I move: "That the Bill be now read a Second Time."
As with other amending legislation in the housing code, this Bill ranges over a number of different areas. However, the principal driving force behind the Bill is the need to make statutory provision for a number of measures aimed at increasing social and affordable housing provision.
The priority afforded by the Government to social and affordable housing provision was clearly articulated in our Programme for Government and refined and updated in the Programme for Prosperity and Fairness and in the National Development Plan 2000-2006 and in other policy documents produced by the Government, most recently Action on Housing published in June 2000. This is the first Government to include targets for housing delivery in a national development plan. These ambitious targets include 41,000 local authority housing starts over the plan period and an increase in voluntary housing output from 579 in 1999 to 4,000 units per annum under the programme by 2006. In total, over the plan period, the housing needs of some 100,000 households will be met under the various social and affordable housing options.
Unprecedented progress has been made in meeting housing needs since the Government took office. In each of the five years since 1997 to 2001, successive record levels of housing output has been achieved. In total some 216,000 new houses have been built in the past five years representing some 18% of our total housing stock. We have also built up the local authority and voluntary housing programmes – the voluntary housing programme to levels never previously reached and the local authority housing programme to levels we have not seen for a generation. Last year's forecast local authority housing output of 5,000 units represents the highest level for more than 15 years. By the end of last year the Government provided more than 18,000 local authority houses since taking office, with a further 4,000 units in voluntary housing projects. My Department has also provided funding for more than 5,500 units under the shared ownership scheme. In the period 1997 to the end of last year, the needs of almost 50,000 families will have been met through the various social and affordable housing programmes.
The Bill adds to the wide range of legislative and policy instruments available to the Government in the housing area. In summary, it provides for a significant increase in the borrowing limit of the Housing Finance Agency to enable it to provide finance to local authorities for housing capi tal purposes and to extend the power of the agency to lend for additional purposes, including capital purposes under the Local Government Sanitary Services Act, the Waste Management Acts or other Acts prescribed by the Minister, and for lending directly to voluntary housing bodies.
The Bill places the affordable housing scheme on a statutory basis and makes provision for a clawback under this scheme and the shared ownership scheme. It introduces greater flexibility in relation to the administration of the new house grant scheme and provides an up to date statutory framework for financial assistance to organisations providing advice or research on housing issues. Provision is also being made for a number of other amendments to housing legislation and technical amendments to the Building Societies Act 1989.
I will now refer in some detail to the main provisions of the Bill. Section 6 provides a statutory basis for the affordable housing scheme, giving housing authorities and voluntary bodies clearly defined powers to build or arrange for the building of new houses for sale by them at an affordable price to eligible purchasers.
Our intention to crank up the volume of housing output under the local authority affordable housing scheme was clearly signalled in the national development plan. This scheme enables local authorities to construct new houses which will be offered for sale to eligible purchasers at cost price and, accordingly, at a significant discount from the market value of comparable houses in the area. The necessary funding to facilitate an output of 1,000 units per annum under this scheme has been provided for in the national development plan. The indications are that last year a total of 300 units were completed under the scheme, with 6,270 units under construction or planned at the end of September 2001. At least 150 units have been completed so far this year. Provision of new housing under the scheme complements activity under the shared ownership scheme, which achieved some 1,200 completions last year, exceeding the target in the national development plan. The improvements in output have been complemented by improvements to the terms of both schemes introduced in Action on Housing. These improvements include the introduction of a site subsidy of up to £30,000 in urban areas for houses built for sale under each scheme.
Section 7 provides for the payment by housing authorities of a mortgage subsidy to eligible persons who have received a loan from a housing authority, and that these subsidies may be recouped in part or all from moneys provided by the Oireachtas with the consent of the Minister and the Minister for Finance.
Section 8 requires each housing authority to establish a scheme which determines the order of priority to be given to persons to whom affordable houses are being made available for sale. The section also sets out the matters to which the housing authority shall have regard in the making of such a scheme. These include the accommodation needs and current housing circumstances of applicants, the period for which applicants have resided in the functional area of the housing authority and the distance of affordable housing from the applicant's place of employment. There is also provision for periodic review and amendment of the scheme of priorities by a housing authority.
Sections 9 and 10 recognise there is also a need to provide housing authorities with some degree of control on the resale of houses supplied under the affordable housing and shared ownership schemes, so that undue profit cannot be made by those to whom a house has been made available under either scheme. These sections, therefore, provide for controls, including a clawback of profit, on the first resale of houses purchased under these schemes in the event that houses are sold by the initial owners within 20 years of the date of purchase.
Section 10 specifically provides controls on purchase of the interest of the housing authority in a house within 20 years of the date of the shared ownership lease. The provisions in relation to the clawback on profit made on the first resale of a house under both schemes mirror closely the clawback provisions on affordable housing provided under Part V of the Planning and Development Act, 2000. In addition, sections 9 and 10 also provide that moneys accruing to a housing authority under these sections should be used by the authority in the provision of housing.
