This is a continuation of the response by the Minister for Housing, Planning and Local Government to statements on housing on 30 January 2019.
Housing: Statements (Resumed)
I thank the Acting Chairman for the opportunity to come back and finish off addressing some of the questions raised when I appeared in this House last week because we ran out of time and I wanted to respond to everyone's contribution. I had time in my initial response to respond to some of the questions asked and made a note of ones that were not answered, so I will work backwards through the Senators in the order in which they asked questions to make sure I get to everyone in the time available.
Senator Mullen asked about statistics and the difference between Government statistics and other statistics. It is very important to say that for many of the things we count or many of the different pieces of information we put out, we are gathering statistics from local authorities or other areas and compiling them for publication. That is done at official level.
Figures for emergency accommodation every month come from the different regions which themselves collect the information from local authorities. The Dublin Regional Homeless Executive is involved in compiling them. We have said that that data collection needs to be improved because it is not capturing enough information. When the Dublin Regional Homeless Executive did a deeper dive last year and produced a report over two quarters, it was able to tell us a lot more information. It is the type of information that we should always be gathering so that work to capture more data for those monthly reports is now happening.
Senator Mullen asked about a particular Dublin City Council site and housing body. He said there had been a delay. I am not sure of the specific site. The Senator can provide me with information. We have a delivery office in the Department of Housing, Planning and Local Government so that where there are delays and snags or problems that require people to sensibly put their heads together, it does that. As we all know, things can sometimes crop up which can lead to long delays if they are not resolved quickly. The housing delivery office is there to work with the local authorities. I have asked colleagues in this House and elected representatives in local authorities to bring areas where they think there are unnecessary delays directly to my attention so that I can chase them up in the Custom House.
Senator Mullen also asked about voids. He mentioned 4,000 voids. We have remediated 8,000 to 9,000 vacant social housing homes that were empty and needed significant repair over the last four to five years. We are coming towards the end of that programme. These are social housing homes that were vacant and required as much as €30,000 in investment to get them back into use and letting. I hope we will have the numbers for 2018 next week. We will see that approximately 500 to 600 voids have been remediated over the course of 2018. We would have done much more than that but we agreed that we would not count above what was in the targeted amount. A lot is happening in that area.
I am supportive of pre-fabrication, modular and rapid technologies. It is also important that as we bring in new housing, we have to bring in all of the facilities required. While there are efficiencies and gains to be made with these new technologies, one still needs to go through planning and procurement, and to put in footpaths, electricity and water. We want to and are doing it, as is the private sector but it has other time and investment requirements that traditional housebuilding also has.
Senator Kieran O'Donnell made a point about recognising that a Government that is led by Fine Gael, Independents and the Independent Alliance is building social housing homes, as have previous Governments. People hark back to different times in Irish history where it is assumed that we were building more social housing homes. While that might be correct for individual years, I read an interesting piece by Karl Dieter over the weekend in which he wrote about the 1950s being the most successful decade for the building of social housing in the State's history. The average output per year in the 1950s was 6,000 social housing homes. We will build more than that this year. We have brought that responsibility back to the heart of Government and local authorities. Delivery is ramping up and I will have confirmation of the 2018 figures next week, I hope. They will show that, at the moment, one in four to one in five of new homes built in the country is a social housing home. That has not happened for a long time and it is welcome.
Senator Kieran O'Donnell was also right to talk about how we need to make sure that we build mixed tenure estates. We want our housing policy to help to build, unite and support communities rather than dividing them. That means having mixed tenure, whether in apartment or housing developments. He also asked about whether empirical work had been done on the viability of house-building. It has been done with regard to the building of semi-detached or terraced homes and apartments. When doing these viability reports, one builds in margins in certain areas as contingencies against risk. There has to be a profit margin because it has to be affordable for the builder to develop it. Depending on the project itself, there will be a greater or lesser gain depending on how risk was programmed into different elements of the build. It is also true that land costs could be a significant contributory factor. Land costs in the State plummeted after the financial collapse but began to rapidly increase again from 2015 onwards. It will depend on when many builders bought the land.
