Detailed information about this Bill has been set out in the explanatory memorandum. In the circumstances I propose to confine my statement to the Seanad to a broad outline of the general intentions of the measure.
In general, the Bill is intended to validate changes made, in anticipation of legislation, in the housing grants, subsidies and loans provided for in the Housing Acts, 1966 to 1970. Included in the Bill are provisions which will enable such changes to be made in future by statutory regulations rather than by special legislation on each occasion. The Bill will also strengthen the statutory controls over the prices of new private houses and flats. It will introduce an optional arrangement for pre-sale structural works to local authority houses and will enable certain land now vested in the Minister for Health to be transferred, principally for housing purposes. The Bill will enable the Minister for the Environment to direct a housing authority to sell, or not to sell, houses of a specified class. The purpose here is to ensure that houses specially designed and constructed for the accommodation of categories such as elderly persons or physically or mentally handicapped persons will not be lost to the local authorities' housing stock. At the same time, changes are being made also in the Building Societies Act, 1976.
Senators may be aware that the administration of the new house grant scheme was delegated on a trial basis to Meath County Council in May 1973. In Counties Longford and Westmeath the schemes of grants for reconstruction work and the installation of private water and sewerage facilities in individual houses were also devolved to the county councils in the following August. These experiments in devolution ended when the new grants schemes for new houses and house improvements were introduced in July and November 1977, respectively, in order to ensure consistency in operation and to avoid duplication of administration.
Section 2 will enable similar exercises in the devolution of the administration of housing grant schemes to be made in the future if the circumstances so warrant.
Section 3 will allow me to make a grant towards the administrative and general expenses of an approved body which represents, or promotes the formation of, co-operative housing groups or voluntary associations. I would like to see this form of activity expanding. The success of co-operative housing depends largely on the dedication and initiative of the groups or associations involved. One body who has been to the forefront in this regard are the National Association of Building Co-operatives who were established in 1970. The Government are anxious that this association be given every encouragement and have approved a grant towards their administrative and general expenses in 1979.
The grant provisions of the Housing Acts, 1966 to 1970, are inflexible in that the amounts of grants payable and the detailed qualifying conditions are specified by the Acts, so that changes which were found to be desirable from time to time in the grant schemes required amending legislation. To meet this situation, sections 4 to 6 of the Bill will confer a broad general power on the Minister or a housing authority to pay a grant for specified purposes, subject to such regulations as may be made. It is intended that the proposed regulatory powers will be broadly in line with similar provisions in the 1966 to 1970 Acts and the Local Government (Sanitary Services) Act, 1962, but modified to take account of changes made since 1972 in anticipation of amending legislation. Future changes in grant schemes can be effected by regulations under these sections. In accordance with section 5 of the 1966 Act, every regulation made under the Bill will be laid before each House of the Oireachtas as soon as may be after it is made and it may be annulled by resolution of either House.
Section 4 provides a statutory basis for new house grants payable by the Minister. Subsection (2) outlines the aspects of a grant scheme which may be incorporated in regulations and varied subsequently. Subsection (3) enables the Minister to lay down technical standards. Subsection (4) provides for certain cases of hardship. Between July 1977, when the £1,000 new house grant scheme for first-time owner-occupiers was introduced, and the end of May 1979, 18,557 grants were approved and 10,860 grants paid.
Section 5 deals with house improvement grants payable by the Minister and follows the same approach as section 4. It will enable us to get away from a legislative code containing separate detailed provisions relating to ordinary reconstruction grants, further grants, essential repair grants, improvement grants payable to housing authorities, water and sewerage grants, and so on. In the Bill, I have described a wide range of grants as house improvement grants and my aim is to simplify still further this grant scheme in the future. Incidentally, section 5 (1) will enable the Minister to pay a grant to a housing authority for improvement works to their rented houses; this replaces section 24 of the 1966 Act.
Section 6 will enable a housing authority to pay a grant to a person providing a new house and to pay a grant or make other assistance to a person carrying out improvement works to a house, subject to such regulations as may be made. The Minister may also contribute to the expenses incurred by a housing authority in this regard.
