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Seanad Éireann debate -
Wednesday, 19 Jun 1957

Vol. 48 No. 4

Public Business. - Small Dwellings Acquisition Bill, 1957—Second Stage.

Question proposed: "That the Bill be now read a Second Time."

It has been urged by house builders for some time past that the statutory definition of market value contained in paragraph (a), Section 32 of the Housing (Amendment) Act, 1950, does not permit of an adequate market value being assessed for new houses, having regard to current costs.

Builders have contended that market value should include all such factors as profit, cost of developing the site, of constructing roads, footpaths and sewers, of providing watermains and public lighting, and of carrying out all additional works required from time to time by local authorities; all fees, expenses and overheads and the acquisition of the site on which the house is built or to be built. It has further been contended that there should be some form of appeal against the decision of a local authority in the assessment of market value.

These representations were considered by the previous Government and on 24th December, 1956, local authorities were informed that legislation would be introduced to amend the definition of market value on the lines of the definition in Section 1 of the Bill. Local authorities were requested to operate the Acts in accordance with the revised definition proposed and it was indicated that legislation would validate any action on these lines taken in anticipation of the enactment of this Bill. The Bill does not propose any amendment of the law governing the proportion of market value which may be advanced.

Section 1 of the Bill is designed to enable all the normal costs and charges falling on an individual building or buying a new house, including the value of his interest in the site, to be included by the local authority in its assessment of market value.

The same section gives effect to the undertaking to validate any determinations of market value made since 24th December, 1956, on the revised basis.

Section 2 of the Bill provides that an appeal to the Commissioners of Valuation may be made by a person who contends that the local authority might properly have indicated a greater amount by way of market value. The opinion of the commissioner on the market value of a house would not commit the local authority to making any advance or to making a particular amount of advance in any individual case.

The person applying to the Commissioner of Valuation would pay a fee prescribed by regulations to be made by the Minister for Finance. These regulations will be laid before each House of the Oireachtas in accordance with sub-section (7) of Section 2.

I welcome this Bill in so far as it proposes to make easier the granting of loans by local authorities and a quickening of the housing drive. We are all aware that, unfortunately, there has been a lot of unemployment in the building trades and I hope this Bill, when enacted, will give some little help in dealing with that unemployment.

I am puzzled, however, as to the purpose of Section 2. I listened very carefully to the Minister and I am still not very clear as to the usefulness of that section. It provides that where a person is dissatisfied as to the amount of loan which may be granted, he may appeal to the Commissioner of Valuation, but we find that the decision of that commissioner in no way affects the discretion of the local authority in deciding what loan should be granted. When I saw that first, I thought it unusual that some outside body should determine what loan would be made by the local authority. In fact, that is not the case because the discretion, as provided in the Bill and as the Minister said, is still left with the local authority. I have no objection to that discretion being left with the local authority, but it still leaves me puzzled as to what the purpose of the section is.

Another question on that is whether it will involve additional expenditure. If a person is dissatisfied with the assessment made by the local authority, he then appeals to the commissioners and the fee is to be prescribed. Will that fee cover all the costs involved in the making of that investigation or assessment? If so, I suppose that is not too bad; but I do not see how the individual aggrieved is any better off. He has to pay for the investigation and again the local authority is under no obligation to improve on its former decision as to what loan will be granted. I hope the Minister in his reply will try to explain to me the reason for Section 2.

I want to ask the Minister just one question. Nobody could object to the Minister's statement. Possibly he may not be able to answer my question. I noticed in the tables circulated with the Budget that an extra provision of £2,000,000 is being made for housing this year. I should be interested to know how much of it is for Small Dwellings (Acquisition) Act housing. If the Minister has not the figures with him, perhaps we might hear them some other day. It has some bearing on this Bill. I take it that the actual provisions of the Bill will not make a big difference, but I should like to know what part of the extra £2,000,000 for housing will come into the category of Small Dwelling (Acquisition) Act housing, that is to say, houses which will pay for themselves.

There is one section to which the Minister referred in his opening remarks, sub-section (2) of Section 1. I am a new member of the House and I do not know if there is any precedent for a section like that which provides that the Government may send out a notice to a local authority saying: "Do this and we will make it all right later on." I should like to know if there is any precedent for such an Order and if the House approves of it.

The only other question I should like to raise is in connection with sub-section (2) of Section 2 which states:—

"Where an amount has been indicated to a person by a local authority under paragraph (a) of Section 32 of the Housing (Amendment) Act, 1950, (No. 25 of 1950), as amended by Section 1 of this Act, and that person contends that a greater amount might properly have been indicated, that person may, on payment of the prescribed fee, submit his contention for consideration by the commissioner."

Would it not be possible also to allow other people, apart from that person, to appeal? For instance, supposing members of a county council thought that too much was being allowed—if they were able to find out —would you not allow them to appeal also and, to a certain extent, bring the matter more in public view?

