Parliament that even its title is not now illustrative of the purpose which it is expected to serve. The Acts are now applied exclusively for the financing of new houses and not at all for the acquisition of ownership of old houses by tenants.
A great expansion of the operation of the Acts took place in the immediate post-war years with the result that the State has been called upon to provide from the Local Loans Fund since 1949 more than £15,000,000 for the purposes of the Small Dwellings (Acquisition) Acts, apart from its participation to the extent of about half this sum again in financing the Acts by the Dublin and Cork Corporations. Side by side with these activities, there has been a substantial growth in the amount of shares and deposits available for private housing by building societies and the resources of assurance companies have also increased. House financing facilities are available from these sources to a greater range of borrowers than was the case in the immediate post-war years.
It is not the function of the State or of local authorities to provide loan facilities for persons in a position to finance their houses from these or other sources. It is intended that local authorities should continue to operate the Small Dwellings (Acquisition) Acts for persons willing to provide their own houses and who are unable to provide the necessary finances otherwise but many persons have been availing of the facilities provided under the Acts who either did not need to do so or who would not have needed to do so if commercial agencies would advance a higher percentage of the purchase price and would allow a longer repayment period.
I have investigated this matter in recent months and, as already announced, discussions have been held with the principal commercial agencies engaged in house financing. I am pleased to say that the representatives of these agencies gave ready and generous co-operation in those discussions. The principal building societies were willing to widen the scope of their loan activities by making higher proportionate advances than hitherto, and by extending the period of repayment as far as practicable, on the understanding that they would not be required to bear the full risk of the higher loans and longer repayment periods and they have now agreed to the terms of guarantee schemes which will enable them to extend their loan facilities in these respects.
It is proposed in Section 9 of the Bill to enable effect to be given to the principles agreed upon with the building societies. It will be noted that the section enables assurance companies to be brought within the scope of schemes for guarantees in relation to advances. The assurance companies which took part in the earlier discussions indicated that, in view of the nature of their house purchase loans and other considerations, they were not participating, for the present at any rate, in the guarantee scheme. If, however, any assurance company wishes to participate in such a scheme it will be facilitated.
I may mention that some assurance companies, as well as continuing to make advances to individuals for house-purchase, are making or have offered to make direct loans to local authorities. The facilities available to borrowers under a guarantee scheme will be similar to those provided by local authorities under the Small Dwellings (Acquisition) Acts, in that a guarantee will only be given for advances made for the purchase or erection of new houses for owner-occupation, and that advances will not exceed £1,800 in Dublin City and County and Dun Laoghaire and Cork City and its immediate vicinity, and £1,600 elsewhere. Subject to these limits the societies will advance up to 95 per cent. of the market value, exclusive of a grant under any enactment. The minimum deposit required from the borrower will be 5 per cent. Some of the societies are prepared to make advances repayable over 35 years. Interest will be at the rate charged by the society in its normal course of house financing.
Under a guarantee scheme a housing authority will undertake liability to a building society for two-thirds of any loss which on default by a borrower the society may incur in excess of the loss which it would have incurred if it had made only its normal advance. A guarantee will terminate when the principal sum outstanding has been reduced to 50 per cent. of the market value or purchase price of the property, whichever is the lower.
The State will recoup the housing authority half of any certified payments made on foot of guarantees. The principal building societies have agreed to make advances under schemes in anticipation of legislation. Housing authorities have been advised of the detailed lines which a guarantee scheme may follow and have been asked to notify building societies immediately on deciding to make a scheme, so that applications for guarantees can be made in appropriate cases. The making of schemes will be a reserved function of the elected members of the local authority.
I commend the proposals to local authorities and building societies in general. The margin of risk of loss on the higher rate of advance envisaged is negligible. Experience of the operation of the Small Dwellings Acts has shown that default has been so rare as to constitute for all practical purposes no risk whatever to the lender. The extent to which building societies can advance money for house purchase depends largely on their success in attracting savings. In this connection I would like to remind the House and the public generally of the statement by the Minister for Finance in his Budget Speech that increased saving "is our basic prescription for economic security and progress".
