Dáil Éireann debate -
Tuesday, 1 Jul 2003

Vol. 570 No. 2

Private Members' Business. - Housing Crisis: Motion.

Mr. Allen:

I move:

That Dáil Éireann:

– noting that the average price for a new home nationally now stands at €198,000 and, in Dublin, stands at €256,000, therefore excluding all but the wealthiest first-time buyer;

– recalling the abolition of the first time buyer's grant and the increased VAT on homes, both of which have added further to the burden placed on those trying to enter the housing market;

– noting that 52,726 families were on waiting lists for local authority housing while only 4,403 new units were completed last year;

– deploring the lengthy waiting lists for disabled person's housing grants, the changes made to the eligibility criteria for such grants and the failure of the current level of disabled person's housing grants to meet demand and modern construction costs; and

– believing that Government figures of 5,581 homeless people are a gross under-estimate of the true figure; condemns the Government for denying young people the aspiration to own their own home, for failing to provide adequate housing to those who have applied to their local authorities for a suitable home for their families and for ignoring the plight of so many people who have been left without any home at all and:

– demands that the Government recognise the vital nature of the home in the lives of Irish people;

– requires the establishment of a national housing agency to reduce bottlenecks in the housing market and planning system;

– demands that the proceeds of lands and properties being disposed of by the Office of Public Works be used firstly for the construction of social housing;

– calls for the publication of the promised review of the disabled person's housing grant scheme and related schemes, on foot of Government cutbacks that are forcing elderly and disabled people to go without essential facilities like downstairs toilets, stair lifts and showers; and

– calls on the Government to change its policy in neglecting the young and the vulnerable towards one which encompasses social justice and provides for the housing needs of the entire population."

I wish to share time with Deputies McGinley, McCormack and Pat Breen.

Acting Chairman (Mr. Sherlock):

Is that agreed? Agreed.

Mr. Allen:

It is an absolute disgrace that I, as Fine Gael spokesman on environment and local government, must bring to the attention of the nation the absolute failure of this Government to ensure that the young people of this country have the opportunity to put a roof over their heads. It is an absolute disgrace that, in its seventh year of office, and having inherited the best set of economic statistics in history, this Government should have failed so dreadfully on this issue. It is an absolute disgrace that the only Government responses to an escalating crisis in the housing sector have been sympathetic words and an utter lack of action.

The Government has presided over the most grotesque rise in the cost of housing ever witnessed. It has sat idly by while a basic necessity became a coveted luxury. It should hang its head in shame. For those seeking to get a foot on the property ladder, the Government has provided a truly appalling vista. House price increases are far in excess of the average salary. In the private sector, under this Government's stewardship, or more correctly, lack of stewardship, the average price for a new home has increased annually at a rate far higher than inflation. New homes cost approximately €0.25 million. For most, paying that price would involve winning the national lottery. Thousands of young people are forced to live with their parents until they are in their thirties, or alternatively in sub-par rented accommodation.

There are local authority waiting lists of 52,000 families – not individuals, families – and painfully slow progress in the number of social housing units being completed. The disabled person's grant is at a woefully inadequate level, sentencing those with a disability to a life of sub-standard housing. Most shocking of all, almost 6,000 people are homeless in a wealthy, developed country. That is shameful.

One would have thought that the seriousness of this situation would warrant a serious analysis on the part of the Government. One would also have thought the same of those with a professional interest in the property market. Sadly, this has not been the case. Fine Gael holds the Government primarily responsible for the intolerable housing situation we face. However, my party would like to take this opportunity to condemn those who have speculated on the probable bursting of the property bubble.

This is not a game; it is a social problem. Housing is a social issue and the predictions of boom and bust do no great service to the housing sector and certainly not to those people who are attempting to get onto the property ladder. It sickens me to see stockbrokers, on the one hand, and auctioneers, on the other, issuing conflicting statements to suit their own agenda. This is a serious issue involving real people. It is not about an investment game or property monopoly or whatever one wants to call it.

It gives me no pleasure to detail the litany of Government failures that have led to the housing crisis, but it must be done. One of the more high-profile casualties of the great election swindle of 2002 was the first time buyer's grant. There was no mention of its demise in the Fianna Fáil manifesto, the Progressive Democrats' manifesto or the programme for Government. Yet with the stroke of Deputy McCreevy's pen, it was gone.

In the area of housing for special needs it is ironic that, as we celebrate the holding of the Special Olympics, we seem to forget the hidden Ireland, namely the thousands of people around this country who are being deprived of their basic requirements due to Government indifference and mismanagement. In this year of the disabled, elderly and disabled people are being deprived of essential facilities such as downstairs toilets, stair lifts and showers because of Government cutbacks.

The Government boasts about the success of the economy but at the same time is abandoning the old and the sick. In a previous Fine Gael-sponsored debate in this House early this year on the disabled person's grant scheme, the Minister for Environment, Heritage and Local Government, Deputy Cullen, promised a review of the scheme and other related schemes as well as increased funding, but the only thing that has increased since that promise was made is the queue of people waiting to avail of the scheme.

The number of families on local authority waiting lists has risen to at least 52,000 at present, an intolerable situation in a modern economy like ours. Against this awful background, the Taoiseach has some brass neck to suggest that we should wait for possibly another two years for a report on housing matters and land issues. The Taoiseach thinks it is okay for Ireland and the Irish people to wait for eight years of his Government to tackle a crisis that has been emerging steadily since it took office. This is a cynical insult to those putting up with substandard conditions and to those who are dreaming of owning their own home but in reality will never be able to afford it.

For the Taoiseach to effectively say that he has no ideas on housing without a constitutional report seems incredible. Under this Government, the shift away from social inclusion towards catering for the property developers is evidenced by the growing numbers of working and middle class people who cannot afford the minimum of €200,000 for a home of their own. The great surge in house prices over the boom years has caused massive upheaval in the housing sector and in Irish society as a whole. The supply of land for houses and houses for people has simply not been sufficient. Proactive action is necessary to bring the balance back into the market. Fine Gael is appalled by the Government's failure to act, but we do not come to this debate empty-handed. The Fine Gael party has suggestions that will go some way to addressing the problem.

Fine Gael believes that the implementation of the following steps is the key to meeting the needs of a progressive and just society. We need to consider the creation of a national housing agency which would be set up in four regions and would incorporate a national supervisory and policies board. The agency would liaise with local authorities to ensure efficient planning and development in the housing sector and would also act as a co-ordinating body for the implementation of the National Spatial Strategy. It would anticipate and prevent instability in the housing market and would co-ordinate across different local authority schemes.

The Competition Authority should also be asked to investigate the situation of anti-competitive practices in the housing sector.

Acting Chairman:

Regarding the sharing of time, is the Deputy proposing that each speaker will have ten minutes?

Mr. Allen:

I will take 20 minutes and the other Deputies will take seven each.