The social housing programmes remain the primary vehicle for providing access to accommodation to lower income households. The Government has committed itself, under the NDP and Action on Housing, to a four year multi-annual local authority housing programme of 25,000 starts, beginning last year and running through to the end of 2003. Consequently, local authorities are now building houses at a rate not seen for many years, to such an extent that, under the programme, there were about 7,000 starts in 2001 and 5,000 completions. As I indicated, this is the highest level of starts since the mid-1980s. The multi-annual approach, introduced to allow for greater forward planning and efficiencies of scale in delivering the increased local authority housing targets, is showing dividends.
To maintain this momentum under the various social housing programmes and give effect to the commitments in Action on Housing, section 17 provides that the borrowing limits of the Housing Finance Agency be increased from the existing limit of £1.5 billion to €6 billion. The present statutory limit of £1.5 billion has been in place since 1992 and will be reached by the agency by the middle of this year. The massively increased housing programme contained in the national development plan makes it both urgent and essential that the Housing Finance Agency's borrowing limit be increased. This increase to €6 billion will cover the agency for about eight years at predicted future levels of activity.
In recognition of the expanded role envisaged for the voluntary housing sector under the national development plan, section 17 also provides that approved voluntary housing associations may be afforded direct access to funding from the Housing Finance Agency, subject to terms and conditions which must be approved by the Minister with the consent of the Minister for Finance, including appropriate conditions to minimise exposure of the agency to risk resulting from such lending. Under the current arrangements voluntary housing associations only have indirect access to funding from the agency through the local authorities under the capital assistance and rental subsidy schemes and the sale of sites subsidy scheme.
Section 17 also provides that the powers of the Housing Finance Agency be extended to enable it to lend to local authorities for certain non-housing related capital expenditure purposes. These include funding to allow local authorities finance the up front capital cost of the commercial and industrial elements of new water treatment and delivery networks and waste water collection and treatment systems. These costs will be fully recovered over time along with relevant operational costs from commercial and industrial customers.
The voluntary housing sector, as I indicated, is playing an increasingly important role in the provision of social housing. The indications are that output by the sector last year was around 1,200 units, which is broadly in line with the NDP target and the highest level of output ever produced by the sector. There has also been a marked increase in the number of units of accommodation under construction and at various stages in the pipeline.
It is clear the sector must be supported financially to continue to grow. Last year we provided more than €1.1 million in grant aid to voluntary housing bodies specifically to assist with their administrative costs and in carrying out research. I am anxious to clarify the position in relation to the provision of financial assistance to approved housing bodies as current legislation is unsatisfactory in this respect. Section 12 brings together the existing provisions governing financial assistance to approved housing bodies by way of grant aid. This section provides powers to the Minister to pay grants to bodies providing research or advice on housing or promoting the provision of housing by voluntary or co-operative bodies. I have also taken the opportunity to clarify the aspects of housing research that may be grant aided. They include research on housing needs, standards, management, finance or other aspects of housing policy.
Section 14 clarifies the management functions of housing authorities in certain cases. It amends section 58 of the Housing Act, 1966, to provide that in cases where housing authorities purchase apartments in private developments and rent them to tenants, they may pass on the service or management charges to the tenants. It also pro vides that the maintenance of common areas is not the responsibility of the housing authority. These charges do not arise in most dwellings owned by local authorities and where they do arise, they should be able to pass them on to the tenant in whole or in part at their discretion. This is to ensure that local authorities are not held responsible for the upkeep and maintenance of common areas where management companies charge owners of all dwellings sharing those areas for such services. It is the management company not the local authority which should be responsible for this task.
Section 14 also confirms that housing authorities can perform management functions, including the charging of rents, in relation to dwellings procured through arrangements such as a leasing arrangement between a local authority and owners of private accommodation whereby accommodation is made available for tenants designated by the local authority. This amendment is necessary because section 58 of the 1966 Act empowers them to charge rents only in the case of accommodation owned by the authority while local authorities will in future need to provide dwellings in a variety of ways, including leasing, which do not require the local authority to own the dwelling. The extent to which local authorities will be responsible for the management of such dwellings will be provided for in agreements with property owners. This is an important provision as local authorities increasingly use a wider range of ways for providing housing, including the purchase of apartments in private developments under arrangements provided for in Part V of the Planning and Development Act and otherwise.
Section 15 clarifies the liabilities of housing authorities following the sale of a dwelling under a tenant purchase scheme in terms of the provision of services and insurance of that dwelling. Following such a sale, it is the tenant and not the housing authority who is liable for any service or work charges in relation to common areas. Once the dwelling has been purchased it is privately owned and the owner becomes liable for all costs arising in up-keep and insurance.
Because of the additional functions being introduced for housing authorities under Part 2 of this Bill in relation to affordable and shared ownership housing, it is necessary to amend section 23 of the Housing (Miscellaneous Provisions) Act 1992, which provides for the definition of a housing authority and the housing functions of different categories of local authorities. The effect of the amendment provided for in section 16 is that county councils and city councils will have the full range of housing functions, including functions under this Bill. Borough councils and town councils will have the same functions as at present except that the borough councils of Drogheda, Sligo and Wexford and the town councils of Dundalk and Athlone are being given functions under this Bill.
