Seanad Éireann díospóireacht -
Wednesday, 24 Mar 1999

Vol. 158 No. 15

Housing Crisis: Motion.

Mr. Gallagher

I move:

That Seanad Éireann expresses its deep concern at the doubling of the Local Authority housing lists and at the 50% increase in the cost of private housing since the Fianna Fáil/Progressive Democrat Coalition Government was formed; condemns the Government for its failure to take any effective action to enable young families to obtain a home of their own; and calls on the Government to establish immediately a Special Commission on Housing to address the exorbitant cost of housing and to draw up a strategic plan for the country's needs well into the next millennium.

I welcome this opportunity to move such a timely and important motion. All public representatives are aware of the housing crisis which has gripped the State in recent years as it manifests itself in our local areas. The word "crisis" is appropriate. Homelessness is increasing at a frightening rate in every town and city; tenants in the private rented sector labour under spiralling rents, lack of regulation and fear of eviction; those on council housing lists are gripped by a sense of hopelessness that their housing needs will ever be catered for. As waiting lists grow, young working couples see the dream of home ownership vanish as prices rocket uncontrollably, and this on a day when the papers are trumpeting news of Ireland's first millionaires' row in north County Dublin. The Government has failed to understand the extent and severity of the housing crisis. Time and again, Opposition spokespersons in both Houses have hammered home the urgent need to comprehensively address the housing crisis. Voluntary and community organisations across the country have combined to urge the Government to establish a housing commission. There is a palpable sense of frustration and anger at the lethargic and partial response of the Government to the chaos in the housing market which cannot be allowed to continue. Through the motion before the House, the Labour Party is seeking to give the Government a wake up call. Piecemeal initiatives designed to give the impression that something is being done are no longer good enough.

There are no quick-fix solutions to the housing crisis. We need a long term, strategic plan to ensure the housing market works effectively and serves our citizens. We need a comprehensive strategy on all aspects of housing provision including: planning; land provision; land servicing; an attack on speculation and gazumping; a new deal for renters and an assault on the scandal of homelessness. In short, we need a national housing commission which will take on board the experience and analysis of all interested parties and devise a long term strategy.

I have not heard the Government put forward one logical, coherent argument to support its opposition to such a commission. Despite the overwhelming evidence that the Government's initiatives have failed to tackle the totality of the problem, it stubbornly refuses even to contemplate the establishment of a housing commission. This is nothing short of a disgrace.

In face of the Government's lethargy on this issue the Labour Party has moved to establish a housing commission to examine the situation. Currently, an experienced and dedicated group of people are touring the country and listening to the advice, views and experience of people who have to deal with the housing crisis every day of the week. At the end of this process we will propose long-term solutions to the State's housing problems which have been discussed and debated throughout the country. It is a valuable, innovative exercise that engages with people and takes account of their views. Is this the reason the Government seems so opposed to the idea?

The Government is making a mistake with regard to the degree of control it is giving to one consultant to guide the State's housing policy. Peter Bacon has done a good day's work in preparing his two reports on housing for the Government. However, he is an economist and his view on housing is limited to his own area of expertise. Housing is much more than a market – it is a social need and there is a moral and political imperative to ensure that every citizen has adequate and appropriate housing. This requires a political response from the Government that goes beyond merely uncritically accepting the narrow and incomplete assessment of one economist.

I have a problem with Mr. Bacon seeming to be in sole charge of devising Government policy. The Government seems to have abdicated responsibility for policy development and put all its eggs in one basket in the hope that one economic consultant will be able to solve all its problems. This is a dereliction of duty by the Government and raises worrying questions about democratic accountability and control. On page 67 of his report, Mr. Bacon urges the Government to cast its net wider and, effectively, to establish a housing commission. The report states:

Therefore, it is recommended that, on a pilot basis, the Minister for the Environment and Local Government should invite proposals from interested and concerned agencies in the voluntary sector as to how they can be assisted to develop and apply their resources more beneficially to provide accommodation for needy sectors of the community.

This is a worthy recommendation which the Government does not seem to have acted upon. A number of other recommendations in Mr. Bacon's second report will prove to be inappropriate and ineffective. The recommendations of the report are based on the false premise that house prices have stabilised as a result of the first Bacon report.

The Department's figures show that in 1998 house prices rose by between 24 per cent and 29 per cent, depending on the category of house. Recent figures released by the Irish Permanent demonstrate that the monthly rise in house prices between December 1998 and January 1999 was much greater than the corresponding rise the previous year. The Department's figures for the comparison between house prices, wages and the cost of house building are revealing. These figures show that the cost of housing has increased massively in comparison to wages and costs, particularly from 1996 onwards and in a more exaggerated manner in the past two years. The motion mentions the 50 per cent increase in housing costs since the Government took office. The latest reports suggest the figure is nearer 60 per cent.

There is so much irrefutable evidence about the continuing hike in house prices that it beggars belief how any Government Minister can still ply the line that initiatives are working and that price rises are slowing down. It is like the captain on the Titanic reassuring passengers that the ship is sinking more slowly.

The chaos in the housing market is hitting the most vulnerable sections of the our community hardest. Rents in the private sector have rocketed out of control over the past 12 months. Eviction is now a real fear for thousands of tenants and there is little or no legal protection for them when faced with the demands of unscrupulous landlords. Over a century ago the Land League fought to establish the rights to fair rents and fixity of tenure for farm tenants. As we approach the end of the 20th century the principle underlying these basics rights is still a live political issue for thousands of housing tenants throughout the country. It is an issue the Government has failed to tackle.

Legislation to give basic protections and guarantees to tenants was introduced by my colleagues, Deputies Stagg and McManus when in Government. However, even the Government has to admit that the number of landlords who, in accordance with the legislation, have registered with their local authority is abysmal. Local authorities who have tried to enforce those regulations have found them challenged and defective in the courts. The Government still takes no action to force compliance with the law. One simple move would be to empower health boards to inform local authorities of the addresses in respect of which rent subsidies are being paid. This would ensure that tenants, who often have to endure dreadful standards of accommodation, receive the protection they deserve under the law.

There is also the need for financial measures to establish a regime for long-term investment in rental accommodation, for example, by institutional investors. Long-term supply will not be encouraged by short-term incentives which depend on the differences between low interest rates and high rents. The Government has failed to use the Finance Bill to take any effective action in this important sector of housing provision.

More than 40,000 families and individuals are now on local authority housing waiting lists, an increase of 20,000 since this Government took office. There is a sense of hopelessness among the people who are stranded on this list. In County Offaly there are almost 1,000 people on the waiting list. At the current rate of provision which has been increased this year, and if no other family were to join, it would take 12 years to clear the list. This Government seems unable to address that and refuses to acknowledge the depth of the crisis.

Since the new year there has been a flurry of apparent activity on the housing front. Initially the Minister of State would not agree there was a housing crisis. However, with an eye on the June elections, the Government tried some more optical illusions to pretend it was taking action. When is a crisis not a crisis? Perhaps when an election is looming. New rabbits are being pulled from the hat every month. The second Bacon report, the affordable housing initiative, the draft residential density guidelines are being trumpeted with uncritical media acclaim. Councils are willing to undertake any affordable housing scheme but they have no practical details to give to applicants on how this scheme will operate; little or no serviced land on which to build houses and no promise of money to provide such land. The Department's figures show that contractors charge more to build a house for a council than for a private purchaser. This means that the cost to the home buyer will be higher under this scheme.

Despite the Government's failure to deliver on promised reform of the planning laws, it has published proposed changes on planning density. These guidelines may have merit from a planning point of view but they should not be used to try to solve the housing crisis. They may produce cheaper houses, but they will be smaller. Even a child knows that a smaller bar of chocolate is cheaper than a big one. No measures are proposed to ensure that the higher densities do not result in bigger profits for speculators rather than lower prices for house buyers.

It appears that when the Government comes under political pressure it produces yet again another one-off scheme that seeks to create the appearance of action. This is not the answer. A coherent national policy which addresses the growing council waiting list, the scandal of homelessness, the gross profiteering that is rampant in the housing sector and the precarious position of private rented tenants is urgently needed. The Government seems unable to grasp the magnitude of the crisis and is incapable of formulating a comprehensive response. This sticking plaster approach to the housing crisis cannot continue.

