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SELECT COMMITTEE ON ENVIRONMENT AND LOCAL GOVERNMENT díospóireacht -
Tuesday, 16 May 2000

Vol. 3 No. 10

Planning and Development Bill, 1999 [Seanad]: Committee Stage (Resumed).

SECTION 79.
Debate resumed on amendment No. 395:
In page 87, subsection (1), lines 25 to 28, to delete "because the payments calculated over the course of a year would exceed 35 per cent of that person's annual income net of income tax and pay related social insurance".
-(Deputy Dukes.)

We discussed this issue the last day in terms of the definition of eligible person and how that eligibility is determined. I wish to clarify this issue and have circulated some examples which might help us establish whether we are doing the right thing in this section. Our definition of an eligible person is someone in need of accommodation but whose income is not adequate to meet mortgage repayments because they would exceed 35% of his or her net annual salary. We may disagree on the figure of 35% or whatever but the amendment would remove that 35% threshold from the definition so that everyone would be eligible for affordable housing.

The purpose of the definition is to provide a benchmark in terms of a local authority deciding on the amount of affordable housing needed and to assist people in determining whether they qualify for affordable housing. Deputies have been given three examples of how the definition would work. For example, a single person seeking a house costing £100,000 would qualify as an eligible person on a salary of up to £24,250. A married couple on one income seeking a three bedroom, semi-detached house worth, say, £128,000, would qualify under our definition on a salary of up to £27,500.

I am satisfied that this is a sufficiently robust definition which addresses house prices, a person's housing need, income and interest rates. It is also important to note that the definition can be amended by ministerial regulations subject to an affirmative vote of the Oireachtas. The figure of 35% of net annual salary has not been plucked from the air. The original Bill spoke in terms of 2.5 times and once the salary. However, when we looked into the matter in greater detail it was decided that this was a fairer way of doing things and it is generally based on the definitions in the shared ownership schemes.

Deputy Gilmore rightly stated that there are a number of schemes which is very confusing and that we should try to align the schemes as much as possible. I am not suggesting that this measure came about as a result of that but we are conscious of this issue. We are talking about providing a benchmark so that local authorities will be able to provide a definition of eligibility which will clarify whether people qualify for the affordable housing list and for affordable housing. If we remove the definition, as proposed by Deputy Hayes's amendment, everyone would be eligible for affordable housing and local authorities would not be able to draw up realistic housing strategies.

The more I hear the Minister's explanation of section 79 the more I am convinced that we should not explicitly include a percentage of net income in the legislation. If the Minister is suggesting this is a benchmark why is it clear that someone who does not fit the criteria will be excluded from the scheme? If it is a benchmark then fine, remove it from the Bill, but if it is a clear unyielding percentage then put it in the Bill. However, the Department should not set the criteria. It is a matter for each local authority and each housing strategy which will be established under this section. Local authorities will draw up their own plans and should be able to produce a definition of eligible person for their functional areas. That would be a more sensible approach in terms of devolution.

The 35% threshold included in the definition of eligible person will exclude a whole section of people. There is little difference between the Minister's plans and the existing shared ownership loans scheme where the income threshold is about 32%. Interest rates, not the total amount of one's income, are the key component in determining whether one is able to pay a mortgage at present. From reading the Bill it seems that people who fall under the 35% threshold will be excluded. There does not seem to be any leniency.

I am grateful to the Minister for providing members with some examples but let us consider a single person trying to buy a house for £100,000. The Minister knows that very few houses in the Dublin area sell for that kind of price at present. If a single person is seeking a house for £100,000 and the eligibility limit is £26,000 when one removes monthly pay, annual pay, gross pay and so on, there does not seem to be any flexibility in the definition to include that person. I accept there have to be definitions but they should come from local authorities and not from legislation.

I thank the Minister for circulating the examples for which I asked at the last meeting. On that occasion I stated that I am finding it difficult to understand what the definition of eligible person is going to mean in practice. The examples circulated underline that difficulty.

The eligibility limits in terms of income are quite illuminating. If we take the example of a married couple on one income buying a three bedroom, semi-detached house for £128,000, the annual gross salary which would make them eligible is £27,500. That is approximately the top of the basic salary scale for teachers. A teacher with 26 years experience is on a salary of about £28,000 without allowances. This is what we are talking about for a single income earner to qualify for affordable housing to buy a house for £128,000. This underlines the scale of the problem and I wish to return to this issue in discussing later amendments, particularly on the percentage of land being made available for social and affordable housing which is inadequate and will not meet the need. If a teacher on the top of his or her salary scale cannot afford to buy a house without admission to what is now social housing, then we are going to need far more than 20% of housing output to cater for social and affordable housing needs.

The formula the Minister is using - 35% of the person's annual income - is dependent on a number of variables and gives rise to a number of questions. Let us take the example of a couple buying a three bedroomed, semi-detached house for £128,000. There has not been a three bedroomed, semi-detached house available in my constituency for £128,000 for a long time. The going rate for former council houses in my constituency is approximately £150,000.

This gives rise to another issue. There is a variable in the price of housing in respect of different parts of the country. The Department's housing statistics published last week sets out in considerable detail the difference in prices between Cork, Limerick, Galway, Waterford and other areas of the country and Dublin. Does it follow that the income at which a person will qualify for affordable housing will have to be different in different parts of the country and how will that be determined? This supports the point made by Deputy Hayes that it be determined at local authority level.

The second issue that arises relates to the second variable, the mortgage repayment, is based on the levels of interest. The examples given by the Minister assume an interest rate of 4.5% over 20 years. All the indications from the economists, who admittedly are often wrong, are that interest rates are likely to rise. What happens if, in May 2000, I do not qualify for affordable housing under the formula set out by the Minister and I buy a house - let us say I have an income of £30,000 - for £128,000? It is concluded that I can afford to buy a house if I have an income of £30,000 and do not qualify for the affordable housing scheme. Let us say I manage through whatever manner of ingenuity to put together the money to buy a house and I am making repayments of £646 per month. Then interest rates increase by 1%. Can I then get into the affordable housing scheme? I have not made the calculations but if interest rates increase by 1%, the repayments which would be required would be such as to extend the eligibility limit under the examples we have been given to incomes over £30,000.

If we look at the different schemes now available - the local authority housing schemes for which there are income limits, the shared ownership arrangement, for which there are income limits not dissimilar to those proposed here by the Minister, and now this variable arrangement for the affordable housing scheme - we are talking about levels of income under the affordable housing scheme which comprehend the type of middle income that people in good secure jobs would have at the point in their lives when they might be expected to buy a house. There appears to be a case for getting rid of the income limits altogether. If somebody has sufficient income to buy a house without any assistance under the affordable housing or shared ownership schemes and without recourse to the local authority to seek local authority housing, they will buy the house. All our experience indicates that.

Before house prices started to increase and the most recent housing crisis arose, if people could afford to buy a house they did so. If they could not afford to buy a house and their income limits were sufficient, they applied for the shared ownership scheme or were included on the local authority housing list. There is a case for getting rid of the income limits. They will give rise to all kinds of variables, as is evident in the examples here. The Minister will not be anxious to reopen the debate about families with two incomes and one income. However, the teacher in a one income family who is at the top of his pay scale at £27,500 will qualify for the affordable housing scheme. A hairdresser married to a factory worker whose respective incomes are £15,000 and £12,500 income will not qualify because the income limit for two incomes is £27,150. If one went through a number of other examples, one would encounter similar anomalies, although perhaps not necessarily working in the same direction.

There is a case for removing the income limits but keeping the schemes in place. Those who need the schemes will use them while those who do not need them will not use them.

I missed much of the debate last week on this section. What has been factored in with regard to children? Take, for example, the single person who is eligible and who buys a two bedroomed house. Are they barred from eligibility if they let the second room, which would give an income? Is there factoring for children?

There is. It is for their personal accommodation needs. That is how the scheme is worded.

They could be living in the house and another person could be living there too.

If they only need a two bedroomed house and seek a three bedroomed house, they are obviously looking for something over and above their needs.

So a single person will only be entitled to a one bedroom house?

No, not necessarily. The definition is that for the purposes of this Part, the accommodation needs of an eligible person includes the accommodation needs of any other person who might reasonably be expected to reside with the eligible person.

This is a couple by another name.

It might not. It could be a person who lives with their aunt or grandparent or the like. It could be a single parent.

Are those people taken into consideration?

Yes, if the second person has an income. We should not confuse the shared ownership scheme and eligibility for local authority housing with what we are discussing here. I cannot agree with the suggestion that we abandon all reference to income in this scheme. It would mean that a person with an annual income of £100,000 could go on the social and affordable housing list of the local authority. If one abandons the concept of income eligibility, that type of problem will arise and we do not want that.

Eligibility and determining eligibility is dealt with in section 79. Deputy Hayes took my use of the word "benchmark" to mean that it was a standard. I am sorry if I gave that impression. This is a qualification. I called it a benchmark because I understood that term to mean it was the rule to be applied. Somebody who is above this guideline will not be eligible and somebody who is below it will be eligible. I want to clarify that it is not a moving feast. It cannot be a moving feast because there must be absolute certainty in legislation. I am sorry if I misled the Deputy in that regard. The scheme is not designed to exclude people - that phrase has been used. It is designed to include anybody who is eligible and it is flexible.

For the purposes of qualifying to purchase an affordable house, the following criteria under section 79 will be considered: a person's net income, a person's status, whether he or she is single or it is a couple in any guise, as I stated in response to Deputy Kelleher, a person's accommodation needs - one must take into account whether there are children, the cost of housing in the area and the cost of mortgages. All those matters must be taken into account.

