Gabhaim buíochas leis na Seanadóirí a labhair ar an rún seo agus ar ábhar atá chomh tábhachtach le seo. Cé go raibh orm éisteacht le go leor rudaí nach raibh mórán céille ag baint leo maidir leis na rudaí atá déanta againn agus maidir le cad tá i gceist againn a dhéanamh is maith an rud é go raibh an díospóireacht againn. Tugann sé seans dúinn a mhíniú don Seanad cad tá i gceist againn a dhéanamh agus cad é an polasaí atá á leanúuint againn faoi láthair.
It would be useful to outline briefly the strategic features of the Government's approach to housing. In An Action Programme for the Millennium, the Government set out a number of key priorities including: a continuing house construction programme by local authorities and voluntary groups; refurbishment of existing inadequate housing; improvement and extension of social housing schemes; maximum co-ordination of housing policy and the development of serviced sites by local authorities to accelerate the supply of new houses to meet rising demands and deflate escalating house prices. Immediately on taking office, we began work on our strategic objectives and in the relatively short time since then we have achieved remarkable progress on all these fronts.
It is an inescapable fact that house prices are determined in the market place by the interaction of supply and demand. This is true whether we are talking about new or existing houses. Considerably more existing houses than new houses are sold, and it is the price of existing houses that primarily dictates the price of new houses. That house prices have increased steeply is due largely to the fact that demand for housing has escalated at an unprecedented rate. The effects of rapid growth in incomes and employment, low interest rates, a significant increase in the number of people in the key household formation age groups, smaller household sizes, and, particularly, very high net immigration, have all impacted hugely on demand for housing.
The current imbalance between supply of and demand for housing has occurred despite the fact that never in the history of the State have we achieved a better performance in terms of housing output. Housing output reached a new record in 1998 at over 42,000 units. We are building new houses at twice the level of 1993 and at a rate of over 11 per 1,000 population – a rate which is by far the highest in Europe and over three times that of the UK. With record planning permissions for houses in 1998 – up over one third on the previous year's total – and significant increases in "Homebond" registrations in 1998 and in the first month of 1999, the signs are good for the future. However, we need to maintain, and indeed reinforce, our emphasis on tackling the serious bottlenecks which can slow the delivery of housing, particularly the availability of serviced land.
House price escalation and general imbalance in the housing market was a serious problem inherited by the Government. However, the Government had the foresight to engage independent expertise on the housing market to complement our own ongoing analysis and evaluation. This has resulted in the production of two comprehensive reports providing detailed analysis of the issues, with specific recommendations to enable appropriate policy responses to be formulated. In each case, the Government provided a comprehensive response to the consultants' recommendations on the same day the reports were published, and virtually all the recommendations have been or are being implemented. This action on our part is unprecedented – I do not think any other report to Government was acted on the day it was published, and its recommendations accepted and measures taken to implement them.
Real progress has been made in recent months. The most recent Bacon report, The Housing Market – An Economic Review and Assessment, confirms a wide consensus that the Government's actions have played a key role in achieving a slowdown in house prices which, the consultants point out, represents a positive achievement against the background of continued economic growth and low interest rates. In recent months there has been a general easing in house price inflation, the removal of serious overheating in the housing market and continued growth in housing output. There is also widespread agreement that there are further beneficial effects to come from the measures already taken.
Internal house price data show that, while house prices increased sharply in the first half of 1998, they rose much less sharply in the second half of the year, especially in Dublin, where the problem has been greatest. There has been a significant moderation in new house prices in Dublin with an increase in the second half of 1998 of 6.9 per cent, compared with an increase of 17.6 per cent in the first six months of that year. There is also evidence of a marked slowdown in second-hand price increases in Dublin with an increase of only 0.8 per cent in the quarter to December 1998, compared with an increase of 10.1 per cent in the quarter to September 1998.
Arising from the recent review and assessment of action on house prices and the housing market, the Government has announced a range of further initiatives in relation to housing. The new measures, in conjunction with measures already taken last year, aim at maximising and expediting housing supply, securing house price stabilisation, addressing affordability issues and ensuring balanced growth of the market in the future.
