Private Members' Business. - Housing Crisis: Motion. – Dáil Éireann (28th Dáil) – Tuesday, 2 Feb 1999

Private Members' Business. - Housing Crisis: Motion.

Mr. Dukes:

I move:

That Dáil Éireann condemns the failure of the current Government to respond effectively to the crisis in the Irish housing market; notes that:

there has been a 60 per cent increase in the number of applications for local authority housing since the last housing assessment in 1996; couples on average incomes can no longer afford to purchase a typical starter home as house prices have increased dramatically; rents in the private rented sector have spiralled; the number of homeless persons continues to increase; and calls on the Government to:

abolish stamp duty on second-hand houses for first time buyers; increase the first-time buyer's grant; establish a national housing commission; establish a cabinet sub-committee on housing, chaired by the Taoiseach and consisting of the Ministers for the Environment and Local Government, Health and Children, Finance and Social, Community and Family Affairs; transfer the administration of the rental subsidy scheme and the mortgage supplement scheme to local authorities; dramatically increase the provision of capital assistance to local authorities to allow 10,000 housing starts each year for the next four years and to substantially increase the capital assistance scheme for the voluntary housing sector; bring forward a comprehensive national strategy to deal with the issue of homelessness with the Department of the Environment and Local Government taking overall control for the direction of policy in this area; review the 1992 Housing Act so as to increase the rights of tenants and to provide incentives for the private rented sector to develop longer term leases; increase housing density, particularly in areas close to transport corridors, and to ensure a mechanism of enforcement by the Department of the Environment and Local Government on appropriate local authorities; introduce legislation ring-fencing development levies for the use of community projects in new developments; complete as a matter of priority an audit of all State-owned lands so as to increase the availability of such lands for social housing; introduce legislation to ban the practice of gazumping.

I wish to share my time with Deputies Timmins, Sheehan, Coveney and Olivia Mitchell.

An Ceann Comhairle:

Is that agreed? Agreed.

Mr. Dukes:

I move this motion on the basis that it includes the essentials of a policy document which Fine Gael recently published on housing, entitled "Affordable Housing for All", which sets out to deal with the multiplicity of issues that face us in dealing with housing our people. We have a housing crisis, and a measure of its depth and gravity is that some commentators seem to be taking comfort from the fact that in the most recent period for which estimates are available the rate of increase in new house prices has declined to "only" in the region of 30 per cent. At a time when general inflation rates are less than one-tenth of that level there is clearly something amiss in the housing sector. If commentators can take some encouragement from the fact that the rate of increase in house prices has declined to 30 per cent, over ten times the level of general inflation, it is clear we have a major crisis on our hands.

Since the last housing assessment was done in 1996 – it beats me why one is done only every three years – the number of applicants waiting for local authority rented accommodation has risen from 26,000 to over 40,000. Indeed there is some indication that the figure may now be closer to 50,000. Even a figure of 40,000 represents an increase of 16,000 in the number of outstanding applications for local authority rented housing in just under three years. Last Thursday the Minister of State, Deputy Molloy, told the House that he expects 3,700 of these applications to be met by new housing completions by local authorities this year and that he expects a further 3,900 will be met by vacancies in the existing stock of local authority houses. Therefore, with over 40,000 applications on the books, the Minister expects that around 7,600 can be met this year. In other words less than one in five of the applicants will get a local authority rented house this year. Four out of five of these applicants will have to wait even longer. Not only that, but they will be joined on the waiting list by a substantial number of new applicants during the course of the year. I do not know what that number will be – nobody can foretell – but looking at the current increase in the rate of family formation, something we are all glad to see, demographic trends which show an increase in population, other factors in the population and economic factors which I will discuss later, it is clear that by the end of this year housing waiting lists will still be a major problem.

Last Thursday the Minister told the House that the voluntary housing capital assistance scheme is expected to provide 450 homes this year and that shared ownership would provide a further 1,200 homes. I would like to know how many of the people who have applied for participation in those schemes are still waiting and how many will find that their needs are not catered for again this year and will still be waiting at the end of the year?

The Minister of State spent some time in the House last Thursday clapping himself on the back for making more money available this year than has been made available in previous years to provide local authority houses. What he said is incontrovertible – the figures show that more money is being made available this year than last year. However, the increase in funding and the number of housing starts is simply not keeping up with the need. We are falling further and further behind. Thousands of families all over the country are suffering from overcrowding, with all the frustrations, family tensions and health problems which overcrowding entails.

The inadequacy of the Government's response to the housing crisis is in a real sense contributing to the reality of social deprivation and is laying the foundations for further social deprivation, marginalisation and all their attendant evils in the future. There is nothing to be proud of, and the self-congratulatory stance of the Government, the Minister and in particular the Minister of State, is nauseatingly irresponsible in the face of the crisis which confronts us.

The problem does not stop there. A new element has come into the picture of housing needs in recent years. There are people now seeking local authority housing and participation in social housing schemes who only a few years ago would never have figured in that equation. They are young couples, many of whom are starting out in their marriages, who in previous years would have had the ambition to buy a starter house even if they were put to the pin of their collar to pay for it, as most people are when they start off. Many couples, even in cases where both are working, as is typical today, now find the purchase of even a modest house way beyond their reach. A person on an average wage who borrows up to the limit of his or her capacity will still be at least £50,000 short in attempting to buy an average starter house in Dublin.

A typical young couple with no children on an average level of income will find it almost impossible to buy a starter house. A couple with one income and a child or children will find it impossible. A married couple on average wages with children will find it virtually impossible to buy a house and pay for childminding facilities at the same time. It is regrettable that in spite of the expectations built up, and possibly fuelled from the Government benches before this year's budget, nothing in any real sense was done to help young couples with childminding and nothing was done to help improve the level of service provision for people who need assistance in childminding, if only to be able to afford to buy a house. The result is that the problem which already existed got bigger and will continue to get bigger and bigger. All this adds to the pressure on local authorities to provide housing, and the allocations made by the Government to local authorities, increased as they are, are nowhere near adequate to deal with this new dimension of the problem.

There is an increasing demand for housing for lone parents, typically for single mothers. Sociologists, psychologists, and I see from one of the Sunday papers, reconstructed apostate feminists, may argue about the causes of this phenomenon and the legitimacy of the problem as one requiring our attention. Indeed it looks as if they will argue about it interminably. The problem exists and the demand and needs exist and must be met.

We got a foretaste of the Government's approach to the problem during the 1997 general election. We remember the soundbite of the Tánaiste – that noted soundbite addict – in what must have been one of the most callous, hard-hearted contributions to political debate. In one of the policy positions most devoid of any compassion or understanding, she proposed that part of the lone parent's allowance should be re-routed, as she called it, into encouraging single mothers to stay at home and raise their children with their own families. She was seriously proposing that thousands of Irish children should be born and raised in the boxroom of their grandparents' house, frequently in seriously overcrowded conditions, often in an atmosphere of serious family tension and always without the advantage of being raised by a mother who has her own space to give her child the best upbringing she can. I very much fear that an element of that attitude may have persisted and may underlie Government policy. Mercifully, as it turned out, we were spared the gross inequity of that heartless re-routing policy. The fact remains, nevertheless, that the inadequacy of local authority housing provision today condemns many mothers and their children to the type of life I just described.