Mr. McCormack:

Deputy Deenihan will speak instead of me.

Mr. Allen:

Hoarding rezoned land has the effect of hindering any type of planned development and needs to be phased out. The perception that developers are keeping prices artificially high should be examined with the option of developing co-operative housing if middle and lower income earners are being deliberately priced out of the market.

The increasing cost of housing has come about partly because of the Government's ever-increasing take from home builders and the possibility of greatly increased development contribution charges in response to sections 48 and 49 of the 2000 Act. These increased charges along with the increase in VAT and the abolition of the first-time house buyer's grant pose a real threat to the continued growth in housing supply in order to meet demand. Recent figures published by Permanent TSB show that house prices rose by an average of 1.3% in April and 1% in March. Other factors such as the Government's failure to deal with high insurance costs pose further threats. It is estimated that sharp rises in insurance premiums have added between €3,000 and €4,000 to the price of a new house.

For example, it is known that a small family-owned housing contractor paid €10,000 for employers and public liability cover in 2002 and faced a bill of more than €75,000 for the same insurance cover in 2003, which must have a major knock-on effect on the price of housing. The Government should consider the abolition of the 2% insurance levy which would, at least, have a knock-on effect in reducing the rate of increase of house prices.

Homelessness is not only but is primarily a housing issue. The Government appears unconcerned that 50,000 people are waiting for council housing and 5,580 are without a home. An integrated addiction and mental health strategy needs to be implemented to first find out exactly what the problems are and then what to do about them. Homeless persons, by their very circumstances, have few support structures around them. Local groups and bodies should be co-ordinated by the local authorities and sufficient funding to deal with homelessness must be a political imperative for the increasingly unaccountable Government.

Construction of more student campus accommodation and senior citizen complexes would free up housing stock and ease the strain on the rental sector.

Housing is not a comfort, but a necessity. The shame for this Government is that it has not taken seriously the crisis that tarnishes politics as a result. In County Cork in the neighbouring local authority to mine, more than 500 elderly and disabled people are going without essential facilities like downstairs toilets, stair lifts and showers because of Government cutbacks. That is the hidden reality of Ireland where people with disabilities everywhere are being deprived of essential facilities which they need in order to get on with their day-to-day lives. Deputy McGinley has highlighted the same problems in County Donegal, which are replicated throughout the country.

In the year of the disabled, the disabled persons grant scheme is collapsing. This appalling situation has come about because of cutbacks in the disabled persons grants, which are administered by local authorities that have been starved of finance this year. In Cork County Council, official figures show that the Government provided slightly more than €6 million this year for the scheme whereas the council actually needs more than €15 million to keep pace with demands. There are approximately 15,000 applications nationally for the disabled persons grant scheme and, despite the fact that demand is increasing and construction inflation is high, the 2003 Estimates show that the budget has been cut by more than €250,000 has been cut from the budget, which is substantial.

The national spatial strategy, which has been debated everywhere except in this House, recognises the need for increased housing in the gateways and hubs. Therefore, additional measures are required to ensure the spatial strategy report does not just go on the shelf gathering dust but that the gateways and hubs are allowed to develop as proposed in that plan. The Government must look at the need for investment in physical infrastructure in the gateways and hubs and must look particularly at our transport infrastructure and the proposals for linkages between gateways and hubs allowing them to maximise their potential.

The 2002 annual housing statistics report of the Department of the Environment and Local Government showed that the number of new houses and apartments built last year totalled 57,695, an increase of 9% on 2001. However, these statistics alone do not show that in the last few years, 30% of all new residential units in the private sector were bought by investors involved in the rental sector and we must take into consideration that there are approximately 340 houses for every 1,000 people in this country compared with the European average figure of 450 for every 1,000 people.

Two other factors must be taken into account when considering future housing demand and supply. The Central Statistics Office's quarterly national household survey showed that the average household size declined from 3.28 in 1991 to 3.04 in 1999 and to 2.97 in 2002 and that the average household size is expected to converge rapidly towards the EU average of 2.63 by 2011 with a significant number of single person households. The number of people in the main household formation age group is expected to rise by 141,000 by 2006, an increase of 27%. Because of these two factors, it is expected that the number of households in Ireland will increase from its current base of 1.25 million to more than 2 million by 2020, which creates an enormous challenge for the implementation of the spatial strategy. If current trends continue, much of this development will take place in the greater Dublin area adding to the congestion of that area as well as driving prices in the greater Dublin area even higher, not to mention the impact on the quality of life in the region.

If we are increasing housing output, it must be done in the right locations based on the national spatial strategy in order to achieve a greater balance of regional development, which will bring about an increase in population in different parts of the country rather than creating greater problems in the pressure pot that is Dublin.

I am proposing six points that should be debated in order to secure the housing future of the Irish people: the creation of a national housing agency; the easing of barriers to the supply of building land; the creation of an environment where the average young couple can afford a home of their own and start a family of their own which is vital to our society; the creation of a rental sector which will involve rights and responsibilities for both the tenant and the landlord; the greater development of specialised housing groups for homeless people, students, senior citizens and the Travelling Community; and the implementation of the spatial strategy, which is imperative.

This issue is too important to be ignored and it is far too important to be left to the Government. I am glad this House has the opportunity to highlight the failure of the Government to act up to now. Let us hope the House can compel it to act in the not too distant future before it is too late.

Mr. McGinley:

I compliment my colleague Deputy Allen for affording us this opportunity to highlight the serious problems caused by the Government's lack of housing policy. It is becoming a social problem in every county, including my county. The waiting lists for public authority houses are unprecedented. In County Donegal, there are 2,000 on the list and I understand this figure is more than 50,000 for the entire country. Lack of housing represents a very serious problem.

The major housing change made by the Government since taking office more than a year ago was to abolish the first-time house buyer's grant. Those grants were not availed of by millionaires or other wealthy people, but by ordinary people wanting to build an average family home. For that reason I am delighted we have the opportunity of discussing this issue.

I wish to focus on the aspect of the motion dealing with disabled persons and essential repairs grants. Yesterday and today, consternation hit County Donegal with regard to these grants. We had almost 600 applications in the county for these excellent and worthy grants. Excellent work has been carried out with their assistance in the past. Today, 600 elderly and disabled people and their parents received letters from Donegal County Council stating baldly, "I am to advise that due to financial constraints, this council have ceased all payments under the grants scheme until further notice". That is a blunt sentence. What hope does it hold out to these people who are depending on such grants?

Last night I had a call from a 91 year old lady who was widowed on 17 June. Last year, she and her late husband were approved for an essential repair grant, but due to his medical condition and other circumstances, they decided not to proceed with putting a new roof on the house and replace some doors and windows until a more opportune time. Now she felt it was opportune as she is on her own. She invited the builders who kindly consented to start work next Monday. However, yesterday that lady, who has been waiting to repair her house over the last year, got a letter stating she is not to proceed with the job because all grant payments have ceased until further notice.

