I am pleased to have the opportunity to address the Seanad in support of the motion, to set out again the main elements of the Government's approach to housing and to update Senators on the positive effect that this approach is having. Housing remains at the top of the Government's agenda. A wide range of measures have been taken over the last five years to reduce house price inflation; to increase housing output to match demand; to remove infrastructural and planning constraints on residential development; to afford greater access to the housing market to first-time buyers; and to improve affordability for first-time buyers and lower income households.
The Government's publication of Action on House Prices in April 1998 was the first of three major policy initiatives on housing. Its primary focus was to increase housing supply through a range of infrastructural and tax measures and to prevent investors pricing first-time buyers out of the market. These measures were supplemented in 1999 by further measures taken in Action on the Housing Market and in June 2000 the Government published Action on Housing, which spelt out additional actions necessary to continue the momentum that was being achieved on foot of the earlier measures that we introduced.
I will outline some of the key measures taken by the Government because some Opposition Senators are not aware of what is happening on the ground. A range of tax measures, including adjustments to the stamp duty system, were introduced to bring forward the supply of development land, remove speculators from the market and improve affordability for first-time purchasers. We introduced targeted measures to increase the supply of serviced residential land on top of significantly increased investment generally in water, sewerage and roads services. More than €63 million in Exchequer funding is being spent on the serviced land initiative, which will provide water and sewerage services for some 165,000 housing units. A total of €248 million in Exchequer funding has also been provided to part fund the construction of 42 non-national roads that will provide services for more than 42,000 housing units. Six project offices have been established to drive key infrastructure projects necessary to support housing development.
We designated the first three sites, comprising some 14,000 housing units, in June 2001 as strategic development zones for residential development to assist in the early development of these sites. We published planning guidelines on residential density in September 1999, which are helping to secure efficient use of serviced development land, facilitate provision of more affordable housing and promote sustainable development. Strategic planning guidelines were drawn up on a regional basis for the Dublin and mid-east regions and this is being replicated in other key regions throughout the country.
We introduced a range of measures to expand the capacity of the planning system, including the appointment of additional planning staff to local authorities and An Bord Pleanála, the recruitment of planners from abroad, additional planning courses in third level institutions and revisions to regulations to increase the size of exempted domestic extensions.
It is clear that Government measures in the housing market have been effective. I published details of the second national inventory of zoned serviced land at the end of 2001, which showed that the position in regard to the stock of serviced building land is encouraging. There is currently approximately six years supply of serviced land nationally, in Dublin and in the greater Dublin area. This will improve further on foot of increased investment in economic infrastructure such as roads, water, sewerage and public transport over the period of the national development plan. The availability of serviced land, which was identified as a key issue when we took office, has been fully and comprehensively addressed.
More than 13 houses per 1,000 population were built in 2001, the highest rate in the EU in proportion to population and approximately four times the UK rate. House completions in 2000 reached almost 50,000 units nationally. Notwithstanding the Opposition's attempt last year to talk up problems in the house building sector, this record level was surpassed in 2001. The prophets of doom in the Fine Gael Party and the Labour Party told us the numbers would decrease. Last year was the fifth consecutive year of record housing output under the Government. Since the Government came into office, housing output has increased by more than 33% from a little under 39,000 units in 1997. Some 216,000 new houses have been built in the five years that the Government has been in office, equating to approximately 18% of our total housing stock.
Since house price inflation peaked in 1998, primarily as a result of the failed policies of the previous Government, there has been a downward trend in house price increases. My Department's September quarter data for 2001 showed a continued moderation in new house prices with the annual rate of increase at 5.6% nationally and 6.7% in Dublin, with second-hand house price increases of 3.4% and 4.8% respectively. This data is supported by other sources. According to the Irish Permanent, November 2001 figures show that for the eleventh consecutive month the year on year growth in national house prices has slowed, falling from 10.1 % in October to 7.5% in November. This is the lowest year on year increase since the index started.
One of my principal objectives in office has been to create space for first-time purchasers. I am glad they are accounting for a larger share of the market, with applications for new house grants increasing by 7.3% in 2001, following an increase of 4.8% in 2000. Indicative figures also show that first-time purchasers accounted for 34% of the market in 2000. This figure increased to 43% in 2001. Our policies have achieved increased output, reduced house price increases and afforded a greater share of the market to first-time buyers. The facts speak for themselves.
The Government can also claim credit for bringing about real and positive changes in the provision of social and affordable housing. We have, for the first time, provided a long-term framework for the funding of social and affordable housing through the inclusion of €7.62 billion in the national development plan, which was earmarked for these purposes. This was supplemented by the Government commitment of a further €1.27 billion for social and affordable housing in Action on Housing.
