Dáil Éireann debate -
Tuesday, 13 Jun 2000

Vol. 521 No. 1

Private Members' Business. - Housing Policy: Motion.

Mr. Gilmore

I move:

That Dáil Éireann, conscious that—

(a)since the election of the Fianna Fáil/PD Government three years ago,

*house prices have risen by over 70%,

*rents in the private rented sector have doubled,

*the number of applicants on housing waiting lists has increased to over 50,000,

*the numbers of homeless people have doubled;

(b)the housing policies pursued to date by the present Government have failed to adequately address the housing crisis;

calls for a radical change in national housing policy to provide for the following:

State Intervention in Building Land

–that the Government direct each local authority to assemble a publicly owned land bank, capable of supplying the sites necessary to meet housing need for the foreseeable future, and thus facilitate better planning;

–that these land banks be acquired by compulsory purchase, where necessary;

–that the land be released to facilitate all forms of housing development, including private housing, affordable housing schemes, public and social housing and voluntary sector housing;

–that undeveloped lands which are zoned for residential development be acquired as part of the publicly owned land banks;

–that the local authority have first option on acquiring newly zoned land for the public land bank.

Price Control on New Housing

–that the Government introduce price control on the sale of new houses, taking account of the costs of house building, the new arrangements for the control and provision of building land and sustainable margins for the building industry;

–that house price control be implemented through a system of fair price certification as proposed in the Labour Party Commission on Housing.

Regulation of the Housing Market

–that legislation be introduced to regulate the operation of the housing market and to protect the consumer rights of house purchasers and to provide for–

*an end to price gazumping,

*minimum quality standards for house construction,

*redress for purchasers whose dwelling is not built or completed to a satisfactory standard,

*control and regulation of charges and practices by professionals and agents in the housing market, including auctioneers, advertisers and legal personnel,

*the establishment of a housing market regulator.

Establishment of a National Housing

Authority

–that a national housing authority be established to lead and co-ordinate the national effort to provide a sufficient number of homes at affordable prices to meet foreseeable housing needs;

–that the national housing authority be the vehicle through which State funding will be provided for the acquisition of building land and for social and public housing programmes;

–that the national housing authority provide the necessary managerial, professional and technical assistance to local authorities and voluntary housing bodies to enable them meet their housing targets;

–that, where necessary, the national housing authority be the body through which public ownership of building land is achieved;

–that, where necessary, the national housing authority supplement the efforts of local housing authorities who are unable to achieve their housing targets.

Strengthening Voluntary Housing Sector

–that the voluntary housing sector be strengthened, supported and resourced to enable it to become a much larger provider of affordable housing;

–that the necessary supports for the voluntary housing sector be provided through the national housing authority.

Reform of Private Rented Sector–that legislation be introduced to provide basic rights for tenants in private rented accommodation and to re-regulate the private rented sector with particular reference to—

*security of tenure for residential tenants, similar to that available for commercial tenancies,

*rent certainty, with rent increases to be index-linked,

*the establishment of a housing court with a mediation service to which landlords and tenants can have quick access for the resolution and arbitration of disputes about leases, rents or any aspect of private renting.

Student/Transient Worker Accommodation

–that purpose built accommodation be built on campus where possible, to help meet the particular accommodation needs of students;

–that industrial and commercial developments should henceforth contain a residential component to help meet the needs of short-term and transient workers.

Local Authority and Social Housing–that the Government's target of providing 22,000 new local authority or social housing units, be increased to 50,000 and that this be front loaded and reviewed on an annual basis.

Housing Benefit

–that a new form of housing benefit be introduced to replace existing schemes such as rent allowances, and that this benefit be administered through the local housing agency.

Reform of Housing Administration

–that the administration of housing policies and schemes be reformed and that the various forms of assistance available through local authorities and health boards be centralised in each housing authority;

–that appropriate staffing and training, including estate management, be provided for the housing authorities.

I wish to share my time with Deputies Upton, Joe Higgins and Caoimhghín Ó Caoláin.

An Leas-Cheann Comhairle

Is that agreed? Agreed.

Mr. Gilmore

This motion outlines the Labour Party's response to the housing crisis and we are seeking the support of Dáil Éireann for the comprehensive package of measures we are proposing.

The housing crisis is damaging individuals, families, communities and the economy. A few weeks ago, during Committee Stage of the Planning and Development Bill, the Minister for the Environment and Local Government, Deputy Dempsey, admitted that a couple with a combined income of £40,000 could not afford to buy a home from their own resources and would have to qualify for the new affordable housing schemes. In other words, two young teachers, professionals or public servants can no longer afford to buy on two salaries the same house their parents could have bought on one income 30 years ago.

We all know of the financial price of housing but there is also a significant personal, family and economic cost. To obtain the money to buy a house, people are over borrowing and exposing themselves to financial risk, particularly if interest rates continue to increase or house prices collapse. To buy a house at a price they can afford, many couples are now buying homes a considerable distance from their place of work and from their families and friends, thus adding to commuting time, congestion on the roads and the disintegration of communities.

To pay the mortgage, it is necessary for both partners to work long hours with obvious con sequences for family life, child care and relationships. Those who cannot afford to buy are forced to rent, often at monthly rents higher than mortgage repayments for a similar property. This increased demand for rental accommodation is, in turn, squeezing out those who traditionally rented on a short-term basis, mainly students and young single workers. All these factors are adding to the increasing numbers on waiting lists for local authority and social housing. At the sharp end of the crisis, evictions are increasing and homelessness is growing.

In March 1999, there were more than 50,000 applicants on council waiting lists for various forms of public and social housing. If one assumes the average family comprises three people, that is 150,000 people. To this figure one can add those who do not qualify for local authority or social housing, those who cannot afford to buy a house and those in need of short-term accommodation, such as students and young workers. It is no exaggeration to state that 250,000 people are directly affected by the housing crisis. Many more people are indirectly affected by the crisis such as families of those on council waiting lists who have to cope with stressful and over-crowded conditions, as three generations are often crammed into a small family dwelling. Those indirectly affected also include retired workers who put up pension or redundancy lump sums to provide down payments for their sons or daughters who are seeking to buy a house.

The economy is also affected. For the past two years or more, international bodies such as the OECD, the European Commission and the European Central Bank have expressed concern about rising house price inflation in Ireland, warnings also expressed by the ESRI, IBEC and the ICTU. The housing crisis is the largest threat to the continued health of the economy. Mortgages are not included in the consumer price index, but rising house prices have helped to re-kindle inflation, now at its highest level for 15 years.

The labour shortage is exacerbated by the housing crisis. The former chairman of FÁS, given the task of encouraging Irish emigrants to return, recently cited the high cost of housing as the greatest disincentive. Individual employers and IBEC have also drawn attention to high housing costs as an obstacle to investment and labour mobility. In Dublin, there are reports of hospitals unable to recruit nurses, schools unable to recruit teachers and, in the past week, one bank offered a special pay increase to Dublin-based employees to help offset the spiralling cost of housing. In addition, the trade union movement has warned that the partnership agreement is at risk because of the Government's failure to address the housing crisis.

The reasons for the crisis in housing are complex and interlinked. It would be unfair to blame the Government for starting the increase in house prices, but it is to blame for allowing the problem to develop to crisis proportions. Three years ago, just before the Government took office, the aver age price of a new house was £73,523. The most recent figures published by the Department show the average price of a new house is now £124,545 – an increase of 70%. Before this Government took office the average price of a new house in Dublin was £84,001, that figure has almost doubled to £163,797.

These are the official figures published by the Department which show that while this Government has been in office, average house prices have risen by £20,000 per year throughout the country, and by almost £30,000 per year in Dublin. When this Government took office, it was possible to rent a family sized house or apartment in Dublin for about £400 per month. The same letting now costs almost double that sum at £750 or £800 per month.

Before this Government took office there were 26,000 applicants seeking local authority housing. By March 1999, the latest date for which figures are available, that number had risen to 40,000 and the total number on all council waiting lists for all forms of social housing was 50,000. That assessment is 15 months out of date and the total number on housing lists is probably closer to 60,000.

The report of the cross-departmental team on homelessness published last month noted the number of homeless people increased during our period of greatest wealth, from 2,501 in 1996 to 5,234 in 1999. Almost 1,000 of these are children living in the Eastern Regional Health Authority area, as highlighted in the report of the homeless initiative published last autumn.

This Government has been a complete failure on housing. Three years ago, it grandiosely proclaimed in its first programme for Government that, "Fianna Fáil and the Progressive Democrats in Government are committed to the deeply held ideal of so many Irish people – home ownership". However, this Government has made home ownership an impossible dream for many.