Far from being inflexible, to respond to Deputy Gilmore, the same rule will apply everywhere but there will be different circumstances like the cost of houses, etc. Deputy Gilmore asked if it means that a person in one part of the country could qualify for this scheme and a person in another part where house prices are different but who is in the same circumstances might not. Far from being inflexible, it will respond to the particular circumstances of the people and house prices in a particular area.

Deputy Hayes raised one other point about the similarities with the shared ownership scheme. He is correct in stating that the figure is either 32% or 33% when you take the 90% loan under the shared ownership scheme, but this scheme is not similar in all respects to the shared ownership scheme because that scheme involves income limits also, although again it depends on whether it relates to a single person or a couple.

Deputy Gilmore asked if a teacher at the top level of the scale will be eligible. If all the circumstances are correct, if the house prices are at a particular level and the teacher is at a particular level of income after tax, etc., a teacher at the top level of the scale could qualify for this but that would depend, as the Deputy rightly pointed out, on house prices in a particular area. We do not intend to exclude teachers, gardaí, industrial workers, etc. It is only right that they would be included, if the circumstances are appropriate. I take the Deputy's point, that it is unfortunate if people in what would have been regarded until recently as reasonably well paid jobs happen to come within the scope of this but if that is the case, so be it. We cannot discriminate, and I know the Deputy was not suggesting that we would.

Deputy Gilmore also raised the issue of increasing interest rates. The flexibility of the scheme is such that, while we have based our examples here on an interest rate of 4.5%, if interest rates increase to 5.5%, then the resulting calculations will be different and a person on a higher salary will qualify for the affordable housing.

On the specific point he raised about somebody who qualifies, gets a house and the interest rates increase a week, three weeks or 12 months later, such a person will not be able to go back to square one because at that stage he or she will have received a house, will be repaying at a particular level and the interest rates will increase, but the same applies to somebody who gets a mortgage. Even with a local authority mortgage, where a person may qualify one year when interest rates are at 3.5%, 4%, 4.5% or whatever, when interest rates jump 1% or 2% the person does not have the opportunity of going back to square one or very few such people would take the opportunity to do so.

Regarding similar points made by Deputies Hayes and Gilmore, the definition covers the relevant variables of income, house prices, interest rates and the eligibility limits. Those are the stan-dards which must be taken into account and they will apply throughout the country, but because of different circumstances, different house prices, etc., some people will qualify in some areas and some will not.

There must be an objective limit of affordability in order that the local authorities know who is eligible and they can estimate the amount of land they need to take under the scheme. The members here are well aware of it, but everybody outside is talking about the provision in the Bill to take 20% of housing land for affordable housing. However, the provision includes up to 20% of the housing lands involved and the provision must be considered in the context of each development plan and the needs of the people in the local area. It is on that basis that the local authority will decide in its housing strategy whether it is 10%, 15% or up to 20%. When the local authorities are drawing up their housing strategies they must have some kind of independent criteria on which to decide whether it is10%, 15% or 20% and this is the way it will be done. We are providing that the land needed for affordable housing will be transferred to the local authority at the existing value rather than at market value, but in case of a legal challenge, the local authority must be able to justify the take, that is, the percentage. Part of their justification will be being able to approve the levels of affordable housing which the local authority has an obligation to provide. Therefore, there is a need for such a definition in the Bill.

I hope I have covered the points raised by the Deputies. We could spend a long time discussing the price of houses and whether they should be at their present levels. The effect of Deputy Hayes amendment would open up——

It would give power to the local authority to determine who is an eligible person.

No, it would not because the local authorities must have certainty. The basis on which the local authorities will decide the percentage of land they will take from the landowners must be set out in legislation. That must be set out in law in order that the local authorities can draw up their housing strategies and then take that percentage from the builders and developers. Removing this definition would have the effect of removing that certainty. It is laid out clearly in legislation, and more recently in High Court cases, that the Oireachtas must give clear policies and principles to local authorities in the legislation. The Laurentiu case is the one which underlined that in a big way. We cannot just say to local authorities that they are entitled to take up to 20% of the land and that they may make it up as they go along. If we said that, the local authorities would certainly find themselves in the courts. For that reason I would ask the Deputy to withdraw this amendment.

I can see a danger in legislating for this matter because one does not know when there will an opportunity to revisit the legislation once it is enacted. It will be a long time before legislation such as this again comes before this House. Local authorities will be obliged to abide by the legislation which we lay down, therefore, there is the danger in relation to fluctuating interest rates and so on. A leaflet circulated by the Minister quotes a rate of 4.5% but this has increased to more than 5% since 1 May. I was in touch with a local authority yesterday on behalf of a client and was quoted a rate of 5.9%. Since this leaflet was printed, interest rates have changed at local authority level.

I detect some passing of the buck in relation to the 20% take back from the Department to the local authorities. It seems the Minister will not now dirty his hands in relation to the 20% take back of development land. Under the legislation, it will become entirely a matter for the local authorities rather than the Department to decide what amount of land is required. What will determine the cost of affordable housing? Is it the base cost of the land plus the cost of building the house on the land that becomes the price of the affordable housing, because some local authorities have land bases dating back ten and 15 years? Some of this land was bought at the agricultural rate of £8,000 or £9,000 per acre so if affordable housing is built on that land, will the base value of the land be taken into consideration when arriving at the price for affordable housing?

I am still trying to figure out how this will work in practice. This is a useful exercise because it is the first time either in the House or in this committee the Minister has spoken frankly about the levels of income required to enable people to buy a house. We are working on a fairly realistic basis when talking about incomes. The cheapest house one can now buy in my constituency will cost in the region of £150,000. Given the Minister's example, it appears the income level which would enable one to qualify for affordable housing would be approximately £33,000. This would apply to the purchase of a former local authority house. If one looks at the price of the cheapest private house available, the salary of a Teachta Dála would come well within the scope of the affordable housing arrangement. I am not exaggerating.

The statistics produced by the Minister's Department are quite interesting. Taking the country as a whole, in 1999 40% of borrowers had incomes of more than £40,000. The normal run of that from 1998 was approximately 20%. If one looks at the figures for Dublin, almost two-thirds of borrowers were on incomes of more than £40,000 per annum. I have been making this point for the past year and a half or so. Given that level of income, it is not possible for people to buy a house without assistance either through the affordable housing scheme, the shared ownership scheme or one of the other social housing mechanisms. Therefore, the 20% figure of land set aside for social and affordable housing will not be sufficient. When the discussion about affordable housing began, it started from the assumption that there was a sliver of people who could not afford to get into the housing market. However, somewhere along the line the figure of 20% emerged and became part of the formula which is now being used.

The reality is that the vast majority of people are not in a position to buy a house. It would be useful to have figures on the proportion of the population at household formation stage with incomes at different levels. There are not many couples in their middle to late twenties, for example, on combined incomes of £40,000 or £50,000. The salary level for teachers in their middle to late twenties is approximately £18,000 to £19,000, assuming they are on the fourth or fifth point of the scale. Looking at the Government's housing statistics, that income would not fall within the range where these people could buy a house. A teacher working in Sallynoggin would not be able to live anywhere remotely close to where he or she is teaching based on that income. I make this point because it is an issue to which we will return later.

I want to question the Minister on how this scheme will operate in practice. It appears that if one wishes to apply for affordable housing under this scheme, the local authority will have to make a decision on four issues. It must decide on the accommodation needs of the person and, notwithstanding the point raised by Deputy Kelleher, this is a issue on which the local authority can make an assessment. The variable interest rate will be given because there is no control over that issue. The income of the person will also be known. However, the critical issue will be the price of the house.

If someone approaches a local authority and states that he or she cannot afford to buy a house, who decides the level of house price which will enable that person to qualify? For example, if someone approaches the local authority and says he cannot purchase a house for less than £150,000 and if the local authority housing officer says houses can be purchased for £140,000, who makes the decision in this regard? If someone who goes into the County Hall in Dún Laoghaire to apply for affordable housing is told that he or she does not qualify because the local authority believes he or she can afford to buy a house, if that person asks where he or she can buy a house for less than £150,000 in Dún Laoghaire and the official tells them if they go to Newtownmountkennedy or, better still, if they go to Gorey or Enniscorthy, they will get a house for £150,000, who will make the decision on the price of the house and on the location of the house? If somebody wants to buy a house and is told by the corporation official that he can get one at a certain price in one part of the city and at another price in another part of the city, who decides?

Let me give an example. I had a case recently of a couple, both with jobs in my constituency, who were told by the local authority that under the shared ownership scheme they could buy on the west side of the city. That is not practical for them from the point of view of work. One of them would have to give up a job. Who makes that decision? Whoever makes the call on the house price determines eligibility. Such things can be very marginal - a difference of £1,000 or £2,000 in the income level can make all the difference in the context of a difference of £5,000 in the house price. How will that work in practice? I would like to hear the Minister on this because when this legislation is enacted, all of us, as public representatives, will find ourselves sitting down with people who are trying to buy houses and trying to explain how it works in practice.

I will not prolong this much further. Some of the examples given by Deputy Gilmore highlight again the number of schemes in existence at the moment, all of which have different income thresholds and criteria. The assumption is that the 20% parcel of land to be given over for affordable housing will be entirely for affordable housing. However, some of that 20% could be related to shared ownership, some to the social housing provision, some to tenant purchase. There will be so many different income thresholds and criteria as to make the whole thing virtually unworkable. I understand shared ownership works on the basis of a threshold of about 32% of income. Now we have a threshold of 35% of income. Income is not the only threshold that determines whether someone is eligible when county managers, housing officers and so on come to implement this. Let us read what it actually says. It says it is to meet his or her accommodation needs because the payments calculated over the course of a year would exceed 35% of that person's annual income net of income tax and pay-related social insurance. It is very definite. It is so inflexible that the suggestion that modification would be possible to accommodate hard luck situations in different parts of the country is not tenable. The reason I tabled this amendment was to allow for flexibility on the part of local authorities, following the Minister's directions. It should not be in the legislation because there could be so many different cases. We have heard many examples here already. People can be eligible on the basis of the number of children they have, for instance, or on the basis of how far from their home they work. It will not be workable if another income threshold is introduced which is hard to explain to people.