The number of homeless people continues to increase. We may argue long, hard and wisely about how that problem arises. It is, nevertheless, a fact. The number of people sleeping rough and seeking shelter is increasing. The number of young people, by which I mean teenagers and even younger, sleeping rough and seeking shelter is increasing. Most of the response to this need is provided by voluntary organisations. The public contribution – the Government's contribution – to dealing with this problem is nowhere near the measure of what is required and the result is more and more human misery and deprivation.

It is all the more deplorable because we, in this House, went to the trouble some time ago of leg islating again on how to deal with and define homelessness. In that legislation, we placed an obligation on housing authorities to deal with the problems of people who, under the definitions of the legislation, become homeless. Having done that, we failed utterly to give local authorities the resources to match the obligations we put on them. The result is that the greater part of the response to the problem of homelessness is provided by voluntary organisations and by individuals, some of whom are people with a mission and all of whom make clear the fact that they cannot continue indefinitely to provide the service they provide and that they cannot, even now, meet any more than a relatively small proportion of the needs they see daily and, indeed, nightly on the streets of our cities and towns.

More and more people find that purchasing their own accommodation is not an available or a realistic option. Many people find that buying a house or an apartment is way beyond their reach. There are many other people who are at a stage of life where the purchase of accommodation is not a relevant or necessary condition. Many people decide they simply do not want the burden of a mortgage and feel other options are more relevant. All these people look to the private rental sector to meet their needs. All these people now face increasing difficulty and ever rising rents.

There is evidence to suggest that the surge in house prices in recent years has led some proprietors, who formerly let their houses in flats or bedsits, to reconvert them into single family dwellings and put them on the market to realise a substantial capital gain. There is evidence to suggest that the provision of new rented apartments has been discouraged by some of the action taken by the Government on foot of the Bacon report. I have always believed even in the days when it was not popular or fashionable to do so, that the tax incentives to those who purchase and let apartments were extraordinarily generous and contributed to a very inefficient allocation of resources in the housing market. The present Government's action in reducing these incentives in an already overheated housing market was surely one of the prime examples in recent years of bad timing and pro-cyclical action. The Government's action reinforced a trend already present in the market and has caused difficulty for a great many people.

The increase in rents has affected the whole rental market from high priced luxury accommodation to bedsits and everything in between. It has had a substantial impact on household budgets for tenants and on the demands made on health boards for rental subsidies.

The surge in house prices and the incoherence of the Government's response to it has revived the myth that there is somehow something evil about those who provide private rented accommodation. Rented accommodation, whether it is in the form of apartments, bedsits or houses, will always be needed. We will, therefore, always need proprietors of accommodation available for letting. There is, however, a need for regulation of the terms of lettings.

We have some legislation in place but all the evidence indicates – evidence given by the Minister of State in response to questions in this House – that action to implement the legislation and ensure observance of its requirements is lamentably deficient. It is clear, for example, that the requirement to issue tenants of rented accommodation with rent books is more honoured in the breach than in the observance. It would be a reasonable guess that a majority of tenants in private rented accommodation do not have a proper rental agreement. There are grounds to believe that many private rented dwellings fall far short of even the most rudimentary safety standards. I suspect there is only a very imprecise record of just how many private rented units there are. There is a clear need for more vigorous action to apply the legislation we have in those areas. If it is not being done by the authorities on whom the obligation has been laid by the legislation, it is up to the Government to make sure they do their job.

There is clearly a great potential for private rented accommodation to become an even more important factor in the housing market than it is today. To that end, we need a proper legislative basis, and that is one of the things for which this motion calls. That will be an increasingly important element in the housing market in years to come. It seems to me if we look at the pattern of neighbouring countries, that as average levels of disposable income increase and as mobility of people in jobs increases – that has become a feature of our jobs market these days – there is a growing demand for rented accommodation for people who are moving around and for people who want to use their disposable income for reasons other than a mortgage.

There is no reason we should not have a well regulated transparent market in private rented property in exactly the same way as exists in many other countries. One does not have to look far for examples where the tenant of rented accommodation is provided with a measure of certainty and stability which is most uncommon in our system. In Belgium, for example, one of the best known things in the rented accommodation market is what is called the three six nine system. One gets a lease which is ultimately for nine years and is reviewable every three years. After three years both the tenant and the landlord have the option to get out, and that applies right across the rented market. It gives tenants a security and fairness of treatment which is, by and large, not available to tenants of private rented accommodation in this country.

I set out the main features of the housing crisis which faces us today but have not, by any means, described all the difficulties, and some of my colleagues will deal with other aspects of it. The list of the problems is long and varied and a variety of remedies is called for. To resolve the problems, the Government, many official agencies and a large number of private and community based organisations will have to work constructively together – they all have a part to play. It is incomprehensible that in the face of the diversity of the problems and the variety of the actions required, the Government still refuses urgent and well-founded requests by the Opposition and a multiplicity of agencies and groups outside the House to establish a national housing commission to draw together and integrate the diverse responses needed to deal with the housing crisis which has such far-reaching social and economic implications for people in all walks of life, particularly for people on low incomes.

The Government's refusal to establish such a commission amounts to nothing more than a nonsensical claim that the Government is the repository of all wisdom in these matters, and that is patently absurd. We know from practical everyday experience that community and co-operative efforts and very often the work of dedicated individuals have all helped to meet some of the pressing housing needs of different groups in our population, even if only in part. It is equally clear that without the efforts of ordinary organisations and individuals like these, a great many people would suffer even greater hardship than they do today and even more people would suffer hardship than is currently the case. It is stupidly irresponsible of the Government to refuse to allow those organisations and people to participate fully in the definition of a concerted response to the housing crisis as proposed in the motion before the House tonight. I call on the Government to mend its hand, reverse its unreasoning stance on this issue and proceed immediately to set up a national housing commission.

The responses we make to the housing crisis will have repercussions on other issues that claim our attention. We can plan housing in a way that will help to alleviate the major problems of traffic congestion that we face in our cities. In that way we can secure a double benefit for the quality of life of our people. There are opportunities in Dublin, Cork, Limerick and Galway for a new housing provision in city centre areas. There are opportunities for a higher density of housing in such areas that we have sometimes applied without replicating the mistakes of ultra-high density housing perpetrated on other cities. There are opportunities of integrating high density housing and developing transport corridors to make it easier for people to move to and from their places of work, education, recreation and their homes. This motion calls on the Government to do that.

I call on the Government to adopt an integrated approach to the resolution of the housing crisis as set out in this motion and to accept that the simple repetition of statistics of expenditure is not a response to those people who will wait in vain throughout the remainder of this year for an answer to their housing problem.

Mr. Timmins:

I congratulate Deputy Dukes on putting down this timely motion. When some issues are debated in this House many members of the public are not familiar with the topic. That is not the case with respect to the housing crisis. In almost all the contributions on the budget, the difficulties that now pertain in this area were alluded to and it has become a common topic of conversation among all sections of the population as we hear more and more hard case stories.