The increased price of houses has, however, inescapably resulted in some households of modest income, who might previously have bought their own house, now turning to the local authorities seeking housing accommodation. Measures introduced under last year's action on house prices are helping to assist affordability for lower income house buyers, particularly through the withdrawal of investor incentives, reduced stamp duty and improvements in the local authority shared ownership scheme. Further innovative approaches to the issue of housing affordability are now being pursued, including the promotion of a better mix of affordable units in new developments and the recently launched local authority affordable housing scheme. I note Senator Coogan has left the Chamber. This scheme has already been adopted by his local authority and I compliment Galway Corporation on being the first local authority to do so.
Under the terms of the new affordable housing scheme, local authorities will provide additional new houses on land available to them in or near urban centres where house prices have created an affordability gap for lower income house purchasers. The houses will be offered for sale to eligible purchasers at cost price and, accordingly, at a significant discount from the market value of comparable houses in the area. Purchasers will be offered mortgage finance at favourable interest rates and a subsidy will reduce further mortgage repayments for households with incomes of up to £16,000.
This new scheme will bring a new dimension to Government efforts to address the problems that have developed in the housing market. An essential element of the scheme is that it is directly linked to the delivery of additional new houses by local authorities and will, therefore, not adversely affect house prices. A number of local authorities are already actively developing proposals which will fit into the new scheme, as a means of responding to pressure on their waiting lists.
This scheme is not being sold as the solution to all the problems faced by house buyers. However, it is an important new initiative to help bridge the affordability gap which rapid house price increases in recent years have created for many aspiring home purchasers. Any measures that would fuel demand through, for example, increased availability of mortgage finance without a corresponding increase in supply would undo the progress that has been made and cause renewed price escalation. The development of suitable sites, including, where necessary, the acquisition of land and the planning and construction of houses will require some time to arrange. We hope that 400 houses may be provided under the scheme this year and between 1,000 and 2,000 houses in subsequent years.
There are indications from ongoing contacts with local authorities of increases in the numbers applying for local authority housing. A figure of more than 40,000 households seeking housing has been widely mentioned and is likely to be a reasonable reflection of the overall number of applications before the merits of individual applications are assessed. It is likely that the high cost of housing, increases in the numbers of people returning from abroad, the shortage of private rented accommodation and changed demographic trends are having and will continue to have an impact on the numbers applying for local authority housing.
The next comprehensive assessments of local authority housing needs will be carried out by local authorities on 31 March. However, it is not to be taken that we are awaiting the results of the assessments before we act. My Department and I are well aware of the housing situation. The Government's expansion of the local authority programme in 1999 to its highest level for many years is an immediate response to increasing needs in advance of the assessments.
Investment in the local authority housing programme is at its highest level in years. Almost £230 million is being provided for the programme this year, an increase of almost £35 million on the 1998 provision. Investment in the local authority housing programme for 1999 is four times greater than 1993. I have secured increases of 18 per cent for the programme in each of the past two years.
The high level of funding will enable local authorities to meet commitments on their ongoing programmes and to fund the enhanced programme of 4,500 new starts in 1999. The substantially increased capital provision for this year is a clear indication of the Government's commitment to local authority housing as the mainstay of the overall response to social housing needs.
In meeting social housing needs, the local authority housing programme is supplemented by a range of other social housing measures, such as the new affordable housing scheme, housing provided by voluntary bodies, shared ownership schemes, etc. It is for each housing authority to develop the full potential of the various measures open to them to respond to housing needs in their area and I have regularly exhorted authorities to do so. I will also be undertaking consultations with voluntary housing bodies to ascertain how significantly increased output from the sector can be achieved in the coming years.
Many local authorities have not availed of existing schemes, such as the capital assistance scheme and the rental subsidy scheme. Yet Senators from those constituencies criticised the lack of affordable housing and social housing in their areas. I have asked local authority members to encourage and invite the voluntary housing organisations to come into their areas and to avail of the substantial money my Department and the Department of Finance are prepared to make available to fund greater output in the voluntary housing sector. I want the sector to expand to 4,000 houses a year, which it has the capacity to do. I am disappointed my exhortation has not been acted on in the local authority areas. I will continue to do everything I can to assist the voluntary housing associations to increase their output.
Taken together with the range of social housing options, the local authority housing programme is well placed to continue to meet the need for housing and good living conditions and to contribute to the improvement of the physical envir onment of urban areas. I expect the 1999 programme, together with output from the complementary social housing measures and casual vacancies occurring in the existing local authority housing stock, to cater for the needs of over 10,000 households in 1999. I am confident that the greatly increased provision for the social housing programmes will considerably enhance the capacity of local authorities to meet social housing needs to the fullest extent possible in present circumstances.