Mr. Ryan

It is extraordinary that, in a booming economy, the Minister of State at the Department of the Environment and Local Government with responsibility for housing must be told that his position is effectively untenable, not because of a lack of intent on his part but because he is a member of what is perhaps the most reactionary Government the State has seen in terms of its unwillingness to take the action necessary to deal with a fundamental social problem. There is a problem in Government on the issue of housing because it is so fixated on the marketplace that it confuses housing demand with housing need.

Two reports by Dr. Bacon have been written according to terms of reference given to him by the Government which leave out the issue of whether demand and supply will or will not match need. The marketplace has not worked in the provision of health, housing, education or income support. Any solution which rests on the hope that the market will balance is doomed to failure. It has always failed. It failed in Britain in the 1980s and it fails consistently in the US, which has a consistent problem of homelessness and poor and limited housing because of excessive reliance on the marketplace.

The Government is ideologically driven and the only pragmatists left in Irish politics are those on the left, who, looking at reality and not ideology, ask what can be done that will work?

Mr. Walsh

That would be a change.

Mr. Ryan

I stand where I am because I believe in what works, not what I dress up ideologically to suit those who are already well off and call it reality. The primary advocate of this view of reality is the Minister for Finance who told this House that he and Senator Ross were the only people in the House who lived in the real world. I invite the Minister of State, whom I know to be a good and decent man, to take the Minister for Finance, who claims to live in the real world, from the top of O'Connell Street back to this House at approximately 11.30 at night and count the number of people sleeping on the streets and let him be ashamed of his lack of grasp of reality.

Homelessness is worse in this society now than it was when I first became a Member of this House 17 years ago because foolish people have relied on the marketplace to provide a solution that cannot work. The marketplace has made some rich, some homeless and has left a large number of other ordinary decent people in a state of impoverishment because of a level of indebtedness that will make their lives a misery for ten years.

There is no easy outcome for any young couple today. Interest rates cannot fall much further and house prices will not fall. We have destroyed one generation, let us not destroy another. A level of intervention is required which the Government is not prepared to consider.

There is only one solution, and it is not immediate. It is to make resources available. Notwithstanding symbols and gestures and some worthwhile measures, the number of local authority houses being built is still not as high as it should be, nor is it as high as it has been at its peak in the past. I do not know of any better way to deal with the problem of local authority housing lists than to build more local authority houses or to acquire them by whatever means the Minister of State wishes. That, ultimately, is a matter of resources because it is a question of rebalancing the market in favour of those who would otherwise be without.

That the market has not been rebalanced and that the tendency by market forces to squeeze those who cannot afford accommodation has been allowed to continue has meant that everybody has been squeezed. Young couples who had aspirations to large houses are buying small houses, those who had aspirations to small houses are in private rented accommodation, those who would have aspired to private rented accommodation are in the hostels and those who had hoped to be in the hostels are on the streets. All is the consequence of ideology taking the place of reality.

Two or three years ago it was obvious the country was heading for a boom, two years ago it was obvious it was, or would become awash with money. That happened this year. Department of Finance figures for the next four years forecast budget surpluses of between £700 million and £1 billion. Such resources could make an enormous difference. They could make land and services and local authority houses available. They could put together the structure of a proper, fair set of landlord and tenant rules which did not make life impossible for landlords but which gave security to those in rented private rented accommodation, which is the most important thing that is needed in housing.

There is no point in offering people insecure housing. To suggest that people should live like that is a contradiction. It defies logic and any understanding of the reality.

When this debate is over, the Minister of State should invite the Minister for Finance, who lives in a world in which everything is judged through a tissue of rigid ideology, to look at what is happening in the real world, not the real world of those who can afford to live, drive, gamble and do everything else well, but the real world of those who have no money, those who have limited incomes and are living on the streets. Last week, around the corner from this House, a man was sleeping in a doorway on Nassau Street. People are sleeping in full visibility along O'Connell Street, not because something is wrong with them or because they do not want to use hostels. It is because our society has something wrong with it, which is the unwillingness to use the resources we now have to look after those without resources.

It is no longer an issue of initiatives, though they are worthwhile. Nor is it any longer an issue of fine tuning the market here or there. It is a question of whether the Government can get over its ideological fixation with the marketplace and deal not with ideology but reality. The reality is that for too many people housing is too expensive. However one deals with that problem it will not be dealt with simply by fine tuning the market. It did not work in the past and it will not work now.

The resource that is most needed is money. The Government has too much of it and is looking for ways to conceal its surpluses. The Director of the National Treasury Management Agency has accused it of hiding them. It is salting away money, pretending it does not have it while at the same time it pretends there are no social consequences arising from that peculiar position. However, there are consequences and they are there in homelessness, overcrowding, local authority housing lists and young people who will never have a decent life because two of them will be forced to pay an enormous proportion of their incomes indefinitely, to sustain a mortgage based on the present irrational marketplace. That is what the Minister needs to deal with and any amount of details or changes here and there will not change that. The Minister needs to announce that substantially greater resources of the order of hundreds of millions of pounds will be used to intervene in the housing market on behalf of the large section of our society which can no longer afford to buy or rent housing without impoverishing themselves and on behalf of those who are already so impoverished they are now out of the housing market.

Mr. Walsh

I move amendment No. 1:

To delete all words after "That" and substitute the following:

"Seanad Éireann welcomes

–the comprehensive range of initiatives taken by the Government to maximise and expedite housing supply and secure house price stabilisation and balance in the housing market

–the measures taken by the Government to improve access by first time purchasers to housing through the introduction of an Affordable Housing Scheme, the promotion of higher densities in suitable locations, improvements to the shared ownership scheme, reduced stamp duty levels and measures to tackle speculative investment in starter housing

–the moderation in house price increases in the second half of 1998 resulting from the Government's actions

–the record level of new housing output in 1998

–the increased local authority housing programme in 1999 and

–the decision by the Government to establish a commission to examine issues relating to the security of tenure in the private rented sector;

and supports the continued commitment by the Government to expand the supply of housing across all tenures and to improve access by all income groups to suitable housing accommodation.

The highest output of housing, some 42,000 units, was achieved in 1998, a significant increase on past output.

I will respond to the points raised by Senators Gallagher and Ryan in proposing the motion by referring to some of the measures implemented by the Government. It is the wont of the Labour Party to use various emotive terms. The analogy of the Titanic fits with Labour's politicisation of this issue. I am surprised that Senator Gallagher, for whom I have the utmost regard, would reduce what is a problem – I do not believe it is a crisis – for many people, that is accessibility to a house of their own, to party political slagging. That does not do justice either to the importance of the topic or the House.

I do not understand the suggestion for a housing commission. The only constructive suggestion made by Senators Gallagher and Ryan was that we should put more money into the housing construction programme. I recall the Labour Party strategy of setting up commissions to look at issues, which is effectively kicking for touch. A commission is not necessary to analyse the housing problem; it is a question of supply and demand. The problem needs to be tackled on that basis to ensure that our exceptional record of a high ratio of home ownership, of which we should be proud, continues as a policy and that the escalating price of houses does not close off that option for people in the future.

The housing market is not in chaos; however it is definitely overheated. Steps being taken will reduce the effects of this. The Minister will tell us about the other initiatives necessary in that regard. The question of long-term solutions was also raised. It was acknowledged that Dr. Bacon did a good job in analysing the problem and making recommendations. House prices and supply and demand has been determined to a large degree by our economic growth in the past decade and particularly in the past five years. The welcome increase in employment has changed our economy dramatically. It is now used as a model for other developing states across Europe, of which we should be proud. Unfortunately, one of the side effects of this is the escalation of house prices.

It galls me a little to listen to those who share some culpability in the matter. On my first day in this House, we established a tribunal to investigate allegations of wrongdoing by politicians. We all supported that and we look forward to that being satisfactorily dealt with in the future. I am concerned about those who were in Government from 1982-87 and inflicted such an appalling vista on this country by doubling the national debt from £12 billion to £24 billion. Fine Gael has said since – I have not heard it contradicted – that this was due to the policies it had to support because it was driven by the Labour Party. The national debt was increased to the extent that we are now paying £2.5 billion a year in interest.

