Vol. 685 No. 4
27 Deputy Tom Sheahan asked the Minister for the Environment, Heritage and Local Government the number of applicants to the home choice loan scheme; his views on opening this scheme up to previously owned homes; and if he will make a statement on the matter. [25190/09]
56 Deputy Mary Upton asked the Minister for the Environment, Heritage and Local Government the number of people to date who have made a full application under the home choice scheme; the cost to date of administering this scheme; and if he will make a statement on the matter. [25061/09]
60 Deputy Martin Ferris asked the Minister for the Environment, Heritage and Local Government the number of loans which have been drawn down under the home choice loan scheme since its inception; the cost of establishing and maintaining the home choice loan scheme to date; and the projected costs for the remainder of 2009 and 2010. [25112/09]
I propose to take Questions Nos. 27, 56 and 60 together.
Over 1,400 prospective purchasers have formally registered interest on the dedicated home choice loan website and, to date, 33 applications have been made, with two approvals issued in principle. A significant number of inquiries have also been received from brokers in relation to applications that may be pending. No loan draw downs have yet taken place.
The home choice loan was introduced not to provide an incentive for households to enter the housing market, but to provide mortgage finance to facilitate certain first-time buyers who have decided to purchase a home at this time. The scheme is, therefore, designed to respond, in a very targeted way, to a specific set of circumstances in the housing market whereby prospective middle income first-time buyers who would previously have been in a position to access mortgage finance from one of the financial institutions, are not currently in a position to do so, due to the impacts of the credit crunch.
The scheme is operated by four local authorities acting on a regional basis, with administrative support from a central processing unit in the affordable homes partnership. Total costs of some €280,000 have been incurred on establishing the scheme to date and these have been met from within existing resources. The projected costs for the remainder of 2009 and 2010 are €10,000 and €20,000, respectively. In addition, it is expected that the ongoing administrative costs will be met from normal lending margins.
The home choice taken applies to new houses and self-builds because a significant majority of first time buyers purchase new houses. At the time of introduction of the scheme the average new house price was almost 14% lower than the average second-hand house price, so it was considered appropriate to target the scheme towards properties which are more affordable for first-time buyers. The price differential between new and second-hand houses nationally remains significant, at 13%. I do not, therefore, propose to amend the terms of the scheme at this time.
However, as indicated previously, I will keep the scheme under review. In that context, particular attention will be paid to any changes in purchasing tendencies amongst first-time buyers generally, as well as to the impacts of the Government's wider efforts, through measures such as the bank guarantee and recapitalisation schemes, to ensure that Irish financial institutions have access to the normal funding necessary to operate their day-to-day business in the mortgage market.
I thank the Minister of State for his response. The statistics he has given paint a damning picture of this scheme. There were 33 applicants, two approvals and no loans have been drawn down yet. In light of that, would the Minister of State review the effectiveness of this scheme?
The Fine Gael Party opposed this scheme during its introduction stating it would trap people in negative equity and encourage them to borrow up to seven times their salary. In light of the statistics he has given, can he review this scheme? Clearly, it is not working. It was targeted specifically at first homes. Would he now include second-hand homes in its remit?
There are a couple of matters that are not true in what the Deputy said. First, there is no question of people borrowing seven times their income.
Up to seven.
It is actually five.
I have consistently stated that the home choice loan scheme was designed to respond to the needs of those households that wish to become home owners at present but who are unable to do so because of the credit crunch. It is there, not with any incentive or inducement.
We are not yet in a position to state that the home choice loan is not being drawn down for reasons that may not be altogether apparent, namely that it may be a spur to the financial institutions to give loans knowing that this alternative exists or that people are not entering the purchase market at this time. There are a number of reasons.
I had said all along that it is a temporary measure. I will keep it under review. It is there as an alternative facility for people who cannot get a mortgage in the normal situation. I am not in a position to withdraw it or to change it at this time, but it will be kept under review.
I also reject that there is any question of the Government putting people into the sub-prime market. This is totally incorrect. In fact, there is no incentive at all in the scheme, which is based on a variable rate. It is for people who have already made a decision to buy a house and who, for one reason or another, cannot get a mortgage due to the credit crunch. It is for the middle-income families above those who are on the social or affordable housing level. It is for people who are on an income of €40,000 as an individual and €50,000 as a couple, and the maximum loan is €285,000.
People make their own decisions on this. As I stated, there is no incentive or inducement. If that were the case, then I could stand accused. Indeed, another accusation made was that I was attempting to bail out developers. Deputy Flanagan did not make that but others have. I certainly reject there being any question of this putting people into the sub-prime area. That has not happened.