Action on Housing also included a number of measures to address social and affordable housing need, including an increase of 6,000 units in the number of local authority housing starts under the national development plan, increases in the income limits for the shared ownership and affordable housing schemes and a new site sub sidy for houses provided by local authorities under these schemes. This overall investment will ensure that the housing needs of approximately 100,000 households will be met with Government assistance over the period of the plan. The total provision for social housing in 2001 was more than €1.4 billion, an increase of more than a third on 2000 and almost treble that provided in 1997 when the Opposition was last in Government. The provision this year is €1.7 billion.
The impact of the Government's social housing strategy under the national development plan is being reflected in the provision of local authority housing. I introduced a multi-annual local authority housing programme for the first time, commencing in 2000 and running through to the end of 2003. Under the programme we aim to provide a total of 25,000 local authority housing starts. The multi-annual approach was introduced to provide for greater forward planning and efficiencies of scale in delivering the increased local authority housing targets. Local authorities completed some 5,000 units in 2001 and commencements of new house starts are estimated at more than 7,000 units, the highest level of starts for more than 15 years.
In addition to the main local authority housing programme, major regeneration programmes have also commenced in Dublin and Cork, most notably the redevelopment of Ballymun in Dublin, which is the biggest regeneration project in the State involving the demolition of all the towers and the construction of 2,800 houses. More than 500 houses are currently under construction and some have been completed and are occupied. Since 1998, I have provided more than €86 million for this project. There are also other major regeneration schemes underway or due to commence shortly in Dublin and Cork. A large redevelopment programme is currently underway, at an estimated cost of some €130 million, in Dublin's inner city, where there are currently more than 200 new houses under construction on six schemes. Work is also due to start shortly on the first phase of the €50 million redevelopment of the Glen area in Cork city.
My Department is also jointly funding with Dublin City Council a once off upgrading of high density older housing complexes, mainly flats, at various locations around the city at an estimated cost of €110 million. These measures are additional to the main construction programme and they all represent new and additional social housing activity. More than €165 million is being provided in 2002 for the Ballymun project and the various redevelopment programmes.
On coming into office, the Government quickly identified the important contribution the voluntary and co-operative housing sector has to make in tackling the growing demand for social housing. The voluntary housing organisations were in deep depression when there was a change of Government. They were dismayed by the lack of support they received from the previous Govern ment, as a consequence of which their house building activity had shrunk.
The commitment of the Government to the expansion of the sector is reflected in the national development plan which includes ambitious targets for output by the sector for each year of the plan and provides the necessary funding to achieve these targets. This commitment is also reflected in my improvement of the terms of the voluntary housing funding schemes on four occasions since 1997, the most recent in July of last year. The improved terms for these schemes clearly have a positive effect on activity. Output by the sector in 2000 showed a substantial increase in the number of units of accommodation provided, with 950 units completed, the highest output by the sector since 1995.
Indications are that output by the sector in 2001 will be in line with the national development plan target of 1,250 units. There has been a marked increase to 7,600 in the number of units of accommodation under construction and at various stages in the pipeline. Last year, I approved €254 million in assistance towards voluntary house building programmes compared with €151 million for the previous year. These indicators augur well for continued growth in the sector.
Housing output from the local authority housing programme, together with output from the complementary social housing programmes of voluntary, affordable and shared ownership housing and with vacancies occurring in the existing local authority housing stock will have enabled the housing needs of about 11,000 households to be met in 2001.
A key concern for me as Minister has been to meet the special needs of specific categories of households such as the elderly and the disabled. This concern is reflected in the substantially increased funding I have 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. The total number of grants paid under the disabled grants scheme and the essential repairs grant scheme in 2000 was just more than 5,000 with a value of €32 million. In 2001, more than 6,300 grants were paid under both schemes. The improvements I have 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 at a value of about €13 million. The number of houses improved under the task force, and the figure for the improvement works in lieu scheme in 2000 was just under 4,000. Activity under these schemes in the first half of last year points to an even higher level of activity in 2001.
I launched the Government's integrated strategy on homelessness in May 2000. The strategy recognises for the first time that homelessness is not just about a lack of accommodation, but that the health, care, welfare, education and training needs of homeless persons need to be addressed in a co-ordinated manner if the problem of homelessness is to be tackled effectively.