House price is a considerable issue in Dublin Corporation, Dún Laoghaire-Rathdown, South Dublin and Fingal. It is still possible to buy a house in my constituency for £95,000 or £100,000, unlike Deputy Gilmore's constituency or the Dublin Corporation area. In the west of the city some houses can be bought at that level. However, the vast majority of houses at that level would be in county Kildare, parts of Laois, Louth or Wexford. There will be a flood of applicants in those areas. Who exactly is eligible? How many years does one have to live in one's functional area before one is deemed to be an eligible person. If it is not possible to get a house for the kind of money we see in front of us in parts of Dún Laoghaire, in Dublin 4 or Dublin 6, a person will have to find a new job because the only house he or she can get is in Gorey, Laois or wherever. There will be a flood of applications for affordable housing in areas of the country where house prices are lower than they are in Dublin because we will not have a supply of houses at that price in Dublin to meet the demand that exists.

The Minister should think again about this. The reason I put in this amendment is to allow as much flexibility as possible to local authorities. I understand the Minister's point on High Court rulings. However, if he set out a generic description of an eligible person without putting in a hard and definite rule in relation to the 35% income threshold, it would get over the legal difficulties.

Local authorities could then decide on an unrealistic percentage of a person's annual income to ensure that their waiting list for affordable housing was very small and they could say what a wonderful job they were doing. I cannot do that. I cannot remove that 35% and give that kind of flexibility. If the argument were about a percentage point one way or the other, we could argue about that.

It says "the principle".

I know it says "the principle". Legally I cannot do it. I would not have a leg to stand on. Despite all the work the Deputy and I and everybody put into it, the Bill would be shot down very quickly in the courts.

We are talking about eligibility criteria. That does not relate to the price of affordable houses but to the level at which a person can get on to the local authority affordable housing list. I know we have been wandering in and out of mortgage levels and so on. Using the example we have talked about, of establishing eligibility at £27,000 for a married couple where houses in their area cost £126,000, once those people are on the list of eligible persons, it is possible that the affordable house they get might be at £90,000. It does not have to cost £126,000.

Deputy McCormack asked whether the Minister was washing his hands in relation to the 20%. The provisions in this Bill in that context have always been on the basis that the local authority will draw up a housing strategy and decide, based on these kinds of eligibility criteria, what percentage of land it needs to take for social affordable housing when a planning application comes in. That has been in the Bill from the beginning. It was always intended that the local authority would have that responsibility because neither I as Minister nor anybody in the Department would be in a position to work out what levels of land would be needed in different areas. At the outset I said it could be up to 20%. I have stood by that decision despite intense lobbying and pressure by the Construction Industry Federation, the Irish Home Builders' Association, the Irish Auctioneers and Valuers Institute and from Fine Gael whose amendments to this Bill would remove that 20% requirement and emasculate the essence of Part V. Before we deal with those amendments - we may reach some of them today - Fine Gael should look at their position. I am not sure that they understand fully what they are suggesting for Part V, which is to remove this provision and to allow builders to continue to do what they have been doing with no social conscience and make as much profit——

We are discussing amendment No. 395.

The Deputy wandered through all of Part V as did Deputy Gilmore. I am not trying to be awkward or political but I am beginning to think that Fine Gael does not know what the provisions of Part V are for. Deputy Gilmore argued the case and has been consistent in trying to get this through as separate legislation. We had that argument. The Deputy has tabled a later amendment to increase this to 20% and I will deal with that issue. However, I understood that all Members of the House were concerned about this and that we were at one in agreeing that something needed to be done to provide land at a reasonable price so that we could provide affordable housing. That is what we are trying to do.

Houses in our first scheme in Ballybane sold for £75,000.

That was a wonderful scheme under the Department's and the Government's affordable housing scheme. It worked very well and there are some very good co-operative housing schemes in Galway which I would like to see expanded. However, we should not confuse the 35%, eligibility and so on. The question was asked in terms of local authorities drawing up housing strategies and how they would decide on house prices and so on. They will have to take into account and obtain data on the price of houses in their areas, as outlined in section 80(5)(ii). They will also have to estimate the housing need and, having regard to densities and the size and type of housing needed, will decide how much land they need to zone in their development plans. It is all tied in together.

Local authorities will have to consider house prices in their areas, a person's income and housing needs, the size of houses and all of that. We are drawing up guidelines for local authorities concerning their strategies to give them as much assistance as possible. The draft guidelines are out for discussion and will be in place as soon as the Bill is in place to assist local authorities in dealing with issues such as the price of houses, determining eligibility and so on.

Deputy Gilmore raised a more general point and it may not be a good week to talk about this. However, the best way to deal with house prices is to increase the supply as much as possible. The Bill will help increase supply because of the housing strategies. It also stipulates that local authorities have to zone sufficient land so that a scarcity does not arise during the lifetime of a plan. We have included the safeguard that there will be five or six year zonings and so on.

Speeding up the decision making process for applications is also important in terms of reducing house prices as is the 20% of land at existing use value. That is why the Bill is urgent and we need to enact it as soon as possible so that work on all these issues can begin in some cases and continue in others. The only solution to the problem highlighted by Deputy Gilmore, and which we accept is a problem, is to increase the supply. When demand is greater than supply——

The Minister should say that to the media.

I should say it to many people. We have covered Part V and will probably come back to most of these points as we go through Part V. However, I cannot accept the amendment.

Amendment put and declared lost.

I move amendment No. 396:

In page 88, subsection (3), between lines 4 and 5, to insert the following:

"(c) the job security or the previous employment record of an applicant for housing.".

Section 79(3) deals with determining the eligibility of a person for the purposes of this Part of the Bill and states that a planning authority shall take into account the income of a person and other financial considerations of the eligible person, and any other person who might reasonably be expected to reside with the eligible person and contribute to the mortgage payments. I am proposing a new paragraph whereby the job security or previous employment record of an applicant for housing could be considered in determining eligibility.

This is an important point. While someone's income may not warrant that person obtaining a mortgage, it is only fair to consider that person's employment security. I am thinking of a garda, nurse or someone working in the public sector who is likely to be on a pay path for 20 or 30 years and who can almost predict what their income will be at the end of that period. Such people should not be ineligible for a house under this section just because their income level at the time does not fit the particular scheme or because other financial considerations are not taken into account. The job security and previous employment record of an applicant should be considered in determining eligibility.

I would not disagree with the Deputy if we were talking about eligibility for a mortgage. However, we are actually talking about eligibility to join the housing list for consideration for affordable housing. If circumstances change at any stage after the person goes on the list, such as if he or she loses his or her job, that can and will be taken into account. We are only talking about a person going on the list for consideration. We are not talking about giving him or her mortgages or whatever.

When the issue of a mortgage arises, lending agencies will be best placed to make a decision on whether a person is eligible or whether his or her job security is sufficient. The Deputy's amendment does not fit and, from a local authority point of view, it would involve a subjective judgment regarding whether a person was in, if you like, a safe State job. Local authorities would not wish to have to make such a judgment but we are talking only about establishing eligibility for the affordable housing list and so on. The amendment is not necessary.

Amendment, by leave, withdrawn.
Question proposed: "That section 79, as amended, stand part of the Bill."

I have a question on section 79(2) which reads: "For the purposes of this Part, the accommodation needs of an eligible person includes the accommodation needs of any other person who might reasonably be expected to reside with the eligible person." What is, or will be, the situation of separated people?

I am sure the Minister is familiar with problems which arise continually where couples separate and where one or other partner in what was previously a couple now has separate accommodation requirements and, in some cases, may have requirements for the accommodation of children or other dependants not necessarily on a permanent basis but sometimes on an occasional basis. For example, it is the kind of situation which would arise as part of a separation arrangement where a father has a requirement to take the children for three days per week, summer holidays or whatever and would, therefore, have an accommodation need to meet that. How is it proposed to address that or has the Minister given it any thought?

It is something which has to be considered. As the Deputy outlined, there are circumstances at various times such as separations, marital break up or the break up of a couple which has been living together with a family, and all those things have to be taken into account.They will be dealt with in the guidelines but also under section 85 which states that the Minister may make regulations specifying the criteria and so on. The Minister can make regulations in that regard. We are obliged in such circumstances to take those things into account and local authorities will be given the guidelines. We will specify that under the regulations. It is an important point which needs to be, and is being, addressed.

Question put and agreed to.
SECTION 80.

Amendment No. 427 is related to amendment No. 397. Both amendments may be taken together by agreement.

I move amendment No. 397:

In page 88, between lines 9 and 10, to insert the following subsection:

"(1) Where an application for permission in relation to a residential development involving more than 2 dwellings is made on or after the date of publication of the Bill for this Act, and has not been finally disposed of on the date of passing of this Act, it shall be lawful for the planning authority or the Board, as the case may be, if it decides to grant the application, to attach as a condition of the permission a requirement that the applicant or any other person with an interest in the land to which the application relates enter into an agreement with the planning authority concerning the development, for social or affordable housing, of land, which agreement may-

(a) provide for any of the following:

(i) the transfer to the planning authority of the ownership of up to 20 per cent. of the land concerned, to be reserved for the provision of social or affordable housing,

(ii) the making of arrangements for the applicant to provide up to 20 per cent. of the land concerned for social and affordable housing in a manner satisfactory to the planning authority, or

(iii) the payment by the applicant to the planning authority of an equivalent sum based on the value of the land with the permission less the amount of compensation which would be paid if the land were to be transferred, which sum shall be used for the purposes of a housing authority only or under this Act,

and

(b) identify the land to be transferred in accordance with paragraph (a), whether in one or more parts.".