This year we are investing around £230 million in local authority housing. There is a correlation between the appalling mismanagement and reckless administration during that era which has led to a situation where ten times our investment in local authority housing could be available to the Exchequer. Nobody was ever held accountable for that mismanagement. It is well known that in other spheres of activity when people trade recklessly or act irresponsibly they are held accountable. That should have happened in that case. I hope institutions will be put in place to ensure Governments do not act so recklessly in the future. That is one of the contributory factors to the subsequent curtailment of public expenditure which led to our economic growth but also affected our investment in infrastructure which limits certain activities.

I agree this problem must be dealt with on an overall basis; it is not just a matter of concentrating on building local authority houses, although that is one part of it. The social housing initiative which was introduced by Commissioner Flynn when he was Minister for the Environment is providing an impetus, with the reduction in the interest rates being applied making housing more accessible. Local authorities should be encouraged to avail of that housing provision more enthusiastically than previously. One of the unattractive elements in that scheme is that where people take an equity stake in a house of 50 or 60 per cent, when they buy the house, the balance is at market value. At a time of escalating house prices, this is obviously an obstacle. Perhaps the price should be fixed at the time they invest in shared ownership. The local authority should cover the cost of interest for the tenant. It could then act as the holder of the initial investment, and would not make a profit on its equity stake. This would make the scheme more attractive.

The certificate of reasonable value, which I have mentioned, should also be looked at. I have espoused the need for the reintroduction of the low income mortgage scheme, which gave people on lower incomes access to house ownership where it had not existed. The Minister of State has taken an initiative whereby local authorities can build houses and offer them for sale to people in certain income brackets, and this will help the situation, as they will also get assistance with their repayments. These are some of the initiatives that can be taken to make house ownership available to a wider range of people, which I am sure this House fully supports.

Mr. Coogan

I am saddened to hear Senator Walsh refer to Senator Gallagher's speech as politicising a matter that was not a crisis. A couple of sentences later he started to blame previous Governments for the increased expenditure during their terms of office, yet he completely forgot 1977 and the Taoiseach, Jack Lynch's budget. I will not go down that path.

Ms O'Meara

Those like Mr. Haughey.

Mr. D. Kiely

What about 1983 to 1987?

Mr. Coogan

I welcome this debate and thank the Labour Party for raising this matter, because there is a crisis. Senator Walsh said that the amount of houses being built was wonderful and was solving the problem, or as good as solving the problem.

Mr. Walsh

I did not say that.

Mr. Coogan

He said how many were being built—

Mr. Walsh

Those are facts.

Mr. Coogan

It reminded me of the little Dutch boy—

An Cathaoirleach

Senator Coogan's time is limited.

Mr. Coogan

—with his finger in the dyke trying to hold back the water, but in this case the Dutch boy has fingers and toes in the dyke trying to hold it back.

I welcome the second report from Dr. Peter Bacon and Associates, entitled The Housing Market – an Economic Review and Assessment, not because I hold everything in it to be true, but by virtue of the fact that it gives an opportunity to debate the issues. Dr. Bacon's first report can be seen to have had some tangible effects, notably the removal of mortgage tax relief on borrowings undertaken for investment in residential property. This has helped to slow down the feeding frenzy in the housing market. In addition, the reform of the stamp duty regime has also helped the first time buyer.

Nevertheless, the cost of housing continues to rise. House price rises accelerated in January this year, rising 1.7 per cent to December 1998 according to the figures from the Irish Permanent that Senator Gallagher quoted, and the average prices were also some 29.2 per cent higher at the end of January than a year earlier. This 1.7 per cent is against 1.3 per cent in the average monthly growth of the last three months of 1998 and conflicts with the figures of Dr. Bacon's second report. I know the Minister of State may have figures of his own, but the Irish Permanent is a reputable company. It is the largest lending corporation for mortgages in Ireland, and I must accept its figures as being based on sound facts.

The frightening effects of these rises can be seen when one looks at the price of a house in Dublin. The average cost of a new house, according to the Irish Permanent, was £134,129 in January. In order to purchase such a house, a buyer would have to have an income of £53,115 a year. The Minister of State is undoubtedly aware that in Galway city, which he represents, house prices rose by over 45 per cent for new houses and by over 85 per cent for second hand houses between 1993 and 1998. Meanwhile, the Minister of State and the Government are complimenting themselves, clapping themselves on the back and claiming that the increase in house prices has slowed down.

Nonetheless, the trend in house prices has continued to rise. It may not be as fast as before, but it is rising all the same. This has the effect of forcing both partners in a relationship to continue to work full time for at least 20 years into the future, with all the possible social consequences that can arise, most especially for children. Furthermore, it places pressure on any attempted wage restraint into the foreseeable future.

In real terms the Bacon report has had no real impact on the ability of low income earners to purchase housing. The scandalous reality is that in the past months the national housing list has increased from 37,000 to 43,757, and this is an indictment of the Government's housing policy. If one projects the rate of increase on the housing lists for the next two years, we would end up with well over 200,000 people on the local authority housing lists.

The Government's response to the crisis of escalating house prices and lack of local authority housing show that for the last two years the Government sat on its hands, and only in recent months has it taken any form of action, limited as that is. This is only as a result of continuous badgering by the Fine Gael and Labour Party front benches who highlighted the crisis because the media highlighted the crisis, and because there was a major public outcry for more affordable housing. The recent actions taken by the Government have been more of an exercise in public relations than an effective means of reducing the housing list or stabilising house prices. The Government's action could be likened to a man being involved in a car accident and revisiting the site of the accident two years later in order to report it. I do not doubt that this minor burst of activity, is no doubt due to the fact that the National Housing Assessment is about to be published and it will show that there is a 60 per cent increase in the numbers seeking public housing.

If one examines the scheme for affordable housing launched on 2 March 1999 by the Minister of State, one is looking at a ball of smoke. It is sleight of hand and a PR exercise and is again based on a limited foundation.

In order for this measure to be implemented and to take effect, every local authority would have to have a sizeable land bank available. The reality is the opposite and the Minister of State is aware of this. I asked Members of both Houses, representing areas throughout the country, how much of a land bank each local authority has. The Minister of State, of course, has this information at his fingertips but is not likely to divulge it to us. The responses I got indicated that in the larger urban areas such as Dublin, Cork and Waterford the amount of available local authority land was either non-existent or very limited.

This survey, while not scientific, is indicative of the situation in the 32 counties. Even where limited land was available, in many cases there was no infrastructure – no sewerage, proper roadways, lighting, footpaths or any such provisions – which would make such lands available for development in anything but the distant future. Therefore, those who have read in the newspapers of this scheme and who have high hopes of getting affordable housing will get a shock when they realise the small number of sites that will be available for development. This lottery will have few winners, least of all the Government, when the public comes to realise the subterfuge that has been played upon it.

The Government partners, the Progressive Democrats, have been traditionally known as the builders' friends and have believed in a policy of non-intervention and allowing the free market to reign. This is one of the major reasons that we now face this crisis.

The Government has failed to implement the measures that it enacted to give greater protection and security to tenants. There is no point enacting laws and not enforcing them. With regard to the registration of landlords, the Government has taken a position that if it does nothing the problem may go away. Fine Gael's intention for housing policy is to provide good quality and affordable accommodation for tenants in the private rented sector. Therefore, these regulations will have to be brought into effect. The Minister of State may say that it is the fault of local government, but I dispute that.

The previous Government enacted legislation in 1996 requiring landlords to register with their local authority. This was to be the start of ensuring standards and value for money in a sector of the housing market which hitherto had been the poor relation. It is critical that such regulations be put in place to protect tenants from unscrupulous landlords. The Minister of State will no doubt try to pass the buck by saying this is the responsibility of local authorities. However, his only contribution in recent years was to send one letter from his Department to county and city managers. This single letter indicates the Minister of State's lack of commitment to the Act. Thus, today at least 75 per cent of all houses in the private rented sector have yet to be registered. I believe there has been a decline in the numbers registering in recent years. Furthermore, the lack of real commitment is indicated by the few prosecutions which have taken place since 1993.

A further anomaly in this area is that the health boards, which pay out large amounts of money in rent subsidies, apparently do not inform the local authorities of the identities of the landlords to whom these sums are paid. It is a belief strongly held by local authority members that the payment of rent subsidies would be better handled by local government.