A key element of the Government's strategy is that homeless action plans are to be drawn up at local level jointly by the local authority, health board and voluntary bodies to chart clearly what services exist for homeless persons and to outline what services need to be provided for them in the next three years. The plans for the main urban areas are completed and work is well under way on the plans for other areas and should be completed shortly.
I have made substantial additional funding available to ensure that the recommendations in the homeless strategy are implemented. Capital funding for the direct provision by local authorities of accommodation for homeless persons is being doubled from €25 million to €50 million over the next five years. Current funding has been increased by €7.6 million per annum to increase bed-night contribution rates to voluntary bodies and to fund other support services such as settlement and outreach services. Additional funding of €7.6 million is also available from the Department of Health and Children to fund the provision of in-house care in hostels providing accommodation for homeless people.
As part of the overall homeless strategy, the Government gave a commitment to prepare a preventative strategy to tackle key groups at risk of homelessness. Having received Cabinet approval for its publication on 30 January, I will be in a position to launch this strategy very shortly. The main theme throughout the strategy will be the need to ensure that no one is released from any type of State care, whether custodial or health related, without appropriate measures being in place to ensure they have a suitable place to live with the necessary supports, if needed.
The Government has also brought about in the Planning and Development Act, 2000, one of the most fundamental changes to planning law introduced by any Government. Part V of the Act radically alters the role of local authorities in the planning and provision of housing. It requires them to undertake a much more strategic role in identifying and addressing housing needs through the preparation of housing strategies. These must address the housing needs in the area covered by their development plan, including the need for social and affordable housing. The Act also requires local authorities to zone sufficient land to meet these needs. The first set of strategies has been prepared by local authorities and almost all authorities have varied their development plans to incorporate their strategies.
Housing output is not simply about increasing the numbers. It has been a fundamental objective of the Government to promote more balanced regional development by promoting the development prospects of areas outside Dublin while at the same time managing and dealing with Dublin's current problems in terms of meeting its housing needs and transport requirements on an integrated basis. This fundamental objective is being fleshed out through the national spatial strategy which is being finalised.
Ireland's critical spatial weakness is that we do not have a wide enough range of the type of locations needed to attract significant levels of international investment or sustain substantial indigenous investment. We need to add to the locations which already have this capability and tackle disadvantage in parts of the country not enjoying the level and growth of development and economic benefits in some areas, especially Dublin.
Doing this successfully will depend on selecting and developing emerging stronger centres or combinations of centres to drive growth in their wider areas at an appropriate scale for each area and strengthening the roles of other towns, villages and rural areas linked to the emerging, stronger centres.
My Department received more than 240 submissions in response to the public consultation paper on the strategy, Indications for the Way Ahead. These emanated from local and regional authorities, representative community groups and interested organisations and individuals throughout the country, not least from a number of Members of the House. All these submissions have been carefully considered with a view to ensuring that the views expressed in them are factored into the development of the national spatial strategy before it is finalised for approval by the Government.
The objective of the strategy will be to identify and provide guidance on the key policies and actions that need to be developed to bring jobs closer to people through developing the potential of different places. The key to this will depend on being focused while seeking to set the agenda for what all areas can do in terms of widening opportunity and access to employment, housing and services. The Government is determined to leave a legacy which will enable all parts of Ireland to develop over the next 20 years and beyond in a way that is economically competitive, environmentally sustainable and socially inclusive.
The Government also recognises the importance of and need for a diverse and well managed private rented sector. In July 1999, I established the Commission on the Private Rented Residential Sector to examine the issues of security of tenure, supply and development constraints and the balance of rights and responsibilities between landlords and tenants. This was the first comprehensive review of the sector undertaken by a Government appointed body. The commission reported to me in July 2000 and the Government accepted my proposals for reform of the sector arising from the recommendations contained in the commission's report. These proposals were announced in January 2001.
A number of relevant measures have been implemented in the Finance Act, 2001, including a reduction in the stamp duty rate for new residential investment properties, tax relief on rental income in respect of refurbishment capital expenditure, the reintroduction of interest relief on borrowings in the case of certain properties meeting specified conditions and roll-over relief on capital gains tax in respect of qualifying reinvestment in the sector.
Implementation of reforms relating to improved security of tenure, graduated notice to quit periods, tenancy termination, landlord and tenant obligations and rent aspects require new legislation, including amendments to the existing landlord and tenant legislative code. The Government approved the general scheme of the Housing (Private Rented Sector) Bill which I brought before it earlier this week. It is the most radical legislative proposal dealing with landlord-tenant relations ever introduced in the history of the State.