What about those people who have already carried out work on their houses? I received a letter by fax from another old age pensioner who has had two hip replacements. He and his wife received the grant last year, began the repair work and will be finished this weekend. They now have been told that the builder, who is owed €16,000 to €17,000, has to wait for his money. I am not talking about millionaire builders that figured in tribunals. I am talking about ordinary handymen with a C2 certificate and one or two employees who specialise in these kind of jobs.

Mr. Durkan:

Hear, hear.

Mr. McGinley:

The millionaire builders would not be treated in the same way. What are the small builders to do now? They might be owed €5,000, €10,000, or €15,000. Where is the money going to come from? Are they to go out of business? This is what is happening due to the cutbacks in these grants.

Half an hour ago I received a copy of a letter from an individual who informed me that his 95 year old grandmother had her essential repairs grant job carried out. The inspector from the council saw everything was in order and payment was due. However, she received a letter yesterday stating there is no money for the 95 year old granny in County Donegal. Where is the morality there?

Highland Radio was inundated with calls from all over the county this morning from people who had similar stories to tell. In this year of the disabled, as Deputy Allen said, we are treating our elderly and disabled in such a despicable manner. I was informed of another case from a mother whose nine year old child is suffering from cerebral palsy. Everything must be done for them in terms of care. As the mother wishes her child to be looked after at home, she applied for a grant to widen the doors for the wheelchair and a hoist to assist the child in and out of bed. Now, the mother has received a similar letter stating that there is no money available for this kind of essential repair.

I am delighted the Minister of State, Deputy Noel Ahern, is in the Chamber because he will remember that a fortnight ago a deputation came from Donegal County Council appraising him that there are 570 applications in the county for these grants. Some of the jobs have been completed and some have been started. Of the €3.9 million we got this year, €3.4 million is for work that was completed last year. I ask the Minister of State and the Government to have another look at the area of disabled persons grants and essential repairs grants. The Government should look after the grandmothers, the widows and the elderly in County Donegal.

Mr. Durkan:

Hear, hear.

Mr. Neville:

Hear, hear.

Mr. P. Breen:

I sincerely endorse Deputy Allen's motion. I question how any Member could not join in doing so given the crisis that exists in housing. Then again, there are few Members opposite in the Chamber and I presume they are running scared on this issue.

Only yesterday we were treated to the latest set of statistics from the Central Bank and the ESRI. It is further evidence of the Government's shameful inaction. The Central Bank announced that mortgage lending continues to grow despite widespread concern. In May alone, mortgage lending increased by 23.6%. Private sector credit is up by 16%. The average price of a house has risen by over 14% in the year up to May. Forecasts for growth in house prices have been revised upwards yet again.

This Government has idled while the average price paid by first-time buyers has risen to from €100,000 to €192,000. That is the amount this Government is prepared to let young couples shell out for their first home. In County Clare, the housing statistical bulletin shows the average price of a second-hand house at an amazing €201,566. To make matters worse, the Government abolished the first-time buyer's grant and increased the lower VAT rate by 1%. This automatically increased the cost of every home for already overburdened families.

Not only are people having to borrow more to put a roof over their heads but, as a consequence, they have less money to save to prepare them for whatever further cuts this Government has planned. The Central Bank has announced that the amount of money being paid into the SSIA scheme fell by 11% in May compared to the previous month. While affordability and savings are everyday pressing issues for families, this Government is failing to react appropriately. Despite over 50,000 families remaining on the waiting list for housing, less than 4,500 local authority houses were completed last year. In County Clare, overall housing output fell from 1,652 in 2000 to 1,466 last year. The trend is remarkably going the wrong way.

When is the Minister of State going to wake up to the financial reality of so many young families today? When is he going to take decisive and meaningful action? I mean action because promise after promise by this Government on housing has been broken. They have failed to deliver to accelerate the supply of new houses, to control the rise in house prices and to adequately expand social housing programmes. Comparing the Government's promises and actions on housing must make the Minister of State utterly ashamed.

The Government has basked in the reflected glory of those admirable athletes, coaches and volunteers who have been an example to so many of us in the recent Special Olympics. At the same time, the waiting lists for disabled person's increase. The Government has changed the eligibility criteria for these grants so that they are now more difficult to obtain. Why does it not set the level of these grants at an amount that might realistically cover the costs involved?

In its estimates last year, Clare County Council allocated €584,200 under the disabled grants scheme. Due to the skyrocketing costs presided over by the Government, and with nearly 300 applicants, that money fell far short of what was required.

This House has widely welcomed and endorsed this year as the European Year of People with Disabilities, yet Members on the Government side – of whom there are very few here tonight – are executing cutbacks that deprive the disabled and the elderly of essential services, such as a downstairs toilet, shower or a stair lift. Deputy McGinley outlined many such cases and I have further examples of constituents who are experiencing similar difficulties. The Disability Federation of Ireland claims that people with disabilities are trapped in potentially dangerous homes, due to the failure of the disabled person's grant scheme. This is nothing short of a disgrace.

I conclude by urging the Government to act in a most uncharacteristic manner; I ask it to implement the necessary and fitting measures to address the crisis that seems obvious to all but the Government itself. I call on the Government to do the right thing and change the policy that neglects and hinders the young and the vulnerable in their quest for the most basis of all rights, a decent and affordable home.

Mr. Deenihan:

It is timely that we should have a discussion on housing in the Dáil before the summer recess. I thank Deputy Allen for affording us this opportunity to look at some of the problems that exist in this regard.

A recent survey in The Economist ranked Ireland as the third most expensive country after Japan and the Netherlands in which to buy a house. Dublin is the seventh most costly capital for a city centre two-bedroom flat after London, New York, Tokyo, Milan, Paris and Sydney.

The Bank of Ireland's recent Irish Property Review showed that house prices in 2002 increased by 14%, with gains in Dublin slightly higher at an estimated 16.5%. The review forecasts that 62,000 houses will be built this year with the average price of a new home costing €207,000 nationally and €267,000 in Dublin. As Deputy Allen pointed out, some 30% of houses were bought by private investors rather than families.

The report also examined the Irish demographic situation. A sizeable youth population is still working its way through the market and this is expected to underpin future demand. It is estimated that up to 55,000 new homes a year could be required between now and 2006, and 50,000 per annum between then and 2011 due to the young population. Some 1.3 million people in Ireland are aged between 15 and 34 years of age. That fact, coupled with immigration, could make the demand even higher.

In today's Evening Herald, I noticed an article which stated that despite the economic slowdown, house prices are growing by some €500 per week. Overall, we are now one of the most expensive countries in the world. It is becoming impossible for many young people to buy their own home and this will become a more serious problem in the future. The one thing saving Ireland at the moment – and saving our heavily borrowed population – is the fact that we are governed by European interest rates. But for that, there would be a major crisis.