I am delighted the Minister of State took on board some of the Fine Gael proposals on density increases in the recently issued strategy guidelines. Perhaps he would benefit from reading and implementing the Fine Gael discussion document on the housing crisis, "Affordable Housing for All". Will the Minister of State outline his views on the possibility of the Government, through local authorities, offering an interest free equity loan of up to 30 per cent to a house buyer? The buyer would then be obliged to raise a mortgage for 70 per cent of the value of the property. This would exclude rental costs and would be aimed in particular at families with earnings above the £20,000 limit in the current scheme. What are his views on compelling private builders to provide affordable dwellings in all housing developments in specific regions?

Housing is one of the major issues facing the Government. Ireland has one of the highest percentages of home ownership in Europe. Figures produced by EUROSTAT indicate that Ireland heads the table for home ownership in the European Union with 91 per cent of private households living in a family home rather than in rented accommodation. It is the traditional belief of members of the Irish public that they are entitled to own affordable and decent accommodation. This might change in the future but I do not have time to discuss this issue or the proposals regarding densities and satellite towns.

It is time for the Government to carry out a thorough review of its housing policy. It is obvious that its present policy is ineffective and it is long past the time for the Progressive Demo crats and Fianna Fáil to produce a realistic national strategy to reduce housing waiting lists.

Miss Quill

I am thunderstruck by what I have heard in three of the last four contributions. There is a deep housing crisis which the Minister of State inherited from his predecessors. A crisis of this magnitude does not develop overnight. It is not a mushroom, – mushrooms can sprout overnight but a housing crisis does not grow in the same manner.

The Minister of State inherited a housing crisis of daunting proportions. This is due entirely to the failure of the previous Government to make projections and to plan in advance, which would have ensured that sufficient serviced land would be available for house building programmes to cater for the increasing number of people looking for houses. Serviced land, no more than houses, also does not become available overnight. Current high housing prices are directly due to the failure of the previous Government to plan in advance and to make provision for those plans.

The previous speaker pointed out that there are no land banks. Why not? There are no land banks because they were not planned or provided for and put in place in the past five years. Land banks cannot be produced from one's pocket like a packet of crisps or a lotto ticket. They must be planned for in a variety of ways. I am a member of the housing authority in Cork city and it does not have a land bank. That is why the plans of the present Government will take a long time to implement and reach fruition. It will take longer than might have been the case if sufficient building land were now at its disposal. The absence of serviced land is one of the major deficiencies in this crisis.

I am impressed by the manner in which the Minister of State is dealing with the housing crisis. I was not a member of a housing authority in the 1960s when, in response to a similar crisis, low cost housing was built throughout the country. This led to the establishment of places such as Ballymun in Dublin and Mayfield and The Glen in Cork. That process was builder driven. The policy was to put the houses up quickly. They were low cost, inferior quality houses and huge housing estates were created. The housing was constructed either in high rise blocks or in sprawling estates.

There were dire social consequences. It has taken a generation of strong, interventionist policies to rectify the fallout of that approach to a housing crisis. It cost huge sums to repair the physical fabric of those low cost houses and to carry out what we called a bricking programme. It cost millions of pounds to bring them to an acceptable level. After spending so many millions, we did not have even one new unit to add to our housing stock. Ballymun is being pulled down, rightly, and not before time.

I am glad the Minister of State did not choose that route when he confronted the current housing crisis. He got the best available expert opinion and he conferred and consulted widely. He has put in place a plan based on that advice to ensure that in future the response to the current situation will stand up to scrutiny in terms of quality. It takes time to do that. That is the reason he has been castigated for a perceived delay – contrived on the part of the previous speaker – in tackling the problem.

There is a right way and a wrong way to do things. The right way is to make the best possible use of the best available advice at a given time and, based on that advice, to put a policy in place. Already, the benefits of the two Bacon reports as incorporated in Government policy are slowly taking effect – I wish they were doing so more quickly. It will take a long time but I believe house prices will level off. I hope local authorities will respond with due urgency to the new policies now in place.

I wish to bring a couple of points to the notice of the Minister of State. He might take them on board as potential new initiatives which might make a difference. There is no single approach which will provide sufficient accommodation for the number of people now seeking it. However, there are thousands of square feet of wasted space above the shops of city centres. These have the potential to provide residential accommodation. Years ago families lived in these spaces until a form of mania struck and they decided to move to the suburbs. When people moved out of the city centres the hooligans and vandals moved in and took possession of the streets. There was no longer any living accommodation so a living city no longer existed.

That is now changing. With the provision of cameras and better security arrangements, the city centres have improved greatly. The time is now ripe to request local authorities in urban areas to encourage the concept of living over the shop so that this potential can be exploited fully and can yield a great deal of additional accommodation.

There should be better housing provision for senior citizens. People are living longer and a number of people living in three bedroom houses would be willing to give them up or sell them to local authorities or private buyers if they could be housed in small projects like the SHARE development in Cork. In those well developed and structured housing programmes, older people feel their needs are catered for in an integrated matter. Anything the Minister could do to expedite sales of such houses would increase the supply of larger houses for families, who are finding it extremely difficult to afford them. We should also tackle the dearth of student accommodation around third level colleges. I look forward to the Minister of State's contribution and have every confidence that the policies now in place will, slowly, make a major difference.

Minister of State at the Department of the Environment and Local Government (Mr. Molloy)

Gabhaim buíochas leis na Seanadóirí a labhair ar an rún seo agus ar ábhar atá chomh tábhachtach le seo. Cé go raibh orm éisteacht le go leor rudaí nach raibh mórán céille ag baint leo maidir leis na rudaí atá déanta againn agus maidir le cad tá i gceist againn a dhéanamh is maith an rud é go raibh an díospóireacht againn. Tugann sé seans dúinn a mhíniú don Seanad cad tá i gceist againn a dhéanamh agus cad é an polasaí atá á leanúuint againn faoi láthair.

It would be useful to outline briefly the strategic features of the Government's approach to housing. In An Action Programme for the Millennium, the Government set out a number of key priorities including: a continuing house construction programme by local authorities and voluntary groups; refurbishment of existing inadequate housing; improvement and extension of social housing schemes; maximum co-ordination of housing policy and the development of serviced sites by local authorities to accelerate the supply of new houses to meet rising demands and deflate escalating house prices. Immediately on taking office, we began work on our strategic objectives and in the relatively short time since then we have achieved remarkable progress on all these fronts.

It is an inescapable fact that house prices are determined in the market place by the interaction of supply and demand. This is true whether we are talking about new or existing houses. Considerably more existing houses than new houses are sold, and it is the price of existing houses that primarily dictates the price of new houses. That house prices have increased steeply is due largely to the fact that demand for housing has escalated at an unprecedented rate. The effects of rapid growth in incomes and employment, low interest rates, a significant increase in the number of people in the key household formation age groups, smaller household sizes, and, particularly, very high net immigration, have all impacted hugely on demand for housing.

The current imbalance between supply of and demand for housing has occurred despite the fact that never in the history of the State have we achieved a better performance in terms of housing output. Housing output reached a new record in 1998 at over 42,000 units. We are building new houses at twice the level of 1993 and at a rate of over 11 per 1,000 population – a rate which is by far the highest in Europe and over three times that of the UK. With record planning permissions for houses in 1998 – up over one third on the previous year's total – and significant increases in "Homebond" registrations in 1998 and in the first month of 1999, the signs are good for the future. However, we need to maintain, and indeed reinforce, our emphasis on tackling the serious bottlenecks which can slow the delivery of housing, particularly the availability of serviced land.

House price escalation and general imbalance in the housing market was a serious problem inherited by the Government. However, the Government had the foresight to engage independent expertise on the housing market to complement our own ongoing analysis and evaluation. This has resulted in the production of two comprehensive reports providing detailed analysis of the issues, with specific recommendations to enable appropriate policy responses to be formulated. In each case, the Government provided a comprehensive response to the consultants' recommendations on the same day the reports were published, and virtually all the recommendations have been or are being implemented. This action on our part is unprecedented – I do not think any other report to Government was acted on the day it was published, and its recommendations accepted and measures taken to implement them.

Real progress has been made in recent months. The most recent Bacon report, The Housing Market – An Economic Review and Assessment, confirms a wide consensus that the Government's actions have played a key role in achieving a slowdown in house prices which, the consultants point out, represents a positive achievement against the background of continued economic growth and low interest rates. In recent months there has been a general easing in house price inflation, the removal of serious overheating in the housing market and continued growth in housing output. There is also widespread agreement that there are further beneficial effects to come from the measures already taken.