In the meantime and pending the enactment of the necessary legislation, I established the private residential tenancies board on an ad hoc basis in October 2001 to deal with disputes and perform other research and information functions. It is developing the necessary procedures to allow it commence dispute resolution. It has advertised for mediators and appointments will be made soon.
As well as measures to improve the operation and regulation of the private rented sector, I proposed to Government measures to boost the supply of private rented accommodation. Over 900 units of student accommodation, providing over 3,500 bedspaces, have been provided on foot of measures introduced in the Finance Act, 1999. A further 3,800 units are at various stages of planning which will provide an additional 14,000 bedspaces, greatly easing the student accommodation problem.
I also proposed a new rent a room scheme, introduced in the Finance Act, 2001, which provides for an exemption from income tax where gross rental income does not exceed €7,600 per annum for accommodation provided in a person's principal private residence. The scheme will increase the availability of accommodation, will assist affordability for house purchasers and will also make better utilisation of the housing stock. In addition, the ceilings for income tax relief in respect of rents paid by tenants in the private rented sector have doubled over the budgets of 2000 and 2001.
Developments in the private housing market, as I outlined earlier, have now allowed us to step in and introduce further measures in budget 2002 to deal further with the rental sector. We withdrew interest deductibility against rental income for housing in 1998 as part of a set of measures designed to reduce speculative demand for housing, reduce pressure on house prices and create space in the housing market for first time purchasers. As a result of these measures conditions in the housing market have altered fundamentally.
I make no apologies for using these financial instruments available to us in order to achieve certain Government policy objectives. The situation was running riot. Speculators were ripping off private tenants because of the shortage of housing at the time. That shortage still exists. It is a huge challenge to provide enough homes to meet the needs of all of our people. We are quite a distance from this. You can call it a crisis, a challenge, a scarcity. The problem exists no matter what you call it. The Government faced straight into it and took a wide range of measures to deal with it, as I had the opportunity to outline tonight. It all depends on the capacity of our house building industry, which we have stretched to the utmost in reaching the astonishingly high output achieved in recent years.
The reintroduction of interest deductibility, as well as the changes to the stamp duty system whereby the rates applying for investors have now been aligned with those applying in the case of existing owner occupiers, will encourage an increase in the supply of rental accommodation. Accommodation provided with the aid of interest deductibility will, of course, be subject to compliance with proper regulatory controls and to registering tenancies with the Private Residential Tenancies Board. Any landlord who does not register his property will not qualify for any of these tax concessions. These budget measures complement the other reforms introduced on foot of the recommendations of the Commission on the Private Rented Residential Sector and are laying the groundwork to achieve my objective of a diverse, properly functioning and well managed private rented sector.
I want to outline briefly a number of the significant initiatives I have introduced over my term in office. A local authority multi-annual approach has been introduced to achieve a total of 25,000 starts for the period 2000-2003 and allow for greater forward planning and efficiencies of scale in delivering the increased local authority housing targets. Senator Costello is a member of Dublin Corporation. I know the number of housing starts that I gave to Dublin Corporation. It has not started to build the number of houses which I authorised from the funding which I made available. It is buying houses with the money, rather than bothering to acquire brown field sites, designing houses, building them and adding to the overall housing stock.
I have committed record levels of resources to funding and supporting the voluntary housing programme. I have increased the funding limits for assistance under the voluntary housing schemes on four occasions and by more than 100% since 1997. It is hard to hear Fine Gael challenging me about the terms of the motion when I know the dismay that existed throughout the voluntary housing sector when I took over. It had been totally neglected by the rainbow Government. The number of activities in the pipeline was at its lowest level for years.
I resuscitated the voluntary housing sector and threw it a huge challenge. I told it to get up off its knees and I would help it. It was building 3,000 units per year under the previous Government and I wanted it to reach 4,000 units per year. I am funding that and supporting those organisations. I am helping them with estate management funding and special training courses for workers in this sector. I have increased the funding to these organisations fourfold with non-repayable loans. They are the brightest sparks in the country, the dedicated people who are active and committed in the voluntary housing organisations. They are coming together where they see a need in their locality and availing of the Government support and funding. They are providing fantastic new homes, through that partnership, for people who need them. Families with low incomes, elderly people and disabled people are benefiting from this. The output is up from 300 to 1,250. There are 7,600 units either under construction or in the planning stages. I want to increase the completions to 4,000 units per year. I know that will be achieved.
It will not matter if I go out of office after the next election. I have started a momentum. It is like a big, heavy ship in the ocean. Once you get it going it will keep going on, even if you turn off the engines. What has been done will continue to bring results and benefit many people for years after the Government leaves office.