I would like to repeat that the proposals in Section 9 of the Bill do not amend in any way or interfere with the operation of the Small Dwellings (Acquisition) Acts. These Acts will continue to serve their purpose, which is to facilitate persons who could not meet otherwise the cost of house purchase.
The method of calculating the appropriate advance under the Small Dwellings (Acquisition) Acts in any particular case is recast for administrative purposes in Section 18. Section 19 removes the limit of one half per cent. above borrowing rate on the rate at which housing authorities may make advances under the Acts. This will enable them to fix a lending rate prior to arranging their own permanent borrowing.
The consolidation of the Labourers Acts is a task which has been proceeding for a long time. Many of the provisions of the Acts are so outdated and outmoded that the entire code as it stands calls for revision and this work has been undertaken. Important changes in advance of consolidation have been effected from time to time, and in this Bill it is proposed similarly to make some amendments which in due course will fit into the scheme of consolidation.
Cottages erected on State lands are specifically excluded from purchase schemes made under the Labourers Act of 1936 for the reason that at the passing of that Act, title to State lands could not be transferred in fee-simple to county councils, and consequently tenants of labourers' cottages could not obtain fee-simple title to their cottages. The State Property Act of 1954 enables the transfer of certain State lands to local authorities and where the transfer is in fee-simple, there is no longer any necessity to exclude the cottages from statutory purchase schemes. Provision is made in Section 13 to give effect to the new position.
Since 1950, councils have been enabled to house in labourers' cottages persons who are not agricultural labourers, but such persons are specifically excluded from availing of purchase under the Labourers Act of 1936. This exclusion has resulted in certain amomalies. A serving soldier, for example, may not purchase his cottage while a working carpenter may. It is only fair that this exclusion should be waived where it is clear that the tenant is of a class similar to those coming within the definition of agricultural labourer, that he and his family are likely to settle permanently in the cottage and that he would not avail of the facilities with merely speculative intentions. I am satisfied that county councillors can be the best judges in the circumstances of each case, as to whether or not they should permit tenants who are not agricultural labourers to purchase their cottages. Section 15 of the Bill accordingly provides this power to county councils as a reserved function.
With a view to expediting the vesting of cottages in tenants who apply for purchase, it is proposed to modify the prohibition on the incurring of expenditure by local authorities on vested labourers' cottages. The procedure envisaged in Section 14 is that, following application for purchase by a tenant, the local authority will, when it has carried out its statutory obligation of putting the cottage into good repair and sanitary condition, vest the cottage in the tenant. The tenant's existing right of appeal to the Minister if he is not satisfied as to the condition of the cottage, will be exercisable within 30 days from the date on which the local authority notified him of vesting, and notwithstanding that a vesting order has been made, the local authority will be empowered to incur expenditure on such further works as the Minister may specify to be necessary for the purposes of the Act.
Doubt has been expressed as to the power of a county council to arrange for the sale of a dwelling erected under Section 35 of the Act of 1952 otherwise than by a lump sum payment. This was not the intention of the law and Section 16 puts the matter beyond doubt.
I am seeking authority in Section 17 to enable me to deal separately with the sites included in a compulsory purchase order for the purposes of the Labourers Acts, by annulling or confirming the acquisition of particular sites or groups of sites by separate orders, instead of having to await the making of comprehensive orders. The parliamentary draftsman is examining the effect which this Section would have on the validity and date of operation of compulsory purchase orders. If a further amendment of the Acts is found to be desirable, a proposal will be brought forward at the Committee Stage. It is proposed in Section 12 to amplify the scope of the local authorities' powers of land acquisition for the purposes of the Housing of the Working Classes Acts, to facilitate in particular the provision of roads, streets, parks and open spaces for the service of existing housing schemes.
Section 11 provides for the continuance of the prohibition of the demolition of certain habitable houses and the empowering of housing authorities to grant or refuse permission for the use other than for dwelling purposes of any part of a habitable house.
I recommend the proposals in the Bill for the favourable consideration of the House.