I am glad this Bill has been introduced because it will help those people building houses under the Small Dwellings Act to acquire homes of their own. Considerable difficulty and hardship has been caused by reason of the interpretation of the section which this Bill is attempting to clear up. I notice from the Dáil Reports that some new arrangements have been made with regard to loans under the Small Dwellings Act. I wonder would I be in order in inquiring from the Minister whether some of the restrictions which were imposed last year on local authorities have been raised?

One of the restrictions was that only those entitled to supplementary grants from local authorities would be entitled to get loans under the Small Dwellings Act. At that stage, the limit for the granting of supplementary grants from the local authority was £620. I understand the position now to be that Small Dwellings Act grants will be available to people with incomes up to £830 approximately. That would be an advantage to people in the category of £600 to £830, who were debarred up to now from obtaining Small Dwellings Act loans.

There was, both in the Dublin Corporation and Dublin County Council, a further restriction on the granting of loans under the Small Dwellings Act. That was that the purchase price of the house must not exceed, I think, £2,000. In a number of cases, houses have already been built which cost more than £2,000, and it would be a hardship, both on the builder and on the prospective buyer who wants to acquire that type of house, if they were unable to obtain a loan under the Small Dwellings Act. I wonder if the Minister could say whether that restriction in the maximum price of houses has been or will be lifted.

This extension of the Small Dwellings Act code should commend itself to the Seanad. It is important to remember that the code itself, enshrining as it does the principle of helping those people who want to help themselves, is a very important code. In that connection, the Minister deserves credit for his recent announcement in regard to valuations and incomes. Loans are now available to farmers under £50 valuation and to income earners under £830 per year. Last year, in a time of financial stringency, limits of £35 in regard to valuation and £620 in regard to income unfortunately had to be imposed. The result was a considerable curtailment in advances under the Small Dwellings Acts code, the reason being that people under those limits, particularly those under £630 a year, were people who would not be availing of Small Dwellings Act facilities in any event. Local authorities also had the experience that many people who did apply under that £600 limit were people who would be, to put it bluntly, not a good risk.

This recommended extension to £830 and £50 valuation brings in people who would be a good risk, so far as the local authority is concerned. In that respect—this might not be the place to raise it—I would point out that local authorities, prior to the restrictions imposed last year, were actually making a good profit out of the loans advanced under this scheme. Secondly, I think the Minister also deserves congratulations for falling in with the suggestion made by the master builders that the definition of market value be extended and made more flexible. It is now also possible for a person to get credit for the interest he may have in the site on which the house my be built.

The point made by Senator Murphy is probably a good one. In Section 2, we have this question of limiting the right of appeal to the Commissioner of Valuations, which, however, is not made mandatory on the local authority. In the Lower House, the Minister quite rightly said that, as the local authority was paying the bill, it should be entitled to have the final say on whatever loan would be advanced. It seems to be fruitless that you should have provision for an appeal to the Commissioner of Valuation that will not be mandatory. While I would agree with the Minister and with people who advocate that the local authority should have a say in what loan is being advanced, if that view is correct, I fail to see the reason for the section at all. The matter may be approached in either of two logical ways. On one hand, have an appeal which is mandatory or, on the other, have no appeal at all. I think the section as it stands will not be availed of. It is a dead section.

The important thing is that the Minister has announced these extensions of the limits under which advances will be made. That is an important thing and partly answers the point made by Senator O'Donovan as to what is going to be done with these moneys. The very fact that the limits have been raised to £50 and £800 will ensure that the greater portion of the moneys devoted to housing will go to people seeking loans under this Act.

Mr. Walsh

I rise to welcome this Bill and the Minister is to be congratulated for changing the red light to the green light for local public bodies once more in order to solve the housing problem. To my mind, however, this problem of valuations between the builder and the local authorities is a question that concerns Dublin City and suburban districts, and possibly to a certain extent Cork City and suburbs, whereas it will not affect the provincial towns such as the one I come from. I do suggest that the Minister will be well advised to tread warily in regard to this question of allowing building organisations to have such a strong voice in the question of valuations.

In dealing with this matter under the Small Dwellings Acquisition Acts, we have always treated the applicants fairly. We never had any difficulties about the amount allowed, and if we did have a slight difference, we were always able to come to amicable arrangements between ourselves. Why there should be so much question about this in the City of Dublin is beyond me. Our policy has been to take a district with so many acres of land on which to accommodate so many houses and we leave space at one side for houses under the Small Dwellings Acquisition Acts. When we finish building, we advertise that site and invite tenants. We have been able so far to fill all those sites. We are at present undertaking a similar scheme and our policy will be the same.