The housing crisis is and has been with us for some time. The extent of it has been well documented and repeatedly spoken about and we referred to it earlier. The main provision in this Bill is the requirement that 20% of what are essentially private developments would be made available for social and affordable housing. In general, that is a provision I welcome and, indeed, it was a measure I and my party had been seeking for some time.

My principal concern since publication of the Bill is that we will not see the measure come into effect for a very long time. If one takes the sequences provided for in the Bill and working on the assumption that we manage to get it through Committee and Report Stages by the time the Dáil goes into recess for the summer - we have made a number of amendments so there will be another journey back to the Seanad - it is probably reasonable to expect the Bill to be enacted by the summer. The period of time the Bill provides for the adoption of a housing strategy by local authorities is one year. I know the Minister will say local authorities can do so in less than one year, although realistically given the complexity of what local authorities are being asked to do under the housing strategies, it is unlikely it will be significantly less than one year. That will take us to the middle of 2001.

Each local authority will have to vary its development plans, if it is not already in the process of reviewing them. The minimum period of time required will be six months. That will take us to the end of 2001. Only at that point is the Bill applicable to planning applications. The planning application is then made and, give or take six to nine months depending on whether there is an appeal, it is only at that point the developer gets into discussions with the local authority on drawing up an agreement on the transfer of land or houses, how it will be done, the portion of land and whether an alternative arrangement is to be made. Even within that process, there is an appeals mechanism.

It will be the end of 2002, possibly 2003, before an agreement will be concluded. We are talking about another year before houses will come on stream based on such an agreement. We are talking of a period of at least three years, possibly more, before a single house is produced under the 20% formula set down in this Bill.

This amendment proposes that the 20% provision should apply immediately to planning applications. In other words, after the planning application is submitted - the amendment states after the publication of the Bill but we are probably talking about current applications at this stage - the 20% provision can be applied to those applications once the Bill has been enacted. That would at least have the benefit of bringing the social housing provisions of the Bill into operation immediately. If that was done, it would have some impact on the affordability of housing.

If it is done under the formula provided in the Bill, we are looking at another three or four years. That will not have sufficient impact on the current housing problem. We can only make a stab at what it will be like in three or four years' time. My amendment proposes to apply it to planning applications being made now. The concept has been around for some time and a number of local authorities have already adopted some kind of formula of a general nature and, in some cases, included it in development plans, that is, the wish to have a social housing quota in private developments. It should be done immediately and that is what this amendment proposes.

The greatest contribution all of us can make to ensure the scenario outlined by Deputy Gilmore does not come to pass is to finish consideration of this Bill as quickly as possible. I would like to see it concluded before the summer, having been thoroughly discussed. I have said on a number of occasions that I will sit all the hours God sends to carefully and fully consider the Bill and try to enact it as quickly as possible. I know I have the co-operation of the Opposition, which I acknowledge. If that means sitting on Fridays, Mondays or Saturdays, I am willing to do that. That would be one contribution we could make. I say that while acknowledging the full co-operation of Deputies opposite and the Chairman since we started.

The second point is that I want to ensure that when this Bill is passed, none of its provisions will give rise to legal challenges. We have to be careful in that regard as we go through the Bill. Some ideas have been put forward by Opposition members at various times which I would like to accept and which would probably be beneficial if they could surmount constitutional challenge. Unfortunately, in a number of cases they would not. I am not averse to speeding up the 20% requirement but it must be done in a constitutional manner.

I acknowledge the support I have received from the Opposition Deputies, particularly Deputy Gilmore, on this matter and on the principles that underline Part V of the Bill. I understand his impatience. The purpose of his proposal is to accelerate the social and affordable housing element of the Bill. However, the proposal could have the opposite effect by involving planning authorities in legal controversy in certain cases. It could involve a range of uncertainty that would put into the shade the scenario outlined by the Deputy, with which I do not agree incidentally.

I am convinced by the strong legal and constitutional advice I have received that a housing strategy must be in place before conditions on social and affordable housing can realistically be attached to planning permissions. To stay within the parameters of the Constitution, one cannot apply these provisions arbitrarily. Such provisions must be based on reasonable endeavour to quantify and define the housing needs to be addressed. There must be a solid basis for what we are doing here. That is what the housing strategy aims to do, to provide that solid basis.

Local authorities, therefore, must have a credible housing strategy worked out, by reference to prospective and existing housing circumstances in their area, before the quota of social and affordable housing to be applied in that area can be determined and sufficient land zoned to cater for that demand. The Bill will require all future development plans to incorporate a housing strategy and there is provision, in the case of an existing plan, for a housing strategy to be made and the procedures to vary the plan to be commenced within a year of commencement of the Act. I doubt that any local authority will wait a full year to do that and a number of local authorities are already preparing the ground for a housing strategy. I do not anticipate them waiting until the commencement of the Act to do the groundwork.

In order to assist local authorities, we have drawn up draft guidelines on the preparation of the housing strategy. These have already been issued to the local authorities and to interested parties for consultation. I have also asked the local authorities to carry out as much preparation as possible and they have informed me they are doing that. We recently advertised for consultants to carry out a pilot housing strategy and that work will help the local authorities to meet the deadlines in the Bill.

Once the housing strategy is completed, the preparation of the draft variation to the development plan should not take much time because the variation of the plan would be in preparation prior to the drawing up of the strategy. The provisions of section 13 provide for a shorter process for variation than under current law. There are four weeks public consultation instead of three months and that will speed matters as well.

In response to the scenario outlined by the Deputy it is equally valid to point out that the groundwork is now in preparation, the legislation will commence in October 2000, by February 2001 there could be finished housing strategies and by April 2001 variations to development plans could be finalised. In some cases it could be earlier if local authorities are drafting their new development plans. One could be talking about June 2001 as the date when the first permissions are granted and of houses being available by the end of 2001. I can accuse the Deputy of being pessimistic and he can accuse me of being optimistic but my scenario is equally feasible.

Amendment No. 427 would delete section 82(13). That subsection——

That is Deputy Dukes's amendment.

That subsection was included on Committee Stage in the Seanad to provide that planning permissions granted to applications for residential development made after the publication of the Bill and before the incorporation of a housing strategy into the development plan, will wither at the end of 2002 or two years after the grant of permission, whichever is later, for houses that have not commenced by then. That gives builders a reasonable opportunity to build the planning permissions they have before housing strategies come into force under the Bill. It will also ensure that all developers are operating under the same rules as soon as possible, in the interests of equity between developers and the implementation of policies underlying Part V of the Bill.

I ask the Deputies to withdraw their amendments on the basis of the explanations I have given.

Which of us is right in relation to how many Part V agreements there will be in three years? All I can do is invite the Minister to have a pint with me at Christmas 2002 when we can count them. I believe it will be easy. The Minister is too optimistic about the number that will be agreed in such a short space of time.

The Minister described the constitutional or legal difficulties and the necessity of having a housing strategy in place. What is the difference? This 20% will either withstand challenge or it will not. I cannot see that the difference between it withstanding challenge or not relates to it being brought in immediately or, effectively, in three years. If it is going to stand, it ought to be capable of being brought in now.

The Minister said it is necessary to introduce it on the back of local authority housing strategies. There is a way of dealing with that. The Minister could publish a national housing strategy and the legislation could be based on that. He would have no difficulty producing a strategy which shows that the 20% requirement is, if anything, modest given the scale of the housing problem. For example, Dr. Fahey of the ESRI has published papers where he has shown that historically about 25% of total housing output was needed to meet local authority housing. There are in the order of one million dwellings, 300,000 of which were built by local authorities.

Dr. Fahey maintains that at any given point in history the requirement for public housing always stood at about 25%. Therefore, without addressing the needs of the people who are eligible for affordable housing there is a need for well in excess of the 20% provision. That situation does not vary significantly from one part of the country to another. Given what we know about the price of houses and the type of income which is required to repay a mortgage, it does not require a great deal of work for the Minister to establish, as I suggested earlier, the proportion of the people whose incomes will be capable of meeting mortgage repayments - this can be done by reference to the Revenue Commissioners and the Department of Finance which have all these figures, models etc. for a variety of purposes. This will decide the proportion of potential house buyers who are likely to qualify for affordable housing. That is a simple way in which it can be done relatively quickly.

Requiring each local authority to draw up a housing strategy, while desirable in its own right, is a long way of proceeding. If the production of housing strategies is the only difference between introducing it now and, effectively, in three years, let us use the national strategy which the Minister produced. There has been so much written on housing to date that it cannot be too difficult to produce the kind of strategy which would justify the provisions of Part V. I would invite the Minister to do that. That would enable him to accept the amendment, introduce this immediately and have in place a national housing strategy which supports it. None of us can predict whether this will stand or fall if it is referred to the Supreme Court. If this runs into constitutional difficulties, those who refer it to the court had better understand that there are at least some of us who will, if necessary, move to change the Constitution because we cannot have a situation where huge numbers of people cannot put a roof over their heads. If it requires a change in the Constitution, either to underpin a constitutional right to housing or to remove whatever obstacles there are regarding the constitutional rights of property to enable the State to take whatever measures are necessary to ensure that its people are adequately housed at affordable costs, that is what we must do.