There are currently 52,000 people on the local authority waiting list. More than 2,500 of that number are in Kerry which is a major problem. In the 1980s, we almost had to look for people to take houses in Listowel but now there is a waiting list in the region of 260 people. In many cases, people are looking for transfers from two-bedroom or three-bedroom houses as their family units have increased in size. I understand there are just 11 houses available for allocation in the next few months, which is indicative of the crisis that exists.

I urge the Minister to review the local authority shared ownership scheme, which is no longer any use to many people as houses are too expensive. While it was a most effective scheme it is becoming increasingly difficult for people to buy houses for the amount of money that is available under the scheme. As recently as today, somebody raised this matter with me.

I will now hand over to Deputy Neville. There is a crisis at the moment that needs to be tackled. I have no doubt that some good suggestions will emanate from this debate and I commend the motion to the House.

Mr. Neville:

I welcome the opportunity to contribute to the debate and congratulate Deputy Allen for introducing the motion.

I wish to focus on the issue of special housing aid for the elderly, a scheme operated by the health boards under the aegis of the Department of the Environment, Heritage and Local Government. This is one of the most frustrating schemes currently in operation and is practically useless to the people who need it. In my constituency, only those who are on an emergency list will get any work done under this scheme. That is what we are told in the letters we receive on behalf of concerned constituents. I am aware of someone who applied five years ago and is now on priority list two. It appears that the work will not be done this year. It will take some nine to 12 months for work to be completed for those on priority list one. Nobody on the second list can hope to have any work done this year. What are those on the third list told? It may be unfair to tell them that the required work will be done because many of them will have moved on to the next world by the time anything is done. A scheme that operates in this way is a mockery.

Mr. Durkan:

It is a disgrace.

Mr. Neville:

Such a scheme should be closely examined. It falsely raises the hopes of the elderly who feel that the scheme is there for them. The scheme was designed to provide showers for people who cannot use a bath any longer due to their infirmity and for those who can no longer climb a stairs and, consequently, need a downstairs toilet. These much needed changes, however, are not being made under the special housing aid for the elderly scheme.

Today, I met representatives of the Disability Federation of Ireland in Buswell's Hotel. They raised strong concerns about the disabled person's grant and the changes in many counties where prioritisation and controls are currently being introduced. It appears to be going the same route as the special housing aid for the elderly scheme. The federation is extremely concerned. I have a great deal of information from them but I do not have time to go into it in detail.

I urge the Minister to look at both of these schemes. We do not need two schemes. They should be amalgamated and a properly designed scheme should be introduced in their place. People should know what to expect and the rules should not be changed in mid-stream, as Deputy McGinley outlined in great detail. This is unfair to elderly people who have worked all their life and paid their taxes. The rules of such schemes, which are designed to give them decent housing conditions in their old age and infirmity are being changed every year. The schemes are no good to them.

Minister of State at the Department of the Environment, Heritage and Local Government (Mr. N. Ahern):

I move amendment No. 1:

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

– "acknowledges the achievements of the Government in:

– focusing on increasing housing supply as the key response to the broad range of housing needs and demand;

– supporting record levels of housing output in each year since 1997 culminating in the completion of 57,695 units in 2002;

– expanding the local authority housing programme to the highest level of output for 16 years;

– increasing voluntary housing output in 2002 to the highest levels ever achieved in this country;

– focusing on the delivery of affordable housing;

– introducing and resourcing an integrated strategy on homelessness; and

– focusing housing expenditure on responding to the needs of low income households and those with special needs through a broad range of targeted initiatives; and

– supports the continued action and commitment by the Government, as set out in the Sustaining Progress partnership agreement, to the delivery of an ambitious scale of affordable housing and to reviewing the effectiveness of programmes designed to assist low income groups, including those with social housing and special housing needs."

I am pleased to open the Government response to another ill-conceived Fine Gael motion and to set out, once again, the main elements of the Government's approach to housing as well as to update the house on the positive effects of this approach. Housing remains at the top of the Government's agenda. We have taken a wide range of measures during our two terms in office to reduce house price inflation, increase housing output to match demand, remove infrastructural and planning constraints on residential development, afford greater access to the housing market to first-time buyers and improve affordability for first-time buyers and lower income households. We have a proud record of achievement in delivering housing across the broad spectrum of housing needs. Since 1997 our efforts have brought a substantial rise in output, with a consequent moderation in the increase in house prices. Some 57,695 new houses were completed last year, which was the eighth year of record production in a row. To put that in perspective, one has only to look at the fact that 21,000, 22,000 and 23,000 houses were built in the early 1990s, which is only ten or 11 years ago. That is a huge increase in output in ten years.

Mr. Durkan:

The price of houses has doubled in the past five years. This is ridiculous.

Mr. N. Ahern:

The provisional figures for this year show another huge increase.

Mr. Durkan:

This is awful stuff. People cannot afford houses.

Acting Chairman:

The Minister of State, without interruption.

Mr. N. Ahern:

We all know prices have increased, but there is more to housing than the price. One must also consider affordability, which takes into account the price, the net disposable income and interest rates. Young couples are under pressure, although they are still managing to buy houses.

Mr. Durkan:

They are paying landlords huge rents every week.

Mr. N. Ahern:

One must consider affordability. The key response of Government is supply. In ten years supply has increased from 21,000 houses per year to 57,000 and it looks like that figure will hit 60,000 this year.

However, the context in which housing policy operates has changed dramatically in the recent past. The unprecedented demand for housing brought about by a number of economic and demographic changes, such as rising disposable incomes, historically low interest rates and changing household formation patterns, has placed pressure on housing supply and house prices. This demand has remained strong notwithstanding the recent slowing of economic growth and it seems likely that the demographic changes underpinning this demand are set to continue. Recently published data from the Central Statistics Office population survey last year points to the decline in the size of families. Coupled with population growth and inward migration, this decline in household size is increasing the demand for housing.

The national development plan estimated the total demand for housing required an additional 500,000 houses to be built in the ten years to 2010. Population forecasts underpinning the national spatial strategy generally confirm this position. This Government is firmly committed to the continuation of the measures which we initiated in our previous term to increase the supply of housing. These measures included increasing investment in the provision of serviced land for housing and more effective use of that land through improved planning guidelines on residential densities.

Mr. Allen:

Why have the numbers on waiting lists increased if the Government is doing so much?

Mr. N. Ahern:

I will come to that. We are also examining issues around the cost of land required for development and affordable housing in particular. The Taoiseach has asked the All-Party Oireachtas Committee on the Constitution to assess the possibility of placing a cap on the value of development land, having regard to the constitutional and practical issues involved.

Mr. Allen:

After seven years in Government.