The Government sought to buy time on this issue and commissioned the Bacon report. In the process of all the discussions on the matter, it used the Bacon recommendations as a defensive mechanism but matters continued to get worse. In County Wicklow, there are more than 2,000 applicants currently on the housing waiting list; in a conservative estimate this could represent 5,000 people. A visitor to this country might be forgiven for thinking that some sections of the tourism industry have reached into every lane and corner as they view the many mobile homes that now dot our landscape. It is difficult to explain why so many young children have to spend cold winter nights in such conditions when we can boast of a £1 billion budget surplus. It appears we now have a Government with no social conscience.

Fortunately for the Government, it is often the council official who must carry the can for a Government which has granted a mere 182 new house starts for County Wicklow in the last year of the millennium. This pales in comparison to the poor years of the mid-1980s when house starts reached 300 and 400 during the term of the then Fine Gael-Labour coalition.

The condition of many local authority houses has been allowed to deteriorate to a very poor level and the inhabitants of many of these estates have become demoralised as they see themselves continually pushed to the margins. During the debate on the Finance (No. 2) Bill, 1998, drafted to implement the recommendations of the Bacon report, my party recognised the serious difficulties that would arise in the rental sector if investors were discouraged from purchasing property. We put down an amendment that would have dealt with the difficulty but our worst fears have now come to pass because, due to a shortage of supply, landlords in many cases now charge inflated rents. This is happening at a time when mortgages continue to decrease.

Deputy Hayes brought forward a Bill to deal with the problem of gazumping and the Minister for Justice, Equality and Law Reform, when outlining his reasons for not accepting it, spoke of Article 43.1.2 of the Constitution which deals with property rights. He was selective with the use of the Article when he said the Bill would interfere with those rights. If the Minister had continued to read Article 43 he would have seen that Article 43.2 states:

The State recognises, however, that the exercise of the rights mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice. The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.

A Supreme Court judgment in 1957 in the Attorney General v. Southern Industrial Trusts case referred to Article 43, private property rights, and the assessment of what the common good required. That judgment stated that those were “matters primarily for the consideration of the Oireachtas”. In 1970, Mr. Justice Kenny, in the case of the Central Dublin Development Association v. the Attorney General, stated that among other things, when dealing with these Articles, the exercise of these rights ought to be regulated by the principles of social justice. He also stated that the State may, accordingly, by law restrict their exercise with a view to reconciling this with the demands of the common good, yet we still have a Government that fails in its responsibility and chooses instead to let the building industry regulate itself.

There are many other areas I would like to deal with, one of which is in respect of the building regulations. Are these regulations being implemented or are they being left to the financial institutions to implement? What happens when cash developers build buildings? I am concerned that in the future several buildings may be seen to be of inferior quality. Is the Department of the Environment and Local Government doing anything about this? I commend the motion to the House.

Mr. Sheehan:

The Government has failed to tackle the real problem of housing. With a 60 per cent increase in the number of applicants since the last housing survey in 1996, it is obvious that more young couples are being forced to apply for local authority housing owing to the escalating house prices. Young couples starting their lives together cannot even contemplate buying their own homes unless both partners have secure, well-paid jobs. It is evident also that parents cannot afford the large mortgage repayments due on their children's houses. Spiralling rents have added to the housing problem. In some cases young couples are living in substandard rental accommodation with poor ventilation, no heating and inadequate sanitary facilities.

To address this problem the Government should immediately abolish stamp duty on secondhand houses for first time buyers. Surely it is not too much to ask a Government to play its part in that respect and give those beleaguered people who are trying to buy a home an opportunity to acquire that home without the Revenue Commissioners insisting that stamp duty be paid on secondhand houses.

The new house grant for first time buyers should be increased from £3,000 to £10,000 because £3,000 is peanuts when one is constructing a new house. That sum has not changed in ten years when the price of building houses was one-tenth of what it is today. Surely it is not too much to ask the Government, in this day of the Celtic tiger economy, to increase the new house grant to £10,000. The stipulation that applicants for new house grants must submit receipts for labour costs of £6,000 if they build their own house should be abolished. It would be sufficient for such applicants to submit VAT receipts for £16,000 because many of these people are working in the building trade and can do much of the work themselves, yet they must show receipts of £6,000 from a qualified builder. That is ridiculous. That scheme is bedevilled with red tape and the sooner the Minister fine combs it, the better.

The Government should introduce legislation to compel builders to adhere to the original price quoted for a house. They should not be allowed to escalate the price when the estate is sold. If builders are prepared to sell a house for £70,000 on the first day and they have 100 houses in an estate, they should be compelled to sell each one at the same price instead of raising it when there is a huge demand for the houses.

The time has come for the Government to introduce legislation to ban the practice of gazumping, which has become widespread. It is pushing up prices on poor, unfortunate people trying to buy a house. When they try to buy a house, auctioneers tell them a higher bid has been made. This leads to a stampede to buy and the price increases significantly. Either people are outbid or they are saddled with an exorbitant price for a property which they should not have to pay. The time is right for the Minister of State to step in to ensure common sense prevails.

The Minister of State is only skimming the surface of the problem. The Government should wake up and become more aware of its obligations. Local authorities should be encouraged to purchase secondhand houses to clear the waiting lists. If the problem is not tackled now, it will worsen to the point where, by the end of the next decade, it will be so huge, no one will own their own house.

Mr. Coveney:

Perhaps the most extreme example of the housing crisis lies less than 100 yards outside the gates of Leinster House. Instead of getting into his car this evening to go home, if the Minister of State were to walk for two or three minutes outside the gates of Leinster House, he would see people lying in doorways, wrapped in filthy and often soaking wet blankets. I see them every second night I stay in Dublin. That is unacceptable in today's society and is something the Government has done nothing to tackle. I assume the Minister of State is aware that the number of homeless people in Ireland is increasing annually. The more worrying statistic is that the average age of homeless people is decreasing annually.

The housing of these people is more than just putting a roof over their heads. They are the weakest and most vulnerable people in society, and the State has a responsibility to care for them. The only way the vast majority can possibly rebuild their lives is to start living a normal life with a roof over their heads. In a sample of 153 homeless people around the country, 65 per cent had drink problems and 40 per cent had mental or psychiatric problems. Almost 50 per cent of them have been in hospital for a long period of time in the past five years, adding to the problem of hospital waiting lists, and 20 per cent had been released from prison in the past five years and were likely to return, from what I have been told.

Is the Minister aware that, adding to this problem in the second largest city in the country, Cork, which is in my constituency, is that there is nowhere for a homeless young boy under 18 to go because no shelter is available for him? Before Christmas, a 17 year old boy came to my constituency office saying he had run away from home for reasons about which he would not tell me. He told me he could not go home and asked where he could stay for two or three nights while he was sorting himself out. I could offer nowhere because there is no shelter for boys under 18, and males comprise the vast majority of homeless people. I would like the Minister to do something about that.