Internal house price data show that, while house prices increased sharply in the first half of 1998, they rose much less sharply in the second half of the year, especially in Dublin, where the problem has been greatest. There has been a significant moderation in new house prices in Dublin with an increase in the second half of 1998 of 6.9 per cent, compared with an increase of 17.6 per cent in the first six months of that year. There is also evidence of a marked slowdown in second-hand price increases in Dublin with an increase of only 0.8 per cent in the quarter to December 1998, compared with an increase of 10.1 per cent in the quarter to September 1998.

Arising from the recent review and assessment of action on house prices and the housing market, the Government has announced a range of further initiatives in relation to housing. The new measures, in conjunction with measures already taken last year, aim at maximising and expediting housing supply, securing house price stabilisation, addressing affordability issues and ensuring balanced growth of the market in the future.

The increased price of houses has, however, inescapably resulted in some households of modest income, who might previously have bought their own house, now turning to the local authorities seeking housing accommodation. Measures introduced under last year's action on house prices are helping to assist affordability for lower income house buyers, particularly through the withdrawal of investor incentives, reduced stamp duty and improvements in the local authority shared ownership scheme. Further innovative approaches to the issue of housing affordability are now being pursued, including the promotion of a better mix of affordable units in new developments and the recently launched local authority affordable housing scheme. I note Senator Coogan has left the Chamber. This scheme has already been adopted by his local authority and I compliment Galway Corporation on being the first local authority to do so.

Under the terms of the new affordable housing scheme, local authorities will provide additional new houses on land available to them in or near urban centres where house prices have created an affordability gap for lower income house purchasers. The houses will be offered for sale to eligible purchasers at cost price and, accordingly, at a significant discount from the market value of comparable houses in the area. Purchasers will be offered mortgage finance at favourable interest rates and a subsidy will reduce further mortgage repayments for households with incomes of up to £16,000.

This new scheme will bring a new dimension to Government efforts to address the problems that have developed in the housing market. An essential element of the scheme is that it is directly linked to the delivery of additional new houses by local authorities and will, therefore, not adversely affect house prices. A number of local authorities are already actively developing proposals which will fit into the new scheme, as a means of responding to pressure on their waiting lists.

This scheme is not being sold as the solution to all the problems faced by house buyers. However, it is an important new initiative to help bridge the affordability gap which rapid house price increases in recent years have created for many aspiring home purchasers. Any measures that would fuel demand through, for example, increased availability of mortgage finance without a corresponding increase in supply would undo the progress that has been made and cause renewed price escalation. The development of suitable sites, including, where necessary, the acquisition of land and the planning and construction of houses will require some time to arrange. We hope that 400 houses may be provided under the scheme this year and between 1,000 and 2,000 houses in subsequent years.

There are indications from ongoing contacts with local authorities of increases in the numbers applying for local authority housing. A figure of more than 40,000 households seeking housing has been widely mentioned and is likely to be a reasonable reflection of the overall number of applications before the merits of individual applications are assessed. It is likely that the high cost of housing, increases in the numbers of people returning from abroad, the shortage of private rented accommodation and changed demographic trends are having and will continue to have an impact on the numbers applying for local authority housing.

The next comprehensive assessments of local authority housing needs will be carried out by local authorities on 31 March. However, it is not to be taken that we are awaiting the results of the assessments before we act. My Department and I are well aware of the housing situation. The Government's expansion of the local authority programme in 1999 to its highest level for many years is an immediate response to increasing needs in advance of the assessments.

Investment in the local authority housing programme is at its highest level in years. Almost £230 million is being provided for the programme this year, an increase of almost £35 million on the 1998 provision. Investment in the local authority housing programme for 1999 is four times greater than 1993. I have secured increases of 18 per cent for the programme in each of the past two years.

The high level of funding will enable local authorities to meet commitments on their ongoing programmes and to fund the enhanced programme of 4,500 new starts in 1999. The substantially increased capital provision for this year is a clear indication of the Government's commitment to local authority housing as the mainstay of the overall response to social housing needs.

In meeting social housing needs, the local authority housing programme is supplemented by a range of other social housing measures, such as the new affordable housing scheme, housing provided by voluntary bodies, shared ownership schemes, etc. It is for each housing authority to develop the full potential of the various measures open to them to respond to housing needs in their area and I have regularly exhorted authorities to do so. I will also be undertaking consultations with voluntary housing bodies to ascertain how significantly increased output from the sector can be achieved in the coming years.

Many local authorities have not availed of existing schemes, such as the capital assistance scheme and the rental subsidy scheme. Yet Senators from those constituencies criticised the lack of affordable housing and social housing in their areas. I have asked local authority members to encourage and invite the voluntary housing organisations to come into their areas and to avail of the substantial money my Department and the Department of Finance are prepared to make available to fund greater output in the voluntary housing sector. I want the sector to expand to 4,000 houses a year, which it has the capacity to do. I am disappointed my exhortation has not been acted on in the local authority areas. I will continue to do everything I can to assist the voluntary housing associations to increase their output.

Taken together with the range of social housing options, the local authority housing programme is well placed to continue to meet the need for housing and good living conditions and to contribute to the improvement of the physical envir onment of urban areas. I expect the 1999 programme, together with output from the complementary social housing measures and casual vacancies occurring in the existing local authority housing stock, to cater for the needs of over 10,000 households in 1999. I am confident that the greatly increased provision for the social housing programmes will considerably enhance the capacity of local authorities to meet social housing needs to the fullest extent possible in present circumstances.

The local authority housing programme also plays an important part in the regeneration of urban areas. The most prominent example is Ballymun where the development of housing is the focus for the social and economic regeneration of the area as a whole. There is £21 million available this year to get the redevelopment of Ballymun underway. This is tangible evidence of the Government's commitment to improve the housing and economic prospects of an area in Dublin that has regrettably been neglected over the years.

Other examples include the regeneration of a number of inner city flat complexes in Dublin, Galway – where Galway Corporation is replacing the flats in Rahoon with standard housing with the aim of eliminating long standing social difficulties – and Cork where a number of local authority housing estates are being comprehensively redeveloped. These area based regeneration initiatives to restore the physical fabric of established areas and to support local communities are a vital aspect of the housing programme.

I am conscious of the importance of the private rented sector and the need to maximise its potential in meeting our housing objectives. Ireland has, traditionally, a high rate of owner occupancy compared with other countries. Government policy will continue to facilitate this goal as the preferred option of the great majority of households. However, after many years of decline, there has in recent years been renewed expansion and diversification in the rented sector with significant growth in the demand for and the supply of good quality apartments. The improvements that have been achieved in private rented accommodation reflect the success of the urban renewal schemes.

I am concerned to secure improved security of tenure for tenants in private rented accommodation. Consideration of this issue must take account of both the complex nature of the landlord and tenant code and constitutional issues. The fair and equitable balance of rights between landlords and tenants is not easily achieved. A poorly thought out legislative intervention in this area has the capacity to do more harm than good, a message clearly brought out in a recent Threshold conference on the private rented sector. It is for this reason that the Government recently decided to establish a commission specifically to examine issues relating to security of tenure.

The motion calls for the establishment of a wide-ranging housing commission to address the issue of house prices and to draw up a strategic plan for the country's housing needs. The factors behind the current problems in the housing market are well known and the Government is addressing them systematically. I have doubts as to what a wide-ranging housing commission would achieve, apart from diverting resources from implementing the measures already identified as necessary and which the Government is already addressing.

Action is what is required rather than wide-ranging discussion and analysis. There is a need for focused analysis in the housing area, for example, research that is focused on a particular issue such as ways to improve security of tenure in the private rented sector. This alone is a major and complex undertaking. We have had, with the two Bacon reports, the benefit of a critical overall assessment of the entire housing market. Our priority for the immediate future is primarily the implementation of the measures approved by the Government to secure increased housing supply and the focused and targeted examination of particular areas, such as the issue of security of tenure.

The recent Bacon report emphasises that to avoid future disequilibrium in the housing market it is extremely important to implement a strategic plan for the location and scale of development in the overall Dublin and mid-east areas. The Government will launch strategic planning guidelines this week which have been prepared with the assistance of consultants and will provide a framework for the future balanced and planned development of the Dublin and mid-east regions. These guidelines will be reflected at sub-regional level through the local authority development plans which will be reviewed.

