Vol. 471 No. 5
18 Mr. N. Ahern asked the Minister for the Environment if he will give local authorities a guideline ceiling figure in respect of the purchase price of houses in private areas; and if he will make a statement on the matter. [21177/96]
Local authorities have been advised that they may purchase private houses where the cost of the acquisition can be met from the authority's capital allocation and the acquisition represents a cost-effective and economical means by which the authority can meet the housing needs of persons who have been included in the last assessment made by the authority under section 9 of the Housing Act, 1988, or who have been accepted for inclusion in the next assessment. The approval of my Department is not required for individual purchases.
It would not be practicable to issue guideline figures, as suggested, to local authorities in respect of the purchase price of private houses, given the variations in the nature of the needs to be met, the size of houses required and the level of house prices experienced in local housing markets.
Does the Minister of State realise that houses to a value of £84,000 have been purchased? Does she believe that value for money or social engineering should be the main priority in dispensing taxpayers' money? Realising that most of the houses bought cost £35,000 to £40,000, will she accept that the main aim should be to buy the maximum number of adequate houses rather than going over the top by purchasing houses to a value of £84,000?
I do not like the term "social engineering", it is not appropriate to use it in relation to housing policy. The cost of acquisition is on a par with the cost of building houses. Value for money is obtained, particularly in cities. In the Dublin Corporation area, where it is difficult to acquire sites and there are delays in providing houses because of planning procedure, the policy of acquisition has proved effective in meeting the needs of those on the housing list. I am happy to allow local authorities to make a choice when it comes to housing provision whether they will build or buy, once they have shown they have adopted a reasonable approach, are not concentrating on one particular area and are genuinely seeking a social mix. Under the local authority housing construction programme there is a complete range of costings across the national spectrum. It is essential that the housing programme is met by the local authorities providing houses of good quality. They should promote the concept of social mix so that we move away from the residue of the old policies under which poor quality and cheap housing was provided in large estates. That day is gone. There is a cost to be paid in promoting this concept and providing good quality housing but it is money well spent.
Government policy should be consistent. It should encourage people at all times to improve their lot. It is important that we offer a range of housing options. Is it right that houses are bought for £70,000 and £80,000? Those who have taken out a local authority loan and are participating in the shared ownership scheme cannot aspire to owning such a house. They can only dream about owning a house worth up to £55,000. Does the Minister of State understand the concern, objections and resentment of those who have struggled, often at huge personal sacrifice, to buy a house in a private estate when they see someone else being given the same type of house courtesy of the taxpayer?
Dublin Corporation has not acquired any houses to the value of £85,000.
For £84,000.
There is only £1,000 in the difference.
With all due respect, I wish to put the matter in perspective.
In 1996 an estimated 300 houses will be acquired, of which four will be in the price range of £80,000 to £84,000. It is, therefore, exceptional for a house acquired by the local authority to cost that amount. Dublin Corporation has adopted an approach, based upon good management, which respects the aspects referred to by the Deputy in terms of acquisition in private estates. It does not concentrate on any particular estate but ensures a genuine social mix. I reassure people who may have fears that experience has been there are no problems with this approach. The corporation has shown that it has managed this system well. The previous approach to housing policy generated enormous problems, which are ongoing — I appreciate the Deputy is aware of these. I ask him for support in this regard because the approach adopted by the corporation is meeting the need in terms of land acquisition and it also has the positive benefit of enabling a social mix in a well managed way.
The policy has my support and that of my party, but it is a case of how quickly the price is reached. I accept that not many houses acquired cost more than £80,000, but in the last couple of months prices have increased rapidly. My concern is that people on shared ownership and local authority loans can only afford houses up to £50,000 or £55,000 while local authority tenants are being housed in accommodation costing much more than that. Perhaps what is needed to overcome this problem is improved shared ownership and local authority loans because one option is out of kilter with the other.
When I came to office I improved the options, including those for shared ownership. The local authority has flexibility in terms of the ceilings set.
Events have passed the Minister by.
We must remember what housing policy is about. We ensure that the need is met. Some years ago there was a vastly reduced social housing programme which led to a great increase in the number of people waiting for housing. We have an obligation to provide for those people but that does not mean we should provide poor quality accommodation — I am aware the Deputy does not disagree with that.
Is that the number one criterion?
If we are serious about social mix, excellence and design we must pay for it. In providing social housing, whether in the acquisition or construction of houses, the costs are similar. Local authorities do not acquire inordinately expensive houses — many of them are good value for money. If we look at the national figures, three years ago approximately 24 per cent of houses were acquired of the total housing programme whereas this year only about 20 per cent will be acquired. This is not a new phenomenon. It is concentrated more in the Dublin Corporation area but it has been part of housing policy and I fully support it.
I am not disputing the policy.
How successful is the scheme of purchasing local authority houses in private areas? Are figures available for the various local authorities of the number of houses that have been purchased in the last year or two? The figures of £50,000, £60,000 and £70,000 compare favourably with the cost of construction of local authority houses. What is the current cost of the provision of a local authority house, taking into account the cost of the site as well as construction of the house?
I would like to help the Deputy but I do not have the precise figures he requested because they do not form part of the question. I will, however, do my best to provide the information which he seeks. It is up to the local authority to determine how it approaches the balance between acquisition and construction. Construction costs, whether in the public or private housing market, have increased. The present policy ensures good quality housing. There is no question of providing cheap housing, that day is gone. It is extremely important to ensure that the quality of housing is maintained and that the social mix involved in the various options continues.