If the provincial towns such as Wexford, Dundalk, Galway, Limerick, Clonmel and other such towns were to act on that policy, it would be a great saving to the local authority and would obviate a good deal of arbitration about what is a fair valuation. We give the site after it has been fully developed; we install services such as water, sewerage, gas, and so on; and we build roads. We put a charge upon those developments and services. We say to a purchaser: "That is yours", and he selects a site and pays us or in cases where it is necessary, a charge is deducted from the loan so that it is not hard upon him in any way. In so far as the provincial towns are concerned, I do not anticipate the slightest trouble in administration. I again congratulate the Minister for getting us on the way once more.

The first matter mentioned by Senator Murphy was this question of the right of appeal. I do see the point he has made and it was made also in the Dáil. I think, too, that it has been sufficiently met there and the Senator in what he has said here admits the right of the local authority finally to determine matters of this nature. It does appear, all the same, somewhat strange that in Section 1 we provide for the inclusion of a number of matters on which there was apparently some doubt when the local authorities are determining the valuation of the house.

I am told that the need for Section 2 arises in this way. It may arise in a number of ways but it serves a purpose in this way perhaps more than in any other. A builder is developing a site on which to build 50 or 60 houses. He has all his plans ready, but not a stone has been laid upon a stone. He wants to get some idea of what these houses will be valued at, when erected. He wants to be able to tell me, as a potential purchaser, what a house is likely to cost. He gets a valuation in respect of a house and when the scheme is developed he may not be satisfied with that sample valuation. He can go back and appeal in the manner set out here in Section 2.

I do not anticipate wrangling between the builder and the local authority, but it would be useful in a case like that to have the right of appeal to the Valuation Office in order to get what the builder might think was a more proper determination of the actual valuation of the house. While conceding that and making provision for it in Section 2, I still contend, and in fact so did the people interested in the amount proposed here, that the local authority should have the final say. I do not think the local authority would be anxious to have any wrangling about these matters, but misunderstandings might arise in the manner I have described.

Another point which was raised by Senator Cole was in regard to the right of others, as well as the builder, to appeal to the commissioners. Such right is provided for. The county manager, as far as I can understand, may appeal. Any private citizen may appeal and there is no hindrance as to the type of interest that may appeal against undervaluation or overvaluation. Senator Cole also mentioned the point that we were providing here for legal coverage for a letter which issued as far back as November, 1956, indicating to local bodies that, while the law was not at the moment as we were proposing to make it, they could operate as if the law at the moment were actually what we were proposing and we would give coverage in that situation. It may not be the most desirable thing, but it is not an unusual thing. I remember another occasion when on the expiration of a Housing Act on 31st March a new Bill had not been passed and the provisions of the expiring Act ran on until the following July or August. In that case, even though the provisions of the new Bill might be somewhat different, nobody was allowed to suffer and nobody was penalised. All those who were building houses got the benefit of any provisions contained in the Act which expired on 31st March up to the time the new Bill became law. Such provisions were applicable in all cases. There is, therefore, nothing unusual. Indeed, not only does that apply in the case of housing, but it also applies in a number of other matters. It may not be altogether desirable, but it is the practice that has been in operation.

I was asked how much money was available out of the provision in the Estimate for the Small Dwellings Acts. Out of the £2,000,000 provided in the Estimate, only £200,000 would have been available for operations under the Small Dwellings Acts. If we were to confine ourselves to that figure, we would not get very far in the provision of loans to those people all over the country who might wish to build or purchase houses. As a result of a permission given to me by the Government recently, there is now no limit in that regard and moneys are available under the Small Dwellings Acts from the Local Loans Fund to the full extent of the public demand.

Senator O'Quigley referred to the price limits set by some local bodies. I think that applied mostly in Dublin, where a price limit of £2,000 was set. Beyond that, no loan would be given. That decision caused a great deal of dislocation. Not only did it cause dislocation, but it resulted in a great deal of injustice over the past 12 months or so. It was clamped down upon the builders without notice or warning. Some builders were building houses the sale price of which was £2,150, £2,200 or £2,300. The houses were in course of erection when the decision to revise the price limit was taken. In so far as builders were affected by that decision and in so far as prospective purchasers were affected, where they can be located, I have been trying to have this position met by the local authority concerned and ultimately there will not be many who will not be covered. Whatever injustice was done as a result of that decision will, we hope, be rectified.

We have not the right to say to a local authority what ceiling they will fix. I understand there is no price ceiling in Dublin City. There is a price ceiling in County Dublin and the matter has recently been discussed by the Dublin County Council. I am informed that they have confirmed that price ceiling. It is not for me to express an opinion as to whether or not that is wise. They have the right to make the decision and they have the right to fix that ceiling, irrespective of whether or not it is wise, or whether or not I like it. It has been done following consideration and discussion by that body.

Question put and agreed to.
Agreed to take remaining stages to-day.
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