House prices are an issue of particular relevance to me as they are to so many people in my age group, between 25 and 30. Many of us want to buy a house but we cannot afford it. The average house price in urban areas in Ireland is close to £100,000. That is an increase of 30 per cent every year for the past three years, despite the fact that 42,000 new houses were built last year. The Government has a responsibility to ensure first-time buyers have an opportunity to buy houses. To do that, Fine Gael proposes that stamp duty for secondhand houses be abolished, that county councils be given funding so they can provide serviced sites, especially for first-time buyers, and that first-time buyers' grants be increased dramatically from £3,000 to £10,000. Some 46,000 families are seeking houses at the moment and the Minister of State proposes to provide 7,000 this year. Where is his social conscience, because I cannot see it?

Ms O. Mitchell:

I wish to highlight two items which I believe to be the major barriers to increasing the supply of housing and which consequently require the urgent attention of Government. As a move is made towards providing additional housing, especially in higher densities, there is a need in the existing and newly built-up areas of Dublin for certain basic infrastructure, some of which has a very long lead-in time, such as a water supply or sewerage scheme, even when it is under construction. It is the time taken for planning, that is, to move from the point where the local authority identifies the strategic need, such as a water supply, to the point where the Department accepts it might be telling the truth, which is the problem. There is little point in the Minister instructing Department officials, as is the case in the current crisis, to contact the Dublin local authorities on an almost weekly basis to know what they are doing about the housing crisis if there is no water supply. Whatever about moving people into new areas without a bus service being provided in advance by Dublin Bus, for example, there is no possibility of moving people into houses without a water supply.

This lack of basic infrastructure is the major constraint on the ability to respond to the housing crisis. There is an urgent need to establish a planning protocol between the local authorities and central Government to ensure clearly identified, regional, strategic, infrastructural needs are subscribed to by both parties. Unless the time lag between identifying need, the function of the local authority and the provision of funding, the function of central Government, is reduced, we will continue to experience such bottleneck crises in the economy, of which housing is just one, although the most critical.

The second item which is in urgent need of amending legislation to the planning Acts is allowing contributions towards the provision of public transport to be levied on large-scale developments. At present and at the behest of Government, all Dublin local authorities are granting planning permission for developments, some of which are on a scale large enough to not only justify the provision of public transport but to manifestly require it. Every day is a lost opportunity because of lack of enabling legislation to facilitate contributions to be made towards the provision of those services. Councils are empowered to seek road contributions but if we move towards higher densities and infill developments, as recommended by Bacon, contributions for new road construction become less relevant and public transport contributions become more essential. If existing residents are to accept higher densities, the very least they will expect and demand is public transport. I ask the Minister to move speedily to bring forward enabling legislation and not to leave it to the review of the larger Planning and Development Act which is not due to be published until mid year, which is too late.

Minister of State at the Department of the Environment and Local Government (Mr. Molloy):

I move amendment No. 1:

To delete all words after "That" and substitute the following:

"Dáil Éireann welcomes:

–the record level of new housing output in 1998;

–the urgent and comprehensive range of measures taken by the Government in the policy document Action on House Prices, following on the Government commissioned report 'An Economic Assessment of Recent House Price Developments';

–the measures taken to improve access by first-time purchasers to housing through improvements to the shared ownership scheme, reduced stamp duty levels, measures to tackle speculative investment in 'starter' housing and higher housing densities in suitable locations;

–the moderation in house price increases in the second half of 1998 resulting from the Government's actions;

–the introduction of the Serviced Land Initiative to produce 100,000 additional sites for housing by the end of next year;

–the Government's commitment to a continuing house construction programme by local authorities and voluntary groups and the increased financial provision for these programmes in 1999;

–the increase in the local authority housing programme in 1999 to its highest level in 13 years;

–the improved terms of the voluntary housing schemes;

–the improved terms and increased resources for disabled persons and essential repair grants;

–the highest ever financial provision for the Task Force on Housing Aid for the Elderly;

–the substantially increased resources and the expanding range of responses to meet the needs of homeless persons including funding for the first 'Foyer' project in the country;

–the enactment of the Housing (Traveller Accommodation) Act, 1998, progress with its implementation and the continued high level of funding for traveller accommodation;

–the introduction of tax incentives for the provision of accommodation for third level students;

–the fact that the Irish Home Builders Association has introduced with effect from 1 February, 1999, a code of conduct which addresses the problem of gazumping by house builders;

–the provision of funding for the comprehensive regeneration of Ballymun;

–the provision of funding for the redevelopment of Dublin Inner City Flat complexes at Lourdes House, Mountainview Court, Sean Treacy House, St. Joseph's Mansions, St. Jude's Gardens, St. Michael's Estate, Poplar Row/Courtney Place, Marmion Court/Queen Street and Bridgefoot Street/Island Street;

–the reference of the issues of gazumping and security of tenure in the private rented sector to the Law Reform Commission for examination;

–and supports the continued commitment by the Government to expand the supply of housing across all tenures and to improve access by all income groups, particularly first-time purchasers, to suitable and affordable housing."

I read with interest and some dismay the list of demands in the motion proposed. Some of these suggestions are sensible and are already being implemented. Some are for the optics, and, while unlikely to achieve much, may not actually be harmful. Some are simply off the rails and demonstrate a serious lack of awareness of what the current housing situation requires by way of Government action.

It is said that those who do not learn from the mistakes of the past are condemned to repeat them. I wonder how much thought the proponents of this motion have given to the effects of some of their demands, for example, the impact of an increase in the new house grant on house prices, the effect on the housing market of different stamp duty rates for first-time buyers and other purchasers, or how a crash programme of 10,000 local authority housing starts over the next four years could be financed and undertaken without adverse effects on the supply and price of building land, serious capacity constraints on the building industry and further pressure on all house prices. This is quite apart from the danger of returning to the large, soulless peripheral local authority housing estates of the past.

This Government has a credible and coherent housing strategy—

Mr. Dukes:

And a closed mind.

Mr. Molloy:

—which is designed to increase housing supply, to improve access to housing for lower income groups and to improve the housing conditions of local authority tenants and other key groups such as the elderly, homeless persons and the disabled.

Housing is at the top of the Government's priorities. Housing is fundamentally important to individuals, households and the overall economy. There should be no doubt that this Government regards addressing housing needs as an essential element of its overall social policies.

It would help to put this whole debate into a proper perspective, if I outline briefly where we are coming from and the main strategic features of the Government's approach to housing as set out in An Action Programme for the Millennium, the Government's policy document Action on House Prices, the 1999 Estimates of expenditure for housing and the 1999 budget.

In An Action Programme for the Millennium, the Government set out its key priorities including a continuing house construction programme by local authorities and voluntary groups; refurbishment of existing inadequate housing; improvement and extension of social housing schemes; maximum co-ordination of housing policy and local authorities developing serviced sites to accelerate the supply of new houses to meet rising demands and deflate escalating house prices. In the relatively short time since the Government took office we have achieved remarkable progress in tackling house prices and the social housing measures.

In recent years, Ireland's economic growth has been little short of phenomenal. GDP grew by an average of 9 per cent per annum since 1993 and an average of 7 per cent per annum since 1990. This strong economic performance is providing real benefits to people. Inflation has averaged 2 per cent per annum in recent years. Most importantly, employment has expanded significantly, by more than a quarter since 1993 and unemployment has fallen from a peak of almost 16 per cent in 1993 to about 7 per cent in 1998. However, this economic growth, coupled with significant sociological and demographic change, has contrived to profoundly increase housing demand.