Section 6, when taken with section 22, validates the payment of grants by the authorities and the making of contributions by the Minister since 1 February 1972 in respect of improvement works to houses used for the accomodation of physically disabled persons. This worthwhile scheme was extended to include accomodation for severely mentally handicapped persons from 1 July 1975 and I increased the amounts of financial assistance substantially from 1 November 1977. Apart from that special scheme, and certain transitional cases, grants or supplementary housing grants have not been generally payable by housing authorities since 1977. Section 6 is, therefore, mainly an enabling provision to cater for any schemes which might be considered appropriate in the future.
Another important scheme provided for in the Bill is the making of grants to approved bodies providing housing and caretaker accommodation for elderly persons. In April 1978 I announced details of a package of financial assistance for these cases, comprising grants, loans and annual subsidies. These financial aids were improved with effect from 1 February 1979. Section 7 will empower the Minister to pay grants to bodies approved under the scheme, subject to such regulations as may be made.
Section 8 deals with house improvement loans and replaces section 40 of the 1966 Act and section 4 of the Local Government (Sanitary Services) Act, 1962. It will enable a housing authority to make a secured or an unsecured loan to a person carrying out improvement works to a house, subject to such regulations as may be made. The maximum unsecured loan, which is being increased from £200 to £600, can be varied by regulations in the future.
Section 9 will authorise the Minister to pay subsidy to housing authorities towards the annual loan charges incurred by them in providing sites for private housing, subject to such regulations as may be made. The section largely replaces a corresponding provision in section 44 of the 1966 Act, but it is less restrictive as regards the amount of the subsidy. I have taken steps to increase the supply of serviced land available by increasing substantially the allocation for sanitary services this year and, in August 1978, I asked local authorities to consider the development of part of their land reserves with a view to making sites available for private housing, particularly as an incentive to tenants or prospective tenants of their houses to secure their own accommodation. To stimulate this activity, I increased the site subsidy available. I regard this scheme as an important element in our efforts to curb increases in house prices.
Subsections (1) and (7) of section 10 validate the subsidy system, which applied in the period from 1 April 1973 to 31 December 1976, under which most of the loss on local authority housing provided for letting was transferred on a phased basis to the Exchequer. Up to 31 March 1973 the payment of housing subsidy to local authorities was governed by section 44 of the 1966 Act, which is being repealed. Since 1 January 1977 the loan charges incurred by housing authorities on the provision of houses for letting are generally met in full by the Exchequer. Section 10 (2) provides for the payment of subsidy in accordance with the arrangements in operation since then, subject to such regulations as may be made.
Under section 10 (5), subsidy payments can be made either to the housing authority or directly to the agency from which the loans were obtained. In the case of moneys borrowed from the Commissioners of Public Works, subsection (6) will allow subsidy to be effected by writing off moneys owed to the commissioners by housing authorities. This would result in savings in administrative costs, but, unfortunately, it is not feasible to introduce this change just yet. When the change is made, it is intended that the amount written off should be clearly identifiable in the Estimates and in the Appropriation Accounts for my Department and that the Minister should be answerable in the Dáil for the sum involved.
Section 11 of the Bill will provide a statutory basis for the low-rise mortgage scheme, which was introduced on 22 November 1976. Earlier this year I modified the scheme so that certain two-person families, comprising one parent and one child, can qualify.
Section 12 provides statutory authority for the payment by the Minister of an interest subsidy from 1 June 1977 on certain house purchase loans made by a building society and guaranteed by a housing authority under section 42 of the 1966 Act. The loans were made between 1969 and 1972 to householders, mainly in the Donaghmede, Finglas, Kilbarrack, Kimmage and Tallaght areas of Dublin who qualified for the normal local authority house purchase loan at a fixed interest rate of 9 per cent. The societies charged their normal variable mortgage rates. Section 12 will enable the Minister to subsidise the mortgage interest rates, so that in effect a flat 9 per cent is payable.
Section 106 of the 1966 Act requires a housing authority to put each of their rented houses into good structural condition before selling it to the tenant. In order to speed up the arrangements for purchase, a new optional procedure is proposed in section 13 whereby the authority and the tenant can agree on the nature, extent and cost of the works necessary to put the house into good structural condition, and the tenant may, within a specified period, carry out the works directly or arrange to have them carried out. The authority would pay the tenant the agreed cost of the works when they have been satisfactorily completed. In the absence of an agreement, the normal arrangement whereby the works are carried out by the housing authority will apply. The section also provides for statutory rights of appeal to the Minister under both arrangements.