I also welcome the recently published ESRI report, "National Investment Priorities for the period 2000 – 2006", particularly its recommendations regarding the priority to be afforded investment in public physical infrastructure. The recommendations regarding investment in social housing, roads, public transport and sanitary services have already been reflected in the Government's policies to date and will continue at the top of the priority list for investment in the forthcoming national development plan. The recommendations regarding the achievement of a better geographic balance of economic activity and population distribution nationally are also important in the housing context and will be afforded due attention and significance by the Government in preparing the plan.

The Government's response to overall housing needs is multi-faceted, combining the various programmes of action together to form a connected strategic response. It is measured, it is viable, it is adequately funded and it is subject to proper political direction by me and by the Government. Indeed, it is relevant to point out that the Government's response to the recent Bacon report was launched jointly by the Taoiseach, by the Minister for the Environment and Local Government and by me as Minister for Housing and Urban Renewal. I, therefore, reject suggestions that have been levelled about a perceived lack of co-ordination of our overall approach. Those who make such suggestions fail to comprehend the multi-dimensional approach that operates at different levels to address key needs.

Housing is at the top of this Government's priorities. There should be no doubt that this Government regards addressing housing needs as an essential element of its overall social policies. I have outlined the range of actions being taken by the Government across the housing spectrum. Of course I acknowledge the problems exist. However, the Government has taken steps to address these problems and the effects are beginning to become apparent. Some of the measures will, by their nature, take longer to bear fruit than others. I am putting in place structures and procedures in my Department to ensure that all aspects of infrastructural development which impinge on housing supply are prioritised. I am continuing to develop further measures that may be appropriate. I believe that the Government's prompt, decisive and extensive action deserves recognition, credit and support.

Senator Ryan referred to homelessness. I agree that the level of homelessness has increased in recent times. There is no need to take anyone by the hand and walk around the streets at night to see the number of people who are sleeping rough. These people were sleeping rough in Dublin and close to this House for the five years that the Labour Party was in office, prior to this Government. Therefore, it is not a new phenomenon. Senator Ryan was originally an Independent Senator and has since joined the Labour Party but that party had responsibility for housing for the five years of the Rainbow Coalition.

The facts will be known when the assessment of homelessness is carried out by local authorities in March as part of the housing needs assessment. I have asked local authorities to carry out the assessment of homeless over a period of seven days to ensure that all homeless persons are included. In the past there has been some difference of opinion about the previous measures employed by my predecessors to assess the level of homelessness. I want to ensure that we all agree on the size of this problem and that everyone concerned with homelessness will play a part in the assessment that will be undertaken.

Homelessness is not just a lack of accommodation. The profile of homelessness has changed in recent years. It follows that the response to homelessness requires more than just providing accommodation. It means providing the necessary support services to enable homeless people to get out of the cycle of homelessness. Increasingly voluntary bodies are providing resettlement services, with funding provided by the Government, to assist homeless people to move into and adjust to an independent lifestyle. This is an objective I strongly support.

Because of the complexity of homelessness and the number of agencies involved in providing accommodation and services for homeless people, the Government has established a cross-Department team, chaired and serviced by my Department, to prepare an integrated response to the many problems which affect homeless people, including matters relating to accommodation, health, education and employment. The team will consult with the statutory agencies and expert voluntary bodies involved before making their report.

We also provided in the budget for the very first "foyer" for homeless persons in this country. Some people may not be familiar with the concept. "Foyers" are specifically designed and managed to provide both accommodation and training opportunities for young homeless persons. A number of "foyers" are in operation in the UK and there is one operating in Belfast. The £1 million made available in this year's budget, with the capital assistance scheme, will enable this project to be developed. Again, it is only one of the many schemes I have initiated since I became Minister. I intend to continue to keep this situation under review and I will continue to introduce new initiatives whenever I get the opportunity to do so. I appreciate the support given by the Minister for Finance for my proposals to date and I expect Government support will continue to be available to meet the extra costs that will be involved in helping to deal with this issue of homelessness and providing adequate affordable accommodation.

This Government and I are utterly committed to solving the housing issue that confronts us. You may call it a crisis or a problem but in reality it is a housing need which is causing financial problems for many families and accommodation problems for other families. I intend to ensure that we will break the back of the problem which has been outlined here. It was a problem that we inherited. There was no forward planning in place in the Department when I took office. There was also no attempt to encourage or help local authorities build up land banks. There was no special attempt to service land for future housing development. We had to introduce the service land initiative at an enormous cost. We did it and will continue to do so. All the schemes that have been submitted by local authorities in response to an open invitation have been approved. I am disappointed that there were not more proposals forwarded to bring services to land which is already zoned for housing which cannot be developed for housing because these infrastructural facilities were not available.

I invite Senators to mention areas where they feel I could take further action rather than wasting their time giving us another analysis of the situation or trying to score political points. This issue concerns people at a very personal level. The people who are affected by the housing situation deserve our sympathy, support and action. I can assure the House that I will seek to implement any reasonable and sensible suggestions that are made in regard to how this situation can be improved. Members should bear in mind that this is a supply problem and those who argue anything else are ignoring basic facts. There is a demand or need which cannot be met immediately because we are not producing a sufficient number of houses. This is the current situation despite the fact that the house building industry has doubled its supply since 1993 and achieved levels of housing output at a high standard. Houses are of a high standard because building regulations ensure there is no drop in standards. This measure would have been unthinkable a number of years ago.

Last year 42,000 houses were built but we still need to increase that figure. Even if we increase that figure to 50,000, I will continue to work towards a figure until we get equilibrium back into the housing market.

Mr. Caffrey

I concede that some of the measures – even belatedly taken as they are – will have an effect at some stage in the future – and I hope it will be in the near future.

Many of the problems that have been spoken about tonight go back in history. As some of the Opposition spokespersons were dealing with history in an attempt to explain the economic problems we experienced from 1982 to 1986, I can say that most of the independent economists will recognise that the basis for those problems harks back to the 1977 manifesto. That manifesto removed our tax base and we were left with just income tax. It is amazing that they did not remove income tax also. They abolished tax on cars and houses. The root of the housing problem goes back to that decision because at present tens of thousands of people own more than one house, some valued at over £250,000, and if there were rates on houses, these people would not own as many of them. I would find Senator Walsh's political assessment of that period amusing if it was not such a disingenuous distortion of the facts. That manifesto laid the foundation for the problems of the mid-1980s. Thousands of civil servants were twiddling their thumbs in that period because they had nothing to do – 25,000 people a year were added to the public service pay roll over a period of four to five years. The Senator should remember the facts when making a political assessment of the mid-1980s

Many of the measures proposed to deal with the housing crisis are being implemented slowly and that is one reason there is no major improvement in housing at present. The demand for houses is continuous and demand determines the price people must pay. Many local authorities at present are out of tune with the thinking in the Department of the Environment and Local Government. It is important for the Department to try to bring together all the local authorities and put them on the same wavelength.

Each week thousands of housing applications are rejected, often on very flimsy grounds, because road transport cannot be interfered with in the planning process. Cars and trucks cannot be slowed down, they must be given a straight path. This thinking must change. Local authorities throughout the country have not responded to the imaginative thinking in the Department of the Environment and Local Government. I urge the Minister to look at this problem to see how it can be resolved.

To emphasise my point I refer to a section of the recent Bacon report in relation to the serviced land initiative.

The Department of Environment and Local Government has put in place a streamlined administrative system to facilitate the speedy implementation of SLI schemes. On the basis of submissions made by local authorities earlier in 1998 four schemes, with an estimated housing yield of 1,400 were due to start in 1998 in the Dublin region.

Only one started with a yield of 300 houses. The other three schemes are now scheduled to commence in 1999. Local authorities are not responding to the initiatives proposed.

Reading through the report, no areas seem to be of any significance except the Dublin and mid west region. There is no mention of the west, as though it does not have a housing crisis. Many local authorities in the west have taken no action on foot of the serviced land initiative. These issues are impeding the process of solving the housing crisis and the Department should examine them.

The time factor involved in implementing many of these proposals is considerable. This crisis will not be solved in the next six to 12 months. I concede that some of the Minister's proposals will have an effect eventually, but people need housing in the meantime. The numbers on local authority housing lists have escalated. Local authorities and urban councils, such as Ballina urban district council, are at their wits end to try to solve the immediate crisis. The Minister mentioned voluntary housing agencies, but the Respond co-operative housing group cannot react to this crisis in the immediate term because it is inundated with demands from local authorities to get housing starts in various areas.