The local authority housing programme also plays an important part in the regeneration of urban areas. The most prominent example is Ballymun where the development of housing is the focus for the social and economic regeneration of the area as a whole. There is £21 million available this year to get the redevelopment of Ballymun underway. This is tangible evidence of the Government's commitment to improve the housing and economic prospects of an area in Dublin that has regrettably been neglected over the years.
Other examples include the regeneration of a number of inner city flat complexes in Dublin, Galway – where Galway Corporation is replacing the flats in Rahoon with standard housing with the aim of eliminating long standing social difficulties – and Cork where a number of local authority housing estates are being comprehensively redeveloped. These area based regeneration initiatives to restore the physical fabric of established areas and to support local communities are a vital aspect of the housing programme.
I am conscious of the importance of the private rented sector and the need to maximise its potential in meeting our housing objectives. Ireland has, traditionally, a high rate of owner occupancy compared with other countries. Government policy will continue to facilitate this goal as the preferred option of the great majority of households. However, after many years of decline, there has in recent years been renewed expansion and diversification in the rented sector with significant growth in the demand for and the supply of good quality apartments. The improvements that have been achieved in private rented accommodation reflect the success of the urban renewal schemes.
I am concerned to secure improved security of tenure for tenants in private rented accommodation. Consideration of this issue must take account of both the complex nature of the landlord and tenant code and constitutional issues. The fair and equitable balance of rights between landlords and tenants is not easily achieved. A poorly thought out legislative intervention in this area has the capacity to do more harm than good, a message clearly brought out in a recent Threshold conference on the private rented sector. It is for this reason that the Government recently decided to establish a commission specifically to examine issues relating to security of tenure.
The motion calls for the establishment of a wide-ranging housing commission to address the issue of house prices and to draw up a strategic plan for the country's housing needs. The factors behind the current problems in the housing market are well known and the Government is addressing them systematically. I have doubts as to what a wide-ranging housing commission would achieve, apart from diverting resources from implementing the measures already identified as necessary and which the Government is already addressing.
Action is what is required rather than wide-ranging discussion and analysis. There is a need for focused analysis in the housing area, for example, research that is focused on a particular issue such as ways to improve security of tenure in the private rented sector. This alone is a major and complex undertaking. We have had, with the two Bacon reports, the benefit of a critical overall assessment of the entire housing market. Our priority for the immediate future is primarily the implementation of the measures approved by the Government to secure increased housing supply and the focused and targeted examination of particular areas, such as the issue of security of tenure.
The recent Bacon report emphasises that to avoid future disequilibrium in the housing market it is extremely important to implement a strategic plan for the location and scale of development in the overall Dublin and mid-east areas. The Government will launch strategic planning guidelines this week which have been prepared with the assistance of consultants and will provide a framework for the future balanced and planned development of the Dublin and mid-east regions. These guidelines will be reflected at sub-regional level through the local authority development plans which will be reviewed.
I also welcome the recently published ESRI report, "National Investment Priorities for the period 2000 – 2006", particularly its recommendations regarding the priority to be afforded investment in public physical infrastructure. The recommendations regarding investment in social housing, roads, public transport and sanitary services have already been reflected in the Government's policies to date and will continue at the top of the priority list for investment in the forthcoming national development plan. The recommendations regarding the achievement of a better geographic balance of economic activity and population distribution nationally are also important in the housing context and will be afforded due attention and significance by the Government in preparing the plan.
The Government's response to overall housing needs is multi-faceted, combining the various programmes of action together to form a connected strategic response. It is measured, it is viable, it is adequately funded and it is subject to proper political direction by me and by the Government. Indeed, it is relevant to point out that the Government's response to the recent Bacon report was launched jointly by the Taoiseach, by the Minister for the Environment and Local Government and by me as Minister for Housing and Urban Renewal. I, therefore, reject suggestions that have been levelled about a perceived lack of co-ordination of our overall approach. Those who make such suggestions fail to comprehend the multi-dimensional approach that operates at different levels to address key needs.