Section 14 extends the general power in section 5 of the 1966 Act to make regulations by enabling them to be applied either generally or to specified classes of areas, houses, loans, persons, works or other matters.
Section 15 validates rates relief given before 1 January 1978 arising from the introduction of improvement grants in 1972 and 1975, respectively, in respect of houses occupied by physically disabled and severely mentally handicapped persons and provides for rates relief consequent on the restriction of new house grants between January 1976 and 6 July 1977.
Section 16 provides that a housing authority may exercise a discretion as to whether or not they should obtain a report from a medical officer of health of the local health board when determining the order of priority to be followed in all letting of houses in accordance with their approved scheme of letting priorities or only in cases where priority is claimed by an applicant on medical grounds.
At present, a housing authority have power to decide under section 90 of the 1966 Act about the sale of any of their houses. I want to ensure, however, that special purpose-built houses which would normally be unsuitable for family use—for example, elderly persons' houses—are not lost from the rented local authority housing stock. On the other hand, I feel that most local authority tenants should be given the opportunity of purchasing their houses. Towards this end, section 17 enables the Minister to direct an authority to offer for sale, or not to sell, as the case may be, houses of specified classes.
The provisions of section 18 are rather complex and I want to explain them in some detail. There is an obvious need for controls on the prices of new houses. This view is shared by the main political parties and, indeed, by many builders. I want to emphasise, however, that I do not envisage that whatever form of house price control is implemented following the enactment of the Bill will remain unaltered indefinitely. A flexible approach must be adopted and controls adjusted, in consultation with interested bodies, to take account of changing circumstances.
Section 18 replaces section 35 (2) of the 1966 Act, under which the system of certifying reasonable value in respect of the prices of new houses and flats has operated up to now. It is generally agreed that the existing provisions do not provide an adequate statutory framework for the control of house prices. Under them, the Minister simply refused a grant for a house where the consideration being charged was greater than what was, in his opinion, reasonable value for the house. I have become aware of abuses and circumvention of the CRV system and I feel it is incumbent on me to take action to stop these malpractices, particularly to safeguard the position of conscientious builders who are prepared to comply with the spirit and the letter of the law. These abuses have been mentioned by public representatives in the media and in complaints made to my Department by aggrieved house purchasers. The controls which I propose to introduce under section 18 of the Bill were welcomed by practically all the Deputies who spoke when the Bill was before the Dáil. I am sure that they will commend themselves also to the Seanad.
Section 18 has two main purposes— first, to empower the Minister to prohibit lending agencies from advancing loans for the purchase of new houses unless a CRV is obtained for each house; and secondly, to oblige builders who have got CRVs to abide by the terms of the certificate and to enable the Minister to take effective action against those who fail to fulfil these obligations. Subsection (2) gives effect to the first purpose. This subsection is an enabling provision which will apply only to such categories of loans and for such periods as the Minister may by regulations provide, having regard principally to trends in house prices, costs and earnings, the availability of mortgage finance and the national housing programme.
The remainder of the section deals with the second purpose I have mentioned as well as making general provisions relating to the issue of CRVs. The broad concept of reasonable value, as enshrined in the 1966 Act, is not being changed in any material way nor does the section introduce innovations in the approach to the determination of what constitutes reasonable value.
Section 18 (4) contains an enabling provision relating to the question of whether or not site costs are reasonable. Section 18 (5) provides for an appeal to the Circuit Court against the refusal of a CRV. This is the first time that provision has been made for an appeal against such refusals. I understand that there are practically no delays at Circuit Court level at present. Officials of my Department will be as informative as possible about reasons for refusals in discussing CRV applications with builders.
Subsection (8) requires a builder to ensure that a house is constructed in accordance with his application for a CRV and that the price charged is in accordance with the terms of the certificate. It also obliges the purchaser to see that where a CRV has issued and he enjoys the attendant benefits, the price paid by him corresponds with that specified in the certificate. This should deter any collusion between the builder and the purchaser to circumvent the CRV requirements.
Subsection (10) will allow the Minister to refuse to consider for a period not exceeding five years any application for a CRV from a builder who has got a certificate and has supplied false or misleading information or failed to fulfil the requirement under section 18. The Minister will have to notify the builder of his intention and the reasons why he intends to take the action. The builder will then have an opportunity of making representations in the matter and he also has a right of appeal to the High Court against the Minister's decision. This should prove an effective deterrent against abuses of the CRV system and I envisage that the power will be invoked only in exceptional circumstances.