As I understand it, there have been two purchasers under the scheme. Is that correct?
No purchasers.
I was not too sure. I could not believe my ears when I heard it. There have been no purchasers. The State has spent approximately €300,000, there are four local authorities involved in the scheme and there is no purchaser. What is going on here? At best, when this scheme was introduced the Minister of State could have been accused, if not of bailing out developers, of at least putting a false floor on the housing market so that properties would not fall below it by bringing in the €285,000 maximum loan. That is the most benign accusation that could be made against the Minister of State in this regard.
I note that in response to the question by Deputy Upton, who specifically asked for the cost of administration of the scheme to date, in excess of a quarter of a million has been spent on a scheme which is out of date, which does not reflect the current market, in which there are four local authorities tied up and in which there are no purchases proceeding. Will the Minister of State scrap this scheme and stop the excessive waste of public money in today's economic climate on what is a failed and flawed project?
I assure the Deputy that 1,400 prospective purchasers have formally registered interest, 33 formal applications have been made and two approvals have been made in principle. I have no intention of denying those people an opportunity if they want to build or buy a house for themselves. The scheme is there to facilitate them.
The start-up costs are those incurred by people who are already working for the Affordable Homes Partnership. The start-up costs were the largest part of the €280,000. Remember that such a facility is now used for the processing of loans throughout the local authority system. In many ways, it is money well spent.
It is obvious that the scheme is not working and the Minister of State clearly needs to review it or scrap it.
As I stated, this scheme is a temporary measure. It will be kept constantly under review. A number of people have shown an interest and have gone through formal applications, and it would be inappropriate to deny them the opportunity we presented in this scheme.
Deputies should remember that there are two other aspects to this. The existence of this facility may have spurred financial institutions to give out loans where they might not have done so in the past. In addition, since September the recapitalisation of the banking institutions was proposed and implemented and these banks are providing loans as well.
Also, the sentiment in the market may say that people are not purchasing. There is no great information available to us that people are purchasing houses at present. While 1,400 have already registered an interest, they may be waiting, like others who have been going through the financial institutions, to see whether we have reached the floor in terms of house prices. There are a number of factors at play here.
The figures in terms of this scheme involve four local authorities, expenditure in excess of €0.25 million, 1,000 people expressing an interest, 33 of whom wanted to have another look and two who decided that they might go for approval. A marketing firm would not market a product on the basis of those figures. What are we talking about here? One thousandth of those who come across the scheme are interested in it or are gullible enough to buy into it.
The sums, the percentages and the marketing figures all show that this is a flawed product. It is time to scrap it. Will the Minister of State, in the context of the next budget, state that this is money badly spent, accept that we are in a hole, put down the shovel and let us get out?
I can understand why 1,400 people would be curious about a scheme where there is the possibility of obtaining loan approval if they wish to purchase a house. That is the way it works in the real world, with loan approval being issued up to a certain figure to allow candidates to participate in a scheme. I ask the Minister of State to examine other ways of meeting the same objective, perhaps by looking again at the shared ownership schemes operated by the local authorities. I understand the limit in respect of local authority loan approvals was recently increased to €220,000. Will the Minister of State consider whether it can be increased further? Essentially, the home choice loan scheme is a publicity stunt and it is not working.
The Housing (Miscellaneous Provisions) Bill 2008 provides for a total revamp of all loans under the shared ownership, affordable and other schemes. Specifically, I have introduced two new types of loan, namely, the incremental purchase scheme and the equity loan. These measures represent significant movement in this area. The home choice loan scheme is essentially a facility for people who wish to build a house but are unable to access finance in the current economic climate. The website received 6,000 or 7,000 hits, with 1,400 people expressing a direct interest. There have been 33 formal applications. I am anxious that those applications be followed through so that people in this category are looked after. As I said, the loan facility is under review. It will be removed only when it is no longer necessary.
28 Deputy James Reilly asked the Minister for the Environment, Heritage and Local Government if he will request that targets for social and affordable housing be included in the new programme for Government; and if he will make a statement on the matter. [25196/09]
Since the current programme for Government was finalised two years ago, significant process has been made in implementing the measures relating to housing provision. While the process and time line for the review of the programme will be a matter for the leaders of the Government parties, I am confident that the programme, as reviewed, will continue to reflect the importance attaching to the range of priorities in the housing area. This will provide a strong platform for building on the considerable progress already made across a range of housing policies and programmes and associated legislation.