New initiatives and more coordination between the Department of the Environment and Local Government and the local authorities is needed. They need to be on the same wavelength and there must be a change in thinking in rural Ireland with regard to many of the initiatives outlined by the Minister of State.

Mr. Callanan

I wish to share my time with Senator Ormonde.

Acting Chairman (Mr. R. Kiely)

Is that agreed? Agreed.

Mr. Callanan

I agree with Senator Caffrey's remarks on the failure of local authorities to carry out policies to the extent to which they should be carried out. The housing problem did not arise because of the change of Government. This is an ongoing and growing problem. I commend the Government, Minister of State, Deputy Molloy, and the Minister, Deputy Dempsey, for what they have done. A sum of £4.5 million was allocated this year to health boards for special housing aid for the elderly. This is a significant allocation. There have been improvements in the shared ownership scheme and in the social and voluntary housing schemes. They are good schemes which are operating well on the ground. Funds have been provided for these schemes and they should be put into operation.

The serviced land initiative deserves special commendation. In the absence of services, housing cannot be built. This scheme has provided us with additional capital in our respective councils. Those of us who are members of county councils can ensure that the programmes set out by the Department, the Minister, Deputy Dempsey, and the Minister of State, Deputy Molloy, are implemented for the benefit of the people we purport to represent.

The rural town and village initiative is another area where funding is available. The programme for this year will be announced shortly. I would ask the Minister to look at the costings set for each area because I believe they are set too high for inclusion in the urban, rural town and village initiative.

I welcome the new initiative for an affordable housing scheme but it is important to implement it. There are also the higher density reduced stamp duty, urban renewal schemes and, if I might mention, the dreaded ground rents. In relation to the residential density and consultation draft guidelines for planning authorities, I would suggest that Members who are on the board of local authorities should look seriously at these guidelines to see how we have been implementing them and how they can be implemented in the future.

For many years the Government has been talking about scarce land resources. We have seen the blemish that has been spoken of and written about members of various local authorities. I want to mention this specifically because elected members have been tarnished and criticised most unfairly in relation to the county development plans in various counties. In my time as a member of local government I never met a member who behaved in a deliberate, dishonest or crooked fashion. I want to say that on behalf of my colleagues. Criticism has been made about them and the zoning of land. The position is that not enough land is being zoned in any county for the provision of housing and service land is badly needed.

Ms Ormonde

I compliment the Minister on his fine presentation. In fact there is so much detail that we should take it home as there is a lot we can learn from it.

I am most familiar with the Dublin planning applications. There is no question but that over the last number of years Dublin planning has been an absolute disaster. We, with our architects and planners, have not got it right. There has been criticism by the residents association at large that we believe in the nimby syndrome. Everyone would agree that there is a housing shortage and a need to rezone land, – but only so long as it is not in their respective areas.

I would like to give an example of how we can delay the implementation of any new guidelines. The new Part 10 regulations deal with the consultation process. I welcome consultation and transparency but it takes so long for any group to consult on a new scheme of houses; it takes about six months to pass through the various processes before plans are implemented. We are in a crisis. We are looking for affordable houses with sustainable prices in order to create a stable future. We have a tradition of house ownership and we want to hold on to it. The Minister has, by his measures, made the first huge impact on getting some integrated approach into this crisis. We do not need lessons from the past or from the Opposition. The Government is capable of implementing a fine programme and I challenge anybody to come up with a better formula for ending the house crisis.

The Minister referred to An Bord Pleanála. Often when rezoning is taking place objections and appeals are made to An Bord Pleanála resulting in a backlog of applications.

I welcome high density housing but it also requires quality planning. In the past we did not have quality planning. There was no need to undertake research into planning because of the land space available. If we have high density, we must introduce a proper infrastructure. The reason we received so many objections was the infrastructure was not in place which brought us to catch 22. Do we put infrastructure in place before the housing scheme? The question is how best to put the two together.

I compliment the Minister and the Government on initiating these procedures and implementing this programme to tackle the housing crisis. We want our young people to have the same opportunity for home ownership as we had. I welcome this move but it will not solve the problem overnight. I hope that by this time next year we will have made a huge dent in the housing crisis.

Ms O'Meara

The first speaker on the Government benches stated that this was not a political issue. Nothing could be further from the truth. Housing is a huge political issue because the housing crisis is the result of political choices made and still being made. It is only when different political decisions and different choices are made that different results will emanate.

I am not saying the Minister is doing nothing about this issue because clearly he is and I congratulate him for coming into this House and outlining everything he has done. But is our contention that he is not doing enough. When we see the housing waiting list has doubled during his period in office, we can only come to the conclusion that not enough is being done. I do not think that lessons in history or trading political insults across this House will do anything for those people whose names are on the local authorities waiting lists, or the people who are panicking as they consider the possibility – or indeed the impossibility – of buying their own house or who are worried with every passing day about the size of their mortgage and are wondering if they will ever emerge from this mountain of debt.

We have heard a lot about the law of supply and demand, the housing market and the Bacon report, but I want to speak about the people for whom the housing market is meaningless because they will never be able to afford to even think about buying a house. They are the people for whom particular political decisions are critical and crucial.

Earlier this week I met a woman in her early fifties whose marriage broke up a number of years ago – not an unusual tale. She returned to her home town, in North Tipperary which I will not name, with her teenage son. She lived with her mother initially while on the housing waiting list. She still has not been housed. She has moved from one flat to another. Four weeks ago she had to leave her flat because the owner is refurbishing it since there is such a demand for better quality accommodation. The woman's son, now aged 16 years of age, has been living with a series of relations. The young teenager has developed social and educational problems and is now practically homeless. The mother is living from day to day with friends and relations. By some miracle, she is managing to hold down a job. This woman is effectively homeless. When I met her earlier this week it was clear that she was seriously depressed. However, I cannot do anything for her.

A number of months ago I met a young woman who left college because of a crisis pregnancy. She is rearing her small child in a flat in a town in north Tipperary. Her child, who is now aged two, is hyperactive and very problematic. This young woman clearly has great potential under the right circumstances. However, she is under serious pressure because of her housing problem. Her general practitioner has advised that her son will not improve in their current housing circumstances. She wants to move approximately six miles out of town to the area in which her family lives. The necessary supports would transform her life and that of her son, but this is not happening.

I know a single woman in her fifties in Nenagh who came back from England a number of months ago where she had been living in a council flat. She is now living with her sister-in-law who recently asked her to leave. The woman exists on a small pension.

Mr. Molloy

There is a division in the other House and I must leave to vote.

Mr. Dardis

In the normal course of events, the debate would be concluded.

Acting Chairman

I understand that, but the debate on the Finance Bill was extended.

Mr. D. Kiely

The Minister of State was caught in a similar situation before.

Mr. Molloy

That is correct; I was not paired. I must leave to vote in the other House. I understood the debate would conclude at 8.30 p.m.

Ms O'Meara

Is the Minister of State leaving the House?

Acting Chairman

He will be back.

Mr. Molloy

I must vote in the other House. I apologise to Senators but I understood the debate would conclude at 8.30 p.m.

Ms O'Meara

The debate on the Finance Bill was extended because of our generosity. We thought it would take 15 minutes to conclude the Bill but it took 50 minutes. However, the Minister of State obviously has no option but to leave to vote in the other House.

Acting Chairman

We can adjourn the debate until 8.45 p.m. Is that agreed?

Ms O'Meara

If it is agreeable to the House, I will continue. I understand the Minister of State's difficulty.

Acting Chairman

That is fine.

Ms O'Meara

I am sure these stories are not unfamiliar to Members of the House and the Minister of State who has given many years of public service at local authority and national levels. However, the stories illustrate the reality of the housing crisis for people to whom the market has no relevance.

The Minister of State mentioned security of tenure and an examination which is being carried out in his Department on this issue. I welcome this move because it is critical, and not only in the current climate which is accentuated by the current crisis. It has long been a major public policy issue that people in the private rented sector, particularly those who are poor, are totally vulnerable. The market has no relevance to these people. They find themselves in substandard private sector housing, but they have nowhere else to go.

Measures introduced by the previous Government, such as the registration of housing, are not being properly implemented. This area must be tackled. This is a political choice which must be made. However, the current Administration will run a mile from taking the action that is required, which is to give rights to tenants in the private rented sector. To do this, responsibilities must be placed on the owners of the accommodation.

