I am grateful to have the opportunity to come to the House to talk not only about the challenges we continue to face in housing provision but also some of the solutions and how they are bearing fruit and helping many citizens. It is a very important time to discuss the issue at the beginning of 2019. Rebuilding Ireland, the Government's action plan to deal with every aspect of the housing crisis that we face, has been in effect since the middle of 2016 and will last until 2021. This is an important year for the plan in continuing to provide for delivery and put in place supports for those who need our help. Many things need to be done as part of the plan because there are many aspects to the challenges we face in housing provision. We are rebuilding a housing sector that was broken at every part of the supply and construction chain. We are building it in a way that it will not be like what it was before but in a way that will protect and future-proof the sector from future shocks.
The most distressing aspect of the challenge we face is the damage being done to people living in emergency accommodation. Damage is being done to society and individuals and their families because they have to spend time in emergency accommodation. There are too many living in emergency accommodation. It is absolutely unacceptable that people still have to go to hotels for emergency accommodation. The whole purpose of Rebuilding Ireland is to bring about political and policy change and actual meaningful change on the ground in order that emergency accommodation will only ever be a very short-term response, family hubs are a first response and that no family will find themselves in emergency accommodation. Because of the housing shortage, we do have this today, but we are trying to correct the shortage as quickly as possible.
When we talk about solutions, whether for the elderly, those in emergency accommodation, persons who are paying too much in rent, young families and young couples who cannot afford to buy a home, there is no point in discussing any of these areas unless we look, first and foremost, at the fundamental issue of supply. Before we talk about whether we should be using the housing assistance payment, HAP, to the degree we are, whether we are building enough social housing, whether we can bring forward cost rental quickly enough, when or how we should reform the rental sector, the use of hotels for those living in emergency accommodation, the right price of a home or the affordability challenge, we have to make sure new homes are being built. That is very important. We have to ensure, two and a half years into Rebuilding Ireland, it is correcting the fundamental problem in supply and the short answer is that it is. The fundamental problem of supply is being corrected very quickly. We are still awaiting confirmation of the numbers for 2018 in the CSO's new build numbers which we did not have at the beginning of Rebuilding Ireland but which we will because we had that piece of work done with the CSO. We will have the figures in the coming weeks. We will also have the figures from local authorities for the increases in the numbers of homes in the stock of social housing. We will have both numbers in February and I expect them to confirm that there was quite a dramatic increase in the supply of new builds during the course of 2018. A recent report from Goodbody, based on its tracker, shows that about 18,500 new homes were built during the course of 2018. If that is true, it is the highest number of new builds in nine years. That is not to be dismissed; it is very important.
The fundamental problem needs to be addressed if we are to look properly at things surrounding affordability, the cost of rent, getting people out of emergency accommodation and building enough social housing. If the delivery last year was between 18,000 and 20,000, as the Government was targeting, what I expect when I receive confirmation from the local authorities is that between one in four or five of the newly built homes was social housing. When was the last time the State did this? It is definitely more than a decade, if not two decades, ago. It is very important to recognise that fact, but is it enough? No, not yet. However, it is making a significant difference.
The other indicators we have such as the numbers of planning permissions and commencement notices indicate that what happened in 2018 was not a once-off. In 2019 the number of new homes built will be even higher again. The number of social houses delivered will also be higher again this year. The increase in supply is having a very real and meaningful impact in a number of ways. As reported on recently, the rate of growth in house prices is falling. In 2018 there was single digit growth, which was very welcome. This year the rate will be lower still.
The other tangible way it has an impact on people's lives is when those individuals living in emergency accommodation move into new homes and get the key to the front door. When I was in County Donegal recently, I had the opportunity to meet families who had moved from emergency accommodation, the rental sector or the housing list or who had been living in overcrowded accommodation. Just before Christmas they had received the keys to their new houses. In the first or second week of January I visited and already it was their home. They had their furniture and pictures on the fridge. They had made it their own place and had that warmth and security from which they could build a life, think about the future and their kids. They were so happy to be there. Others were just getting the keys and about to move in, but they were already thinking about what they should bring into the kitchen and the type of furniture they might want to have in their home. It was all very exciting for them. If we keep the people we are trying to help at the centre of our focus, we will be able to deliver the right solutions in the right way for them, solutions that will last. The worst thing we could do would be to offer solutions, homes to people, in an imprudent or unsustainable way and then find them back in a precarious position or others in an even more precarious position in the future. We have a responsibility to do this in the right way. That is happening but not quickly enough, which is why I have to continue to drive and monitor Rebuilding Ireland, reform or change it, where needed, and maintain it as a priority for the Government.
On emergency accommodation, we are enduring a period of cold weather, with very low temperatures. The cold weather initiative is in effect. Some have been saying incorrectly that people have been turned away from shelters, but that is not the case. There is sufficient capacity in the system and we have extra outreach teams out.