The Rebuilding Ireland home loan has been a success. We have seen that in the level of drawdowns. It has been operating for almost a year and as of December, approximately half of the allocation for three years has been drawn down. That has been successful. Senator O'Donnell made a point about some local authorities building in the wrong locations and that there was inadequate due diligence.
If that is the case and if he has examples of that, it is difficult to square it with people stating that we need to cut red tape in the Custom House and strip out some of the oversight that exists. The Senator makes an important point. However, we in government and as Members of the Oireachtas have to make sure that, as we rebuild our housing sector and get local authorities back into building, we build the right homes in the right places and that we do not relax things so much that we end up making mistakes like we did in the past, leading to ghost housing estates or developments like Priory Hall in the future. While we have cut red tape and streamlined things in the Department, and we are looking to make a few more changes in that area, we have to be careful that we do not go too far.
Senator Norris described the role of the Minister for Housing, Planning and Local Government as a poisoned chalice. I do not agree. Of course, it is a challenge. It is perhaps the most important domestic challenge we face but it is one we can resolve and are resolving. Within the plans we have, some things will work well initially and others will not and will need to be reformed and monitored to see that they are working. Overall, at a high level, when we look at what we are trying to achieve, which is basically to increase the supply of homes as quickly and sustainably as possible. That is happening.. Even in the supplements of the newspapers, we can see that it is happening. Of course, we need to do more but the fundamental supply problem is being corrected and we need to drive that further.
Senator Norris is correct to state that this cannot be solved overnight. When we are talking about building any house or housing scheme, it will take a time to move from the initial idea to planning, design, procurement, building and occupancy. We are not just talking about a few schemes but about thousands upon thousands of new homes. We are also talking about rebuilding those elements of the housing system that had been broken, whether in regard to the skilled labourers who are needed, the architects whose profession got hammered or those who had emigrated. In addition, we did not initially have the finances and they had to be restored. New procurement and planning procedures have been put in place, including the fast-track process. We are doing all of those things and increasing our resources in each part of the housing sector while at the same time starting to build. It is happening now but it takes time.
I also agree with Senator Norris that we cannot return to the sprawling housing estates of three-bedroom semi-detached homes. Let us take the example of Crumlin, a great area and a very desirable location but the density is far too low in terms of what should have been built there. Good planning should take advantage of the infrastructure that is there in the city and also have regard to issues such as climate change and the environment that are very important for us and for future generations. We have to make sure we do not make those kinds of density mistakes into the future. When we talk about building now, we must look for infill development or increasing densities where we can, particularly around transport corridors, and that means more apartment building.
Senator Norris also referred to the numbers in emergency accommodation and to the massaging of the figures. I have to disagree with that absolutely. We are talking about people in emergency accommodation. What was discovered by the Dublin Region Homeless Executive when it was doing its work in conjunction with my Department was that some people had been categorised as being in emergency accommodation when they were not. These are people who had been in their own homes and who had been at risk of going into emergency accommodation but, because of the financial support they received from local authorities, they never had to leave their own home, never presented for emergency accommodation and never became homeless, yet were counted as being in emergency accommodation. That miscategorisation issue was accepted by the Oireachtas when we discussed it at the Oireachtas committee, although some have since gone back on that for political reasons.
It is very important that we understand who is in emergency accommodation, not just because of the numbers involved but because we need to know why they are in emergency accommodation and how we get them out of emergency accommodation in a sustainable way. That is where the Department and the local authorities are focused, namely, on understanding who is there and how we help them out of emergency accommodation into sustainable homes. It is very important that we can do this work and that we have an accurate understanding of the enormous scale of the challenge. We will continue to work with local authorities to address all of the issues we can but, of course, concomitant with that is the delivery of new homes, which is happening, and, in addition, the delivery of a family hub programme where we can have safe, secure supports for families until we get them into their new homes. The figures show that, on average, families are spending less than six months in family hubs, which is very important for those families.