The Minister of State said that local authorities are not taking up initiatives, such as the serviced land initiative which the Department put in place to deal with certain issues in the areas of social and voluntary housing, etc. Why is that happening? I assumed this would be a relevant question for a housing commission to examine because we should know the answer. In posing it, the Minister of State has made me hugely curious about the answer. Where does the fault lie?

There is a housing crisis. Senator Quill called it as it is, although the Minister of State called it a housing need. It is a political issue and ultimately political choices will deal with it.

Mr. D. Kiely

I welcome the debate and compliment the Minister of State, Deputy Molloy, and the Minister for the Environment and Local Government, Deputy Dempsey, on their work since they took office to alleviate the problem. There is a housing crisis, but it did not arise today or yesterday. When I became involved in the local authority in County Kerry 20 years ago there were approximately 1,600 people on the housing list. The current figure is 483, and we consider that high.

Under the coalition Government between 1973 and 1977, a total of 1,500 people were on the housing list. Fine Gael Senators said the removal of rates on houses caused the problems. However, between 1973 and 1977, 75 per cent of the rates had been removed from houses in private ownership. The Fine Gael Party manifesto at the time contained a promise to remove the other 25 per cent if it was elected. I do not understand all the hullabaloo about this.

In the period from 1983 and 1987, the national debt more than doubled from £12 billion to approximately £26 billion. This wrecked the economy and the Fianna Fáil Government between 1987 and 1989 had to try to put it back on a proper footing. We can make a political football out of this issue if the Opposition wishes.

I admit there is a housing crisis and ways to solve it must be found. On many occasions in the past I said more land should be rezoned and that proper infrastructure, such as water and sanitary services, should be put in place. There are ways around the problem. I welcome the social housing initiatives and the fact that some local authorities are taking up the challenge. However, many authorities are not taking up the challenge although massive grants are available.

The people most exploited at present are tenants. This area must be addressed. Students in Dublin are exploited out of all proportion and the landlords who provide the accommodation should be ashamed of themselves. This is creating a major housing problem and the Government should become involved in the development of more on-campus student accommodation. This would ease the pressure on housing in Dublin.

I am aware of landlords who are making up to £1,800 a month in rent for poor accommodation. This is scandalous and new standards must be introduced to take these people to task. A ceiling should be created because landlords are taking out new mortgages to buy other properties. This is driving up the price of houses because fools are paying huge rents for poor accommodation in Dublin city and elsewhere.

Senator Quill mentioned the transfer of ownership of large local authority houses. The Government will have to tackle that problem. I know of many people in three and four bedroom local authority houses, whose families have left home, who would like to move to smaller accommodation. When they approach the local authority, they find they are not allowed to transfer to a smaller house. If that problem was taken on board, it would free many houses throughout the State.

People are proud of home ownership. I am delighted to see such demand for housing. For long enough thousands of people had to emigrate but the present housing situation is a result of the economic boom. We have to meet the demand for housing.

When I first entered my local authority people waited three or four years for a house and they appreciated it when they got it. Now people expect a house within six months and if they do not get it within 12 months they are banging on doors for their entitlements. I do not know of any country where you can simply put your name on a housing list and walk into a lovely new three bedroom house costing £100,000.

I welcome shared ownership. Much more should be done to bring shared ownership into play.

The delays in An Bord Pleanála were mentioned. The Minister was recently in the House to say that he was dedicating extra staff to this area to reduce the waiting period for those with appeals before An Bord Pleanála. I also welcome the fact that extra staff have been employed by local authorities to deal with planning. When all these things are in place, this so called "crisis" will fade and people will get what they are entitled to in due course.

I compliment the Government on the work it has done to control this crisis. The last Government did not even address the issue.

Mr. Gallagher

I am delighted the motion was taken this evening because this has been a worthwhile debate and every Member made a serious and informed contribution.

I was disappointed to hear Senator Walsh say that I was approaching the issue in emotive terms. I tried not to, but any of us who deals with situations such as those outlined by Senator O'Meara could instance cases of people in dreadful con ditions in mobile homes, private rented accommodation or living in overcrowded circumstances. That is intolerable for a supposedly civilised and prosperous country. It is difficult not to bring some degree of emotion to bear when describing such situations and seeking to resolve such problems. I make no apology for that.

I did not reduce this debate to party political slagging; that was introduced by later speakers. Our intention in proposing a commission is not to waste time or resources. The Minister has conceded the value of the commission he is establishing on the private rented sector. No individual has all the answers but, by approaching this in the spirit of partnership which has served this State so well in the past decade, we could consult those who can make a contribution to come up with a solution of this problem.

The Minister knows there are many groups which can contribute. He is in regular contact with the voluntary housing sector, the sector in which I got my first experience as a founding secretary of a local housing association in Tullamore, long before I was politically active. Local authorities, the Minister and his officials, and other Departments all have a contribution to make. We propose to approach this issue in a structured, consultative, time limited and focused way. It is not an attempt to say that is the answer; it is an attempt to say that we can learn from what everyone has to offer, from what partnership has offered this State nationally and locally in the past decade. We must apply ourselves collectively to addressing the needs and problems of our people.

I thank Senator Coogan and his colleagues for their support. He raised the important matter of the social effect of this problem. Families have no choice about who goes to work; they are struggling to meet housing and child care costs. I fear what that will mean for parents raising young children and for those children as they grow up.

I was disappointed to hear Senator Quill say she was thunderstruck about what we said. Certainly the Minister inherited many issues but he did not inherit a 60 per cent increase in house prices in the last two years. This Government did not inherit a doubling of local authority housing lists. In response to political points made by the Government side, the period referred to by Senator Walsh, 1992-7, will be remembered as the period with the highest level of local authority house building in the history of this State. It was under two Governments between 1987 and 1992 that the local authority programme was decimated. During that time there were only 12 houses built in my local area. That is the problem my party confronted so well in Government from 1992 onwards. No one should say that all the problems were caused by only one side of the House.

I disagree with Senator Quill that the benefits of the Bacon report are taking effect. I listened carefully to the Minister's response. I accept the various initiatives being taken but these are indi vidual initiatives and the experience of members of housing authorities and public representatives is that they are not being applied in a co-ordinated fashion. Listening to the Minister speaking on house prices, I was reminded of the Titanic. Prices are rising but they are rising more slowly – the ship is sinking but it is sinking more slowly.

The Minister invited us to respond to the service building land initiative. Why, when four service building land applications were made by Offaly County Council last year, was only the smallest, amounting to an investment of £60,000, approved? Unless I am being misinformed by my local authority, the other larger applications were submitted but not responded to. Unless we get a response we cannot deliver on the programmes the Minister is putting in place.

We are asking for a structured, consultative and applied approach which will result in a strategic plan to tackle this area over a sustained period. Whether one agrees or disagrees with its findings, the Culliton commission was set up by a colleague of the Minister of State to address a crisis in industry. All the national programmes were set up to address an economic crisis. We need a similar approach to housing. Without such an approach the unco-ordinated, step by step responses will not yield the desired result. For that reason I commend this motion to the House.

Amendment put.

Tá

Bohan, Eddie.Bonner, Enda.Callanan, Peter.Chambers, Frank.Cox, Margaret.Cregan, John.Dardis, John.Farrell, Willie.Finneran, Michael.Fitzgerald, Liam.Fitzpatrick, Dermot.Gibbons, Jim.Glynn, Camillus.

Keogh, Helen.Kiely, Daniel.Kiely, Rory.Lanigan, Mick.Leonard, Ann.Lydon, Don.Mooney, Paschal.Moylan, Pat.O'Brien, Francis.O'Donovan, Denis.Ormonde, Ann.Quill, Máirín.Walsh, Jim.

Níl

Burke, Paddy.Caffrey, Ernie.Coghlan, Paul.Connor, John.Coogan, Fintan.Costello, Joe.Doyle, Avril.Gallagher, Pat.Hayes, Tom.

Henry, Mary.Manning, Maurice.O'Dowd, Fergus.O'Meara, Kathleen.O'Toole, Joe.Ridge, Thérèse.Ryan, Brendan.Taylor-Quinn, Madeleine.

Tellers: Tá, Senators Farrell and Keogh; Níl, Senators Gallagher and Ryan.

Amendment declared carried.

Motion, as amended, agreed to.