As far as I am aware, mention was first made of the 20% requirement, the aspect of the Bill which seems to have attracted the most attention, at Naas Urban District Council and Kildare County Council, where people sought to have their lands rezoned. Landowners were left in no doubt that, if everything else was in order, their applications would receive favourable consideration if they were in a position to offer 20% of the land to the urban district council or the county council. That worked extremely well. Once landowners realised that everyone was playing according to the same rules, it did not appear to generate any great opposition. Why is this 20% provision to be applied to the developer rather than to the landowner when he or she is applying to have the land rezoned? The landowner is providing nothing other than the land. In recent years the developers have done well but that has not always been the case and it will not always be the way. The business of developers still involves a gamble, particularly with current prices. The current situation cannot last indefinitely.

The Minister told the committee that a housing strategy must be in place in each of the local authority areas in order for Part V to become applicable in law, that is, before he can require the 20% for affordable housing. I do not know whether this provision will be challenged on the grounds that it is unconstitutional, we must wait and see. I would argue that the best route to guarantee that the Bill is constitutional would be for it to be considered by the Council of State and the President. That would resolve the issue and people would not be able to threaten the viability of the Bill in terms of its ability to provide affordable housing. That would be the straightest route open to the Oireachtas, through the President, to achieve that objective.

Whatever the intention, there is still uncertainty about whether this will be effective. In the meantime, as long as that uncertainty exists or before the housing strategies are applied, the Minister should stipulate that all planning applications would require this 20% condition until such time as all the strategies are in place and the validity of the law has been guaranteed through the courts. Deputy Dukes has tabled an amendment to that effect. That is an option that is open to the Minister which would get over the difficulty of having a time lag between enactment and the date of full implementation of the Bill where planning applications could be required to provide for this affordable housing quota of up to 20%. It would also resolve the concerns which Deputy Gilmore has placed before the committee.

On the review of the county and city development plans which would be necessary to implement this provision and the one month public consultation process, will those reviews be confined solely to the effects of this Bill or can those opportunities be used by a local authority to review other matters in its development plan? What about a local authority which is in the course of debating its development plan? How would the one month public consultation process work regarding the statutory provision of a three month period for a review of the development plan? Often many local authorities which are not in the process of reviewing their development plans want an opportunity to deal in the interim with matters which were overlooked in the most recent review. Can this opportunity be used for this purpose? If so, will it slow down the review necessary under the legislation?

The provisions in relation to the variation of the development plan apply if a local authority has overlooked an issue, if there is a contradiction in the plan or if circumstances change. We are talking here about a local authority which has just concluded, or has concluded for a number of years, a development plan. It will then draw up a housing strategy and insert it into the development plan as a core part of that plan through the variation procedure to which we referred. If a local authority wants to change or vary other issues in the development plan at the same time, it will be perfectly free to do so. However, I would not encourage this in case some other matters were more controversial and would hold up the housing strategy.

Deputies Hayes, Power and Gilmore mentioned taking the figure of 20% straight away. Nothing would give me greater pleasure than to be in a position to pass legislation allowing local authorities, willy nilly, to take 20% from everyone who sought planning permission from the time I decided the house builders and the CIF were not going to come up with a scheme on a voluntary basis. However, Ministers and Deputies must act in a constitutional manner. Any legislation we enact must be fair, proportionate and equal. I would like to deal with these issues in a much more simple and straightforward manner but I cannot do so. I am obliged to take legal and constitutional advice. Deputies know that if there was an easier way to deal with the issue or if someone came up with a good idea that could be operated constitutionally and legally, I would take it on board. However, this is not possible. We must go through this procedure to ensure there is a sound basis for what we are doing. This is why I am going down this particular route.

Deputy Gilmore made a very valid point. We considered adopting a national approach to this issue as advocated by Deputies. However, we were advised that the requirement would have to relate to local needs, not to national needs, because the problem in Dún Laoghaire, for example, in relation to the availability of land for development would perhaps not be a problem in Leitrim. Rules and regulations would have a different effect in different areas. The legal advice we received was that the regulation would have to apply to local needs, it would have to be fair, proportionate and equal and that a national figure would not be robust and would not be able to withstand legal challenge. Therefore, there was a clear need to work out this issue at local level and local authorities are best placed to do this. The Kenny report on building land and so on, which was published approximately 20 years ago, was never implemented by any Government of any hue or shade because of the fear - we can argue whether this was real or otherwise - of constitutional provisions and so on. In the 20 years since publication of the Kenny report, we have had Governments of all shades and hues, from the extreme left to the extreme right.

And perhaps somewhere in between.

I recall an Oireachtas joint committee considered this issue in 1983.

On the point raised by Deputies Power and Hayes, I am not sure if I am breaching my legal obligations by commenting on an individual planning application, but the Dublin Docklands Authority had a provision of 20% and An Bord Pleanála took the view that there was no legal basis for it. We are trying to ensure that if any other local authority does this, it will have a legal basis for its decision. I do not wish to highlight what local arrangements might have to be arrived at in Naas or wherever or comment on how robust this might be from a legal point of view. That might not be helpful.

The Minister is a straight talker.

Some months ago I made a statement to a newspaper that if this Bill is challenged, taken to court and deemed not be constitutional, it is time to change our Constitution. If the Constitution does not meet the needs of the common good, it is time to change it. I have no hesitation in saying that I will contemplate going down that route if the Bill is deemed unconstitutional. I do not think this will happen because we as Members of the Oireachtas are being as careful as possible. I believe the Bill will be deemed to be justified. Deputy Gilmore is correct in relation to this issue. If the rights to property are deemed to be greater than people's rights or the common good, it will be time to rebalance the Constitution.

To houses.

That is a chance we must take. We certainly will not have houses unless this Bill is passed.

Amendment put and declared lost.

Amendments Nos. 398 and 400 are related and will be discussed together.

I move amendment No. 398:

In page 88, subsection (1)(a), line 15, after “population” to insert “over the lifetime of the development plan”.

This relates to the housing strategies and I propose to insert after "population" in subsection (1)(a) “over the lifetime of the development plan”. I believe the strategy should be employed for the period of the development. Having read the Bill, I do not think the timescale is sufficient and I ask the Minister to consider my amendment in that light.

My amendment concerns the length of time for which a housing strategy will apply. The Bill as presented sets out two possibilities. One is for the period of a development plan which would now be six years under the formula we agreed earlier or, in the case of a development plan which has not expired, the remaining period of the development plan which could be a year or two, or could be a very short period of time. Of its nature a housing strategy needs to be for a period of not less than five years. This might in some cases overlap two development plans if it is made towards the back end of a development plan. The concept of multi-annual housing provision and planning and allocations have been accepted by the Minister, and we are talking about four year allocations. Looking at the national development plan where it talks about housing provision over a period of seven years, housing strategies will need to be for a minimum of five years to have any real meaning. The effect of my amendment would be to still tie it to the development plan, but it would be for a minimum of five years.

I wish to clarify a matter. This arises only in the immediate aftermath of the passing of this Bill. In the context of the next development plan there will be a new strategy which will be an integral part of the development plan at that stage. Perhaps we need an amendment to make it clear that the first housing strategy introduced covers to the end of the current development plan but that thereafter such strategies will be an integral part of the plan.

Obviously local authorities will be asked to develop their housing strategy once the Bill is implemented. Is the Minister saying that from now on whenever a development plan is determined in each local authority area a new housing strategy must be established for the lifetime of that development plan?

That is right. It will be an integral part of the development plan because housing is a huge part of development generally. I understand what the Deputies are trying to do. If they look at the bottom of page 88, it says that the housing strategy shall relate to the period of the development plan or, in the case of a strategy prepared under paragraph (c) to the remaining period of the existing development plan. The second part of that covers the first housing strategy adopted on foot of the Bill being passed. Thereafter the housing strategy will be an integral part of the development.

That partly solves the problem. It solves it in relation to the longer term in the context of subsequent development plans. However, that formula would mean, in year three or four of an existing development plan, that local authorities would be drawing up a housing strategy for a two year period. That needs to be lengthened. A two year housing strategy in the context of what we are dealing with at the moment would be nonsense. I ask the Minister to have a look at that.

I will have a look at that. The first one drawn up on foot of this is for at least five years, even if it overlaps.

All the building, according to ESRI predictions, will take place over the next ten years anyway. From then on, if population predictions are correct, there will be quite a reduction in the number of new houses that will have to be built. The period of the next ten years is the critical time.

We can draft an amendment which makes it clear that the first housing strategy, irrespective of when the end of the development plan is, should be for a period of at least five years, and notwithstanding that, when the new development plan is being put in place it should be reviewed and revised and should cover the period of the plan.

And be included in the development plan?

Amendment, by leave, withdrawn.

I move amendment No. 399:

In page 88, subsection (1)(b)(ii), line 32, to delete “one year” and substitute “6 months”.

This is a speeding up provision. I mentioned earlier that the local authorities are being given one year to prepare housing strategies. I am suggesting that this should be brought down to six months. Given what the Minister said earlier, it should be possible to do this now. He has already indicated that some local authorities have already commenced work on housing strategies. Guidelines are being prepared to assist them. If my memory serves me right, the Minister said that he expected housing strategies to be adopted in local authorities by 2001, assuming that the Bill is commenced in October, which is an even more ambitious target than my amendment provides for. If the Bill is commenced in October, this will give local authorities until April to have their housing strategies in place. Given the length of time the Bill has been around, local authorities have been aware that this would have to be done, at least some preliminary work is being done and consultants are being appointed to draw up model housing strategies, there is a case for whittling it down to the six months and taking that much time off the gestation period of Part V.