Housing is at the top of this Government's priorities. There should be no doubt that this Government regards addressing housing needs as an essential element of its overall social policies. I have outlined the range of actions being taken by the Government across the housing spectrum. Of course I acknowledge the problems exist. However, the Government has taken steps to address these problems and the effects are beginning to become apparent. Some of the measures will, by their nature, take longer to bear fruit than others. I am putting in place structures and procedures in my Department to ensure that all aspects of infrastructural development which impinge on housing supply are prioritised. I am continuing to develop further measures that may be appropriate. I believe that the Government's prompt, decisive and extensive action deserves recognition, credit and support.
Senator Ryan referred to homelessness. I agree that the level of homelessness has increased in recent times. There is no need to take anyone by the hand and walk around the streets at night to see the number of people who are sleeping rough. These people were sleeping rough in Dublin and close to this House for the five years that the Labour Party was in office, prior to this Government. Therefore, it is not a new phenomenon. Senator Ryan was originally an Independent Senator and has since joined the Labour Party but that party had responsibility for housing for the five years of the Rainbow Coalition.
The facts will be known when the assessment of homelessness is carried out by local authorities in March as part of the housing needs assessment. I have asked local authorities to carry out the assessment of homeless over a period of seven days to ensure that all homeless persons are included. In the past there has been some difference of opinion about the previous measures employed by my predecessors to assess the level of homelessness. I want to ensure that we all agree on the size of this problem and that everyone concerned with homelessness will play a part in the assessment that will be undertaken.
Homelessness is not just a lack of accommodation. The profile of homelessness has changed in recent years. It follows that the response to homelessness requires more than just providing accommodation. It means providing the necessary support services to enable homeless people to get out of the cycle of homelessness. Increasingly voluntary bodies are providing resettlement services, with funding provided by the Government, to assist homeless people to move into and adjust to an independent lifestyle. This is an objective I strongly support.
Because of the complexity of homelessness and the number of agencies involved in providing accommodation and services for homeless people, the Government has established a cross-Department team, chaired and serviced by my Department, to prepare an integrated response to the many problems which affect homeless people, including matters relating to accommodation, health, education and employment. The team will consult with the statutory agencies and expert voluntary bodies involved before making their report.
We also provided in the budget for the very first "foyer" for homeless persons in this country. Some people may not be familiar with the concept. "Foyers" are specifically designed and managed to provide both accommodation and training opportunities for young homeless persons. A number of "foyers" are in operation in the UK and there is one operating in Belfast. The £1 million made available in this year's budget, with the capital assistance scheme, will enable this project to be developed. Again, it is only one of the many schemes I have initiated since I became Minister. I intend to continue to keep this situation under review and I will continue to introduce new initiatives whenever I get the opportunity to do so. I appreciate the support given by the Minister for Finance for my proposals to date and I expect Government support will continue to be available to meet the extra costs that will be involved in helping to deal with this issue of homelessness and providing adequate affordable accommodation.
This Government and I are utterly committed to solving the housing issue that confronts us. You may call it a crisis or a problem but in reality it is a housing need which is causing financial problems for many families and accommodation problems for other families. I intend to ensure that we will break the back of the problem which has been outlined here. It was a problem that we inherited. There was no forward planning in place in the Department when I took office. There was also no attempt to encourage or help local authorities build up land banks. There was no special attempt to service land for future housing development. We had to introduce the service land initiative at an enormous cost. We did it and will continue to do so. All the schemes that have been submitted by local authorities in response to an open invitation have been approved. I am disappointed that there were not more proposals forwarded to bring services to land which is already zoned for housing which cannot be developed for housing because these infrastructural facilities were not available.
I invite Senators to mention areas where they feel I could take further action rather than wasting their time giving us another analysis of the situation or trying to score political points. This issue concerns people at a very personal level. The people who are affected by the housing situation deserve our sympathy, support and action. I can assure the House that I will seek to implement any reasonable and sensible suggestions that are made in regard to how this situation can be improved. Members should bear in mind that this is a supply problem and those who argue anything else are ignoring basic facts. There is a demand or need which cannot be met immediately because we are not producing a sufficient number of houses. This is the current situation despite the fact that the house building industry has doubled its supply since 1993 and achieved levels of housing output at a high standard. Houses are of a high standard because building regulations ensure there is no drop in standards. This measure would have been unthinkable a number of years ago.
Last year 42,000 houses were built but we still need to increase that figure. Even if we increase that figure to 50,000, I will continue to work towards a figure until we get equilibrium back into the housing market.