Adjournment Debate. - Housing Crisis.

The matters raised by Deputies Broughan and Hayes will be taken together.

I thank the Minister of State for coming to the House to discuss this vital issue. A profound crisis is facing us as a nation in terms of the provision of housing, particularly for people on lower incomes. It is particularly acute in Dublin city where a number of years ago when my party was in Government the waiting list reduced to under 4,000 families, but has now shot up to 6,000 and many others face eviction from private rented accommodation. It is growing daily and the Government has not shown any sense of urgency in coming forward to respond to this problem. We know the causes following the Bacon report which include changing demographics with the return of emigrants and their families, problems associated with young homeless people, separations, divorces and all the difficulties in the private rented sector.

These problems are exacerbated in Dublin city and Fingal by other special qualities. We made a decision to refurbish and rebuild many areas in the city and in my own constituency, Darndale estate and Swan's Nest Court estate in Kilbarrack. One of the results is that there are fewer opportunities on the housing list since people coming from the estates which have been demolished or refurbished are joining the list.

This year in Dublin city there are only 230 units of newly built houses for the local authority public sector area and only 70 houses being purchased in the social area. After 2000, so far as I understand it, no sites will be available for local authority housing in Dublin city. One of the reasons for this has been the policy pursued by the Minister, Deputy Dempsey, and some of his predecessors in respect of the artificial division of Dublin into four counties with four separate housing responsibilities so that the city area is totally landlocked with no provision for housing. The city manager and the city council are facing a crisis which was discussed today at a meeting at City Hall for some hours. I represent the Fingal ward of Howth-Sutton-Baldoyle. On my file I have approximately 200 low income families from the fishing community, in particular, in Howth who are desperately seeking accommodation. This Government is prepared to give them the princely total of seven — five one-bed and two bedroom — houses. This is an absolute disgrace. The whole approach of Fingal County Council in addition to the Government's approach in relation to the housing needs of lower income persons is inflexible and unresponsive. The Minister should have a word with Fingal county manager and the housing manager and ask them to live up to their important responsibilities under the housing Acts to look after people who urgently need it.

We have had a report today from Dublin City Council which covered some of the areas to which the Minister will probably refer, infill development, over shop development, home improvement loans and expediting the service of underdeveloped lands. Even allowing for all that we need a fundamental response from the Minister. The Bacon report was merely the first chapter out of about eight or nine initiatives which the Minister, Deputy Dempsey, and the Minister of State, Deputy Molloy, should have taken if they were serious about trying to address the housing crisis. We need to look at the four Dublin counties as one area. I do not understand the reason we do not have common housing allocation lists for families because families, certainly between Fingal and Dublin city, are seeking accommodation but do not know to which county they belong. It could be argued that there should be a major plan. Dublin city and Fingal county councils are reviewing their development plans. There should be a major plan to look at housing needs not only in the four Dublin counties but in the surrounding counties of Louth, Meath, Kildare and Wicklow, because that area with a population of 1.3 million to 1.5 million is beginning to operate as a single housing area. It needs an initiative from Government which has allowed the situation to slide and is not prepared to take the necessary decisive action.

The bottom line is that there is a problem of supply and demand and we do not have enough supply. The initiatives which the Minister has taken in relation to the shared ownership scheme, other social housing responses and the responses put in train as a result of the Bacon report have not got to grips with the situation, particularly for low income families, due to the explosion in house prices in Dublin. I understand that today there was a record in house prices, a residential home changed hands for something of the order of £5 million in Dalkey. Even the shared ownership scheme offers a loan of only £40,000 or £50,000 with repayments of, perhaps, £100 from somebody earning——

The Deputy should conclude.

In Dublin city and in Fingal there is an urgent housing crisis, especially for lower income families. This will be a major issue in the next general election, sooner or later.

Mr. Hayes

Thank you for selecting this item, with Deputy Broughan's. There is a national housing crisis and the sooner the Minister and the Government recognise that and respond accordingly the sooner we will be able to respond to the huge demand in society for housing.

The specific issue I wish to bring to the attention of the House relates to a proposal to establish a national commission on housing. Fine Gael welcomes a recent call by five national housing organisations to establish such a commission. This proposal has come directly from people who see on a daily basis the housing conditions and the ever increasing demand for affordable accommodation. It is not an exaggeration to suggest the crisis in the housing market reached fever pitch during the past year or so, particularly in the reign of this Government.