Mr. N. Ahern:

The Government will consider any recommendations made by that committee, including any recommendations for a change to the Constitution. In addition, my Department is looking at identifying other necessary measures aimed at moderating land costs for housing and other essential public infrastructure.

Our success in increasing housing supply is reflected in the eighth consecutive year of record house completions achieved last year. We are building houses at a faster rate compared to our European counterparts.

Mr. Allen:

You are doing it for investors.

Acting Chairman:

The Deputy should address his remarks through the Chair.

Mr. N. Ahern:

Even if a house is bought by an investor, it still provides a unit of accommodation. The Deputy mentioned the development of an expanded rental sector. If a house is bought by me or by the Deputy and is let to someone, it still provides a unit of accommodation.

Last year 14.7 new dwellings per 1,000 population were completed compared to the UK building rate of approximately three units per 1,000 population. I was at a conference recently where I saw the relevant figures for our EU partners. They were extraordinary because we were streets ahead. Sweden had a building rate of one dwelling per 1,000 population, while the UK's rate was three. No other country was near us in terms of house completions. Perhaps we have come from a small base, but 14.7 new dwellings per 1,000 population is enormous. It is a tribute to the Government and to those in the construction industry that we have managed to achieve that level of output in recent years. Even with housing output at record levels, which were not seen before in this country and are unique in European terms in relation to population, we are still faced with difficulties in meeting the ever growing demand for housing. Nevertheless, the overall objective of the Government is to ensure that output responds to the projected housing demand.

I was pleased that the supply of housing in Dublin increased significantly in 2002.

Mr. Allen:

As well as prices.

Mr. N. Ahern:

Our figures were high for a few years, but the greater Dublin area was not expanding to the same extent. Last year there was a growth of 31% over 2001 levels and the early indications are that output is continuing to grow in 2003. Provisional figures for the first quarter will show that housing output in Dublin has increased by 16% or 17%. They are the type of figures we need. If we could do that for a couple of years, we should be able to meet demand. We are seeing the benefits of investment in serviced land and the effective use of these lands through residential density guidelines. The industry has also responded to the Government's call with a greater range of starter homes now coming on stream.

I and the Government are aware of the role of home ownership in contributing to the needs of people. I feel strongly about maintaining and promoting that. The affordability of the housing we provide must improve in line with increasing supply and our policy is focused on that. I am acutely aware of the need to get as many people as possible onto the first rung of the housing ladder and that is why I have placed great emphasis on the delivery of affordable housing.

Activity under the affordable and shared ownership schemes, which are aimed at low income households, continues to increase. A total of almost 1,700 houses were sold under the shared ownership scheme last year, an increase of 4.6% on the previous year. I expect a similar level of activity this year. I accept what Deputy Deenihan said about the need to increase the levels. However, one must be careful because the last time we increased the figures approvals were given to people for €150,000 when they previously got approvals for €130,000. Estate agents then wanted to know for what they had approval and the house which was €119,000 last week was suddenly increased to €139,000. While we all understand the point made by Deputy Deenihan, we sometimes get caught up in trying to meet the needs of individuals. However, we must be careful to ensure that policy does not give estate agents the excuse to increase house prices.

The affordable housing scheme accounted for the needs of almost 900 households last year, which was a threefold increase on the number of households provided for in 2001. This year, approximately 1,000 houses will be sold under the scheme. Our target of 2,000 units for both of these schemes – the shared ownership scheme and the affordable housing scheme—

Mr. Allen:

It is a disgrace that when we are discussing a major issue such as this, not one other Government Member is in the House.

Acting Chairman:

Lean ar aghaidh, a Aire Stáit.

Mr. Allen:

I am tempted to call for a quorum, but I will not.

Mr. N. Ahern:

I am not sure whose responsibility it is to ensure there is a quorum in the House during Private Members' time, although I accept that it is the Government's responsibility during the rest of the day.

Mr. Allen:

I said I was tempted.

Mr. N. Ahern:

The Deputy might end up calling in his own colleagues.

Our target of 2,000 units for both of these schemes was comfortably exceeded last year and activity should be further enhanced this year. The provisions under Part V of the Planning and Development Act 2000, as amended, will also assist in the delivery of social and affordable housing. The changes made to the 2000 Act, which provide for greater flexibility in concluding agreements between planning authorities and developers, will ensure a more efficient operation of Part V. I understand many authorities are actively engaged with developers in Part V pre-planning discussions and negotiations and I look forward to the contribution to overall output from this measure.

The important contribution that affordable housing provision can make in helping those in younger and lower income households to achieve their dreams of owning their own homes has been recognised in the new national partnership agreement, Sustaining Progress. The new affordable housing initiative being developed is aimed at further enhancing the supply of affordable housing. I welcome this initiative as another means of bringing more affordable housing on stream. The Government is committed to an ambitious scale of delivery of affordable housing for the target groups concerned. This initiative will differ from the local authority affordable housing scheme in terms of the target group and the fact that it will be designed not to have an impact on the Exchequer or general Government finances. Furthermore, it is intended that the initiative will not detract from the funding available for existing social and affordable housing programmes or affect the momentum of delivery of these programmes. We will work to ensure that the output from all affordable housing schemes is maximised.

It is important that those on various rungs on the housing market ladder are offered real choices, including choices in respect of tenure. Meeting increased housing demands in a balanced and efficient fashion requires not only increased private housing supply but also provision for tenure choice. For that reason, the Government is committed to developing and modernising the private rented sector in order that the range of effective choices can be expanded. I was glad to hear Deputy Allen speak about the rental sector as one of his key areas. The Residential Tenancies Bill was published on 30 May 2003 and commenced Second Stage in the Dáil a few weeks ago. Subject to the approval of the Oireachtas, it should be enacted towards the end of the year, even if Second Stage has not been completed before the summer recess.

The Bill provides for the legislative reform of the private rented sector recommended by the Commission on the Private Rented Residential Sector and accepted by the Government. It introduces a significant measure of security of tenure for tenants, specifies minimum obligations applying to landlords and tenants and provides for the establishment of a private residential tenancies board to resolve disputes arising in the sector, operate a system of tenancy registration and provide information and policy advice. Furthermore, the Bill restricts rents to market level and also contains provisions relating to procedures for the termination of tenancies, including graduated notice periods linked to the duration of a tenancy. The private residential tenancies board will be established when the relevant provisions of the Residential Tenancies Bill come into operation. The Government recognises that the private rented sector has an important role in meeting housing needs and the introduction of this Bill demonstrates our commitment to providing a new residential landlord and tenant regime.

This Government can also claim credit for bringing about real and positive change in the provision of social and affordable housing. We have responded actively to the increased level of housing need by expanding social and affordable housing output very significantly. Last year saw the delivery of the highest level of output under the range of social and affordable housing measures for more than 15 years, with the social and affordable housing needs of more than 12,700 households being met.