I introduced a new initiative to enable voluntary bodies undertaking housing projects under my Department's voluntary housing capital assistance scheme to provide accommodation for elderly emigrants who wish to return and who are unable to provide it from their own resources. Many Senators do not know this. They have not read their brief and acquainted themselves with the facts. These emigrants did not qualify under the previous regime in which a person had to be living here, put their name on the housing list and wait for three or four years for an offer. Now a voluntary housing group can come together and allocate a large percentage of their homes to people returning from England. I compliment Doctor Gerry Crowley in Mayo, who acts as an agent for my Department in co-ordinating applicants to his organisation. This is in its infancy and I am proud of it although we have not yet brought home one emigrant. It will benefit people for many years.
I provided funding to Rural Resettlement Ireland, a voluntary national agency, which deals with assisting Irish urban families to move to areas of their choice in rural Ireland. Funding has been made available for major research projects in housing including, for example, the three Bacon reports on the housing market, the establishment of the housing unit, which is invaluable now, particularly to voluntary organisations and local authorities and the undertaking of the national house condition survey.
The Housing (Miscellaneous Provisions) (No. 2) Bill, 2001, currently before the Dáil will increase the Housing Finance Agency's borrowing limit to €6 billion and allow it lend directly to voluntary housing organisations. It will no longer need to apply to the local authority, which no longer needs to seek the approval of the Department of the Environment and Local Government. Now it can go straight to the Housing Finance Agency.
Substantial increases in funding were made available for the housing management initiative to enable local authorities to fund the employment of a number of staff to work with tenants and residents groups as well as addressing the training needs of their own staff in this area. A provision of €63 million was made for the serviced land initiative which will provide water and sewerage services for some 165,000 housing units. This is a completely new initiative by the Government.
I introduced increases in the income limits for the shared ownership and affordable housing scheme, which is a new scheme that I introduced a few years ago. My local authority, in Galway, is making excellent use of this. Other local authorities are not using it at all. It is quite astonishing. The local authorities are the housing authorities. We lay down the policy, provide the funding and the schemes. We have laid out all that is required, down to site subsidies to help them buy the land and they are still slow to avail of some schemes. Members of both Houses on the Opposition side, who are also members of local authorities, are criticising when they should be getting more action on the ground in their own areas.
I introduced increases in the income limits for all of those schemes and extended the essential repairs grant to urban areas. There are still Deputies and councillors who have not made themselves aware, by reading the local authority circulars, that this extension has taken place. The terms and conditions of the scheme have been improved, as has the disabled person's grant scheme, on several occasions since 1997. I am very proud of the disabled person's grant scheme, which I introduced in 1971 and have greatly improved over the past four and a half years. Tens of thousands of disabled people have benefited from it. I am happy to say that €32 million was spent on that scheme last year.
Substantial increases in funding for the various grant schemes have been provided. The provision for the special housing aid for the elderly schemes has increased from €5.1 million in 1996 and this year I will provide almost €12 million for that excellent scheme. The health boards and the task force have been put to the pin of their collars to keep up with the funding being made available by the Government. Their problem in many cases is in spending the money provided. Some Western Health Board areas came back for more money before the end of the year but others could not keep up with the level of funding. I want to see backlogs being cleared.
Funding for the disabled person's grant and the essential repairs grant has been increased to €32 million. Funding for Traveller accommodation has increased from €12 million in 1997 to €23.7 million last year and will be increased further this year. The enactment of the Housing (Traveller Accommodation) Act, 1998 has led to the subsequent adoption by all local authorities of the five year accommodation programme to meet the existing and projected accommodation needs of Travellers in their areas. I launched a comprehensive Government strategy on adult homelessness in May 2000 and will shortly publish the preventive strategy to ensure that people leaving State care do not become homeless.
The Government's record on housing speaks for itself. We have responded to the numerous and diverse challenges with a credible and wide ranging set of measures. We have adjusted and fine tuned existing policies to reflect developments and introduced new policies where we deemed they were necessary. We have provided unparalleled levels of funding. Our vigilance in the housing area is paying off. Output is up, prices have been stabilised and social housing is being delivered at record levels. The motion clearly sets out the range of actions taken by the Government in relation to housing and these actions need to continue with the support of the Seanad.
With the continued support of my colleagues in Government we can deal with the current housing challenge. The country is in an economic boom. We have had a huge increase in the number of people needing homes and applying to public authorities for them. We have responded to the need for housing and the house building industry has been challenged to keep up with the funding and planning of the Government. I am happy with the work we have done and proud of the contribution we have made. Much more remains to be done.