Section 18 should provide an effective statutory framework for the operation of controls on the prices of new houses and flats which benefit from State funds or which are financed by mortgages from the main leading agencies. The purpose is to strike a fair balance between the interest of the public authorities, the householder, the builder and lending agencies.
Section 19 will extend the categories of persons who may take and receive a statutory declaration for the purposes of an application for a grant, loan or subsidy under the Bill. This will facilitate applicants.
Section 20 proposes to amend section 30 (2) of the Building Societies Act, 1976, which governs the powers of the Registrar of Building Societies to investigate the affairs of building societies. The point at issue is similar to that for which provision was made in the Tribunals of Inquiry (Evidence) (Amendment) Act, 1979. The section will extend in certain respects the Minister's power to make regulations under section 77 of the 1976 Act in relation to the amounts and purposes of building society loans. The amendment proposed has been found necessary in the light of experience since the coming into operation of the 1976 Act. For example, from time to time, it is necessary to reconcile the anticipated level of mortgage lending for new houses with the financial needs of the national housing programme.
Section 21 will allow the Minister for Health to transfer, mainly for housing purposes, about 54 acres of land held by him at Navan Road, Dublin, to Dublin Corporation and the Commissioners of Public Works. That Minister at present holds the lands in trust under section 21 (3) of the Saint Laurence's Hospital Act, 1943, and amending legislation is necessary to allow the lands to be transferred for other public purposes.
Section 22 validates the payment of grants or subsidies made by the Minister or by a housing authority from the date of commencement of the particular grant scheme or subsidy arrangement.
Section 23, the Schedule to the Bill, repeals those sections of the Housing Act, 1966, and of the Local Government (Sanitary Services) Act, 1962, which are superseded by various provisions of the Bill. In all, 30 sections are being repealed, wholly or in part, and ten sections of the Housing Act, 1970, will be spent when the Bill becomes law. Section 23 also repeals sections 90 (6) (a) and 98 (5) of the 1966 Act, which allowed a housing authority to require payment to them, generally referred to as a "claw-back" payment, of part of the profit made on resale by a tenant purchaser of certain houses.
Finally, section 24 of the Bill relates to the Title, collective citation, construction and commencement. It provides that different provisions of the Bill can be brought into operation on such day or days as may be fixed by order by the Minister.
Before I conclude I should like to place on the record that before presenting this Bill to the Seanad or recommending or getting Dáil approval to certain amendments, I had special regard to recommendations made to me by the Construction Industry Federation. The Federation's press notice of 1 June 1979 criticising the Bill contained several inaccurate and misleading statements. I do not wish to repeat all the points which I made in a press rejoinder issued on 1 June. I want simply to reiterate that, since this Government resumed office, there have been numerous meetings between the CIF, the Minister, the Minister of State, and senior officers of my Department, at which various aspects of the CRV system were discussed. I informed the Federation, as recently as 23 April last, that as soon as the Bill was published, any observations they might wish to submit in the matter would be carefully considered. On 25 June I was informed that the Federation did not wish to add to their views as set out in their press notice of 1 June.
In similar circumstances, the Irish Building Societies' Association, who are concerned about aspects of section 20 of the Bill, also submitted to me a memorandum setting out in considerable detail why they felt that the section as originally drafted should be changed. To meet their request for changes, the original section was amended when the Committee Stage of the Bill was before the Dáil to provide that the question of the mortgage rate applicable to building society loans shall not come within the scope of regulations made under section 77 of the Building Societies Act, 1976, as amended by section 20 of this Bill. Other amendments at that stage provide that, where the Minister refuses to grant a certificate of reasonable value, pursuant to subsection (5) (a) of section 18, the applicant will have a right of appeal to the Circuit Court.
We have already seen the practical advantage of this Housing Bill. As from 9.30 this morning an explanatory memorandum and application forms are available to the public about the new imaginative scheme of house improvement grants to reduce dependence on oil. I have arranged that copies of these forms will be available today to Senators and Deputies. Heretofore this change should strictly have been effected by a new Bill but this would inevitably lead to undue delays. The oil situation is serious. It requires urgent action and we have taken that.
The Bill was generally welcomed by all parties in Dáil Eireann and I commend it now to the Seanad.