Some accommodation is not suitable to remain open during the daytime. Where that is the case, we transition people into day care centres and places where they do not have to be out in the cold during the day. It is important to do this because it is a vulnerable time when we have cold weather like we have now. Homelessness, when it comes to individual adults, is complex. Even when we have the worst weather imaginable such as Storm Emma, some people will still refuse to come inside. We will not stop going out with our outreach teams to help them because it is a priority for us to keep them safe at such a time.
The emergency accommodation numbers for December will be released later today and what we will see is that there has been a reduction, which is welcome. It would have been anticipated to a degree because it was the month of December. We will also see a decrease in the number of presentations and an increase in the number of adults because of the new beds we have brought into the system. While no increase is welcome, the people in question are now in the system, off the streets and receiving the care they need. We need to transition them into sustainable accommodation where they can be safe and secure. The overall number living in emergency accommodation is down, which is to be welcomed.
The Government priority is the provision of housing. Everything we do must have a tangible impact on people who are experiencing difficulties, be it high rent, homelessness, living in emergency accommodation or housing insecurity. Up to €2.4 billion will be spent this year on housing. That is the most money a Government has ever spent in a single year on housing and it will be put into helping people into new social housing. We expect the 2018 social housing figure to show an increase in stock of eight times what it was in 2015, the year before Rebuilding Ireland was launched. We have our hub programme which is looking after more than 500 families. On average, families are waiting about six months before we get them into a home, but they have all the care and support they need. We have teams regularly sourcing accommodation to ensure people can get out of emergency accommodation quickly and sustainably.
I talked about some of the families I met recently in County Donegal and the good work happening there. It is happening all over the country. I thank local authorities, housing bodies and all our partner NGOs which are doing much work in this area with the Government and taxpayers’ money to help people. During the course of last year more than 25,000 tenancies were secured. Social housing solutions will have been reached thanks to taxpayer support and because it is a Government priority. However, while we continue to see landlords exiting the market, we will continue to have people presenting to emergency accommodation services, even though the social housing stock is increasing. That is why reforming the rental sector is so important. We know that rent controls are working from the data in the Residential Tenancies Board, RTB, quarter 3 report. However, we also know that they are not working evenly across rent control areas. I have legislation to strengthen enforcement of rent controls in rent pressure zones to protect renters. It will ensure there is a longer notice to quit period which will effectively be doubled to give people more time to source new accommodation. It will put in place a rent register to ensure rent transparency and that people know what a fair rent is, as well as addressing student rents and other issues.
In this year’s budget we increased mortgage interest relief for landlords to 100% because we need them. We cannot force people to be landlords, but we need them providing the service. We have to ensure that in everything we do, we avoid unintended consequences and strike a balance. How can we protect tenants further, while also ensuring we have landlords offering homes as accommodation? We know that we do not have the typical rental market one has in other European countries. We know that we are an outlier in that regard because 86% of landlords in Ireland own only one or two properties. Many of them are accidental landlords because we are still dealing with legacy issues dating from the financial crash. As we approach this issue, we have to bear in mind that we must keep potential unintended consequences in mind, while trying to strike a balance for both. That is why we are reforming the rental sector and giving increased resources to the RTB. Increasing its budget for this year by 67% is all part of the change management programme to make it a more robust regulator for landlord and tenant alike in the rental sector. We also want to see a cost rental sector. Last night in Inchicore I met the consultative group for the St. Michael’s regeneration effort which has proposed a pilot project for a cost rental model for the first time. The model makes up 20% to 25% of housing in other European cities and provides security in renting. It shows the cost of rent in the coming five to ten-year time horizon and longer. We are working on it and I thank the consultative forum, which is important, for engaging positively last night.
We know that we have to address the issue of short-term lets in the rental sector. From 1 June there will be big changes in this area. We support home sharing when it means just that. If it is a primary residence, one can continue to let a room to tourists. Alternatively, one can let one’s entire home to tourists, provided it is for less than the 90-day cap. However, if it is a second, investment or rental property in a high-demand area, it can no longer be used as a short-term let. It has to be used for people who are living and working in the area. That is what we deem to be the most appropriate use of the housing stock, particularly at a time when there is a shortage of housing. Obviously, carve-outs have been made for holiday homes. In many parts of the country home sharing makes a fantastic contribution to the tourism sector. The same can be said of executive lets. Where people are coming to work for longer periods, it is important that we have such facilities.
Affordability will be a key challenge for us. We saw how the rate of house price inflation has come down to single figures in 2018. It will come down again this year. The rate of rent inflation has also come down in rent pressure zones where it is working. In the 12 months to October last year, there were more than 50,000 house transactions. One in two of these homes was sold for less than €250,000. That tells us that affordability is a challenge, but in parts of the country only. In other parts the affordability challenge might actually be more on the builder’s side in being able to obtain the necessary finance. That is why the Minister for Finance and I launched Home Building Finance Ireland earlier this week. It will ensure homes can be built in communities where there is demand and affordability is not necessarily a challenge on the buying side.