It is an inescapable fact that house prices are determined by the interaction of supply and demand. The problems we have been experiencing in the housing market in recent years are primarily a result of the imbalance that has developed between supply and demand for housing. This has occurred despite the fact that never in the history of the State have we achieved a better performance in terms of housing output. Housing output reached a new record in 1998 at more than 41,500 units, almost 8,000 up on the level set in 1996. We are building new houses at twice the level of 1993. We are building new houses at a rate of more than 11 per 1,000 population – a rate which is by far the highest in Europe and more than three times the rate in the United Kingdom. We are building 800 houses per week.

That house prices have increased steeply despite this remarkable leap forward in housing output is due largely to the fact that demand for housing has escalated at an unprecedented rate. Developments in the housing market have closely mirrored the overall pattern of growth in the economy. Clearly, our tremendous economic performance in recent years has put enormous pressure on infrastructure, including the supply and availability of serviced land. The effects of rapid growth in incomes and employment, significant increase in the number of people in the key household formation age groups, smaller household sizes and very high net immigration, have all impacted hugely on demand for housing.

This current situation has not happened overnight. As long ago as 1995, house prices were increasing significantly ahead of inflation. The problem of house prices had emerged long before this Government took office. The momentum of house price inflation, driven by an imbalance between supply and demand, was there for all to see.

The difference between this Government and its predecessor is that we did not stand back with a sense of awe and helplessness. Shortly after coming into office I commissioned a consultancy study on house prices to obtain a comprehensive and rigorous analysis of the problem that had been building for a number of years. The Bacon report, published last April, provided a sound basis for policy formulation. The Government responded immediately with a substantial and well balanced package of measures – Action on House Prices – implementing virtually all the consultants' recommendations.

In late 1997 at the same time as we commissioned the Bacon study we launched the Serviced Land Initiative. It was perfectly clear to us – and should have been to the rainbow coalition – that immediate action was required to increase the amount of serviced land for housing. House buyers were paying and continue to pay the price for our predecessor's inactivity. There is a long lead time to produce housing. Where this is compounded by serious infrastructural bottlenecks on land supply, the results are obvious.

The previous Government did nothing to address this fundamental problem. Worse still, it indulged in some very ill-judged tinkering with stamp duty rates, introducing 50 per cent increases in the rate of stamp duty on houses priced from £150,000 upwards. This showed a lamentable lack of understanding of how the housing market is integrated with people moving to different type houses as their needs change. Essentially, the message given to house owners by the previous Government was "we will tax you heavily if you move from your existing home." People tend to act rationally to financial disincentives. Consequently, there was a dearth of middle range houses on the second hand market. By failing to adjust stamp duty rates to take account of house price inflation, first-time buyers of a second hand house had to pay stamp duty at a rate of 6 per cent, which amounted to £5,000 or £6,000 on a house costing between £85,000 and £100,000. For example, as a result of the previous Government's action on stamp duty, if someone wished to move from a house valued at £150,000 to a house valued at £200,000 the transaction costs of the move were more than £20,000 of which stamp duty was £18,000.

The rainbow coalition must also have been aware that first-time buyers were being increasingly squeezed out of the starter home market by speculators – as if the problems caused by inadequate supply of new and second hand houses and penal stamp duty rates were not enough. Yet the previous Government was content to allow the activity of speculation in housing to be subsidised by over-generous tax reliefs. Investors are necessary to provide private rented accommodation. However, with low interest rates, the prospect of capital appreciation and Government incentives, housing became a one way bet. One simply could not lose if one had money to speculate. The previous Government should not have allowed such distortion to continue, especially when the main victims were the hard pressed first-time buyers whose tax breaks were far less attractive and valuable than those available to investors.

This is the sorry scenario we faced on taking office, a nightmare for the house buyer – particularly the first time buyer – and a growing threat to the continued success of our economy, with ominous signs of a bubble market developing as tax driven speculation pumped house prices upwards.

We are still grappling with the effects of the previous Government's failure to take timely action. We have taken decisive action and will continue to push forward with maximum determination. There are welcome signs that we are turning the corner.

The measures introduced in the Government's Action on House Prices addressed factors that were causing overheating or distortions in the market and were designed to restore a better balance between supply and demand. Measures to assist first-time buyers formed a key element of the package, including removal of fiscal incentives to investors, who had been pricing low income buyers out of the housing market; an increase in the income limits for the local authority shared ownership scheme; significant reductions in stamp duty rates, particularly at lower price levels; and measures to boost housing supply, through the Serviced Land Initiative and increased residential density.

Reduced interest rates arising from our membership of EMU will also help affordability.

The full effect of many of the measures taken, particularly those designed to promote housing supply, are only beginning to be seen and will continue to operate into the medium term. Positive effects have already been reported by market sources, including indications of easing in house prices, investors no longer squeezing first-time buyers out of the starter home market, and an increase in the number of secondhand houses coming on the market, as a result of stamp duty reductions.

The house price figures available for the December quarter of 1998 provide strong evidence of a significant moderation in the rate of house price increase in the second half of 1998, particularly new house prices. This clearly reflects the fact that the measures in the Government's Action on House Prices stopped investors from bidding up prices in the new starter house market where they had been buying up houses virtually in job lots.

The overall effect of these last quarter trends is that the annual rate of house price increase in Dublin was at a lower level than at any period since the third quarter of 1997. We are now beginning to see the results of the action taken by the Government and the trend of house price stabilisation that is emerging – for example, second-hand house prices in the Dublin area increased by less than 1 per cent in the December quarter – will be greatly reinforced in the months and years ahead, particularly as our efforts to ensure continued increase in the supply of housing bear fruit.

I have emphasised on previous occasions the need to avoid demand-led interventions, such as increased grants or subsidies that could, in the prevailing market conditions, only lead to a resurgence of steep house price escalation. Increased supply of housing is ultimately the only way to meet the increase in the level of demand. I must, therefore, reject the populist demand in the motion for an increase in the first-time buyers grant which could achieve little except to further boost new house prices and pass the benefit on to builders.

The Government's strategy with regard to stamp duty is to reduce its burden throughout the housing market, thereby helping to increase activity and mobility in the market. Focusing stamp duty relief on one sector of the market would simply create further anomalies.

With increased housing output we are using up zoned and serviced land at a rapid rate. As I have said, our priority is to increase housing supply and two of the key elements of the Government's strategy on housing supply are the serviced land initiative and increased housing density. The serviced land initiative to increase the supply of serviced land for housing, launched prior to the Bacon report, has been twice augmented since and complemented by funding for road access to development land, bringing total Government funding to £44 million. This special Government funding will result in overall investment of over £100 million in land servicing and access, yielding some 100,000 additional sites for housing, the equivalent of an additional – that phrase must be emphasised – two and a half years housing output. Local authorities have been asked to expedite delivery of schemes under the initiative.

The initiative is, of course, additional to the main water and sewerage investment programme. The recently launched 1999 programme is once again at a record level. Over £275 million will be spent on water and sewerage infrastructural development this year and the potential for this investment to bring more residential land into service will be maximised.