This is the first Government to put home ownership beyond the reach of young middle income working couples. Its response to the housing crisis has been characterised by denial, delay and deficiency. At first it refused to recognise there was any crisis. Shortly after the formation of this Government, professionals in housing, particularly those involved in social and voluntary housing, began to demand the establishment of a housing commission to examine the housing problem in its totality. The Minister for the Environment and Local Government, Deputy Dempsey, and the Minister of State, Deputy Molloy, who are absent from this debate so far, pointedly refused to establish a housing commission and insisted this was a market problem which could be resolved by increasing supply and rebalancing the market. Almost every belated attempt by this Government to address the housing crisis has been a failure.

Deputies Molloy and Dempsey claimed that increasing housing supply would restore balance to the market. Last year housing output increased to a record 46,000, of which only 3,500 was for social housing, and a large proportion of the new houses built last year were purchased by investors. The number of first time buyer's grants issued by the Department actually fell. The Government is at last recognising what the Labour Party has been arguing for the past two years – that increasing housing supply is not enough and that intervention in the market is necessary.

The Government also gave credence to the notion promoted by developers that local authorities had not zoned sufficient land for residential development. The Department's national survey of building land published last week clearly shows that sufficient land is zoned to satisfy building requirements for the next four years at least, and that the real problem with building land is caused by speculation and hoarding.

The two Bacon reports published in 1998 and 1999 were supposed to calm the housing market and reduce investor activity. However, they achieved neither. The conclusions being reached in the third Bacon report are proof that the first two failed to resolve the problem. The new house price index rose from 176 when the first Bacon report was published in spring 1998 to 236 at the end of 1999, an increase of 60 points, hardly evidence of price calming.

The various incentives introduced by Government to assist the building industry have been pocketed by builders and developers and not passed on to the house purchasers. The serviced land incentive, in effect, is a State subsidy to builders and developers who are already making high profits. The reduction in capital gains tax from 40% to 20% was supposed to encourage the release of building land, yet even now the Government admits this has not worked and that building land is being hoarded. Despite the incentives provided by Government, all the evidence is that builders, developers and land speculators are making an enormous killing at the expense of house buyers.

The indices published in the Housing Statistics Bulletin of the Department of the Environment and Local Government are revealing on this point. They show that back over the years, the new house price index remained consistently in line with the consumer price index, the average earnings index and the house building cost index. In 1995, the house price index was 116, average earnings 116, the CPI 111 and cost of building 114. By the end of 1999, the house price index had shot up to 236 whereas the CPI had only increased to 121 and the cost of building index to 134. In other words, the cost of building a house, that is the cost of labour and materials, had increased by 20 points since 1995, but the price of the house had increased by 120 points. The 100 point difference is the excess profit that has been made by a combination of land owners, builders and building professionals directly at the expense of the house buyer.

Those official figures show the irrefutable evi dence of profiteering in the housing market. We all know that house prices have increased over the past five years, but these figures show that house prices have gone up not because it is more expensive to build houses but because sections of the construction and development industry have been plundering the house buyer for excess profit.

The housing crisis is no longer capable of being solved by modest reforms such as changes in stamp duty or capital gains tax. Comprehensive and radical measures are needed to get to grips with the depth of the housing crisis. In this motion tonight, the Labour Party puts forward such a package. It is based on the excellent study of the housing crisis undertaken by Professor P. J. Drudy of Trinity College who chaired the Labour Party housing commission which reported in May last year. Unlike the failed Bacon reports, Professor Drudy's analysis has endured and the innovative recommendations contained in the report of the housing commission, some of which were dismissed by the Minister at the time, are coming to be accepted as necessary and urgent.

There are ten essential elements to the housing strategy proposed by the Labour Party. Our first proposal relates to State intervention in building land. It is generally accepted that the price and availability of building land is one of the major factors contributing to high house prices. In their submission to the Oireachtas Joint Committee on the Environment and Local Government, the CIF and the Irish House Builders Association stated that the cost of land accounts for approximately 50% of the price of new houses. The ICTU told the committee of its evidence that building land in Dublin is being hoarded by a small handful of developers who control 80% of the zoned land in the capital. Some builders are experiencing great difficulty in acquiring sites at a reasonable cost because of the land hoarding by large developers. The windfall profits being made from land rezoning have contributed to speculation in agricultural land in and around towns and cities and that, in turn, has contributed to the corruption of the planning process, which is the subject of the Flood tribunal.

Measures to end land speculation and to release building land for the construction of urgently needed houses are long overdue. The Labour Party proposes that the Government should direct each local authority to assemble a land bank capable of supplying the sites necessary to meet housing need for the foreseeable future. Local authorities already have the power to buy land for development purposes and to acquire land by compulsory purchase, where necessary. In addition, we propose that local authorities should be given the power and resources to compulsorily purchase undeveloped zoned land that is being hoarded and to have first option on the acquisition of newly zoned residential land. Such land banks would be managed by the local authority and the land released not only for the authority's housing programme but also for the private house building sector, affordable housing schemes and housing to be provided by the voluntary sector.

There are several advantages to bringing building land under the management of local authorities. Through the local authority services such as roads, water and sewerage are provided to these lands. The local authority is responsible for the planning of development and ultimately taking public charge of housing estates when built and often for the provision of community, leisure and recreational facilities. By putting the local authority in charge of the land resources, we provide for better planning and for the development of communities and community facilities at an early stage of development.

In the context of house prices, this measure would undermine land speculation and puncture the land profiteering which is adding so much to the cost of housing. Considering the huge amount of housing development that must be undertaken over the next decade, approximately 500,000 new houses, it makes sense in the interest of making houses affordable and of good planning to manage the land resource by the same public authorities that are responsible for servicing, planning and ultimately taking public charge of the development.

To resource this initiative, the Labour Party proposes to use part of the surplus that has been generated by the sale of State assets. The Government intends to use these funds to establish a public service pension fund. The Labour Party believes those funds should be invested in Ireland and that investing in residential land would serve two purposes. It would help resolve the housing crisis while investing at home in a secure asset on which a sufficient return could be obtained to underpin public service pensions.

The Labour Party's second proposal relates to the establishment of a national housing authority. This State is facing a decade of house building unprecedented in our history. It is estimated that 500,000 new dwellings will be needed over the next ten years. That means that one in every three housing units needed by 2012 will have to be built over the next decade. To drive and co-ordinate the provision of housing on this scale, the Labour Party proposes the establishment of a national housing authority. The existing National Building Agency and Housing Finance Agency could be consolidated into a new NHA. Such an authority would be responsible for the allocation of funding for local authority land banks, overseeing local authority house building programmes, the acquisition of building land, where necessary, the provision of professional, technical and managerial support to the voluntary housing sector, supplementing the house building efforts of local authorities, where necessary, and administering quality standards and fair price certification.

At critical stages in the development of this country it has been necessary to establish national agencies to drive and co-ordinate the process. We needed the IDA for industrialisation, the ESB for electrification, FÁS for industrial training and, more recently, the National Roads Authority for road development. Our national housing need is now so great that provision can no longer be left to the traditional sources of private house building and local authorities. A co-ordinated national effort is required, hence the need for a national housing authority.

The Labour Party's third proposal relates to the control of new house prices. I referred earlier to the extent to which the price of new houses has shot ahead of the cost of building them. The extent of excess profiteering in the housing market is a justification for putting some control on new house prices. Such control will be needed, in any event, if the measures on building land proposed by the Labour Party are to be adopted. Controls on price will also be needed when the 20% affordable housing provisions in the new planning Bill eventually take effect. Controlling new house prices is not a new concept. In the 1980s an attempt was made to control new house prices through certificates of reasonable value. The Labour Party housing commission has proposed a more refined and more effective means of controlling new house prices through a system of fair price certification which would be based on the cost of house building, the new arrangements which we are proposing for the control and provision of building land and sustainable margins for the building industry.

Our fourth proposal relates to the regulation of the housing market. Not all of the profiteering in the housing market is attributed to land speculation. There has been well reported evidence of price gazumping by builders. Last year a Bill on that subject introduced by Deputy Hayes was debated in this House. The standard and quality of some new houses is poor. Workmanship, finishes and the quality of materials are sometimes substandard. While the house buyer has redress to the home bond scheme for major defects in a house, there is little a purchaser can do to resolve matters such as uncompleted snags or poor quality materials.

There is no licensing or regulation of our building industry. Any person without the necessary qualifications or experience can set himself up as a builder.

Clearly there is a need for regulation of the building industry. Similarly, the practices of some auctioneers, advertisers and lawyers in the housing market have been less than commendable and have added hype to that sector and contributed through that hype and high fees to the increased prices being paid by the purchaser.

The Labour Party believes legislation is needed to regulate the operation of the housing market, including the registration of builders, the activities of professionals and agents in the market; the control of standards and the protection of the housebuyers' consumer rights. We are proposing the establishment of a regulator to oversee all aspects of the operation of the housing market.