The scale and composition of the social housing programme in the years ahead will be dependent on several factors, including the level of available funding and the evolution of the housing market generally. Subject to these factors, and taking account of the increase in housing needs evident in last year's housing needs assessment, I am determined to ensure the programme is framed in a manner that optimises the use of available Exchequer supports and explores alternative solutions to addressing housing needs. This will provide a robust basis for maximising the capacity to meet housing needs, particularly in respect of the most vulnerable sections of society.
In regard to affordable housing, it is evident that the housing market has changed significantly since 2007, with substantial improvements in the affordability of housing. The question of future commitments in respect of affordable housing must take this into account, together with the extent to which there is a significant quantum of completed affordable housing currently available for sale.
It is imperative that the Minister of State review the targets for social and affordable housing in light of the current economic situation. More than 56,000 people are currently on the social and affordable housing lists. Under the national development plan, 60,000 new social housing units and 40,000 affordable units were to be provided. Will the Minister of State indicate what the revised targets will be?
I expect there to be some adjustment to the figure of 56,000, and that figure will be available in the coming weeks. It is important to note that there are various ways in which people's housing needs are met other than via the social housing programme, including the voluntary housing programme, the rental accommodation scheme and the new long-term leasing scheme. The resources available this year will allow for 7,000 social housing units to be acquired by local authorities and the voluntary sector, including the roll-out of the new long-term leasing arrangement. Funding for the rental accommodation scheme has increased from €51 million to €90.5 million in 2009, an increase of 77%. In all, the needs of some 19,500 households were met in 2008 through the full range of social and affordable housing measures. It is expected that a similar level of housing need will be met in 2009. This equates to a 32% increase on the 2006 provision. I expect to meet the targets for 2009.
By the end of the year, there may be in excess of 4,000 affordable housing units lying vacant. I agree that the Housing (Miscellaneous Provisions) Bill 2008, to be debated tomorrow, includes several positive incentives in regard to the purchasing of homes under various social housing streams. However, how does the Minister of State intend to rectify the situation whereby the affordable housing programme is clearly no longer competitive when compared to what is available on the open market? Does he intend to give direction to local authorities that the prices of affordable homes must be reduced? Those prices were agreed with developers two years ago in an entirely different housing market. Unless prices are reduced, these units will remain vacant at the end of the year.
Recent reports on "Drivetime" have referred to the large volume of housing purchased by local authorities throughout the State in 2007 at hugely inflated prices. Will the Minister of State ensure that local authorities secure value for money in any future purchases of housing stock?
Will the Minister of State ask local authorities to review their housing strategy and to undertake an audit of the vacant properties within their areas?
In regard to vacant properties, we have asked for an updated audit. I recently allocated almost €20 million to local authorities throughout the State to bring housing stock back into use. It is expected that some 1,500 of those vacant houses will be turned around. We are allowing €15,000 per unit, which would be 75% of the cost, with local authorities providing the remainder from their own resources. This comes under the retrofit scheme, under which I have directed funding for this purpose for 2009.
Deputy Tuffy referred to recent "Drivetime" reports. I insisted on taking part in that programme because of the inaccuracies being put forward and the one-sided debate that was taking place. Some of the statistics were also challenged by a representative of Dublin City Council. For example, a figure was given for the purchase of a house but it was not pointed out that this property included an adjacent site. That information was conveniently omitted. In another instance reference was made to the high price paid for a house without any indication that the local authority was using it to accommodate a family with special needs. These circumstances must be taken into consideration.
There is no question that local authorities should vacate the market simply because market prices are now low. Local authorities must continue to provide houses for those who need them. In regard to value for money, there is significant expertise within the local authority system. Those people are in position to value the market and to set prices. It is important to note what has been done in recent years in response to pressures on affordable housing. Affordable housing output increased significantly between 2004 and 2008, reaching 4,500 units last year.
As everyone knows, affordability and the market have matched recently. The Department closely monitors developments as regards unsold affordable housing. We issued further guidelines to local authorities on their affordable housing stock in which we set out a number of options. We also asked them to reduce prices to ensure they are able to offload affordable housing units. The Department has been informed by the local authorities that they are in a position to dispose of approximately 1,000 units on the open market. We have also asked them to consider other options if they are unable to sell these units under the affordable housing scheme. For example, the Housing (Miscellaneous Provisions) Bill 2008 provides for an incremental purchase scheme. Individual local authorities may consider offering potential buyers the option of purchasing under this scheme.
I have also indicated that in certain circumstances, when local authorities are experiencing pressure on the social housing side, I would be willing to consider other options. They must, however, in as far as possible continue to take a sustainable communities approach to social and affordable housing developments.