The proposal for increased residential density is one demand in the motion which I support unequivocally. Housing densities in Ireland are low by international standards and this is one of the supply constraints contributing to house price increases, particularly in Dublin. Increased density in cities and on high quality public transport links is desirable on grounds of sustainability and can also help to counteract problems of commuter traffic and promote the provision of more efficient public transport. Planning authorities have already been advised to promote higher densities at appropriate locations. Consultants are currently finalising draft planning guidelines on residential density and these will be available for public consultation by the end of the month.

I see increased residential density as being vital to the Government's strategy in relation to housing supply, stabilisation of house prices and sustainable development. While, as I have already said, measures to increase housing supply generally take time to have effect, the benefits of increased density can, in many cases, be felt more quickly than other supply measures. The effects can be maximised by concentrating particularly on locations, such as inner city areas or close to public transport, where high density levels are most achievable.

The release of land already in public ownership for housing would contribute towards improving housing supply. At present, the Department of Finance is actively seeking to ascertain the amount of State-owned lands which might be suitable for this purpose and I expect the results of this study to be available shortly.

The motion also called for the introduction of legislation to ring-fence development levies for use on community projects. The concept of ring-fencing is, of course, already very much part of the levying of development contributions because funding received must be spent on the infrastructure for which the development contribution was required. Development levies already make a valuable contribution towards the cost of necessary infrastructure, including water services and roads, and the issue of levies for community infrastructure is being examined in the review of the Planning Acts.

As a means of further increasing supply, I have asked local authority managers to explore fully the scope for using temporary treatment facilities to allow housing development to proceed where major infrastructural works are planned but will take some time to complete. This can, in certain circumstances, be a valuable means of bringing additional land for residential development into service much earlier than would otherwise be the case. With modern technology and the application of appropriate standards and safeguards, this can be a very acceptable and cost effective approach.

I am conscious of the importance of the private rented sector and the need to maximise its potential in meeting our housing objectives, particularly in the context of changes in Irish social patterns which are influencing the nature of housing demand such as: a reduction in average household size; a greater tendency for young single people to live outside the family home, increasingly in rented accommodation; and an increasing tendency towards contract working.

Ireland has traditionally a high rate of owner occupancy compared with other countries. Government policy will continue to facilitate this goal as the preferred option of the majority of households. However, after many years of decline, there has, in recent years, been renewed expansion and diversification in the rented sector with significant growth in demand for, and supply of, good quality apartments. The improvements which have been achieved in private rented accommodation reflect particularly the success of the urban renewal schemes.

I will shortly be announcing the introduction of the residential elements of the new urban renewal schemes in advance of the resolution of the issues which are currently under discussion with the EU Commission on the commercial and other elements of the package.

The Opposition motion calls on the Government to review the Housing (Miscellaneous Provisions) Act, 1992, so as to increase the rights of tenants and to provide incentives for the private rented sector to develop longer-term leases. The rights of tenants in private rented accommodation are, in the first instance, governed by the terms of the lease or other tenancy arrangement under which the tenancy is held. These are subject to the provisions of the landlord and tenant code which is the responsibility of the Minister for Justice, Equality and Law Reform. The consideration of what action may be warranted and possible in relation to the rights of tenants must be considered in consultation with the Minister for Justice, Equality and Law Reform and would be more relevant to the general landlord and tenant legislative code than to the Housing Acts.

Consideration of the issue of greater security of tenure has to take account of both the complex nature of the landlord and tenant code and constitutional issues. The fair and equitable balance of rights between both parties is not easily achieved. Over-regulation could have a damaging impact on the supply of rented accommodation.

A poorly thought-out legislative intervention in this area has the capacity to do more harm than good, a message clearly brought out in a recent Threshold conference on the private rented sector. My Department is currently examining possible approaches by which necessary and appropriate amendments to landlord and tenant law in the area of residential accommodation might be brought forward.

The key to achieving stability in the private rented sector is, in the final analysis, the same as in the housing market as a whole – increased supply of housing. All the sectors in the housing market are inter-related – a problem in one area will ultimately impinge on another. The fundamental supply-demand imbalance has also impinged on the private rented sector. We must, therefore, continue to increase the total supply of housing. None of the measures referred to in the motion, irrespective of how attractive some of these may be, especially for a party in Opposition, can substitute for this essential requirement.

An interdepartmental committee comprising officials of the relevant Departments is examining the issues which arise in relation to the transfer of the administration of SWA housing supplementation from the health boards to local auth orities. Transfer of this to local authorities gives rise to a number of important issues with wide-ranging implications for recipients under the scheme, local authorities and other agencies concerned. It is hoped to finalise the work of the interdepartmental committee shortly.

Our priority must be to promote long-term commitment to the sector on a basis that will work to the benefit of both the providers and tenants of private rented accommodation. Incentives for the provision of private rented accommodation are appropriate where they are well targeted and result in an increase in housing supply. The announcement in the budget of the extension of section 23 type incentives to purpose-built student accommodation provides a good example of a well targeted initiative in his area. This will contribute to the provision of private rented accommodation for third level students and should ease pressures in the general rental market in the medium-term.

The motion calls for legislation to ban the practice of gazumping. Many complex legal issues would be involved in drafting any such legislation in order to ensure, for example, that house purchasers are not locked into a contract before they have either arranged their finances or have finally decided they wish to buy the house. Following an approach by me in this regard, the Attorney General has requested the Law Reform Commission to review the payment of booking deposits and the associated practice of gazumping and to submit to the Attorney General proposals for reform in respect of those matters that the commission considers appropriate. I understand that the commission has already commenced this review. I am grateful that it has taken up this matter quickly.

The Irish Home Builders Association has recently launched a voluntary code of conduct which I understand will be mandatory for all members of the association. The introduction by the industry of such a voluntary code of practice was, of course, one of the recommendations of the Bacon report which the Government was anxious to see implemented quickly. The code sets out to deal with three issues, gazumping, phased release of developments and interim payments. It is my understanding that the three elements of the code are separate, stand-alone measures. On that basis, I regard the code as an improvement on the current situation in so far as it relates to gazumping. It sets out that the builder must provide the contract to the purchaser within four weeks or other agreed period of receipt of a booking deposit. The purchaser will then have three weeks to return the contract. During this period the builder is precluded from increasing the price or accepting an offer from another party. The protection afforded to the new house purchaser by the prevention of an increase in price and prohibition on acceptance of an offer from another party for a seven week period following payment of a booking deposit represents an improvement on the current position. The introduction of legislation in this area will depend on the effectiveness of the voluntary code and on the recommendations of the Law Reform Commission regarding the desirability and feasibility of a legislative approach to the issue.

I note the code's attempts to improve transparency in relation to the phased release of developments, although the wording is somewhat vague in this regard. I will be seeking further clarification from the Irish Home Builders Association as to the precise obligations on developers in terms of the advertising of different phases of housing developments. I will also be seeking further information from the association regarding the nature of sanctions to be applied to builders who do not comply with the code and the mechanisms and length of time involved in dealing with complaints.