Our fifth proposal relates to local authority and social housing. In March 1999 there were more than 50,000 applicants on council waiting lists for local authority housing and for the various other forms of social housing. Despite the fact that overall house construction has doubled in the past five or six years, the number of local authority and voluntary sector houses being built has remained static. In 1999 there were fewer local authority and voluntary sector houses completed than in 1995. The figures for 1995 are 2,960 local authority houses and 1,011 voluntary sector houses, a total of 3,971, while the figures for 1999 are 2,909 local authority houses and 579 voluntary sector houses, a total of 3,488.

The prospects for 2000 are not much brighter. At the recent meeting of the environment committee which considered the Department's annual Estimate, the Minister admitted the total number of completions for this year would be about 4,000, a far cry from the 5,500 promised in the Programme for Prosperity and Fairness and in the national plan, and an even further cry from the number required. More applicants are being added to the housing list every year than the number of houses being provided. There will have to be a massive increase in the public and social housing programme. The Labour Party has proposed a front loaded programme for the construction of 50,000 local authority and social housing units. This programme should be reviewed on an annual basis and adjusted to meet anticipated need.

Voluntary housing accounts for only about 1% of house tenure in Ireland. This is the lowest in Europe. Clearly there is huge scope for the voluntary sector, including building co-operatives, trade unions and others, to become directly involved in housing provision. The Minister has set an ambitious target of 4,000 voluntary sector housing units per annum. Only slightly more than 500 per year are being built. To increase the output of the voluntary sector, it is necessary to provide a much wider range of supports for the voluntary housing sector. We propose that this be done through the National Housing Authority.

For a variety of reasons there is a necessity to reform local housing administration. First, there is considerable overlap and duplication between the local authorities and the health boards. The local authorities maintain the housing lists and allocate houses but the health board is responsible for emergency accommodation for homeless people. The local authorities are responsible for the registration of private rented accommodation but the health boards administer the rent allowance scheme. All this administration should be rationalised and brought under one roof. Second, local authorities have in recent times been unable to meet the relatively modest housing targets set for them. In some cases this is due to land shortage, but in others it points to a need to strengthen the skills and resources in local authority housing departments. There is a need to develop a housing services profession within the local government system and to provide appropriate training for local authority staff who are working on new and difficult areas of housing administration, such as estate management.

We have particular proposals in the private rented sector. In April, RTE broadcast a hard-hitting documentary on the private rented sector. It highlighted a number of things. It showed that landlords were taking rent from tenants in accommodation which had been condemned and it highlighted a string of examples where accommodation was unsafe with serious structural problems, appalling wiring and dampness.

The private rented sector is in tatters. We are the only country in Europe which has no effective legislation to govern the relationship between landlords and tenants. Lack of affordable private housing and the enormous shortage of public housing has forced more people into private rented accommodation and, as an off-shoot from the demand in this sector, standards have dropped and prices have soared. Some 12 months ago it was clear that new legislation was needed to deal with standards and security of tenure in the private rented sector. True to its record on housing, the Government turned into jelly and avoided the issue by establishing a commission to identify the problems in the sector. We have yet to see the recommendations of this commission.

The Labour Party is calling for the introduction of legislation to protect tenants in the private rented sector. We are seeking security of tenure for tenants. Figures from the housing agency, Threshold, which show that illegal evictions doubled last month, are indicative of the urgency attached to our demand. In this motion we seek also rent certainty. Today's consumer price index shows the single biggest factor in rising inflation was housing costs, and much of this can be attributed to rising rental costs. Rents should reflect people's ability to pay and not the value of property.

As an additional safeguard in the private rented sector, we propose the establishment of a housing court which would operate along similar lines to the Employment Appeals Tribunal to determine issues relating to security of tenure, rent certainty and other disputes between landlords and tenants. Students and transient works have specific accommodation needs. To date, the State has failed to develop any ground rules which would ensure their access to short-term housing within the vicinity of their workplace. Most European countries have developed provisions which ensure students are not forced to spend the first three months of each academic year in search of housing which is either unaffordable or in appalling condition. We propose the building of purpose built accommodation on campus, where possible. During off-peak periods, this accommodation could be used to facilitate conferences and exchange students.

In this motion, we are also putting an onus on commercial and industrial developments to contain a residential component to cater for transient and short-term workers. The administration of rent allowance and other housing benefits is out-dated. The changing needs of the labour force and the increasing dependency on private rented accommodation among low paid workers makes it imperative that the schemes be radically altered in the way in which they are administered.

The Labour Party proposes a new housing benefit which would be neutral as to the tenure of housing and the labour market status of the applicant. As it stands, a low income family on family income supplement who live in private rented accommodation cannot access any rent subsidy, while a family in similar circumstances in local authority accommodation will qualify for differential rent. Such anomalies need to be addressed in a meaningful way through the introduction of a single benefit.

The report of the Labour Party housing commission last year set down four basic principles to underpin housing policy. First, housing is a social good. Since housing represents one of the fundamental requirements of human beings, it should not be treated in the same way as non-essential traded commodities for speculation or investment. Second, every person should have a right to good quality affordable housing appropriate to their particular needs. This right should be enshrined in the Constitution or in legislation. Third, in view of the particular significance of housing for society, market forces alone must not be allowed to dictate its provision and price. In accordance with the Constitution, strong intervention by the State may be essential in the interests of social justice and the common good. Fourth, land is one of the critical resources required for housing. For this reason, actions of the State on behalf of the community to re-zoning, planning permission or the provision of infrastructure should not result in significant untaxed gains to landowners.

Unfortunately, these are not the principles which inspire this Government's housing policy. For this Government, a house is a commodity. To the Progressive Democrats, housing is a market and they are ideologically hung up about State intervention in that market. For Fianna Fáil, the house building industry is its commercial wing and it too has been reluctant, for obvious reasons, to intervene in the interests of the house buyer.

An Ceann Comhairle

The Deputy's time allocation is up.

Mr. Gilmore

I thought I had 40 minutes.

An Ceann Comhairle

I understood the Deputy was sharing time.

Mr. Gilmore

In that event I shall leave the remainder of the time to my colleagues.

Dr. Upton

The housing crisis in Dublin is at an all time high. Demand for local government housing has never been greater and private housing has never been more expensive. It is impossible for a young person on an average salary to contemplate the purchase of his or her own home. The luxury of ownership of their own property is totally outside the realm of most young people on an average wage. Although, as a country, more houses are being built than ever before, only 7.5% of these are for social housing even though the ESRI estimates that the proportion needs to be raised to 35% to meet current housing needs.

The price of new and second-hand houses in Dublin increased by almost £30,000 last year. This level of increase is impossible for the average home buyer. Speculators are now one of the major causes of the house shortage. Houses were purchased by speculators for purposes of investment and letting, thus depriving first-time buyers of the opportunity to purchase their own homes at a reasonable price.

The rate of homelessness has doubled in the past three years. This is another aspect of the housing crisis that has been forgotten by those who reaped the rewards of many of the planning scams of the 1970s, 1980s and the early 1990s. The number of hostel places for homeless women, for example, is nowhere near adequate. At present the number of homeless women in Dublin is estimated at more than 1,000, but hostel places are available for less than 500.

The Government has presided over an unprecedented increase in the number of homeless people in our capital city. At a time of unequalled wealth it is unforgivable that so many people should have to face such a situation day after day and night after night on our streets. The resources to deal with homelessness are available but the political will to use them is absent. The causes of homelessness are complex and often related to factors other than material needs, but the problem of homelessness on our streets is a national scandal. It is a problem that could be reduced significantly if only the political will existed to address it comprehensively.

There is a need to review the system of allocating local authority flats or houses. People find it difficult to understand why some are allocated flats or houses while others drop further and further down the waiting list. For the latter group, it is like looking for a pot of gold at the end of the rainbow – it never arrives. One of my constituents has been 14 years on a housing transfer list. Each time he thinks he is almost there, the points increase again and once more a house is beyond his reach.

An ombudsman to deal with housing complaints or concerns, such as the one I have just described, would be one way of addressing the problem. An appeals mechanism would remove all doubt or question from the minds of those on the list. All allocations and the reasons for such allocations should be publicly available.

Tenants in private rented accommodation are paying huge rents and have few, if any, legal rights. Unlike most other European countries, Ireland offers little protection to tenants. Generally, tenants can have their rents increased by the landlords at will and can be evicted for no reason, with just one month's notice. Inordinate rent increases at the whim of a landlord provide an effective way of ensuring tenants will leave their accommodation.

Just two weeks ago, one of my constituents had her monthly rent increased by £200. In such a case there is no need for a landlord to consider an eviction notice because the unfortunate tenant has no choice but to move on. As always, it is the vulnerable who are exploited in this way. They have little redress, are unable to afford the rent and are forced to find accommodation of poor quality. Alternatively, they will find themselves homeless. Tenants in private rented accommodation have to be protected. Above all, there must be a fair and equitable system of appeal that will ensure tenants are not victimised by an unscrupulous landlords.