In overall terms, the total capital funding for housing in 2003, Exchequer and non-Exchequer, is just over €1.7 billion, an increase of almost 7% on the amount provided in 2002. This will provide for the social and affordable housing needs of close to 13,000 households. This is in addition to the substantial increases that were provided in 2002 and 2001 – 19% and 52%. The equivalent capital provision in 1997 – only six years ago – was €442 million, or only one quarter of what is being provided for this year. Looking at the development of the resources over that period, one can see the enormous amount invested. In effect, we are consolidating the very significant progress made in recent years and maintaining a very high level of commitment to social and affordable housing. The overall figure for this year has gone up by 7% but at that level, even if things stand still for a year or two, we are maintaining progress.

In its action programme, the Government set out its key housing priorities, including a continuing house construction programme for local authorities and voluntary groups, refurbishment of existing inadequate housing and the improvement and extension of social housing schemes. Since the Government took office it has made remarkable progress in widening and strengthening social housing measures. The Government has been very conscious of the increased level of social housing need. The motion tabled by the Opposition indicated that there were 52,000 families on local authority waiting lists while only 4,400 houses were completed last year. I do not know where the Opposition found these figures.

Mr. Gilmore:

They are the Government's own figures.

Mr. N. Ahern:

They are not.

Mr. Gilmore:

They are.

Mr. N. Ahern:

Several times tonight Deputies have referred to the same figure of 52,000 for the waiting list, but we all know that is not the figure.

Deputies:

What is the figure?

Mr. N. Ahern:

If Deputies want to quote statistics, they can say 48,413.

Mr. Gilmore:

No, that was the figure 18 months ago.

Mr. N. Ahern:

We all know that is the figure.

Mr. Perry:

I know the figure in Sligo.

Mr. N. Ahern:

An official assessment is made every three years and that is the latest figure, which was obtained in March of last year.

Mr. Gilmore:

Eighteen months ago – the Minister of State is behind the times.

Mr. N. Ahern:

I might be, but there is no point in looking in to one's crystal ball and saying it is such a level now because we do not know that is the case. We might as well be honest – if we want to quote statistics we should quote them. The last available figure was 48,213. That is too high. The Deputies should not misunderstand me; I am not suggesting it is a very low figure. However, it is 48,000, not 52,000, so there is no point in reiterating that figure.

Mr. Perry:

It is a very dated figure.

Mr. N. Ahern:

The level of need is of concern to the Government. Last year, the needs of more than 12,700 households were met through social housing provision. That means that more than 12,700 families on waiting lists obtained proper housing last year. Local authorities themselves built or acquired 5,074 housing units. The figure quoted by the Opposition overlooks the full range of responses to meeting the needs of local authorities. Specifically, it seems to ignore the fact that local authorities bought almost 700 second-hand houses.

Mr. Gilmore:

Until the Government stopped them.

Mr. N. Ahern:

Some local authorities are better than others. I do not think the one on which the Deputy sits is very good.

Mr. Gilmore:

It is controlled by the Minister of State's party, which is the biggest problem because it opposes everything.

Mr. N. Ahern:

I wonder, that is new. I know more about the north side but I do not believe that my party ever controlled Dún Laoghaire-Rathdown.

Mr. Gilmore:

It does now.

Mr. N. Ahern:

The position must be changing.

Mr. Gilmore:

The Deputy's party has moved upmarket and has forgotten the men of no property.

Mr. N. Ahern:

Through the capital assistance and loan subsidy scheme, voluntary bodies provided a further 1,360 houses to families on waiting lists. The motion fails to acknowledge the valuable contribution many such voluntary bodies make to the provision of social housing. The Government recognises the important role of voluntary bodies and will continue to support their valuable work.

I mentioned the 12,700 households whose needs were met last year through the provision of social housing but we must also include the work done by voluntary bodies through the shared ownership, mortgage allowance and affordable housing schemes. All of those make a contribution with the result that some 12,700 families on the waiting list accepted offers of accommodation. I am not suggesting that the list has decreased by that number because I realise that new people are applying all the time. This year, however, local authorities alone will secure the completion of some 5,000 housing units, which is an indication of how they have successfully accelerated their programmes in order to meet existing demand.

I expect that the needs of close to 13,000 households on waiting lists will be met this year. In 1997, capital expenditure on the main local authority housing programme was €229 million and this year it will be €700 million. In the past five years, we have invested €2.66 billion in that programme alone, which is proof positive of strong Government support for the provision of local authority housing.

Mr. Gilmore:

The Government is supporting the building industry and landowners.

Mr. N. Ahern:

Each household on the waiting list comprises individuals with their own set of needs. It is quite wrong for the Opposition or anyone else to group them in a way that ignores the variety and range of the different needs of single people and families in a variety of existing accommodation. We are also witnessing the emergence of new pressures on the waiting lists arising from refugees from non-EU countries as well as asylum seekers who have been given permission to remain in this country as a result of having Irish-born children. The extra numbers on the waiting lists are reflected in local authorities such as Fingal and South County Dublin where up to 18% or 19% of those on waiting lists are from the aforementioned categories that were not on the waiting lists some years ago. Approximately 32% of those on waiting lists are single people who require a different type of accommodation. Comparing current waiting lists with those which existed five or ten years ago is not comparing like with like. I am not denying that the numbers on the lists are too high, but the measures we are taking will hopefully continue to reduce them.

Some local authorities, including Fingal, have changed their letting schemes in order that houses can be allocated on the basis of a person's length of time in the scheme. Officials in the housing department of Fingal County Council have made three or four offers to people who have been on the waiting list for five or ten years. If such people do not accept the offers it raises questions and one begins to wonder if people are really in urgent need of accommodation. As a public representative, I have often encouraged people to get on the waiting list just in case their ideal house came up. It is extraordinary, however, that local authority officials have told me that they have made three or four offers to some people who did not accept them. I am sure Deputy Seán Ryan has met these people himself.

Mr. Gilmore:

The Minister of State should resign. He does not have a clue what is going on.

Mr. N. Ahern:

Obviously, not all of these 48,000 people are in urgent need of accommodation.

Mr. S. Ryan:

They do not want to be housed 20 miles away.

Mr. N. Ahern:

A huge amount of money is being spent on inner city flat complexes under the remedial works programme. These include Oliver Bond flats, Nicholas Street-Ross Road, Liberty House and Mary Aikenhead House, as well as work in Cork and Limerick. Major regeneration schemes are also ongoing, such as the redevelopment of Ballymun where we will be providing about 2,900 new low-rise houses over the next six years. This year alone we expect to see the completion of about 400 new houses there. Regeneration work is continuing on inner-city blocks, including the Glen area in Cork city involving the construction of 48 new housing units and the refurbishment of 24 existing flats at a cost of €18 million.