I have serious concerns about the interim payments element of the code. I would not wish to see the extension of the practice of builders seeking stage payments to areas where it has not been normal practice to date. I also regard the level of the interim payments, as set out in the code, as not being in the interest of the house purchaser. The schedule of interim payments where title to the site is transferred before completion of the transaction, as set out in the code, provides that the purchaser would have 90 per cent of the agreed purchase price paid at internal plastering stage. A significant amount of work inside the house and in terms of estate development remains to be completed at that point and it is likely that a considerable amount of time may elapse before the purchaser could take possession.

I am concerned that house purchasers should not be asked to make interim payments which exceed the amounts guaranteed under the HomeBond warranty scheme. Interim payments which are not covered by the warranty expose the house purchaser to an unacceptable degree of risk. I have written to the association asking it to ensure members neither seek interim payments in excess of the Home Bond warranty nor seek to extend the practice of stage payments to areas where they did not previously operate and to furnish assurances to me in these respects. If these assurances are not forthcoming, I will take any appropriate action open to me.

Meeting the needs of persons who cannot afford to provide adequate housing from their own resources is a key element of the Government's housing policy. Through a combination of factors, including high housing costs, cutbacks in public expenditure which curtailed social housing investment in the 1980s and early 1990s, the age profile of the population and changes in the structures of household composition and size, social housing needs have increased in recent years. Considerable priority has been afforded, therefore, to tackling increased social housing needs. Our approach is two pronged – to increase the traditional local authority house building pro gramme and to expand voluntary housing activity and output under other complementary schemes such as shared ownership.

Mr. Dukes:

The Minister should take a deep breath, drink a glass of water, shorten his scripts and spend more time thinking.

Mr. Gilmore:

Amendment No. 2, in the names of Members of the Labour Party, states:

In the fifth-last paragraph, to delete "increase the rights of tenants" and substitute "provide proper security of tenure for all those living in private rented accommodation"; and in the fourth-last paragraph before "increase housing density" to insert "subject to good quality design and the prior provision of the necessary social, environmental and community infrastructure"; and to add the following paragraphs at the end of the motion:

"–amend the planning laws to strategically integrate housing, transport, social and environmental policy and to ensure that land use and spatial planning in Ireland serves the public good and ceases to be driven by the demands of developers;

–provide for a minimum of 20 per cent social/affordable housing in all new developments and to provide a legislative basis for this;

–address profiteering in development land and construction by;

(a)introducing either a cap on profits from rezoned land or a windfall tax on profits from rezoned land;

(b)reversing the decision to reduce the capital gains tax to 20 per cent;

(c)controlling new house prices by reference to the cost of building and the cost of building land;

–develop a long-term strategy for the construction industry to provide for sustainable long-term building activity and an adequate supply of housing to meet need;

–encourage the release of residential property, which is under used, by providing new forms of housing tenure and house exchange.".

I welcome the motion proposed by Deputy Dukes. I have tabled our amendment to deepen and strengthen some of the remedial measures proposed to deal with the housing crisis.

The Minister's response to the motion is pathetic. He asserts that the level of activity on housing is adequate, he recites an inaccurate list of the perceived shortcomings of his predecessors despite the fact that he is now almost two years in office and it is time to take responsibility for his own record in Government and he rebuts every single proposal put forward in the motion and every idea put forward by people outside this House to deal with the housing crisis. He does not announce a single new policy proposal or initiative despite the fact that he has had half an hour to do so.

This Minister of State with responsibility for housing says there is no housing crisis. He and his Government are responsible for the most inactive record on housing of any Government in living memory. Never before has every aspect of housing from house purchase to homelessness been in such crisis. Yet this Minister and this Government, blessed with more resources than any of their predecessors are not only failing to act but refusing even to acknowledge the scale of the problem.

For the first time ever in this State, a young working couple in professional occupations cannot afford to buy a home of their own, council housing lists are the longest they have ever been, rents in the private sector are unaffordable and we have record levels of homelessness. The Minister and the Government seem to be having difficulty coming to terms with the fact that they are almost two years in office. It is no longer an acceptable substitute for policy inaction to make inaccurate statements about the record of their predecessors because since the Government took office house prices have increased by more than 60 per cent, 20,000 additional applicants have gone on housing waiting lists, private sector rents have risen by 50 per cent, the rate of evictions from private flats has quadrupled and more families are losing their homes through eviction in 1999 than 120 years ago when Michael Davitt formed the Land League to campaign for fair rents and fixity of tenure. Homelessness is so out of control that none of the statutory or voluntary agencies can now even put a figure on the number without homes. The numbers sleeping rough in Dublin has increased by 37 per cent. That is the record of this Government. Yet the Minister insists there is no crisis and that he is on top of the problem. How much worse do things have to get before the Government takes the problem seriously and gives it the priority it deserves?

This Fianna Fáil-Progressive Democrats Government does not even acknowledge that there is a housing crisis and its inaction is incredible. Despite every serious commentator having pointed to the need to reform our planning laws to increase housing supply, legislation has not yet been published in this area. Of the 101 Bills promised by the Government and contained in the Government's legislative list, not a single Bill is included to deal with any aspect of the housing crisis, from price gazumping to the protection of tenants' rights. The Minister has promised an additional 600 local authority housing starts for this year which is miniscule considering that an additional 10,000 applicants have gone on to waiting lists in the past year alone. Nothing has been done, or is even promised, to tackle profiteering in the housing market. According to his own Department's housing statistics bulletin, the house price index at the end of the third quarter of last year stood at 185 or 60 points ahead of the house building cost index and almost 70 points ahead of both the consumer price index and the average earnings index for adult workers. First Active, in its recent survey, showed that in the past year house prices rose by 44 per cent or 20 times the rate of inflation and 20 times the rate of increase in the cost of building a house.

The most depressing aspect of the present shortage is the Government's failure to admit it, to do something about it or even to plan for some longer term solution. Housing has now long replaced unemployment as this country's biggest social problem. Unless it is given the same priority as job creation and all of the social partners and relevant Government Departments and agencies are mobilised and focused on its solution it will destroy the economic success in which we all now take pride.

Shelter is a basic human need. If those who are at work can no longer provide a home for themselves and their families, they will inevitably either question the value of working in the first place or seek greater reward. House price inflation and housing shortages will inevitably work its way into the general economy and the individual personal hardship now being experienced by those who cannot provide or obtain their own homes will lead to a much more serious problem for all.

This country has prided itself on being a home-owning democracy. Our unwritten, unspoken social charter holds that if you work, the reward will enable you to provide for yourself and your family. That understanding meant a person could provide his own home. That social contract on which relative social stability has been built and maintained has now been seriously undermined. A young couple today, setting out to buy their first home are faced with house prices for a standard three bedroom semi of between £110,000 and £120,000 in the greater Dublin area. To buy the cheapest new house in Dublin at around £110,000 the couple will need savings of around £20,000 to cover the shortfall between mortgage and price and to provide for legal fees, furnishings etc. They will, in addition, need a mortgage of about £100,000.