Many tenants live in unbelievable conditions because they cannot afford to complain for fear or being evicted or having the rent increased beyond their reach. All private rented accommodation should meet minimum standards of comfort and safety. Landlords should be required to be registered and subject to a quality control system as applies in the provision of many other services and facilities. Those who do not reach the required standards should not be allowed to let their properties and should be subject to stiff penalties if found in breach of the regulations.

Standards of new homes should be assured through quality assurance schemes as in other production processes. Shoddy work, unfinished building sites and poor quality materials should be eliminated. People are not only paying a great deal for their houses – that is, those who can afford to buy a house – but new houses are frequently poorly finished and the quality of materials used is also poor. The surrounding areas are often neglected by the builder as he moves on to commence another new job, leaving behind unsightly debris, including rubble.

Increasingly, people buy their houses from plans without even seeing a show home and once they have paid their deposits, little redress is available to them. It is beyond the means of a young couple to engage in long and expensive legal battles. Instead, they opt to endure the poor workmanship and shoddy materials simply because they cannot afford an alternative.

A landbank is available in Abbotstown, which it is proposed to use as a sports stadium. Since nobody appears to need this white elephant, it would be much more appropriate to dedicate the site to housing.

Caoimhghín Ó Caoláin

I thank Deputy Gilmore for sharing his time. I support the motion and I note that many of the measures contained in it reflect proposals put forward by my party in our general and local election manifestos, as well as in successive pre-budget submissions I have prepared since 1997.

We have been in the depths of a housing crisis since the Government took office and that crisis has worsened since the general election almost three years ago. At a time when there are daily revelations about the funding of the two major parties by speculators and developers, more than 50,000 people are languishing on housing waiting lists. These waiting lists were created by the inaction of the same parties in successive Governments and by the gross profiteering of their friends and fundraisers. This is a national scandal.

The 1999 assessment of local authority housing needs showed more than 700 people on the waiting list in County Cavan and more than 600 in County Monaghan. People in desperate housing need contact me, and my party colleagues, daily. For these people this is a crisis. Their right to housing is fundamental and it is primarily the responsibility of the State to direct provision by the local authorities to ensure these people are housed.

There must be action by the Government to curb speculation. In its pre-budget submission, Sinn Féin argued for an increase in capital gains tax on speculative owners of multiple dwellings. Such a tax could be introduced on a phased basis over a period of two years – at 40% in April 2001 and 60% in April 2002. We also called for the abolition of stamp duty for all houses whose purchase price is less than £150,000.

We have yet to see the measures we are told were approved by the Cabinet today, but it is reported that the Government – very belatedly, I may add – is coming some way towards these proposals. I hope it is, but much more needs to be done and much more should have been done before now. Whatever measures are announced this week, they cannot hope to make up for the three years of failure and neglect of the housing crisis by the Government. When the next general election comes and the record of the Government is examined, this will prove to have been the single biggest failure. That will be crystal clear to the electorate.

Mr. Higgins

(Dublin West): I support the motion in the name of Deputy Gilmore. We have a massive housing crisis not as a result of any accident, but because the Government is in the pockets of speculators, big builders and developers. It puts the interests of that small cabal before those of ordinary working people and the poor. We have a crisis in the private rented accommodation sector because the Government is in the pockets of landlords. It allows free reign to rack rent at a rate that would make even the landlords' 19th century predecessors blush with shame, such is the level of exploitation and profiteering.

The revolting saga of corruption and payola that has been revealed in all its lack of glory in recent months, featuring politicians and political parties in the pay of developers and big builders, leaves ordinary people with a heavy price to pay. Politicians and political parties in the pocket of this cabal have allowed it to profiteer outrageously at the expense of ordinary people. There should now be an immediate imposition of an 80% tax on windfall profits that have been accrued as a result of profiteering by this cabal in the housing industry in the past few years. Speculation must be rooted out.

The price of building land has to be strictly controlled through a landbank – as envisaged in the motion – which would be purchased by local authorities at agricultural prices. We desperately need controls in the private rented sector, including security of tenure and controlled rents. Purpose-built accommodation for students would free up thousands of places in the private rented sector and, in turn, would assist in providing necessary accommodation. We need massive investment in local authority housing. The horrific suffering of people in need of homes due to overcrowding, tension and stress, which I as a public representative witness on a weekly basis, must be dealt with. We need emergency investment to meet this need. We must put people before profit and provide a proper housing policy.

Minister of State at the Department of the Environment and Local Government (Mr. D. Wallace)

I move amendment No. 1:

To delete all words after "Dáil Éireann" and substitute the following:

"(f2>a)acknowledges the housing achievements of the Government including;

–significantly increasing overall housing output since coming to office,

–the introduction of an expanded multi-annual local authority housing programme,

–the range of measures taken to expand output of the voluntary housing sector,

–the introduction of a comprehensive integrated strategy to meet the needs of homeless persons,

–the inclusion of housing for the first time in the national development plan and the provision of £6 billion for social and affordable housing over the period of the plan,

–the measures taken by the Government in "Action on House Prices" and "Action on the Housing Market" to increase housing supply and moderate house price increases, and

(f2>b)welcomes the Government's comprehensive, credible and coherent housing strat egy across all housing tenures and sectors including initiatives to:

*maximise and expedite housing supply through

–introducing and financing a serviced land initiative which will deliver over 115,000 additional serviced sites for housing,

–additional investment to remove any significant infrastructural constraints – roads, water, sewerage, public transport, to housing development,

–fast-tracking significant infrastructural projects required to facilitate housing investments,

–preparation and publication of residential density guidelines to ensure more efficient use of housing land,

–a strategic approach to future development in the greater Dublin area and throughout the country,

–initiating the strategic planning guidelines for the greater Dublin area, and ensuring the guidelines are kept up to date,

–taking measures to increase the capacity of the planning system, including increased staffing of local authority planning departments and An Bord Pleanála,

–establishing a housing supply unit within the Department of the Environment and Local Government to ensure urgent and effective delivery of supply measures and to address any bottlenecks;

*comprehensively reforming planning law in the Planning and Development Bill, 1999, including:

–provisions to allow local authorities acquire up to 20% of land being developed for housing at existing use value, or cost price if purchased before publication of the Bill, for social and affordable housing in response to identified need,

–a substantial number of changes designed to streamline the planning system and speed up the processing of planning applications so that delays to necessary development, including housing, are kept to a minimum,

–integrating housing fully into the planning system through the making of housing strategies,

–provisions to ensure sufficient land is zoned for housing,

–the development of more socially integrated communities;

*adopt a long-term strategic approach to planning housing settlements through:

–preparing a national spatial strategy which will identify broad spatial development patterns for areas and set down indicative policies in relation to the location of industrial, residential and rural development to deliver more balanced development between and within regions,

–further refining and implementing of this national approach through regional planning guidelines and individual local authority development plans;

*secure house price stabilisation through:

–increasing housing supply in response to increased demand,

–removing the problem of illiquidity in the second-hand housing market through reducing stamp duty rates on housing,

–withdrawing investor incentives to tackle speculative investment in housing;

*improve access to housing for first-time purchasers through:

–promotion of higher densities in appropriate locations,

–improvements to shared ownership scheme,

–the introduction of new affordable housing scheme,

–reducing stamp duty levels,

–reducing competition from speculative investors for starter housing;

*place the private rented sector on a secure long-term footing through:

–the establishment of a commission on the private rented residential sector which is due to report by the end of June to examine the various issues surrounding the landlord-tenant relationship and to make recommendations designed to improve security of tenure, maintain a fair and reasonable balance between the rights and obligations of both landlords and tenants, increase the supply of rented accommodation and remove constraints to the development of the sector,

–introducing specific tax incentives to increase the supply of student accommodation;

*increase social housing output through:

–investment of £6 billion, in 1999 prices, under the national development plan for the provision and improvement of social and affordable housing and accommodation to meet the needs of 50,000 households over the period 2000-03 and 90,000 households over the period of the plan,

–expansion of the local authority housing programme to deliver 35,500 local authority starts over the plan period and the introduction of a multi-annual programme to ensure more effective planning and implementation of local authority housing delivery,

–significantly increased levels of funding assistance to voluntary housing bodies under the voluntary housing schemes including, for the first time, additional assistance towards site acquisition costs,

–establishment of a dedicated voluntary housing unit to drive the expansion of the voluntary housing sector;

*improve the existing social housing stock through:

–regeneration of Ballymun involving the provision of 2,800 dwellings to replace the existing stock at a total projected cost of £350 million,

–a comprehensive redevelopment programme for a number of inner city flat complexes,

–continuing a high level of funding for the remedial works scheme and extending its coverage;

*ensure the effective delivery and funding of accommodation for groups with special needs including the provision of:

–substantial additional resources have been devoted towards the needs of homeless persons, including doubling the funding for hostel accommodation,

–development of a comprehensive, integrated strategy to combat homelessness including emergency, transitional and long-term responses taking account of matters relating to health, education, employment and home making,

–enactment of the Housing (Traveller Accommodation) Act, 1998, which provides an updated legislative framework for the provision of Traveller accommodation and requires housing authorities to prepare and adopt five year programmes to meet existing and projected needs of Travellers in their areas;

*significantly increase funding and improve the range of schemes providing targeted assistance to those most vulnerable and those with special needs through:

–increasing the effective maximum disabled person's grant from £8,000 to £14,000 and from two thirds of the cost of works to 90% of cost,

–increasing the effective maximum essential repairs grant from £1,800 to £6,000 and extending the scheme to urban areas,

–increasing funding for the task force on special housing aid for the elderly to record levels, from £4 million in 1997 to £8 million in 2000;

–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 to suitable housing accommodation."