Senator Buttimer was right to refer to focusing on affordability. It is incredibly important that the State is directly involved in building social housing homes but it must be noted that the majority of people do not qualify for social housing.
It is true to say that the vast majority, with just a little bit of help, could make that money go a long way. That is the reason we put together the help-to-buy scheme, to help people put together a deposit because they were finding it difficult. That is the reason we have the Rebuilding Ireland home loans, namely, to give people affordable mortgages where they were not able to borrow from the banks because the rates offered by the banks would not allow that. This fixed-rate product over the lifetime of the loan, linked to affordability, rather than loan to income, had been very successful in that regard in helping people to get affordable mortgages.
We have the rent pressure zones, which are rent caps, and they have been shown to be working, although we need to do more work to make them work better. We also have the serviced sites fund, which is an affordability package to help local authorities to deliver affordable homes on their own land. All those things will help with affordability, as will the delivery of new homes. Recent evidence has begun to show us that the increasing supply is having a moderating impact on house price inflation.
I believe the Central Bank mortgage rules are prudent and should remain because it is important that we do not return to practices of the past. We have made a number of changes to address the cost of building homes and making it more viable but we will not be stepping into areas that were shown to be mistakes in the past such as using tax incentives to promote a particular type of building in a particular area. That did not work. It hollowed out the tax base and was very risky and as a result our stock of public debt ballooned. It did not balloon because we took on bank debt. Bank debt is only about a quarter of the stock of debt we took on. We took on a significant stock of debt because we had to continue to fund public pay, public pensions and the various social services support, but because the taxes had dropped so dramatically, because there were unsustainable tax changes such as the ones I mentioned, that is where the real exposure came and the significant risk to the economy. That burden that was taken on by taxpayers, by all of us. We will not be returning to that old thinking of the past.
I agree with what was said about the need for more private homes in Cork. We set up a task force in Cork to look at a range of issues and that has been very successful in terms of driving delivery. We are going to replicate that approach in other parts of the country where it is needed.
I was asked whether the Rebuilding Ireland home loan approval is even throughout the country. There was some reportage on it which said there was a lack of consistency across the country. I do not think it was comparing like with like in terms of time horizons but if Members are concerned, we carried out a review of the Rebuilding Ireland home loan to make sure that it is being applied consistently across the country, which is very important. On a number of occasions we have worked with the Housing Agency and some of the key local authorities to make sure that the staff involved in the scheme have the training and know exactly how the loan is to be applied.
Senator Lawlor referred to the increase in social housing in Kildare since 2011. It is important to note that according to some of the latest figures I have seen, there has been an eight fold increase in new social housing homes being built since the year before Rebuilding Ireland was launched. That is not a coincidence. It is because of Rebuilding Ireland and the policies in it that we have seen that dramatic increase in social housing supply. He asked about the Land Development Agency. Its intention is to lodge its first planning applications this year. The first board meeting was held on Monday of last week. There is a great team involved in the board and the organisation itself. The agency continues to hire staff. It has its first eight sites and it is moving on those as quickly as it can. What we have seen recently is some very important reportage on the reason we need the Land Development Agency and why it should always have been there. It will do very important work, long after we all have left both this House and the Dáil.
Home Building Finance Ireland is open. The website is in place. A total of €750 million is available for lending. It wants to begin lending in the first quarter. It is primarily looking at starter homes and small and medium sized builders. The capital is available and more capital can be made available. We want to make sure that we are communicating to people that they can borrow. A roadshow is about to get under way, working with the Construction Industry Federation and another organisation, the name of which I cannot recall. Given that we have been putting the plans in place for Home Building Finance Ireland, a lot of people know that it is there and are ready and waiting to put their applications in, so we hope it will start lending in this first quarter.