I would like to ask one further question.
The Deputy will have to find another way to elicit the information he seeks.
With the Minister of State's indulgence, I will ask one final question. I read the circular issued to the local authorities by the Department and reducing prices was not among the options it set out. May I assume from the Minister of State's statement that a further circular has been issued in the meantime advising local authorities that they may reduce the prices of affordable housing units? If so, will he furnish me with a copy of the document?
I ask the Minister of State to be brief.
The Department maintains ongoing contacts with the local authorities which also inform us about the feedback they are receiving. Some local authorities have taken a focused approach to sales, particularly in the Dublin region, and consult the Department regularly. We continue to monitor developments in this regard. The Deputy will be aware that I recently introduced an implementation plan for the homeless strategy. Alternative options are available to the local authorities.
29 Deputy David Stanton asked the Minister for the Environment, Heritage and Local Government, further to Parliamentary Question No. 107 of 22 April 2008, his views on introducing policy initiatives and anti-litter responses similar to the adopt-a-highway scheme in operation in other countries; and if he will make a statement on the matter. [24926/09]
I am aware that schemes such as those to which the Deputy refers are in operation abroad. Similar schemes are in place in certain local authority areas here. Under statute, the primary response to litter is a matter for local authorities. My Department's role is to provide the legislative framework for combating litter pollution and motivate and energise anti-litter responses, as necessary. It is the responsibility of each local authority to enforce the litter laws and determine the most appropriate course of action to tackle litter pollution within the relevant legislation.
The anti-litter awareness grant scheme operated by the local authorities and which my Department is responsible for administering, has in recent years included projects of the type referred to in the question. This year, I have allocated a total sum of €1.07 million for grant purposes and a number of adopt-a-road and adopt-a-bring bank schemes proposed by local authorities will receive financial support from my Department.
Does the Minister agree that if one travels any country road, one will see bags of rubbish dumped on the roadside and nappies and various other types of household rubbish strewn across hedgerows? Is he happy to preside over such conditions? Does he agree the problem is deteriorating rather than improving? What initiatives does he propose to introduce to address the problem?
Does the Minister agree that as well as its awful visual impact, fly-tipping is impacting on tourism and health? In most other European countries, the problem is not as serious as it is here. Does the Minister agree that positive initiatives are required to educate people and increase civic awareness? A sense of patriotism is needed and serious sanctions must be imposed to hurt those who are caught fly-tipping? What measures will the Minister introduce to address the problem?
While I agree that anecdotal evidence suggests fly-tipping has increased, I remind the Deputy of the results of a survey published recently by Irish Business Against Litter, IBAL, which does fantastic work. My Department's national litter pollution monitoring system will also publish results soon. The results of both IBAL and my Department's system point to a steady reduction in litter levels across the country. According to the IBAL report published last week, 68% of areas monitored are clean to European norms, up from 40% in 2002. Steady progress has been made and the IBAL findings are echoed in the findings of the national litter pollution monitoring report which shows that 66% of areas surveyed displayed high levels of cleanliness compared to 48% in 2002. While specific results relating solely to roadside litter are not available, figures from that area clearly feed into the national results. It is clear, therefore, that some improvement has been made, particularly in cities.
On the issue of fly-tipping, we must catch people in the act. A monitoring programme in place in my Department has been highly effective. Footage from CCTV cameras installed in the national parks, which I have seen, shows people fly-tipping. Some of the individuals in question are regular offenders and the footage shows the registration numbers of their cars as they engage in deliberate fly-tipping.
Deputy Stanton referred to civic mindedness and patriotism. The individuals in question do not have any clue about such concepts but are simply trying to get away with not paying waste charges. A number of steps must be taken. Proper registration is required across the country to identify those who are registered as paying waste charges with the local authorities. As the Deputy will be aware, a significant number of private waste disposal operators are seeking to attract customers by offering what they claim to be a better deal than that on offer from the local authorities. Unfortunately, a significant number of people slip between the cracks and may not be registered with a private operator or local authority. We need to establish who is registered for waste services as it is clear some of those who are not registered are engaged in fly-tipping on roadsides and in some of our most scenic areas, including the national parks. As I stated, the Department has an operation in place in the national parks and I hope shortly to reveal its results in order that we can secure prosecutions and make examples of these litter louts.
My question referred to litter pollution on country roads. One sees bags of rubbish on roadsides in the middle of nowhere. I agree, however, that the position in the cities has improved. Does the Minister propose to establish some form of database recording which citizens or households are registered with local authorities and private operators? If so, will those who are not registered be pursued? What is meant by his statement that a register of householders registered with the local authorities and private operators is required? What action does he plan to take?