I urge the Minster of State, Deputy Molloy, to respond favourably to the proposals from Threshold, Focus Ireland, St. Vincent de Paul, the Simon Community and Sonas Housing Association to establish a national commission on housing. Such a commission could report to Government within a relatively short period on the plight of people on low incomes who are chasing an inadequate supply of affordable accommodation in the city and country. In their communique they pinpoint exactly the problems in the housing market: 40,000 households are in receipt of the SWA rent allowance — these people are living at the lower end of the private rented sector which is becoming increasingly expensive, often of poor quality, largely unregistered accommodation which is subject to almost a negligible level of monitoring or even the most basic form of standards — the inability of the private rented sector to provide accommodation that is affordable, habitable and offers security of tenure and some stability to rental costs; and the lack of appropriate housing for the homeless — theEvening Herald highlights the crisis in relation to homelessness every evening of the week. It is a terrible blight on society that we have not been able to manage that issue, given the wealth in our country; the lack of adequate funding arrangements to cover the management and running costs of sheltered housing, hostels and settlement services; the increasing cost of construction is putting continued stress on capital funding arrangements for social housing schemes. There are many excellent housing schemes but they cannot be built because those in the building industry want to move on to more lucrative parts of that industry and there are not sufficient people to do the work in the construction industry. As I said six months ago, 30,000 applicants on the housing list represents over 100,000 people seeking a home. There is a lack of housing options available to those released from prison, the elderly and separated persons. One of the major problems in my constituency is that there are single men who will never get any form of accommodation from South Dublin County Council. They are separated and living away from their children. This is leading to further alienation. There is a lack of funding for the provision of recreation, culture and shopping developments. There is a lack of control in respect of the upper income house purchasers moving to rural areas and transforming the property market to the exclusion of low to middle income persons.

While the Bacon report and the subsequent response by Government may help middle income persons to obtain a home, the reality for thousands of low income persons is somewhat different.

The view of the organisations which proposed a national commission is that the response of Government to the housing issue to date has, unfortunately concentrated on only one dimension of the problem. If we fail to grasp the fact that during the past 18 months local authority housing lists have increased by over 30 per cent, that individuals on average incomes can no longer purchase any form of accommodation, that rents are now escalating beyond reasonable levels, that homelessness is on the increase and unless we begin to recognise how severely these facts are impinging on the supply of decent and affordable accommodation we will all have failed to discharge the most fundamental objective of society, to provide shelter for all.

The population is on the increase. By 2006 it is expected there will be 4.4 million people living here. That figure is even more dramatic when one considers that over 30,000 new homes must be built every year between now and 2006. The work of a commission on housing would not only address the immediate problems in the market but would begin to put in place long-term strategic planning to deal with the housing crisis, which this Government has so badly neglected.

I thank the Deputies for raising these matters and affording me the opportunity to indicate some of the positive measures being taken by the Government in the housing area. First, I indicate my concern to ensure that appropriate housing is available to lower income households, not only in Dublin city and Fingal, but throughout the country.

Deputies will be aware of the Government's concern that rapidly increasing house prices were putting house purchase beyond the reach of many lower income house purchasers who reasonably aspired to owning their own houses. The Government commissioned and had brought to conclusion within a tight timeframe the Bacon report on house prices. Moreover, at the same time as publishing the Bacon report the Government also announced a comprehensive package of measures to tackle the problem of rising house prices. The Government's action on house prices was a comprehensive response designed to restore order to the housing market, in particular by increasing the supply of serviced land for housing, reducing speculative demand by investors and specific measures to assist lower income and first time purchasers.

The Government's action on house prices contains a number of important measures to assist first time buyers. First time buyers of existing houses have benefited significantly from reductions in stamp duty rates, particularly at lower house price levels. Stamp duty has been abolished on houses priced up to £60,000, which is important in rural areas. The rate of stamp duty on houses priced between £60,001 and £100,000 has been halved to 3 per cent and the overall package of stamp duty reductions will improve mobility in the second-hand house market and as a result increase the supply of these houses available to first time buyers.