I already talked about the Rebuilding Ireland home loan. We are looking at a possible second tranche at the moment with the Minister for Public Expenditure and Reform. Local infrastructure housing activation fund, LIHAF, funding is ring-fenced. Some sites are very complex because they involve a number of landowners and a number of different types of infrastructure to unlock the housing. Other sites are more straightforward, such as some of the sites in Fingal, where the Donabate distributor road is already under construction. LIHAF, funding is ring-fenced to be drawn down as it is needed. That €200 million commitment is safe. It is possible for someone who is divorced or separated to apply for the Rebuilding Ireland home loan, even though he or she may have owned a home previously. If there are difficulties in terms of interpretation of the application form, Members should please bring them to my attention.
We need more modular homes, more timber-frame homes. Frameworks are in place for prefabricated technology to be used. I am going to speak at a thought leadership seminar on that after this session as to how we can get people to do more in terms of using prefabrication. It is important to note, however, that it is only one part of the process. It is a good part because it involves new efficient technology that should be used, but one still needs to have planning, do procurement, build the roads and the infrastructure and everything else. While it is an efficiency, and it is of great benefit to those who are building but also those who will live in the new homes and it will cut timelines and cut costs, other things need to happen as well in tandem with that.
In regard to listed buildings, heights and the notion of overlooking, one of the things I wanted to make sure that we were doing in removing the height caps that we have in towns and cities throughout the country is that it could not then be undermined by, for example, the degree to which a new building might overlook a historic building. It is important that we keep in mind our heritage, in particular our built heritage and history in cities, but other modern cities have managed to bring in tall buildings and protect their heritage. We can do it too. Many of the bad planning decisions that were made in the past in cities were not necessarily made in relation to height but other factors that meant whole buildings were torn down that should not have been torn down or the building of a particular type where the design rather than the height was inappropriate for the context or setting into which it was going. That has changed. Some of the building that has happened around Leinster House has been built bearing in mind its local environment and it has sat very well into the streetscape, so we can have modern new buildings that are exciting, visually appropriate and tall without having a negative impact on historic settings. We are talking about lifting the height caps, not so that we can necessarily go to the moon but to make sure that we build an appropriate shoulder height and maximising the type of densities that we want to achieve where the existing infrastructure and places to work and live are already there.
Senator Humphreys talked about the investment in housing and he made some points about an increased investment in the build-to-rent sector. We can have a detailed discussion on that. Build to rent is going to be an important part of the rental market in the future. It will be important in terms of more apartments being built. We developed build-to-rent guidelines for the first time to encourage more investment in the build-to-rent sector and we are seeing that happen. We want larger, more professional landlords because we need a better balance in the landlord sector. We are still too reliant on small and accidental landlords for the provision of much of our rental stock. It is very important in parts of the country where one only needs a smaller amount of rental provision that there will be smaller individual landlords with one or two properties but in other parts of the country one needs the bigger investors coming in and that is the reason there are better regulations for it. It is important that we have that kind of investment where people are investing for a rent roll rather than capital appreciation, where people are happy to look for modest increases in rent over a period because they are looking for a steady and sustainable return on investment rather than investing in a property, hoping it might skyrocket in price over a five or ten year period and then get out and get that capital appreciation. That is the type of reform we have seen in the rental sector, which we are trying to drive with new guidelines and regulations.
More people will be renting. It is not just a function of the fact that house prices have gone back up again to a point where they are out of the reach of many. It is because people are staying in college later. They are meeting their partners later. They are starting families later. They are moving jobs more frequently and they are moving in and out of the country. Some people will want to maintain the flexibility that renting gives, even as their lives change. The key responsibility for us as a Government is to make sure that renting is affordable and can be safe, secure and sustainable for them. That speaks to the changes that we are trying to bring forward in the rent Bill and changes that will come in the rent Bill after that.