I have outlined what action the Department is taking on the issue of fly-tipping. Some people are not registered either with a private operator or——
What does the Minister propose to do?
We will ensure that people are registered. Under legislation, people will have to dispose of their rubbish or waste in an environmentally friendly manner. In other words, they will be required to register with a local authority or private operator. The only conclusion one can reach is that those who are not registered are either fly-tipping or burning their waste. The question of whether a regulator should be established in the areas of waste has been discussed and I have come to the conclusion that such a regulator is required.
When will we have a regulator?
As soon as possible.
30 Deputy Denis Naughten asked the Minister for the Environment, Heritage and Local Government his plans to introduce a grant to upgrade septic tanks; and if he will make a statement on the matter. [24922/09]
Primary responsibility for the prevention of pollution from septic tanks and other on-site waste water treatment systems rests with owners or occupiers of premises served by such systems. In its water quality 2004-06 report published in 2008, the EPA noted, inter alia, that greater attention needed to be given to ground water protection and in particular to prevention of pollution at source, including pollution from septic tanks. A number of measures have been taken or are under way in this area. These include strengthened legal provisions under the Water Services Act 2007 to require the occupier or owner of a premises to ensure that waste water from the premises does not cause nuisance or risk to human health or the environment; an updated code of practice for waste water treatment systems for single houses developed by the EPA which will incorporate the requirements of new European standards due to come into force on 1 July 2009; and a pilot waste water collection and treatment project for rural villages which has now been completed.
I am conscious of the need to address the findings of the EPA report on preventing pollution at source, including from septic tanks. The European Court of Justice is also due to rule in a case pertaining to the treatment of waste water from septic tanks in Ireland later this year.
The programme for Government includes a commitment in regard to a scheme of support for the replacement and upgrade of septic tanks older than 15 years with newer systems. While my Department has been examining the conditions which might attach to such a scheme, the timeframe for pursuing this commitment will remain under ongoing active review, having regard to current budgetary constraints.
That is the most meaningless reply I have ever heard from a Minister. Nothing meaningful has happened regarding the objective of improving our ground water and addressing contamination from septic tanks. We have been waiting 18 years for the EPA manual to be updated. The Minister is implying that the commitments of the programme for Government are null and void and there is no commitment to meet the water framework directive obligations arising from the contamination of ground water by septic tanks. We are prepared to pay fines to the European Commission rather than do something meaningful about improving ground water.
That is not the case. This is a serious problem because there are approximately 418,000 septic tanks in the country compared to England which has just over 800,000 despite being one of the most densely populated countries in the world. That puts the matter in perspective.
The Joint Committee on the Environment, Heritage and Local Government, of which Deputy Hogan is a member, made recommendations which make sense in the context of current budgetary constraints. It has recommended that my Department develop a strategy to address concerns regarding pollution of ground water resources and the rural environment. I assure the Deputy that will be done. It also recommended that local authorities should police on-site sewage treatment and disposal processes through a variety of measures, including the establishment of panels of approved system designers, site assessors and inspection and enforcement officers, and that incentives to upgrade existing septic tanks should be introduced. I have indicated that the final recommendation is subject to budgetary constraints but that does not rule out the necessity of a proper inspection regime. The fact of the matter is that a laissez faire approach was taken to septic tanks. For whatever reason, county engineers have allowed tanks to be constructed in totally inappropriate soil types. We need to tighten up the regulations across the board.
It is not fair to say that we are prepared to pay fines because that is not something I want to countenance. I am absolutely committed to dealing with this problem but given the multitude of houses that have installed septic tanks, it is not an easy proposition.
The Minister likes to think this is just a rural issue but there are septic tanks near Dublin Airport. It is as much an urban issue as it is a rural one in many parts of the country because we have not invested sufficiently in group schemes and public systems. The Minister is admitting that he has taken no initiative to address the contamination of ground water even after waiting 18 years for a manual on updated best practice. That is not good enough. Will the Minister give an undertaking that a scheme of upgrading septic tanks will be put in place in 2010 arising from the review of the programme for Government?
I have stated that the matter will have the highest priority. The European Commission is taking the matter very seriously and if we do not get our act together quickly we will face the prospect of fines.
Why should we wait for Europe?
We will do it all right. I hope the Deputy will support the measures I introduce. He has not done so thus far.
I remind the Minister that my party has drawn up a policy on this issue and I would be delighted to share it with him.
Fine Gael will not implement it.
We will.
Written Answers follow Adjournment Debate.