The improvements which have been made to the local authority shared ownership scheme are specifically designed to help lower income first time buyers. The income limit has been increased from £15,000 to £20,000 for a single income household with a corresponding increase for two income households. The removal of fiscal incentives to investors, who were even buying up former local authority houses and pricing low income buyers out of the market, have also improved the prospects of first time buyers.

While the full effect of some of the measures will only be seen in the medium term, positive effects of the Government's action have been reported by many commentators. For example, auctioneers and estate agents are increasingly reporting a significant easing of house prices in the market generally and have in particular highlighted the fact that first time buyers have reclaimed the starter home market which had become increasingly dominated by investors during the previous Government's term of office

The Government has not lost sight of those for whom home ownership, even through measures such as shared ownership, is not an option. "An Action Programme for the Millennium" sets out the Government's commitment to a continuing house construction programme by local authorities and voluntary groups. A programme of 3,900 housing starts and acquisitions has been notified to local authorities for 1998. The capital provision of some £213 million is 19 per cent up on last year.

Mr. Hayes

There has been a lack of response to the crisis. Housing lists are up by 30 per cent.

Dublin Corporation and FingaCounty Council received £49 million, excluding £20 million for the redevelopment of Ballymun, for which the outgoing Government did not provide one penny. The increase in funding provided for the programme in 1998 reflects the Government's commitment to maintaining the housing programme at a high level. The local authority housing programme is being monitored and I have stressed the need for authorities to take all necessary steps to enable the housing programme for the year to be progressed rapidly and to ensure that the full output for the year is achieved.

Also, authorities have been called upon to renew their efforts to exploit the full potential of the range of social housing measures now available to them, such as voluntary housing and shared ownership. The direct provision of housing forms part of the overall response to social housing needs. To supplement the traditional programme and to diversify the response to housing needs, each local authority has a responsibility to utilise, to the maximum extent possible, the range of available measures. Output from these measures made a significant contribution to meeting social housing needs in 1997 and I will continue to urge local authorities to promote the schemes and extend their scope within their areas. Recent improvements in the terms of the social housing schemes should help to increase output from these measures.

It is estimated that the local authority housing programme, with the output from complementary social housing measures and vacancies occurring in the existing local authority housing stock, will enable the needs of some 10,000 households to be catered for in 1998, about one quarter of which would be in the Dublin city and Fingal areas.

I have only recently received a copy of the joint statement by five voluntary housing organisations seeking the establishment of a national commission on housing. The statement referred to a wide range of housing issues and I am not certain how they all might be tackled within a single framework or what positive contribution a commission might make in addressing issues ranging, for example, from accommodation and services for the homeless to the problems caused by upper income house purchasers moving to rural areas.

It is clear that the housing sector has experienced the effects of the social and economic change which is under way in Ireland. Increased affluence, the increase in population due to Irish people returning from abroad, other inward immigration and natural demographic change have increased demand for all forms of housing, including private rented accommodation and social housing, especially in the cites and surrounding counties. Housing output has responded strongly to these demands with record levels of completions in each of the past three years, reaching almost 39,000 in 1998. We are building at a faster rate relative to population than any country in Europe.

In the light of the reported difficulties for people on lower incomes securing adequate housing, the next assessment of housing needs, to be carried out by local authorities in March 1999, will be particularly important as a basis for the future planning of the Government's response to social housing needs. My Department will issue detailed guidelines on the conduct of the assessment to local authorities in the autumn. Detailed guidelines will also issue in relation to carrying out a separate assessment of homelessness which will be crucial to improving our understanding of the nature and extent of the problem and in devising the most appropriate strategies.

In our year in office the Government has faced new and significant challenges in the housing area and has responded with urgent and decisive action. I assure Deputies that this will continue to be our approach. The position outlined by the Deputies has been inherited from their parties when they were in Government.

Mr. Hayes

We had the problem 12 months ago.

It is much worse since the Progressive Democrats came into office.

We will continue to take action in a positive manner for the benefit of those most in need of social housing, instead of leaving all the limits and grant levels as they were without making any provision for the increase in costs. The problems with the social housing programme occurred because the outgoing Government was dilatory in that matter. I also inherited the house price crisis. What land banks do local authorities have? The position on social housing was allowed to deteriorate but I intend to take much more action than the Deputies' parties when they were in Government.

The Government's economic policies are the problem.

Mr. Hayes

Look at the housing lists.