The Minister said that he recently sent to local authorities draft guidelines in relation to the preparation of housing strategies. Was there a date in those guidelines as to when he wants the strategies in place? I understood a February deadline existed but it does not seem to make sense. Is there a definite date?

These are similar guidelines to those relating to consultation on retail planning and density. We are in a consultation period now. Because this is so complicated and because some of the questions being raised here must be addressed, we have engaged consultants to do a draft to assist local authorities on the detail, based on the draft guidelines we have already sent out. We do not have a date. One would not normally put a date on them.

On this amendment, I sympathise with what Deputy Gilmore is seeking here, to get strategies in place as quickly as possible. The difficulty is that I am not sure what effect it would have if we put it into legislation that the strategies must be in place in six months and the local authorities did not meet that deadline. I do not know how that would affect a development plan or a housing strategy. Six months would be tight and a year is, perhaps, too long. I am not horse trading, but if the Deputy agreed to go three months further, I would agree to come back and fix it at nine months. The point the Deputy is making about conveying the urgency of the situation to the local authorities is a valid one. At the same time we do not want to put unrealistic demands on them, given all the other pressures they are under at present. Perhaps a period of time less than one year might get that urgency across more quickly.

I was going to suggest an alternative way of doing it because whatever period of time is stated in the legislation, that is what it will be. If we say a year, it will be a year.

Those under greater pressure from a housing point of view might operate more quickly.

A possibility I was going to suggest was to perhaps insert six months, which would underline the urgency, but to include a proviso stating "six months unless the Minister has authorised an extension". However, nine months is better than one year as it at least takes something off it.

Have local authorities the necessary staff to carry out those reviews or will they have to be done by consultants?

They may have to do that. I cannot make a bald statement on whether they have the staff. They may have to bring in consultants. We are endeavouring to offer as much assistance as we possibly can. That is why we requested consultants to do a housing strategy for a local authority on a pilot basis. Hopefully, that will show local authorities the method and way of doing this so that they will be able to apply it locally. It may show up some of the difficulties they might face and the pitfalls they can avoid. The Department is endeavouring to give local authorities as much help, back-up and expertise as it possibly can in this area, but they may have to bring in consultants. Some of the housing and planning staff in a number of the local authorities would be experts in this regard and it may not be required in some cases.

I would not share Deputy Gilmore's concern on whether it is six or 12 months. Most local authorities have given the housing situation serious consideration and it will not prove too great a difficulty to devise a housing strategy. As the Minister said, the difficulties in Dublin will not be the same as those in Leitrim or in any other area. By and large, we share a lot of the same problems and when the legislation is passed, we will find that local authorities will be very proactive and will not need the stick approach whatever about the carrot. They will be only too willing to co-operate and I see the strategies being put in place very quickly.

I am following the debate on this, Chairman. I propose the following amendments, of which I will give the Chairman a copy in writing. "In page 88, subsection (1)(b)(ii), line 32, to delete “one year” and insert “nine months” and “In page 88, subsection (1)(c), line 43, [because it is consequential] to delete “one year” and insert “nine months”.

Are the Minister's substitute amendments to amendment No. 399 agreed? Agreed. Will Deputy Gilmore withdraw his amendment?

Amendment, by leave, withdrawn.
Amendment No. 400 not moved.

I move amendment No. 401:

In page 89, subsection (1)(e), lines 1 and 2, to delete “, or pursuant to the direction of the Minister shall,”.

This amendment relates to the ability of two or more planning authorities to come together to develop a housing strategy. We need to encourage this, particularly in parts of the country where we have seen the problem of house price inflation. It may well be sensible for a number of local authorities to come together to draw up a set of proposals through their strategies. When I read this section, I asked why the Minister has this all-encompassing power when it comes to a housing strategy being presented by two or more planning authorities.

My amendment proposes to delete this all-encompassing power where it states: "or pursuant to the direction of the Minister shall". I do not believe that should be included. If two or more planning authorities come together to draw up a housing strategy affecting their area over a period of time, they either agree it among themselves or they do not. I do not believe the Minister, wearing a devolution cap, should be prescribing them to do otherwise.

When the Deputy asked why the Minister should have this power, I was tempted to say because he is the Minister.

It is good to be the king.

I will resist the temptation.

It is necessary for a Minister, whoever he or she might be, to have this power, which is rarely used. There is at the moment a situation between two local authorities which shall remain nameless. I have been told by the Members of the Houses of the Oireachtas who are on one of the local authorities that the other local authority is something else and does not believe in forward planning or in doing anything and that its development has been inhibited by the obstructionist attitude of the other local authority. I am trying to avoid saying which is the most obstructionist. It is a——

Hurling country.

It is obviously a corporation and a county council. The members of the other local authorities have said to me "not an inch" and so on. At times it is necessary to have this power which should rarely be used. It is necessary that somebody from outside the local authority should be able to bang heads together because housing development and planning and development generally do not fit neatly into local authority boundaries much of the time. It is for that reason only that the power should be there.

I agree with the Deputy and it should be used sparingly by any Minister. Most Ministers have avoided using these kinds of powers because of the difficulties they cause for themselves and colleagues. It is, however, necessary that this power is there and I ask the Deputy to withdraw the amendment before war breaks out in a particular part of the country.

There is a certain merit in Deputy Hayes's amendment and he and the Minister do not seem to be too far apart on it except that the Minister wants to hold onto the power to make local authorities co-operate. There are occasions when this arises, particularly where, as the Minister said, there is a city and a county borough. I had the distinction of serving simultaneously on a county and city borough for two terms, and I often thought that they should have more in common. In other words, there are rural areas in the Galway city borough and if one moves to the next townland one is in a rural district within the county but the same set of requirements may be needed in terms of a housing strategy or development plan or any other issue common to both. There should be more co-operation in terms of joint policies between adjoining authorities.

This could relate, for instance, to an area within two local authorities. Am I correct in stating that a strategy could be put together for a part of two local authority areas which came together? There is merit in that proposal on the basis that the connection between County Kildare and South Dublin, or between Fingal and County Meath, require a joint strategy approach, particularly in the development of many of the new towns. The only problem is that this can only be done with the agreement and consent of both authorities. Even if the Minister instructs two authorities to do business together, it will not work unless they want it to work.

This power is prescriptive and is found in other legislation. However, it is inherently undemocratic in terms of the devolutionary powers we are trying to put in place. I have said this before, most legislation is checked in terms of gender or equality. All legislation which goes through this committee should be checked in terms of its devolution quota. This is inherently undemocratic and the Minister should think again.

The Deputies are making the case for me. Not only does one have to gender proof legislation, one also has to eco proof it, poverty proof it, Northern Ireland proof it - there are a string of proofings. For a variety of reasons, local authority members, particularly those who are also Members of the Oireachtas, would rather see the Minister wielding the big stick. They may know that a particular line of action should be taken but for local electoral reasons may decide that they are not going to take the odium. It is nice at times if they can speak to a Minister and get him or her to take the decision for them. I am not sure that giving such powers to the Minister is such a huge loss to local democracy. In fact, at times it could enhance it. However, it is necessary to do so at times. I accept that the power should be used sparingly but it is necessary to retain the power.

The Planning and Development Act, 1963, gave the Minister power to make directions but that power has not been used so far.

Why have it?

Just in case. My predecessor was able to make observations or send strong signals to a local authority as to what might happen if it did not act in a reasonable manner. I reiterated this to a different local authority. A Minister could write to some local authorities forever if that is all he or she could do. However, if a local authority knows that the Minister has a residual power then it is more inclined to act reasonably.

Can a housing strategy be varied at any time, for example, if it is in place for two years and people are wondering whether it has worked or had any impact?

One of the requirements is that the manager has to report on the strategy after years two and four. Section 81(3)(b) stipulates that where a manager considers there has been a change in the housing market or in the regulations made by the Minister, etc., it can be varied in the interim.

Has the Minister considered the loss which will be suffered when people can no longer be Members of the Oireachtas and local authorities? It would be almost impossible to deal with this Bill if one did not have much experience of local authorities. One would not be able to deal with it unless one had gone through these issues so often in development plans, housing plans and so on within one's local authority. How will the Minister manage with the next crowd?

The Minister will not have any difficulty with the next crowd as he will be on this side.

Amendment, by leave, withdrawn.

Amendments Nos. 402 and 403 are related and may be taken together.

I move amendment No. 402:

In page 89, between lines 8 and 9, to insert the following subsection:

"(2) Each local authority shall carry out, each year, an assessment of housing needs in accordance with section 9 of the Housing Act, 1988, and the Minister shall publish the results of the assessment, not later than one month after the closing date for completion of the assessment.".

The proposal is that in drawing up a housing strategy, a planning authority would have regard to the most recent housing assessment or assessments made under section 9 of the Housing Act, 1988, that relate to the area of the development plan. The problem with that provision is that the housing assessments carried out under the Housing Act, 1988, are very often out of date. For example, the requirement at present is that the housing assessment is done every three years. The last interval was between 1996 and 1999 when the housing situation changed dramatically. There were about 26,000 people on local authority waiting lists in 1996; that figure went up to 40,000 by 1999. If one adds those looking for other forms of social housing the figure was 50,000. There has been a significant change. If this legislation had been in place and a local authority was drawing up a housing strategy in the early part of 1999, it would base its strategy on a housing assessment which was seriously out of date and where the assessment of housing need was about half the current level.