Home ownership should be an aspiration for everyone. If it is the choice people want to make, we have to tackle the affordability challenge. How do we do it? We should use public money to open up private and public land. The local infrastructure housing activation fund, LIHAF, will provide €200 million to provide 20,000 new homes, the majority of which will be social housing, affordable purchase and cost rental homes or eligible for a cost-related deduction because of the public investment made. There is the help to buy scheme which has helped over 8,000 families and individuals to put together the deposit to buy a new home. Rebuilding Ireland is not even a year old, yet half of the money made available for it has been drawn down. It is a three-year programme. In the first 10 months half of the funding has been drawn down by people to buy homes. We have the serviced sites fund, the largest affordability package introduced by a Government in over a decade which comes to €310 million. The first sites, worth €43 million, have been identified for the delivery of homes in 2020. The second call will be made to local authorities shortly.
The first board meeting of the Land Development Agency was held on Monday. The agency will bring forward sites in high-demand areas where there are already large State sites which are not being used efficiently. The first eight have been identified. We believe the appropriate use of public lands for the public good is to provide homes for everybody, as well as social and affordable homes that can be sold to people who cannot avail of subsidised housing schemes. At least 40% of homes on these lands will either be delivered through social housing or subsidised schemes. That will make a real impact, not just for the people who will get to live in these homes but also in moderating house prices in these areas.
This year we will put fewer people into homes using the housing assistance payment than we did last year because we are building more social housing. In 2021, the last year of Rebuilding Ireland, we will be accommodating more people in homes that will be part of a stock of social housing than we will be in the rental sector through the housing assistance payment. It is important that we achieve that rebalance in the life cycle of Rebuilding Ireland and drive it beyond it. The ideal is to have one in four or five homes built as social housing. That will help people on housing waiting lists and those who need our help the most. That is important, but it takes a little longer and can be more expensive. We must make sure we do not build sprawling housing estates without the schools, roads and community facilities they need. We must provide these in time together to ensure we will not strand communities. We have to make sure we are providing mixed developments. We want to use housing policy to support, not divide, communities. That is a key driver of Rebuilding Ireland.
We have made other reforms such as of apartment guidelines to encourage a greater build-to-rent sector and make it more viable to build apartments by examining the number of units per core and the need for car-parking spaces to increase densities. We have also addressed lifting the height caps.
We have begun to reform transport infrastructure in large towns and urban centres because it does not make sense any more for sustainable and high-quality living. We are ensuring we have a fast-track process for planning, cutting red tape where we can to build larger sites more quickly and reducing our own approval process by cutting red tape in the Custom House. The four-stage process has been reduced to 59 weeks. We are also examining how we can reform the one-stage process in order that more housing programmes can be covered by that process, which is quicker than the four-stage process. There is also a new housing delivery office in the Department. The work the Minister of State, Deputy English, is doing with that office is important.
There are vacancy teams in each local authority. Although we know that vacancy is not the low-hanging fruit which we initially thought it was, we are taking in homes through the repair and leasing scheme which has been reformed and the buy and renew scheme. We have changed planning regulations for promoting above-the-shop living and there is the urban regeneration fund. Some €3 billion will be spent in the next ten years to ensure that as we build, we build sustainably in the right locations, thinking of the future in terms of climate change, transport times, commuting times, quality of life and people's health. As we build houses, we must ensure we build communities, places and homes, which is what we ultimately want to do and achieve, but it was not always done before.
We have never really had a properly functioning housing sector, either because not enough social housing homes were built directly by the State, there was not enough supply, there was too much supply or supply in the wrong places, or rents and the cost of a house have been too high. All of these problems have happened before and we have moved in cycles. We are now trying to break those cycles once and for all, which is at the heart of Rebuilding Ireland. While we have more to do, there are three years remaining in Rebuilding Ireland and my responsibility is to drive the plan to its conclusion and take all the additional steps we need to take, ensuring we are always driving delivery because without it, we cannot talk about any of the other solutions we need.
I thank Members of the Oireachtas for their input to date. Rebuilding Ireland was shaped in large part by the work done when the current Dáil was formed by the committee drawn from both Houses of the Oireachtas on the steps we needed to take. We have built on the back of that good work to build the Government programme and planned beyond it, through Project Ireland 2040, to ensure that as Rebuilding Ireland concludes, a new programme will continue the strong parts of Rebuilding Ireland that have been shown to work well.
I look forward to the contributions of Senators and welcome every contribution. Rebuilding Ireland is a plan that is working, but parts of it are not working as well as they should be. If people have ideas about where we can make improvements, I will listen and bring about those changes where I can, notwithstanding the fact that we need to be conscious of unintended consequences or that we need to ensure that at the heart of everything we do, we help, first and foremost, those who are most vulnerable in the best way possible.