A key concern for me, as Minister of State, has been to meet the special needs of particular categories of householders, such as the elderly and the disabled. This concern, which was mentioned earlier by some Deputies, is reflected in the funding that has been made available for the task force on special housing aid for the elderly, the disabled person's grant scheme, the essential repairs grant scheme and the scheme of improvement works in lieu of local authority housing. I heard what Members said earlier but, last year, the total number of grants paid by local authorities under the disabled person's grant and essential repairs grant schemes was 9,200 at a value of some €84 million. In 2001, there were 6,300 grants. The improvements the Government has made to the terms and conditions of both schemes since taking office, have led to a significant increase in activity, given that fewer than 3,000 grants were paid in 1996.

Earlier in the debate, Deputy McGinley spoke about Donegal, but some counties—

Mr. Sherlock:

Did the Minister of State take notice of what he said?

Mr. N. Ahern:

Yes, I did.

Mr. Gilmore:

Is the Minister of State saying they do not deserve the grants?

Mr. N. Ahern:

Some counties seem to think the disabled person's grant or the essential repairs grant schemes are for general home improvements, but that scheme was done away with years ago. If one examines the list of such grant usage in different counties, the differences are extraordinary. While some Deputies will tell me that there is a higher profile of older people in some areas, and I realise that, it is quite obvious that some local authorities are using the scheme for general home improvements, although the criteria are not the same.

Mr. Sherlock:

Deputy McGinley described the cases that were being disallowed.

Mr. N. Ahern:

We cannot simply continue with that level of increase – 3,000 grants in 1996, 6,300 in 2001 and over 9,000 in 2002. That is not sustainable. Many local authorities are whingeing and crying but they have not made provision for one third of the money themselves. Some counties may have gone the other way around, including Deputy McGinley's. They should be careful that the money they are borrowing to pay their own one third is sustainable, otherwise they may be putting a millstone around the neck of their local authority for the future. The scheme needs to be reviewed and we are doing this. Various counties are introducing changes but we would like counties to be more measured in their approach. They should not just keep going until the kitty is empty and then send out letters to say they cannot meet expenditure costs.

Mr. Allen:

Is the Minister of State blaming the local authorities now?

Mr. N. Ahern:

I am suggesting that local authorities should live within their means, act intelligently and budget their money over a period instead of just spending and then wondering how they will cater for urgent needs.

Mr. Allen:

The Minister of State is blaming the managers and the local authorities for the cutbacks.

An Leas-Cheann Comhairle:

The Minister of State should conclude as his time is up.

Mr. N. Ahern:

Homelessness and Travellers remain priority issues for the Government. Our commitment in the housing area is paying off. Enormous sums are being expended with a 7% increase this year in Exchequer and non-Exchequer spending to a total of €1.7 billion. This is the eighth year in a row of record private housing production. We need to sustain this because of the ageing profile of the population and this year's figures again look impressive.

Mr. Sherlock:

The Minister of State is out of touch.

Mr. Perry:

He is going back to the future.

Mr. N. Ahern:

Despite a number of experts saying the market would slow down, there is no sign of that happening. However, people who might not need a house for a few years are buying them in advance because the cost of loans is cheap and interest rates are low. If the Government maintains its commitment and funding and encourages the construction industry to invest in the social and affordable schemes, we will break the back of this problem.

Mr. Sherlock:

Does the Minister of State believe that?

Mr. Gilmore:

I wish to share time with Deputies Seán Ryan and Perry. The Minister of State with responsibility for housing and urban renewal has addressed housing issues on a number of occasions and replied to parliamentary questions on the topic but the more I hear him, the more I arrive at the conclusion that at the very least he is out of touch and is certainly out of sympathy for those in need of housing.

I refer to the beginning of the Minister of State's contribution and what he trumpets as the Government's objectives in the area of housing. He boasted, "We have taken a wide range of measures over the course of our two terms in office to reduce house price inflation." I do not know whether he has noticed that house prices have increased by 130% during that period, which is five times the rate of inflation, four times the rate of increase in average industrial earnings and more than three times the rate of increase in building costs. Earlier this week a Permanent TSB-ESRI study highlighted that house prices increased by 14% in the past year, which is three times the rate of inflation, yet the Minister of State thinks the Government has done something to reduce house price inflation.

He stated a Government objective "to increase housing output to match demand." The Government parties in their two terms have presided over a doubling of the number of people on local authority housing waiting lists. Will the Minister of State or his economic advisers explain how supply can increase but house prices continue to soar?

The next Government objective is "to remove infrastructural and planning constraints on residential developments." The Government presides over traffic chaos and congestion throughout the State and cannot get its act together to put essential public infrastructure in place, for example, in Dublin city where it wants to run an over-ground rail system through the busiest road junction in the country.

A further objective is "to afford greater access to the housing market to first-time buyers". However, it abolished the first-time buyer's grant and contributed to inflated house prices by increasing VAT on building materials by 1%, which has added €6,000 to the price of an average house. The Government may fuel prices further by presiding over the increases in development charges that are being contemplated by local authorities.

The Minister of State stated the Government's intention "to improve affordability for first-time buyers and lower income households", yet those on low and modest incomes have been priced out of the market by the Government. The Minister of State is under the impression that if one is single and is on a housing list, one's need for housing is not that great and it is not something about which we should be concerned. It ought to be easier to house single people than to house those with family needs. If one third of the housing lists comprises single people, it is all the greater shame on the Minister of State and the Government for their failure to meet their needs. The Minister of State's attitude is that people on housing lists do not have a housing need because they are single or refusing houses. Any old excuse will be used not to provide housing for them.

However, the most disgraceful comment in the Minister of State's contribution related to the disabled person's grant when he implied that people applying for this grant are faking their disabilities. That is a disgraceful comment, which should be withdrawn. It is shameful that applications for the grant by people with disabilities who have a housing need, particularly elderly people who cannot climb stairs and live in difficult circumstances, are being turned down, not processed or delayed for two to three years.

The Minister of State will have a few months to reflect on this issue before the House resumes. He would be better off applying himself to persuading the Government to give him the resources to address the State's housing need than coming to the House to offer excuses, for example, for people not receiving the disabled person's grant or the lengthening housing waiting lists.

The Government likes to boast. The Taoiseach and his Ministers have claimed credit for every job created and every economic advance made over the past six years. They even, unashamedly, claim credit for initiatives, with which they had absolutely nothing to do, such as the Taoiseach's tawdry airborne attempt last weekend to hijack credit for the Special Olympics. However, they are undeniably silent on the housing issue. Since Fianna Fáil and the Progressive Democrats took office in 1997, the average price of a new house has increased by 130%, which is five times the rate of inflation, four times the rate of increase in average industrial earnings and more than three times the rate of increase in building costs. The Government has ended for young working families on low and modest incomes the prospect of buying their own homes or at least the possibility of buying a home in their own communities or near their places of work.