To get a mortgage of £100,000 under the traditional formula used by most lending agencies – 2.5 times the income of the higher earner plus the income of the lower earner – they will need to have a combined income of somewhere between £45,000 and £50,000 to qualify for a loan. This means that two teachers, two nurses, two gardaí or two executive officers or higher executive officers in the Civil Service will not qualify for a loan and unless they have some private income, or parents who commit their retirement lump sum as very often happens, they will not be able to buy a home of their own. Given the low interest rates, some lending agencies may be willing to stretch the lending criteria.

Two teachers, for example, on the sixth or seventh point of their scale will have a combined income of about £35,000. For them, if they get a loan, repayments on a £100,000 loan will be close to £700 per month. Taken together with transport costs, child care costs and other costs associated with working, the real disposable income of such a family is bordering on material poverty in order to pay a mortgage. Inevitably, the marginal benefit of work for one of the partners comes seriously into question. A couple who manage to buy a house, even with the burden of a large loan, at least have a secure roof over their heads, but a couple whose earnings are £5,000 to £10,000 lower are caught in a housing poverty trap. Their income is too low for them to get a loan and too high for them to go on the council housing list. They end up renting in the private sector and face monthly rental payments of £600 to £700 for a family size dwelling with no security of tenure. Inevitably, the high price of houses, the high rents and shortage of private rented accommodation have driven increased numbers on to the housing waiting list, which has grown at an alarming rate and public housing provision is falling way behind.

The Minister emphasised the 600 extra housing starts for 1999. That is grossly inadequate when one considers an extra 10,000 applicants are coming on to the housing list every year. To disguise how inadequate it is, the Minister of State shifts the count and says he will provide for 10,215 new lettings in 1999. That is old style Fianna Fáil double counting. If a tenant is transferred from a three bedroomed flat to a newly built council house, that is one letting; if another tenant is transferred from a two bedroomed flat to the vacant three bedroomed flat, that is a second letting; and if a housing applicant is allocated the two bedroomed flat, that is a third letting. In this case, there is only one additional new dwelling and only one applicant will be taken off the housing list. That is mainly how the Minister gets 10,000 lettings from 4,500 new starts.

It all comes down to a long frustrating wait for housing applicants. There are young couples whose children are stuck in the boxroom of an in-laws' overcrowded house with family and inter-personal tension mounting by the day. Housing applicants are living in substandard and over-priced private flats, while their bad landlords are effectively subsidised by the taxpayer through the rent allowance scheme. Single elderly people trying to maintain some standards in their lives are living in fear of their landlords' knocking on their door, the expected notice to quit, their unprecedented and unfamiliar appearance in court, the humiliation of eviction and homelessness and the shame of becoming a reluctant dependant on State housing after working all their lives for personal independence.

Every Member of this House and every member of a local authority who is in touch with his or her constituents knows all of the personal hardships that go to make up the number on the housing list. The Minister of State must know this from his considerable constituency experience. Why is he and the Government doing so little about it? Why is housing so far down the Government's list of real priorities? Is the Progressive Democrats blind faith in the self-regulating market preventing the Government from intervening or is Fianna Fáil's legendary liaison with the construction industry making it so reluctant to act on the side of the home buyer, the tenant or the housing applicant?

The Government is almost two years in office, but it has no housing policy, unless one can describe a continuation of its current inactivity a policy. Every time it is asked about it, it points to the Bacon report. Peter Bacon and his associates were asked to examine particular aspects and distortions in the housing market and they did so professionally. However, their recommendations were not fully implemented by the Government and, even if they had been, they would not have been sufficient to deal with a problem that is wider than the remit given to Mr. Bacon in the first instance. It is unfair to Mr. Bacon and his associates for the Government to continue to link his name so often with their failure of policy. Mr. Bacon is not the Minister with responsibility for housing and it was not his responsibility to provide a surrogate housing policy for this hopeless Government.

The Minister and the Government have not been short of advice and suggestions as to what needs to be done to tackle the housing crisis. Voluntary bodies, trade unions, professional organisations, lending agencies and reputable economists and planners have all put forward proposals. I am mindful of bodies such as Threshold, the homeless initiative, Simon, Dublin Corporation, SIPTU, the CPSU, auctioneers and valuers, building societies, Colm McCarthy of DKM, Peter Bacon and many more who, over the past year and a half, identified the problems and suggested a way forward. What has the Minister of State done to assess and draw from this wealth of information and advice on national housing policy? Nothing. Has he established a housing policy unit in his Department? No. Has the Government established a housing committee? No. Will the Minister of State set up a housing commission? No. Does he have answers to address this problem? Most certainly he does not.

What needs to be done? Immediate action needs to be taken to tackle the housing waiting list. We require a major increase in the resources allocated to public and social housing. It is necessary to do this now because of the long lead in time between the allocation of resources and the provision of housing.

Action needs to be taken to tackle profiteering in new house building. There is a problem in relation to land prices. We have come a long way from the recommendation of the Kenny report, but the Government's decision to reduce capital gains tax was bad and is contributing to this problem. There is a need to control land prices. The average price for a new house in Dublin is £120,000, but the cost of building such a house is only £60,000 and the remainder of the cost of the house covers the price of the land.

There is a need to tackle problems in the private rented sector. A new deal is required in the private rented sector, one which would pro vide protection for tenants, security of tenure, a fair rents regime and enforcement of regulations. At present, only 13,000 of the rented housing units are registered, even though we know there are approximately 80,000 private rented units throughout the country. There is a new deal needed to encourage long-term rather than speculative investment in the private rented sector to encourage institutional investment such as building societies' investment and pension funds.

There is a need to tackle homelessness immediately. As Deputy Coveney said, it is unacceptable that people are sleeping rough in the doorways in this prosperous city. This is not a short-term problem. There is a need for a long-term strategy, which we are not getting from the Government, which pulls together housing policy, transport and planning. There is a need for radical changes in the way we plan and use our space, and that needs to be integrated. We do not need to repeat the mistakes of the past where housing was regarded as simply providing houses without any regard to the social and community infrastructure that was needed.

There is a need to increase supply, but supply needs to be increased to meet need, not just economic demand. Somebody with spare cash can add to the demand, but he or she may not be in need of housing. Government policy to date has focused on supply to meet economic demand rather than supply to meet the needs of people who are in need of homes. I heard nothing, for example, from the Minister about the suggestion that 20 per cent of new projects and developments should contain a social housing provision and the need to give that legislative back-up. For example, if there are to be increased densities, there is a need to enshrine that in good design and the provision of community facilities. There is also a need to plan land use on a rational basis, rather than on a developer driven basis, which is the practice we have seen so far.

We must look at the housing problem in the context of the construction industry as a whole. One of the problems in the construction industry which has contributed to the housing crisis, is its cyclical nature. We need a stable construction industry which is there for the long haul, not based on speculative development, but providing houses to meet the needs of our people and secure employment for its employees. The Government needs to intervene to ensure that we have a construction industry which is sustainable, not one which is there to make a quick buck when times are good and then disappear when times are bad.

Debate adjourned.

Dáil Éireann debate - Tuesday, 2 Feb 1999

Private Members' Business. - Housing Crisis: Motion.

Mr. Coveney:

Dáil Éireann debate -
Tuesday, 2 Feb 1999