I am pleased to have the opportunity to address the House on the crucially important subject of housing and to outline yet again the main features of the Government's approach to housing and the degree to which the Government's measures are yielding positive results in a period of extraordinary and unprecedented growth in housing demand.

The Labour Party's motion for discussion here this evening is nothing more than a hopeless attempt to dredge up the hulk of their so-called commission on housing, the report of which was launched by that party for the local elections and promptly and unsurprisingly sank without trace. That they would seek to do this is understandable given the party's poverty of ideas and mix of ideologies but I am genuinely disappointed that the Labour Party still seems unable to grasp even the most basic issues involved.

Its motion is testament to the strong philosophy of control and regulation alive and well in the new Labour Party. The headings alone betray its outdated and discredited philosophy – state intervention, price control, regulation of the market. Of course, no piece of good old-fashioned socialist rhetoric would be complete without a call for the establishment of a quango or two. Its lack of understanding of the real world is illustrated clearly by the absence in its motion of any mention of the need to address supply and capacity bottlenecks or the need for a strategic approach to development planning.

In December 1994, Labour Party Ministers took up office in two Departments of key influence in relation to housing – the Departments of the Environment and Finance. Why, during their two and a half years in Government, did they not take action to address the problems that were clearly developing in the housing area? The motion refers to 70% price increases since this Government took office. What it neglects to state is that almost half of that increase took place in this Government's first year, directly as a result of the previous Government's neglect of the crucially important issue of housing.

Of course, it is not entirely correct to say nothing was done. The trouble is that what was done made matters worse – like the hefty hike in stamp duty on middle of the range houses imposed in the 1997 budget. The result was that the cost of moving house became prohibitive. There was a major blockage in the second-hand market with the knock-on effect that houses were not being released to first time purchasers.

Shortly after the Government took office we commissioned a detailed study of the house prices issue. Even before the study was completed we acted decisively to address the critical housing supply situation with the launch of a serviced land initiative in November 1997. If the previous Government had the foresight or concern to take such an initiative, we would now be reaping the benefit of a large increase both in housing supply and in availability of serviced land.

This Government's priorities have focused on the introduction of a range of measures which aim to maximise and expedite housing supply, secure house price stabilisation and meet increased need for social and affordable housing. The Government has taken a range of initiatives, each building on the others and culminating in the inclusion of housing in the national development plan for the first time, which together provide a comprehensive and coherent response to the major housing issues.

This Government's publication of Action on House Prices in April 1998 was the first of two major policy initiatives aimed at achieving moderation in house price increases and relieving the pressures in the housing market. The primary focus of Action on House Prices was on a range of measures to increase supply. These included doubling the funding, from £15 million to £30 million, for the serviced land initiative and subsequently increasing this to £39 million later in 1998. Some £5 million was provided for specific non-national road schemes opening up land for housing development. Tax measures were also implemented with the aim of bringing residential land quickly into development and to prevent investors pricing first time buyers out of the market.

A number of positive developments took place last year, supported by a continuation of the measures in Action on House Prices and additional measures introduced in Action on the Housing Market which took account of the recommendations in the second Bacon report completed last March. These developments included the publication of guidelines on residen tial density, strategic planning guidelines for the greater Dublin area, the introduction of an affordable housing scheme, improvements to a number of social housing schemes and, of course, drawing up the national development plan.

We are ensuring housing supply continues to be maximised. My Department issued the residential density guidelines to all planning authorities in September 1999, to which they, and An Bord Pleanála, are statutorily required to have regard. Indications are that local authorities and An Bord Pleanála have already taken on board the principles set out in the guidelines. Since their publication An Bord Pleanála has granted appeals for high density development on the Blanchardstown Hospital site, which will yield 1,500 housing units, and a second site in Santry, Demesne, which will yield 1,100 housing units.

Good progress is being made under the serviced land initiative and output under the initiative is expected to exceed the 100,000 units originally envisaged. By the end of this year schemes providing 100,000 sites nationally will either be completed or in construction. Key infrastructure projects such as the Swords treatment works and the north fringe sewer, both of which are critical to the development of the north Dublin area, are progressing well. Tenders for the Swords scheme, which has the capacity to support the development of 8,000 additional housing units, were approved at the end of last year. The north fringe sewer will be completed by mid-2002 rather than 2004, which was originally projected when the second Bacon report was produced. Additional staff have been recruited by An Bord Pleanála and local authorities to accelerate the planning process.

The national development plan published in November last provides for massively increased investment in economic infrastructure such as roads, water, sewerage and public transport, which is essential to support housing development in the period to 2006 and beyond. Never before has State investment in water, sewerage, roads and other services required to open up building land for development been increased so substantially as it has been by the Government since we took office. To give one example, funding for water and sewerage services has increased from £163 million in 1997 to almost £290 million this year, an increase of 78%.

This increased investment is clearly yielding dividends. My Department published details last week of the first national inventory of zoned serviced land which shows that, based on local authority returns, the position in relation to the stock of serviced building land is both encouraging and is set to improve significantly, going forward on foot of further major investment in these services over the period of the national development plan. In Dublin, for example, the supply of zoned and serviced land exceeds 1,000 hectares which is sufficient land for more than 40,000 housing units or four times last year's record output in the Dublin area. House completions in 1999 reached a record 46,512 units nationally, up 9.8% on 1998, which was, in turn, up 9% on 1997. Output in Dublin topped 10,000 units last year, a 12% increase on 1998, while completions in the greater Dublin area totalled 15,228 units, up 7% on 1998.

These measures, taken by this Government, achieved a private housing output of 43,000 units in 1999. This was the level of output projected in the first Bacon report in 1998 that would be required to achieve stability in the housing market. We have achieved the targets we set, which many economists thought were too ambitious. However, extremely strong economic growth, employment growth and immigration means that we must redouble our efforts. The indications are that the upward trend in new house completions is set to continue. HomeBond registrations, a leading indicator of future housing development, rose by 16.5% nationally in 1999, and registrations are up 21.4% nationally in the first five months of 2000, compared to the same period in 1999 and by 38.7% in Dublin city and county.

In spite of continuing high demand, the effects of increased output are reflected in moderating house price trends since house price inflation peaked in 1998. Prices for the first quarter of 2000 in Dublin are showing reductions of 1.1% and 2.7% in the average prices for both new and second-hand homes, respectively – the first time that average house prices have dropped since 1995.

Year-on-year new and second-hand house prices rose by 13% and 14% nationally, the lowest increases since 1996. This we have been able to achieve despite the lack of foresight and financial planning on the part of the previous Government.

Of course, the Labour Party's knee-jerk response is to introduce price control in a classic case of the economics of illusion. Otherwise it would hardly insult the intelligence of the people with the discredited concept of new house price control. What happens when the new house becomes a second-hand house? This Government is acting to curb speculation in housing. Artificial controls on new houses would facilitate this. Who will issue these "fair price" certificates or on what basis? A similar approach was tried in the past and proved ineffective and in many ways counter-productive. It would not cause a single extra house to be built. It could retard housing supply if, as inevitably would be the case, it gave rise to an elaborate bureaucratic process. Few, if any, credible commentators seriously suggest that artificial price control offers a sensible approach to addressing the real issues currently affecting the housing market.

The Government is addressing where our growing population will live and how people will get from their homes to work, school and other amenities which are central to our quality of life. We are preparing a national spatial development strategy which will identify broad spatial development patterns for areas and set down indicative policies on the location of industrial, residential and rural development. The strategy will attempt to deliver more balanced development between and within regions. Strategic planning guidelines have been launched by the Government which will form the basis of a development strategy for the overall Dublin and mid-east area. This strategy in the regional guidelines will be implemented at sub-regional level by local authorities through their development plans.