Having failed to make house purchase affordable, the Government has also failed to protect the interest of tenants in the private rented sector. During the six years these parties have been in power, more families have lost their homes through eviction than during an equivalent period of the 19th century under British rule. A Sunday newspaper published a photograph of an eviction scene from the 19th century, which is part of the Lawrence collection and it caused me to ask a question, which the Fourth Estate might answer. Photographs of 19th century evictions are available but we do not have photographs or video or other evidence, which it ought to be possible to put together, of the many families who have been evicted from flats, apartments and houses during the past six years.

The Bill to provide minimum protection for tenants was delayed for three years and has been postponed again until after the summer recess, which will give the unscrupulous minority of bad landlords an additional opportunity to evict tenants and increase rents before the Bill's provisions come into operation.

Mr. N. Ahern:

That is not fair.

Mr. Gilmore:

The Government is presiding over the longest housing waiting list in living memory. Despite the doubling of the numbers on housing lists since 1997, the Government parties have cut the budget for social housing this year by 5% in monetary terms and 20% in terms of housing output. In an era in which Ireland has enjoyed its greatest economic prosperity, it is shameful that the Government has failed the people regarding housing provision. No Government in the history of the State, no matter what its composition or political complexion, and many having had to operate in difficult economic circumstances, has failed like this one in terms of housing. It has failed to provide housing for those who cannot afford to buy a house and has especially failed the 5,500 people in this country, including more than 1,000 children in this city, who are homeless tonight as we speak.

Mr. S. Ryan:

I am pleased to have the opportunity to make a contribution on the Fine Gael motion on housing. As this is not the first motion from various parties on the issue, I hope the Minister will take on board the concerns and views of the Opposition.

The removal of the €3,810 first time buyer's grant and the increase in VAT to 13.5% on new houses in the December budget impacted significantly on house buyers, particularly first time buyers in the affordable housing category. Figures released yesterday show that the average price of a new house nationally is €198,000 and in the greater Dublin area a whopping €256,000. Prior to the last general election people, particularly young people, were led to believe by Minister after Minister that the full implementation of the Bacon report would resolve the problem of supply, with a consequential reduction in the price of houses. Three years later, first time buyers must pay €250,000 for a house, with prices continuing to spiral out of control.

The original intention of Part V of the Planning and Development Act 2000 was to encourage integration, that is, movement away from the concept of large public housing estates, which were a blight on areas. The recent changes in Part V of the Act have thrown out the window the concept of integration. The changes give developers the option to build and ignore the requirements under the planning Acts. If a developer has another suitable site, he can relocate the social and affordable housing element of his development. It is obvious that the Minister has given in once again to pressure from developers. The consequences of the cave-in will be large-scale social housing developments in certain locations in the future. Unfortunately, some of us, particularly the Government, will not learn from the mistakes of the past.

Affordable housing throughout the country, particularly in the greater Dublin area, has not made the progress envisaged. The maximum loan that may be advanced to an eligible applicant by a local authority is €130,000. The eligibility on income grounds is €32,000, or a formula of up to €80,000 where there is more than one applicant. It is totally unacceptable that income limits have not been changed since 15 June 2000. It is imperative that the maximum loan is increased and income limits are set at a more realistic level.

In the brief time available to me I want to refer to an issue I raised previously. It relates to the potential of Part V of the Planning and Development Act 2000. As we speak here tonight, many suitably qualified applicants have been deprived affordable housing under Part V of legislation passed by the Oireachtas, and signed by the President, due to an impasse between the financial institutions and the Minister. Under the scheme, it was envisaged that the finance for the scheme would be provided by the financial institutions. However, these institutions are not prepared to implement the claw-back arrangements inherent in the scheme. People who exceed the €32,000 limit for a €130,000 loan are being told by the building institutions that they cannot obtain a loan, while at the same time they are being told by local authorities that they have exceeded the limit of €32,000. No one seems to be taking on board the provision under Part V of the 2000 Act. I ask the Minister of State to take the gloves off to the financial institutions to resolve this issue. He must also ensure that local authorities implement this scheme.

Mr. Perry:

I thank Deputy Allen for tabling this important motion. Housing is one of the most important issues facing this generation.

Where is the Government's hired gun, Peter Bacon, who has gone from the frying pan into the fire? He was wheeled out on every issue to justify the previous Government's building programme. However, he is not being wheeled out by the current Administration. It is difficult to justify that Sligo County Council only received approval for its expenditure in June of this year when it should have been approved in January. Therefore, it must spend its whole allocation in six months. Four developments in the area, including Tubbercurry, Coolaney, Bunanadden and Grange, are waiting for local authority approval. The council must spend its whole allocation in six months and if the money is not spent it will be deducted from the next allocation, which is very unfair.

Mr. N. Ahern:

It had a multi-annual programme.

Mr. Perry:

The developments have been delayed for several reasons. Re-design is just one of the reasons given to justify non-compliance. As Deputy Gilmore said, house prices have increased by 135%. In Sligo alone, only 755 housing units were built in 2002 compared to 903 in 1998. House prices are 25% more expensive than they are in America. There are 52,000 people on the national housing waiting list. More than 800 families are on the housing list in Sligo.

Mr. N. Ahern:

They are probably in the investor houses.

Mr. Perry:

These people cannot afford investor houses. That is an elitist market. Some 800 people are waiting for a house in Sligo. The first time buyer's grant was abolished in the last budget. Even though the purpose of this abolition was to reduce house prices, prices have increased. The 1% increase in VAT has added €2,000 to the price of a house. There was also an increase in PRSI.

Five years ago, five out of ten houses cost less than €120,000. Now just one out of ten can be bought for less than €120,000. Some 4,000 houses were promised last year in the voluntary housing sector but only 1,360 houses were built.

Mr. N. Ahern:

Within the lifetime of the NDP.

Mr. Perry:

The letters "NDP" are visible on every shed in Sligo. I do not know who is erecting them but it is a big con job. Every job being carried out is referred to as an NDP job. All the national development plan means to Sligo is NDP signs. It is the biggest joke of all time. To own one's home was deemed essential in the past, but now it is a luxury. It took the Government six years to introduce the Bill on the rental sector which is not yet enacted.

Deputy Gilmore's comments about the essential repairs grant were correct. Reference was made to fact that managers were spending their allocation of money. They are only getting peanuts. They must match that fund from their own allocation. The Government cannot even accommodate people in nursing homes. People are being sent home. An 81 year old lady who has neither heating nor hot water in her house called to my office yesterday. She was told the fund has almost run out and that she will have to join the queue to establish if she is entitled to an essential grant for the elderly.

The Minister of State referred to a caring Government but under this Government the most vulnerable in society are not cared for. There are 800 people waiting for houses in Sligo and the Minister of State told me they should go into the elitist, rental market. I am disappointed with his reply.

Debate adjourned.