I am proposing that there should be a requirement on local authorities to carry out a housing assessment each year. That is not necessarily placing an undue burden on authorities because they already have the information. The procedures for updating local authority housing lists vary but most update their housing lists at intervals of not more than about six months. Some do so on an on-going basis so the information is available and it might be more convenient for local authorities to carry out their housing assessments on a more frequent basis. At present, they are maintaining and managing their housing lists. They know what the demand is for housing and every three years they have to do a stock take. It can create all kinds of difficulties later if people are taken off housing lists when they should have been left on them.

There are two reasons for my belief that the interval for the housing assessment should be a year. One is that, for the purposes of drawing up the housing strategy, it will ensure that the strategies are based on up to date information. Second, we need the up to date information anyway. The current position whereby housing statistics and the assessment of housing need can be as much as three years out of date is not good. It leads to many problems. Housing allocations are based on seriously out of date information. There should be a one year interval between housing assessments.

Amendment No. 403 is similar to Deputy Gilmore's amendment. The legislation provides that before the housing strategy is prepared the planning authority should have regard to the most recent housing assessment. The most recent information on housing in each functional area is now widely out of date as a result of the problems in the housing market.

I propose that before preparation of a housing strategy begins, the planning authority shall make a housing assessment under the relevant section of the Housing Act, 1998. The Minister of State, Deputy Molloy, and I have been at loggerheads on this issue for some months. He believes it is set in stone that there must be a housing assessment every three years. The Housing Acts provide the power to a local authority at any given stage to carry out a housing assessment. It need not wait for a direction to do so from the Department. Given that the main problem is the supply of housing and that the amount of housing stock that is required for the next ten years will be 500,000 new homes, it seems sensible that an assessment be carried out before the housing strategy is put in place.

Computerisation has changed each housing department's ability to do its job. While many local authorities change their housing lists every six months, my local authority changes it every three months. It can be argued that an authority could change its housing list every day on the basis of new information. For example, there might be 1,000 people on the housing list. On any given day there will be new applicants and changes in medical points and overcrowding situations. All that is required is that the information is input into the computer. It would be a little like the Nasdaq index, in that the list would change each day. However, it is a more realistic assessment of people's needs than an assessment at six monthly intervals. There is no reason not to move towards that type of system, given that the programmes are in place in the local authority planning departments can effectively deliver it.

I ask the Minister to consider this proposal. If he is asking local authorities to prepare their strategies on the basis of dated information, the strategies will not be in line with the needs that exist in each local authority area. That must be changed.

I support the amendment. It is essential for many reasons. One matter often comes to the notice of public representatives and Deputy Gilmore already alluded to it. If people are in hospital or are away from their home address temporarily and a notice is sent to them to which they cannot reply, they are taken off the housing list. They come to us saying, "I applied for a house in 1992 and when I went in to check it in the year 2000, I was told that I am off the housing list and am only now being put back on it". In other words, keeping housing information up to date is essential and the amendment put down by Deputy Hayes would assist that.

The proper place for housing assessments and much of what has been mentioned in this discussion is the Housing Act. Deputies are misreading this section of the Bill. The housing strategy "shall take into account", among other matters, the most recent housing assessment under section 9(2) of the Housing Act, 1988.

It would be a foolish housing authority which solely took into account the recent housing assessment under that section of the Housing Act. It is evident and adequately provided for in this section that the local authority can take a range of other matters into account when making the strategy. It needs to ensure there is housing available for persons with different levels of income, a mixture of house types and sizes, to counteract undue segregation in housing, take into account the supply of and demand for houses generally or houses of a particular class or classes in the whole or part of the area, the price of houses or houses of a particular class or classes, the income of persons and the rate of interest. In addition, local authorities will take into account and monitor the ongoing lists, who is going onto the list and who is leaving it. Local electoral area lists are another source of information. This is one thing they must have regard to but they should not tie themselves to it.

Local authorities should not confine themselves to housing assessments and the Bill does not provide for that. There is ongoing monitoring of lists and that should be taken into account. Even if we were talking solely in terms of the most recent housing assessment, it should now be possible, given that there is a six year cycle for development plans, to ensure the housing assessment coincides with the housing strategy. It will be possible to do that.

For those reasons, there is no need to encroach on the Housing Act in this regard. I ask the Deputies to withdraw their amendments.

I have made my case. I will withdraw the amendment and put it down on Report Stage.

Amendment, by leave, withdrawn.

I move amendment No. 403:

In page 89, lines 2 to 12, to delete subsection (2) and substitute the following:

"(2) In preparing a housing strategy, a planning authority shall make a housing assessment, under section 9 of the Housing Act, 1998, that relates to the area of the development plan.".

I ask the Minister to think about this again and not just on the basis of the importance of getting the housing strategies right. I accept that it is more than just an assessment of people who are seeking social housing. However, there is another reason for carrying out the assessment before the strategies are put in place. The Bill only provides that the strategy should have regard to the assessment. It should be more explicit.

The other reason for carrying out an assessment is that at a time when the Minister and his Minister of State regularly inform the House about the Government's expansionist plans for social housing and the amounts of money being spent, it is only right to audit what effect that expenditure is having in each local authority area. This would have a dual purpose. On one level one would be preparing to help the housing strategy itself, but at another level one would see whether we are delivering on our commitments. I accept that in the past year there has been a considerable increase in funding, although not in terms of the percentage of the total capital budget. Whether it will deliver the number of houses is another matter. Forcing the local authorities to do this assessment would have the dual purpose of helping the strategies but also helping to see whether we have delivered at a national level on the new moneys spent. I would ask the Minister to consider this again before Report Stage.

Amendment, by leave, withdrawn.

I move amendment No. 404:

In page 89, subsection (3)(b), line 17, after “income,” to insert “and to ensure that young individuals and couples, as first time buyers, are provided with housing,”.

Section 80(3) states that a housing strategy shall take into account the likely future needs of persons referred to in section 9(2) of the Housing Act, 1988, and the need to ensure the housing is available for persons who have different levels of income. In addition, it should ensure that a particular demographic group, that is, young individuals and couples who are first-time buyers, are provided with housing. I say that in light of a recent reply I received from the Minister's Department. The fall in the number of first-time buyers' grants issued in the past couple of years is astonishing. There were 9,129 first-time buyers' grants issued by the Department in 1999, whereas there were 10,348 issued in 1998. Despite all the rhetoric about there being 48,000 new homes and a massive supply of housing, it is clear that we have not seen that kind of expansion with first-time buyers and that is the area which must be addressed.

The Minister will say that many second-hand homes have been purchased. Most young couples and individuals who were first-time buyers purchased houses in new estates. They are not in the second-hand market in Dublin, which is galloping well ahead of the first-time buyers' market. The Minister needs to insert a commitment in the subsection to deal with the interests of young couples and individuals who are first-time buyers to give them a foothold in terms of the housing strategy.

The housing strategy must take into account the housing needs of all of the population. As set out in section 80(3), it must take account of those in need of housing from the local authority, the need to ensure that housing is available for persons who have different levels or income, and the need to ensure a mix of house types to match the requirements of different categories of households.

I am satisfied that the needs of first-time buyers are comprehended in these particular requirements. They are certainly included among those on different levels of income and their specific requirements in terms of size of accommodation, etc., are covered under subsection (3)(c). The needs of first-time buyers are identified separately in section 83(3)(a), where in drawing up a scheme to determine the order of priority to be accorded to eligible people in the allocation of affordable housing the local authority must have regard, in particular, to the accommodation needs of eligible persons who have not previously purchased or built a house for their occupation. It is in the allocation of affordable housing that we must take account of the specific needs of first-time buyers, and the Bill does so. The Deputy’s concerns are already catered for in the Bill. For that reason I would ask him to withdraw his amendment.

On the Minister's reference to a later section, will there be a section in the Minister's guidelines for local authorities stating that their lists of eligible persons should take account of the concerns of first-time buyers in particular and will there be positive discrimination in favour of that group? As the Minister will be aware, that group, more than any other, has been priced out of the current market.

It is covered in section 83(3)(a).

I am happy with that.

Amendment, by leave, withdrawn.

I move amendment No. 405:

In page 89, subsection (3)(c), lines 22 and 23, to delete “suffering disability” and substitute “with disabilities”.

This is a corrective amendment to make the wording of the provision conform with wording used elsewhere in the Bill. There is no change of substance involved.

Amendment agreed to.
Amendment No. 406 not moved.

I move amendment No. 407:

In page 89, subsection (3), between lines 25 and 26, to insert the following:

"(e) the need to improve and maintain the existing housing stock within the functional area of the planning authority.”.

This may not be the right place for this amendment. If the Minister is putting in place a housing strategy, he should not exclude the existing housing stock. The Minister will be aware that a substantial number of housing units in many areas are local authority homes and only a small percentage of the money spent on housing is provided for the refurbishment of that existing housing stock. We should not leave this particular subsection without including a specific commitment to improve and maintain the existing housing stock within the functional area of the planning authority.

Like other members, I am aware of many local authority housing estates which are waiting in a queue for the most menial jobs, such as replacing draughty windows, and a programme of refurbishment. In the local authority of which I am a member there is a list of about 16 estates where certain matters of refurbishment have been brought to the attention of members of the local authority. People cannot afford to refurbish their homes and depend on these refurbishment schemes. There should be a commitment to look at this issue so that when it is being presented to the public an audit of all local authority homes, in particular, would be provided in this way by the strategy. I ask the Minister to consider the need to insert a reference to the existing number of homes within a planning authority area in order to improve and maintain the existing housing stock.

The Deputy said that this may not be the right place for this amendment.

I did not stop at that point.