The Labour Party's proposals make no reference to one of the most fundamental changes to Irish planning law which is contained in the Planning and Development Bill, 1999, currently at Report Stage. Part V of the Bill requires local authorities to prepare housing strategies addressing the housing needs in the area covered by their development plans, including the need for social and affordable housing. The Bill requires them to zone sufficient land to meet these needs. Up to 20% of land zoned for residential development may be set aside to meet the assessed social and affordable housing need. The Bill permits local authorities to secure this land at existing use value from developers. This provision will secure significant tracts of residential development land for local authorities on completion of their housing strategies.

The provisions in Part V recognise that the value of land is increased manifold by a local authority decision to zone land. No person is entitled to have his or her land zoned and it is perfectly reasonable that the greater community, through the local authority, should be able to reap for the public good an appropriate proportion of the gain it confers on the landowner. The landowner will be able to get full development value for the remaining 80% of the land involved and will not suffer any loss on the land transferred to the local authority. This approach will make land available to local authorities at low cost, while not interfering unfairly or in an arbitrary manner with the property rights of the landowner. Local authorities have been asked to press ahead with working up their housing strategies so that they can be in place at the earliest possible date following commencement of the Bill.

The acid test that must be applied to the Labour Party proposals in this area is whether they will bring land into development more quickly or at a cheaper cost than can be achieved at present. The simple fact is that they achieve neither of these. Contrary to how the Labour Party would portray its proposals, there is no quick-fix, bargain basement solution to moderating house prices through wholesale acquisition of land. This Labour Party motion implies that we should send out housing officers with cheque books to compete for land and further drive up prices. This is another example of the lack of rigorous analysis underlying this motion.

At a time when our objective is to accelerate and increase the supply of housing, the Labour Party seeks to impose another layer of bureaucracy in the form of a national housing authority, which, of course, would have the opposite effect and cause a hiatus in the supply response. Does the Labour Party propose we should set aside the local authority system and that the national housing authority should usurp its role? The local authority response over the last few years has been commendable under very difficult circumstances. I wonder how enthusiastic Labour Party councillors throughout the country would be about losing housing functions to a national housing authority, or about the slur implied in the reference to "local housing authorities who are unable to achieve their housing targets".

The Government will seek to strengthen and resource the structures that are already in place in the Department and in local authorities to secure the necessary supply of housing and seek to expand the capacity of the construction industry to achieve a further increment in the supply response.

With regard to the private rented residential sector, the Government established a commission last July to examine and make recommendations on a wide range of issues relating to the sector, including improved security of tenure, maintaining a fair and reasonable balance between the respective rights and obligations of landlords and tenants and increasing investment in, and the supply of, accommodation in the sector. The membership of the commission includes representatives of landlords, tenants, the legal profession and property investment interests, together with relevant Departments.

The commission was asked to report by 1 June 2000. However, the chairman, on behalf of the commission, asked to extend the deadline by one month and the request was acceded to. In making the request, the chairman indicated that a considerable effort had been expended on trying to reach consensus on the key areas of security of tenure, dispute resolution mechanisms and rent reviews, and that the additional time would facilitate the commission in seeking to achieve as much consensus as possible. The Government is now expecting the report of the commission at the end of June or early July and intends to arrange for its publication after we receive it. In conjunction with its publication, the action the Government proposes to take on foot of the recommendations contained in the report will be announced.

While not wishing to pre-empt the contents of the report, I anticipate that recommendations will relate to changes required to the legislative and regulatory frameworks, with a view to achieving better enforcement of an agreed framework and to removing certain legal difficulties that currently exist; improved dispute resolution mechanisms, including the possible establishment of a new body with mediation and arbitration functions; measures to improve security of tenure, to provide greater awareness of mutual rights and obligations and to amend notice to quit periods to reflect length of tenancies; and measures to promote the development of the sector and, in particular, to facilitate increased supply of accommodation with a view to meeting longer term housing needs.

I expect the commission will identify areas where changes can be made, leading to a rented sector which provides an excellent service to tenants and an appropriate return to landlords. The objective is to enable the sector develop to its maximum potential so it may be seen as a tenure of choice, along with social housing or home ownership.

In the past two years the Government has taken measures to boost supply of private rented accommodation and to provide additional support for people in private rented residential accommodation. Substantial increases in tax relief for tenants took effect from the current tax year. The protection afforded to tenants under the registration of rented houses regulations has also been improved. In January last, the regulations were amended to provide that the onus is now on the landlord to prove that a dwelling is exempt from the requirements of the regulations and to remove the exemption from the regulations on the grounds that the letting is of a "temporary convenience" nature.

Targeted incentives for the provision of student accommodation were introduced in the Finance Act, 1999. I am pleased to say that some 1,100 places should be available by October of this year and more than 7,500 places are at various stages of planning. It seems the Labour Party has missed the boat on this one.

Instead, the motion calls for rent control. Rent control proved disastrous for the private rented sector in this country, as it did in any other country in which it was imposed. EU countries are now trying to get rid of any vestiges of rent control that have sent their private rented sectors into decline. Above all, rent controls would not provide a single extra rented house or apartment. They convey an enormous advantage on persons already in rented accommodation and, of course, effectively ensure that no accommodation will be available for those seeking rented accommodation in the coming years.

On the question of rent assistance for private rental accommodation, the Government has decided in principle to establish a new local authority rent assistance scheme in accordance with the main recommendations in an interdepartmental committee report published last August. This would replace, in the main, the current arrangements for rent supplementation under the supplementary welfare allowance scheme.

A planning group, under the aegis of my Department, which commenced work in April 2000, will report towards the end of this year with detailed proposals on rental assistance to enable the Government to take definitive decisions on future arrangements. It will also address a range of issues arising in the implementation of new arrangements and examine the possible scope for improvements in the existing SWA scheme, pend ing the introduction of new arrangements. Some improvements to the existing scheme have already been introduced in this year's budget and Social Welfare Bill, particularly in relation to arrangements for retention of supplements by people making the transition from welfare to work.

The key aims in the rent-assisted housing sector are to achieve greater effectiveness in meeting housing needs, maximum co-ordination of housing policy and effective arrangements to ensure needs are met. This will include retention of a welfare safety net for urgent income support needs, while avoiding, as far as possible, factors which could promote further imbalance between supply and demand in the private rental sector.

I want to make it clear, however, that we have no intention of repeating the mistakes made in the UK where the introduction of a "housing benefit" system in the 1980s contributed to the creation of a high rent and chronic dependency environment. Many tenants are caught in a benefit trap – they cannot afford to leave the system and there is a major disincentive to improve their earnings.

I am a little surprised that the Labour Party would wish to be associated with an approach that had its origin in Thatcherite ideology designed to undermine the position of local authorities. I am not surprised, however, that it would advocate a system that has proved something of a bureaucratic nightmare. It is well accepted that the UK housing benefit system has resulted in a high degree of complexity, cost, fraud and administrative difficulties generally. It is a system that does not appear to have served either the taxpayer or the tenant well and it has defied reform by successive Governments.

Introducing an expanded system of benefits or any other device that would inject more money into the market is not the answer. Indeed, it would be counterproductive in a situation where there is imbalance between supply of and demand for private rental accommodation. As is the case in the housing sector generally, it is important to focus on the supply side and this will be a key consideration for the planning group which is examining new rental assistance arrangements.

The group's work is at a relatively early stage. One of the important issues which it will explore is the potential for more supply focused approaches to rental assistance, including possible arrangements and measures needed to promote improvements in standards and supply of rent assisted accommodation. The objective will not be simply to transfer what is largely a welfare payment scheme to local authorities or, as the Labour Party motion would imply, to create an expensive, bureaucratic and counterproductive system of housing benefit.

This Government has for the first time provided a long-term framework for the funding of social and affordable housing through the inclusion of £6 billion in the national develop ment plan earmarked for social and affordable housing. This allocation, which averages over £850 million per annum, reflects the commitment of the Government to tackle social and affordable housing need. The investment will ensure that the housing needs of over 90,000 households will be met with Government assistance over the plan period.

The plan provides for an increase in the local authority housing programme with funding for 35,500 starts, front-loaded to meet existing demand more quickly. It also provides for the expansion of voluntary housing activity with funding for over 15,000 voluntary housing dwellings. Funding is also included for the provision by local authorities of 7,000 affordable houses and for 7,000 households to acquire homes under the shared ownership scheme. Investment in additional accommodation for the homeless and for Travellers is also included.

Resources are being provided for the remedial works scheme which targets the improvement and upgrading of low cost, pre-1960 dwellings and run-down urban estates. Area based regeneration initiatives to restore the physical fabric of established areas and to support local communities will also be supported, most notably the redevelopment of Ballymun and a number of inner city flat complexes. The previous Government announced the redevelopment of Ballymun but, in typical fashion, provided no funding for a project estimated to cost over £350 million.