We also need cost rental. I was at the St. Michael's Estate where we want to do the first cost rental properties at scale. Other countries have cost rentals as part of the rental landscape of the order of 20% to 25% of the stock of what is being rented. If we are honest about it, it will take us a long time to get there, but we need to make sure that we can do it at scale and that is what the St. Michael's project is about. We will do it at scale first and then replicate it. Once we have proven that concept, we can then roll it out to other areas. That will suit young couples, young workers and the elderly. We know cost rental can get longer term leases that are secure, and that also provide security on rent payments that are below the market rent, linked into a nominal increase, that is nothing like even the 4% we have in rent pressure zones.
Regarding short-term letting or home-sharing, Senator Humphreys asked whether the changes have been published. We have sent the proposed changes to the Oireachtas joint committee and it has already examined them in a private session. I will bring in a very simple change to primary legislation and I hope to do that soon and then we will lay the regulations, when finalised, before the House. That change came into effect on 1 January this year.
On the proposed development at Poolbeg, that matter is still with An Bord Pleanála but I hope it will have been dealt with soon. I am reticent to talk about it publicly while it is still before An Bord Pleanála but the commitments that have been made on that front must be honoured.
Senator Mulherin asked about the important issue of mica and pyrite. This issue has been raised by a number of colleagues from different parties and particular counties. Thanks to the work of Senator Mulherin and others, agreement was reached at budget time between my Department and the Minister for Public Expenditure and Reform to introduce a scheme. The scheme was approved by Government we will put it in place this year. We have been doing considerable work with officials in the background to work out the details. The scheme is basically ready and it is now a question of aligning the funding for it in order that people can start to make applications. I will publish more details when I have them. We hope to bring the scheme before Cabinet again very shortly.
A housing summit in the next two weeks will discuss the targets we set for 2018 and what was delivered against them. In terms of the social housing needs assessment, the number of people waiting for social housing has dropped in recent years because of the increased social housing supports and solutions that have been put in place. Security of tenure is an important issue and changes are coming in that respect.
I spoke recently about the repair and lease scheme. We had to make changes to the scheme because it was not working in the way we had initially hoped. As a result of the reforms that have been made, the scheme is working better, although more could be done with it. In some cases, local authorities found that applicants to the repair and lease scheme were better suited to the buy and renew scheme and they were transferred into the latter scheme. While the repair and lease scheme is working, the vacancy level was not as high as we initially anticipated because the figures from the Central Statistics Office included homes for sale, homes in between lettings and holiday homes. As we drill down into each local authority area, we see the true level of vacancy.
I spoke to Senator McFadden in the Chamber last week about the vacancy level in County Westmeath. The vacancy team in the Westmeath local authority area has started work and we have vacancy action plans for each local authority area. I would be happy to discuss with any Senator the local authority plan in his or her area and what has been achieved in terms of compulsory purchase orders issued or homes identified to bring into the social housing net. The key point is that such homes are in the right area, namely, villages and town centres where we also want regeneration.
Senator Boyhan asked about the Shanganagh Castle site. To update him briefly, my Department has been meeting officials from Dún Laoghaire-Rathdwn County Council on a regular basis about this proposal. We also meet them every month to discuss housing delivery in general at which time we raise this issue because we know how important it is for the area. The council is also working with the National Development Finance Agency with regard to funding options. Five meetings took place between February and September 2018 on this particular proposal and the funding potential. The council has been briefed on the different models that could be progressed. A workshop was held for elected members in the Dún Laoghaire area committee on 5 November 2018. My understanding is that an application will be made to the serviced sites fund, which is now open and available. However, no formal application in respect of the site has been submitted to me. I believe I have answered all the questions I did not reach last week.
I am grateful for the opportunity to come to the House for statements and questions. I have had the chance to reply on two occasions now. I am always available to come to the House to discuss housing, as we have done frequently in the Seanad recently. As housing is such an important domestic issue, I will make myself available when I can.
I thank the Minister for his comprehensive reply to the statements.