I do not disagree with the Deputy in relation to this matter. However, it probably is more appropriate to housing legislation or local authority good management. Subsection (5)(a)(i) states that the planning authority shall have regard to the supply of and demand for houses generally, or houses of a particular class or classes. This covers the Deputy’s point about having a look at the existing housing stock. The major input in any event will come from the existing stock. Nationally the addition to the housing stock, even at the record levels for last year, only accounts for approximately 3.2% of the housing stock generally. I agree that the maintenance and improvement of existing housing stock is an important objective for local authorities. Various plans and objectives should be in place to ensure the improvement and maintenance of local authority housing stock. Obviously this is of crucial importance given the considerable amounts of taxpayers’ money which is invested in this housing. Subsection (5)(a) requires local authorities to have regard to the supply of housing in their areas and that includes existing housing. To go beyond that would require them to take into account the need to improve and maintain existing stock and this is not the appropriate Bill to deal with that issue. Therefore, I ask the Deputy to withdraw his amendment.

Subsection (5)(a) proposes that “When making an estimate under subsection (4)(a)(ii), the planning authority shall have regard to the following”. The Minister rightly points out that there is some provision there in terms of the existing stock. What impact will this have on the strategy? Surely when drawing up a strategy of housing need in an area, one must do an audit of what is already in place.

That would be part of the audit. As the Deputy rightly states, if there are 25 derelict houses in an estate, obviously that would have an influence on the housing strategy because, strictly speaking, those houses would not be available. This would have to be taken into account.

There is no difficulty including this in the strategy?

Amendment, by leave, withdrawn.

I move amendment No. 408:

In page 89, subsection (4)(b), line 35, to delete “for” and substitute “For”.

This is a correction to the text which makes no change to the substance.

Amendment agreed to.

Amendments Nos. 409 and 414 will be discussed together by agreement.

I move amendment No. 409:

In page 89, subsection (4)(c), line 39, to delete “more” and substitute “less”.

Section 80(4)(c) reads:

A housing strategy shall provide that as a general policy a specified percentage, not being more than 20 per cent, of the land zoned for residential use, or for a mixture of residential and other uses, shall be reserved under this Part for the provision of housing for the purposes of either or both subparagraphs (i) and (ii) of paragraph (a).

Subparagraph (i) relates to the provision of local authority and social housing and subparagraph (ii) relates to the provision of affordable housing as defined in the Bill.

There are two problems with that provision. First, it effectively puts a cap on the total amount of land which can be zoned and provided for local authority housing, all the various social housing schemes which come under section (9)(2) of the 1988 Housing Act and all the affordable and voluntary housing provided for in this legislation. I understand this provision to mean that all this housing cannot exceed 20%. In turn, this is translated into the development plan through section 81 which effectively puts a limit on the total amount of land a local authority can make available for social and affordable housing. In fairness, I believe the Minister set out to have an arrangement whereby up to 20% of land for private development would be released into the public system for social and affordable housing, with which I agree. However, this provision draws on the 20% concept, but in a different and more restrictive way by using the 20% concept to effectively put a cap on the total amount of land that will be available. This would introduce for the first time in land use zoning the concept of putting a limit on the amount of land which would be made available for social and affordable housing. This is not something with which I or the Labour Party would agree.

Second, 20% will not be sufficient. When we talk about social housing in its many forms and affordable housing, we are talking about the majority of people who are seeking housing. Taking my constituency as an example, we are talking about people with incomes of less than £35,000 or £40,000 per annum. Everything gets boxed into this 20%. This section as it stands is effectively saying that for the majority of people in the State who cannot afford to buy housing in the normal way and who will either seek to be housed under the affordable housing arrangements provided for in the Bill or seek some type of social, voluntary or local authority housing, we are only going to provide 20% of the available land for residential use. For obvious reasons, I do not think we should do this. Therefore, in relation to this provision, the amount of land available for social, affordable, voluntary and local authority housing arrangements should be not less than 20%. We know from historical experience - I referred earlier to Dr. Fahey's work in the ESRI - that approximately 25% of housing needs to be provided for people who cannot afford to buy houses in the normal way. If anything, that figure is arguably much higher now because of what has happened to house prices. In that context, to say that the Minister is creating a social housing reservation of 20% is simply not sufficient. That will have to be widened considerably.

What is the Minister's rationale for selecting a figure of 20%? Why 20% rather than 50%, before we even talk about it as being more or less than 30%? I would disagree fundamentally with every one of Deputy Dukes's amendments, if the Minister told he me he was accepting my amendment No. 430. That is at the heart of the whole matter. This will not work unless the Minister can ensure that the costs which landowners and developers must forego as a result of these changes will not be passed on to the 80% of people who buy their houses in the ordinary way. At the moment there is no provision to ensure that, and that is the key issue.

Despite the public pronouncements, unless we have in this legislation a cast iron guarantee that the 80% of people who buy their houses in the ordinary way in new estates will not have to pay for the other 20%, it will not work. We are asking that landowners take the hit, but there is nothing in the Bill which guarantees that social housing will not be paid for on the backs of 80% of the people. That is the key issue.

I would be interested to hear how the Minister arrived at the figure of 20%, particularly because we will not have to go into Deputy Dukes's amendments if the Minister can tell me right away that he is prepared to accept my initiative for a certificate of reasonable valuation, which we already had in this country but which, for whatever reason, someone decided to forego. If we are really serious about ensuring that landowners and people who have done very well from the recent spiralling house prices take the hit, we must have a mechanism to ensure that they do not pass on the cost to the 80% of people who will buy their houses in the ordinary way.

Deputy Gilmore rightly said that the 20% proviso is a maximum. I readily admit that there are parts of the country where it should be 50%. In this county alone in particular it should be 50% because of the difficulties people have in trying to fund a mortgage. There may well be parts of the country where it could be less than 20%. The reason I say it should be 50% in Dublin is primarily because there is virtually no land bank left for Dublin Corporation. The land bank for Dún Laoghaire-Rathdown council is shrinking. We in South Dublin council have quite a considerable local authority land bank as does Fingal County Council. However, Dublin Corporation's position is completely out of kilter with the position in other counties which have a considerable land bank. I would like to hear the Minister's reply.

Let me start by addressing Deputy Gilmore's points, particularly in relation to his amendment which seeks to require that not less than 20% of land shall be reserved, as opposed to the provision in the Bill requiring that not more than 20% shall be reserved. The Deputy is wrong in his assessment of what the Bill actually means. What he is pointing out has been well spotted, but the strong legal advice is that the Deputy's fears are unfounded. Taking the belt and braces approach of a few days ago, I intend on Report Stage to address this issue to put it beyond doubt and make it clear that we are not putting a 20% limit on social and affordable housing in a particular area. The Deputy has raised a reasonable doubt about that. My advice is that his interpretation is incorrect.

At the same time, none of us wants to spend so much time on this Bill only to find people going totally against the spirit of the Bill. I ask the Deputy to withdraw the amendment on the basis that we will produce an amendment which will clarify this matter on Report Stage. I acknowledge that, even though he is wrong, it is well spotted. It is something that should be addressed and clarified.

Deputies Gilmore and Hayes said in separate contributions that 20% was not enough. Let me make a couple of points about that. As to how the 20% limit was arrived at, Deputy Gilmore is right that 25% of the housing stock in the State is local authority housing. That has been the case historically since the foundation of the State.

Not recently.

Not recently. The huge house building programme that was put in place by Fianna Fáil in the 1930s and 1940s greatly increased the average. In the last number of decades new housing units completed by local authorities were typically 10% of the housing stock. Having regard to the trend in waiting lists the 20% limit was thought to be appropriate and reasonable.

The Deputy is right in saying that 20% will not be enough. However, the 20% is not meant to cover 100% of the social and affordable requirement, the social requirement in particular. One of the accusations being made against us by the IHBA is that we are transferring all of our responsibilities for social and affordable housing from local authorities over to the private sector. We are not doing that. There will still be a need for local authorities to have land banks to provide their own houses and so on, some of which, but not all, will be provided through this. The Deputy is correct in saying that the 20% will not be enough. The reason is that we are not transferring the State's responsibility over to the private sector. If we did that, there would be merit in the argument the IHBA and the CIF are putting forward that this is unfair, unconstitutional and so on. The State will retain responsibility to provide for the housing needs of certain categories of people.

In relation to Deputy Hayes's point——

We should really advance.

Let me say what I have to say and then we will not mention it again, to save the Deputy embarrassment. We had artificial house price control before in the 1970s and 1980s, which proved ineffective. In 1977 or 1978, or perhaps a bit earlier, house prices increased by about 27% when CRVs, as they were known, were in existence. In many ways CRVs proved counterproductive; in 1977-78 house prices increased by 28%.

Just like now.

No, the increase is considerably less now. Under the system which then operated house purchasers were penalised because some were forced into more expensive financing arrangements, forgoing grants which were available and paying stamp duty, when they wished to buy a house which they - but not the Department - considered to be reasonable in terms of value. In some cases houses were sold for less than appeared on the certificate of reasonable value.

The system became hugely bureaucratic and was not an advantage to house buyers. Therefore, I do not intend returning to that system and none of the credible commentators on housing have seriously suggested its reintroduction. It was considered in the first Bacon report and the conclusion was that an artificial intervention would be inappropriate and ineffective and might result in distortions in the market to the detriment of house buyers rather than house builders. For these sound and solid reasons I am not going to return to CRVs.

Did the Chairman say we were going to adjourn at 4.30 p.m.?

There are a few more things I want to say but will not have time to do so before 4.30 p.m. I will return to the matter tomorrow.

I thank the Minister, his officials and members. As agreed we will resume consideration of the Bill tomorrow morning, 17 May, at 9.00 a.m.

The Select Committee adjourned at 4.33 p.m.
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