This Government has also significantly increased the funding available and improved the range of schemes providing targeted assistance to improve the living conditions of those most vulnerable and those with special needs. We have increased the effective maximum disabled person's grant available from £8,000 to £14,000 and allowed 90% of the cost to be recouped as opposed to the two thirds of cost grant we inherited. We have increased the effective maximum essential repairs grant from £1,800 to £6,000 and extended the scheme to urban areas. Funding for the task force on special housing aid for the elderly has been increased to record levels – from £4 million in 1997 to £8 million in 2000.

Investment in the local authority and social housing programmes is over £440 million in 2000, up almost 150% on the £180 million the previous Government provided in the 1997 Estimates. A multi-annual approach to the local authority housing programme has been adopted which will allow for greater forward planning and efficiencies of scale in delivering the 22,000 additional local authority houses to be started over the next four years.

One wonders how much thought the proponents of this motion have given to the implications of their demands of 50,000 new houses to be built by local authorities for the next four years. It will put local authorities under considerable pressure to deliver the local authority multi-annual programme together with a greatly expanded voluntary housing programme as well as securing increased output under the affordable housing scheme and the range of other social and affordable housing measures already in train.

Leaving aside the practical constraints, however, the effect of the suggested crash programme of local authority house building would inevitably see a return to the provision of large, soulless, peripheral local authority housing estates, remote from good public transport, amenities or jobs. This is not a policy which this Government will countenance. I challenge the Labour Party to say whether it supports the building of large-scale local authority housing schemes and perhaps it would identify some areas where those schemes might be built.

When I allocated housing starts to the local authorities last year I asked them to front-load their building programmes as much as possible to meet increased needs. The implementation of this programme is being followed up by my Department and my officials have been saying to local authorities that they should try to start as many houses as they are capable of commencing this year. In effect, they have a carte blanche to start as many as they wish and the Department will facilitate them in doing so. Funding is not a barrier and no local authority is being refused capital funding.

Of course, the Labour Party is quite capable of saying different things to different people, depending on which audience it is facing. It is calling for the provision of 50,000 local authority houses in this Chamber, yet its members are quite capable of going back to their local authority areas and opposing individual developments on the ground. I can find no evidence of a strong push for more local authority housing from Labour councillors in their own local authorities. Let us see the evidence of their campaign in each local authority for more social housing. There is none and its absence only serves to show the hypocrisy of this motion.

We recently saw Deputy Gilmore express his concern over the number of vacant housing units in the Dublin area, saying that these should be immediately made available to those on the waiting lists. These concerns are shallow indeed and he deliberately avoided saying why many flats in the Dublin area are vacant. The practical explanation for the increase in the number of vacant flats in Dublin in recent months is that the Department is funding major renovations to a series of flat complexes in the inner city which require major regeneration. This work is now commencing and it is necessary for Dublin Corporation to vacate the flats and move tenants to other accommodation. Examples of where these major renovations are being undertaken include St. Joseph's Mansions, St. Michael's Estate and within the Ballymun area.

These are concrete examples of important regeneration programmes being funded by my Department and they are being progressed on the ground. Does Deputy Gilmore not support these major projects or is he suggesting that we abandon them completely and simply relet what is substandard accommodation to those on waiting lists? He will be familiar with this type of project in his own local authority area and I am confident that he is not suggesting that Dún Laoghaire-Rathdown County Council should abandon the redevelopment of the Hillview Court flats in Ballinteer and relet the flats which are about to be demolished.

This Government recognises the important contribution to social housing needs by the voluntary housing sector and is committed to increasing output from the sector. This commitment is reflected in the national development plan which provides for the necessary resources for the sector.

I am delighted that the Labour Party is belatedly supporting the strengthening and resourcing of the voluntary housing sector. When I was appointed Minister of State with responsibility for housing, the voluntary sector was practically on its knees because the funding available had not kept pace with the increase in building and tender costs. The levels of assistance available under both voluntary housing schemes operated by my Department were increased substantially on two occasions since this Government took office – in November 1997 and again in October 1999 – to take account of rising construction costs and to stimulate greater activity in the voluntary housing sector. In addition, for the first time, additional assistance towards site acquisition costs by voluntary bodies was introduced. These steps have resulted in increased activity at local level in the voluntary housing sector. The levels of assistance to this sector will be kept under review on an ongoing basis by the Government.

Further steps which have been implemented aimed at facilitating the growth of the sector include the establishment within the Department of a dedicated unit with responsibility for all aspects of voluntary housing and a remit to expand and develop the sector. A working group on voluntary housing has been established to identify and advise on changes to procedures and schemes governing the voluntary housing sector, on ways of further expanding the sector and of increasing its output. The group consists of representatives of the voluntary and co-operative housing movement and local authority and Department officials.

This Government has provided the increased support to the voluntary housing sector that the Labour Party only talks about and I am committed to continuing this support.

The Government is also committed to tackling the problem of homelessness. As a measure of its commitment, it recently launched the integrated strategy on homelessness which offers a new approach to the way in which services for the homeless are to be planned, funded and provided. The strategy aims to provide an integrated response from all statutory and voluntary agen cies providing services to the homeless. The Government has made substantial current and capital funding available to ensure that the measures outlined in the strategy are implemented.

Under the strategy each county and county borough is required to establish a homeless forum, for the delivery of homeless services on a joint basis, consisting of representatives from the local authorities within their area, the health board and the voluntary bodies operating in the county.

Mr. Hayes

I wish to share my time with Deputies Crawford, Clune, Cosgrave, Neville and Perry.

Fine Gael welcomes this motion in the name of the Labour Party as another opportunity for the House to debate the appalling record to date of the current Government. When it comes to the housing market, this Government has a difficulty with the concept of political accountability. It finds it difficult to understand that it has been in office for the past three years, during which time the housing crisis has gone from bad to worse. According to the Government, the problem is the fault of planners, landowners, housing departments and An Bord Pleanála. The only skill the Minister, Deputy Dempsey, and the Ministers of State, Deputy Molloy and Deputy Dan Wallace, have shown in the housing debate is the constant ability to blame everyone but themselves for this housing crisis. No one in Government is taking responsibility for this problem. It is high time the Government was honest enough to admit its policies to date have not worked and, if anything, have fuelled an increase in house prices over the past three years.

Since the Government took office in 1997 house prices have virtually doubled, the national housing list now consists of 100,000 men, women and children, rents have increased beyond reasonable levels and the appalling problem of homelessness is still waiting to be tackled. The housing market is in chaos and seems unresponsive to any set of proposals the Government offers. The fundamental response by Government is that house prices will stabilise when housing supply meets demand. While there is no doubt a radical increase in the number of housing units is required urgently, this policy alone cannot solve the problem for people on average incomes. The market simply cannot bring about greater affordability.

We must ask how many houses will we have to build before supply meets demand? Dr. Bacon's latest report seems to suggest that a housing output level of 55,000 units per annum should be our new national target. Even if the supply of houses to the market met the current demand, however, price stabilisation would still not deliver a house to people on income of less than £40,000. The fixation with the concept of supply and demand – this wonderful Progressive Democrat concept and now part and parcel of Fianna Fáil ideology – as the only policy response of Government to date would permanently block out of the housing market an entire generation of young Irish people.

From Dr. Bacon's recent assessment of the housing market two startling observations come to light. First, the position of the first time buyer in the housing market has been eroded since 1997 and, second, despite the measures announced in the Finance (No. 2) Act, 1998, speculation has returned as a factor in fuelling house price inflation. On the first observation, I have repeatedly drawn the Minister's attention to the fact that fewer people applied for the first time buyers' grant in 1999 than in any year since 1995. While the Government boasts that housing output has virtually doubled since 1995, reaching a total of approximately 47,000 homes last year, why is it the case that fewer new house grants have been paid by the Department? In 1995 10,155 first time buyers' grants were sanctioned by his Department while in 1999 the figure was just 9,129. How can housing output virtually double when the number of people who are the key group in terms of buying new homes reduces in size?

It is facetious to suggest that young couples and individuals are buying second-hand homes as their first house option. Proportionately the second-hand housing market is more expensive than that for new houses. The question must be asked who is buying the new housing units coming on the market?

Last August I had the temerity to suggest that speculation had returned to the housing market. On that occasion I pointed out that the 1998 housing statistic bulletin showed that approximately one third of all new homes built in 1998 were purchased without mortgage finance. The conclusion I drew from this data was that investor demand within the first time buyers' market had re-emerged as a major problem. I was even so bold as to suggest that a large proportion of new homes were purchased for investor demand. The Minister of State, Deputy Molloy's response to my analysis in September last year was to castigate my views as misleading and erroneous. He further suggested that house buying for investment was not a problem – I use this as the first piece of evidence in my contribution tonight – when he baldly told The Irish Times that house buying for investment was not a problem. The newspaper article on Saturday, 14 August, 1999, read, “Minister dismisses misleading claim by Fine Gael TD”.