The Bill also provides for a number of measures in the private housing market. Our commitment to addressing the imbalance in the private housing market was signalled early in the life of the Government with the publication of Action on House Prices in 1998. The measures contained in that policy document and other measures introduced subsequent to that have had the desired effect in terms of increasing housing output and moderating house prices. Last year housing output was more than 51,000 units, the fifth consecutive year of record housing output by this Government. House price increases have also come back to annual rates of around 5% to 6%, rates which are very closely aligned with movements in consumer prices.
One of the principal objectives of Government policies has been to afford greater access to the housing market to first time buyers who are now accounting for an increasingly large share of the market. Section 11 updates the general power of the Minister to pay new house grants. This updated provision will enable us to remove a small number of anomalies, in particular to ensure that following a legal separation applicants who are themselves first time purchasers will be eligible for a grant. Heretofore a grant could only be made available in these circumstances when the applicant could prove hardship.
It is also intended to provide flexibility for the payment of grants in the future, including provision for differential rates of new house grants to encourage, for example, more efficient use of energy, including the use of renewable forms of energy in line with the national climate change strategy.
The availability of accurate and comprehensive information on all aspects of the housing market, in particular trends in relation to house prices, is essential for the development of housing policy and policy instruments. My Department currently obtains and publishes average house prices on a quarterly basis for new and second hand houses in Dublin, in the other major cities and nationally. Given the importance of comprehensive house price data, my Department engaged the services of consultants to examine the house price information currently obtained by my Department and data otherwise available and to assess and recommend how to improve the use and analysis of the data. This work is now completed and the consultants have recommended that the existing data be augmented and improved information technology systems developed with the aim of providing a broader range of house price indices for statistical purposes. Provisions are included in the Bill to facilitate this.
Section 13 provides that anonymised data provided to the Department by mortgage lenders will be given appropriate protections and cannot be disclosed to any other person, except in accordance with arrangements made between the Minister and the mortgage lenders concerned or in accordance with the Freedom of Information Act.
Mutual building societies play a key role in the operation of the private housing market by con tributing to competition and diversity in the mortgage market. It is estimated that they account for about one quarter of the mortgage market. It is important that mutual building societies are able to compete with other financial institutions on a level playing field. The main body of legislation governing the operation of building societies is the Building Societies Act 1989. The environment in which building societies operate has changed significantly since 1989, most particularly in recent years with much greater competition in the mortgage lending market. Consequently, section 18 contains a number of largely technical amendments to the 1989 Act, including amendments intended to take account of changing accounting practices in relation to the preparation of annual accounts.
Consideration is being given to the inclusion of a number of additional provisions in the Bill on Committee Stage in the areas of Traveller encampments, consumer protection and possible further amendments to the Building Societies Act 1989.
The issue of encroachment on public and private lands by Travellers has been an issue of much genuine concern recently, particularly in those areas where large scale encampments were involved. Such unauthorised encampments raise issues wider than accommodation matters proper to the Housing Acts, such as issues of public order, intimidation and trespass. I have taken this issue up with my colleague, the Minister for Justice, Equality and Law Reform, with a view to exploring whether this type of incident may require to be dealt with on a broader front.
The Minister for Justice, Equality and Law Reform has requested the committee which has responsibility for monitoring and co-ordinating the implementation of the recommendations of the 1995 task force on the Traveller community to consider the issue of trespass by Traveller dealers and traders. That committee has in turn set up a subgroup consisting of representatives of the social partners and Traveller organisations and officials of my Department and the Department of Justice, Equality and Law Reform to examine the issue. I also understand that the group is being assisted by representatives of the Garda and of local authorities in their task.
Its terms of reference are to produce, by a consensus approach, a report on the issue of trespass by Traveller encampments and what can be done to minimise the negative impact of large scale movements of Traveller groups. My Department has also requested that the contents of the Housing (Miscellaneous Provisions) Bill 2001, which is a Fine Gael Private Members' Bill proposing to provide for new powers in this area, and introduced in Dáil Éireann on 14 November last, be examined in the context of the committee's consideration of the issue. The report of the committee should be completed within the next two weeks.
If the Government decides in the light of the committee's report that amending legislation is necessary, I anticipate that it would be done either by way of a Committee Stage amendment of this Bill or in a Bill to be sponsored by the Minister for Justice, Equality and Law Reform, as appropriate.
Consideration is also being given to the need for certain consumer protection measures for new house purchasers. These include measures aimed at addressing gazumping in relation to the purchase of new houses, and measures aimed at protecting house purchasers from demands for excessive stage payments. I am concerned in considering these complex issues that there is no undue or disproportionate interference with the operation of the housing market and the long established contractual procedures for house purchase while at the same time ensuring that individual house purchasers are adequately protected.
This Bill addresses a wide range of issues but the urgency of some of its provisions mean that it is not as comprehensive as I would have liked. I have indicated a number of areas where further measures may be introduced on Committee Stage. The Bill, nonetheless, provides additional legislative support to the efforts being made by the Government, local authorities, voluntary housing associations and other actors in the housing area in the delivery of much needed housing. I look forward to a positive and constructive debate on the Bill and I commend it to the House.