Following the latest economic analysis, it is high time the Minister of State engaged in some backtracking. When he speaks I hope he will use this debate to apologise formally for his failure to acknowledge the problem of investor demand, now that the extent of the problem has been recognised by Dr. Bacon.

This debate provides us with an opportunity to concentrate our minds on the appalling situation which now exists for those people who are squeezed out of the housing market. In a special way we must concentrate on the problems of first time buyers. Fine Gael believes that a special package of measures must now be introduced to give first time buyers a hope of finding a home. First, the Government should move to accept the Fine Gael proposal outlined over 18 months ago to abolish stamp duty on the sale of second-hand homes to first time buyers. The Government has repeatedly rejected this Fine Gael proposal, although it now seems their economic advice is to the contrary. We will wait and see.

Second, consideration should be given to removing or reducing indirect taxation on the sale of homes to average income couples or first time buyers. It is an irony that VAT receipts from housing now make up a massive pool of resources for the Minister for Finance and are in effect another barrier to home ownership for thousands of young couples.

Third, local authorities should be building homes on subsidised sites for those locked out of the housing market. Where land does not exist for house building, special powers should be introduced to either a local or national authority, as proposed in the Labour Party motion, for the purposes of providing affordable accommodation. A recent analysis by the Department of the Environment and Local Government on the availability of zoned and serviced land shows an abundance of land which could be used for housing development. It is unacceptable that a landowner can intentionally hoard land for the purposes of trying to control the market price of land. Land which is zoned as residential must be put on the market at the earliest possible time. Whether this can be achieved by way of compulsory purchase or through a range of taxation measures in an attempt to force the sale of land is a matter that needs to be resolved in this House as soon as possible.

My party was the first to propose giving a national authority specific new powers for the purposes of house building. It is high time we moved away from a piecemeal, development-led approach to residential planning. The problem faced today in terms of a chronic shortage of housing and a Third World public transport system can only be addressed when we take a long-term approach to sustainable planning. Fine Gael believes this House should designate lands for the purposes of accelerated development in parts of the country where it is possible to increase housing output radically. Special development zones for housing along strategic transport corridors offer a real solution to the problem of increasing the housing supply. Unlike the Government, Fine Gael has already published the areas where this accelerated development needs to take place. The country cannot wait for a spatial strategy which is currently under examination by the Department of the Environment and Local Government. The function of the House is to take important decisions in connection with potential growth centres which should be designated as part of a new spatial strategy.

Whatever reason the current Government has failed to propose areas of the country for future residential development, the matter needs to be advanced. I believe the Government is taking this decision from purely a political perspective. Hard decisions such as this cannot be left until after the next general election. None of us should underestimate the challenge of providing close to 500,000 new homes in the next ten years. It cannot be achieved through piecemeal development or by one local authority jealously guarding its interests over those of another. If we are to be successful it requires the Government taking decisions in the national interest.

Using the concept of strategic development zones, already a feature of the Planning and Development Bill, we can deliver increasing housing supply along existing transport corridors. However, by putting off the inevitable decision in terms of the spatial strategy and deciding on the areas which need to be developed the Government will add further pressure to the housing market.

As the motion suggests and as my party first proposed in A Plan for the Nation and in our policy document, Affordable Housing for All, bold decisions must be taken if we are to deliver a major increase in the national house building programme. For the first time in a generation the economy has the resources to build affordable homes and new infrastructure. It is suggested by some that we do not have the labour force to meet this challenge. It is ironic that many Irish engineering and construction firms are contributing their ingenuity and labour to much smaller infrastructural projects abroad. Large scale international construction firms will come to Ireland to build a new integrated satellite town or to renovate an existing small town if the scale of the development is large enough. The problem is that virtually all our development has been of a scale which does not lend itself to international tendering and competition. For this to take place a revolution will be necessary in the way in which we plan and develop our residential and commercial communities.

There was a time when we prided ourselves on building houses for people on low incomes. In 1975, one third of all houses built were part of the local authority house building programme. By 1985 the figure was 27% and by 1995 the figure was 10%. The provision of affording housing by local authorities should be a sign of State support to poor and low income families. The greatest scandal in the current housing crisis is the appalling record of the Government in the provision and co-ordination of the local authority house building programme. We are spending the same percentage of the national capital budget in 2000 as in 1995. Yet, over the period the number of applicants looking for homes from their respective local authorities has more than doubled. The problem of the national housing list is now so acute that many see the prospect of homelessness as their best option in order to improve their chance of getting a local authority home.

Each year the Minister makes a commitment to build new homes in the social housing sector. Yet the out-turn from money voted by this House fails to meet demand. For example, in 1998 he promised 3,900 new local authority homes while only 3,304 were built and the position was similar in 1999, which saw a significant increase in the money provided for the local authority house building programme. A national agency is necessary not just to assemble land banks for social housing, but to provide better co-ordination of each local authority house building programme. I have argued repeatedly that there should be a single agency in the Dublin region given the acute problems which exist. To date the Government has sat on its hands and repeatedly blamed local authorities for their failure to provide additional housing units. If the Minister believes local authorities cannot deliver a radical increase in housing output he should intervene in the market.

The Government has also failed to take action in the private rented sector. During the lifetime of the Dáil rents have spiralled and the Government has consistently failed to modernise legislation is respect of tenant security. Ireland is the only country in the EU which affords virtually no protection to people who have short-term leases.

The motion highlights the incompetence of the Government and the way ahead for a future Government concerned about the provision of homes for our people at an affordable price. This will be the key issue and the Achilles heel for the Government in the next election, which will be sooner than we think.

Mr. Crawford

Housing remains the most important issue for families and is causing serious problems in terms of inflation. A house in Monaghan which cost £85,000 when sold as new four years ago was bought for £140,000 two years ago and was sold recently for around £250,000. This is what is happening in one rural town, never mind what is happening in Dublin city. Young couples with ordinary jobs cannot afford mortgages. Yet those who are well paid and who got the most tax benefits in the budget can buy and rent houses for all sorts of commercial purposes, a situation which must be curtailed. Perhaps this year's fifth budget of the Minister for Finance, due in the next day or so, may address this issue.

I wish to refer to the commitment by the Government to the restoration of grants for the rebuilding or restoring of old houses. This is one of the issues on which the Government came to power, but three years later nothing has happened. The scheme was very beneficial in the restoration of many rural homes and small villages in the past and must be revisited.

There is a need for more social housing and group homes for the elderly. When we canvass in villages and other areas we find many three and four bedroomed homes with one inhabitant. There is no doubt that many more family homes could be made available if more thought was put into how we could bring the elderly and others together, ensuring they were much safer in the process.

Many have already pointed to the need for more local authority houses. There is a problem with sites in this regard. One must wonder what was happening when one thinks back on the days of the slush fund when the then Minister, Mr. Flynn, decided to sell the land.

There are approximately 600 people on the waiting list in County Monaghan. My colleague, Deputy Ó Caoláin, blamed both the current and previous Administrations, saying the two main parties had failed to do anything about housing. However, Monaghan was granted funding for 28 houses but the Sinn Féin led urban council failed to build them leaving the position in Monaghan town even worse as a direct result of incompetence. It is sad when money which is available is not used.

There is a serious problem with the points system. People in good quality flats or houses, which is sometimes the only accommodation they can find, cannot get on the housing list or if they can, they are placed towards the bottom. People must almost be homeless or on the road before they are considered.

There is also a problem with new estates. There was an auction in the 1977 general election to see who would form the next Government and rates were abolished. The responsibility for estates is no longer in the hands of UDCs and there are many unfinished buildings and much less playground accommodation then there would be if rates had not been abolished. We must learn from that and try to do something to salvage the situation.

The Minister referred to the serviced land initiative. Promises were made 18 months ago but nothing has really happened in that regard.

Another serious cause of the increase in the value of sites is the fact that there is an insufficient number of planners. Recently Monaghan County Council advertised for new planners and, although a number of people applied, nobody went for interview. This is something we must examine seriously if we are to ensure that permissions applied for are responded to on time, rather then applicants being sent requests for further information at the end of the two month period. This is causing many problems in the housing market and leading to an increase in the cost of sites.

The problems in Dublin, 80 to 100 miles away, may seem distant but they are causing a serious crisis for young people in third level education. The percentage of young people from County Monaghan attending third level is one of the lowest in the country, partly because of the cost of accommodation in places such as Dublin. It is almost out of reach. The issues raised by my colleague, the restructuring of rents and long-term leases, are vitally important.

I wish to refer to the outrageous situation within health boards and the so-called initiatives administered by county councils. Elderly persons who have no toilet or bathroom facilities are being asked to have the work done themselves, which will be funded if they can find a builder to do it. It is important that they are looked after. They served the nation in the past and it is completely unacceptable that they should have to live in such conditions in this day and age.

Debate adjourned.