Dáil Éireann Debate, Tuesday - 15 January 2019
41. Deputy Eoin Ó Broin asked the Minister for Housing, Planning and Local Government the steps he will take to increase the delivery of both social housing new builds and affordable private market homes for 2019 (details supplied). [1627/19]
Amharc ar fhreagra42. Deputy Darragh O'Brien asked the Minister for Housing, Planning and Local Government the status of affordable housing targets for 2019; and if he will make a statement on the matter. [1588/19]
Amharc ar fhreagraThe housing supply co-ordination task force report for quarter 3 was published on 20 December last. While it indicated that there were some positive signs, there were also worrying data contained in the report, in particular a 50% reduction in the number of houses under construction in Dublin city compared to quarter 3 of 2017. The reduction was 20% when the city and greater Dublin region were taken together. Is the Minister concerned about this and can he provide the House with an explanation as to why it is the case? Is it something that will be rectified in quarter 4 report when published?
Before the Minister replies, I note Questions Nos. 41 and 42 are being answered together. Only the person who tabled the first question is given an initial 30 seconds but each Deputy will have a full allocation of time for supplementary questions.
I thank Deputies Ó Broin and Darragh O'Brien for Questions Nos. 41 and 42 which I propose to answer together.
In the first nine months of 2018, some 18,781 additional social housing solutions were provided across all local authorities, representing 74% of the overall 2018 annual target of 25,469. Within these overall numbers, the 2018 build target was for the delivery of 4,969 social housing homes, 2,369, or 48%, of which had been delivered by the end of quarter 3. My Department continued to work intensively with local authorities and approved housing bodies over the course of quarter 4 with a view to maximising delivery to year end and I expect to be in a position to provide indicative full-year delivery data in the coming weeks. I will also be setting 2019 social housing delivery targets for each local authority. I am satisfied that the significant expansion in the social housing construction programme over the course of 2018 provides a strong platform for increased build activity this year.
Affordable housing is being facilitated through a range of measures. Under the serviced sites fund, €310 million will be made available from 2019 until 2021 to fund the provision of facilitating infrastructure on local authority sites to support the construction of over 6,000 affordable homes. In response to a first call for proposals under the fund, I issued approval last month for funding for infrastructure projects costing €43 million. This funding will support the delivery of 1,400 affordable homes.
I expect to issue a second call for proposals under the fund shortly.
Dublin City Council is working to deliver almost 250 affordable homes at O'Devaney Gardens and Oscar Traynor Road, with some 380 cost rental homes being progressed through pilot projects at St. Michael's estate in Inchicore and at Enniskerry Road in Dún Laoghaire-Rathdown. The local infrastructure housing activation fund, LIHAF, will also yield an affordable housing dividend, with some 2,350 affordable homes being facilitated on sites benefiting from LIHAF funding. A further 5,600 homes will benefit from a LIHAF-related cost reduction. To support further delivery, the Land Development Agency, which was established late last year, is actively pursuing the development of an initial tranche of eight sites yielding 3,000 homes, 30% of which will be affordable homes. The timescales for the delivery of affordable housing will be one of the issues I will explore further as part of my next engagement with chief executives of local authorities in the coming weeks. In 2019, record funding of €2.4 billion is being made available to support activity in respect of housing programmes generally. I am confident that this will underpin a further significant increase in momentum across all local authorities this year.
The most recent data show the continuation of some very positive trends with regard to broader housing supply. They indicate that we remain on track to reach the 25,000 target for new home delivery by 2020 as envisaged under Rebuilding Ireland. Planning permissions were up 62% in the year to the end of September 2018. Commencements have more than doubled since the end of 2015, with over 21,000 commencements in the year to October 2018. According to CSO data, some 20,396 new homes became available for use in the year to the end of September 2018. House prices and housing affordability vary significantly across the country. In the year to October 2018, the median house price nationally was €244,999. It was highest in Dublin, at €365,000. Median prices were as low as €100,000 in some areas. In terms of supporting home ownership, nearly 9,500 applications have been approved under the help to buy scheme. It is estimated that the Rebuilding Ireland home loan, which was introduced last year, saw over 500 loan drawdowns by the end of 2018. Delivery across all parts of the housing spectrum will continue to be afforded the highest priority by the Government over the course of this year.
Every new home that is built is welcome. Any increase in supply is also to be welcomed. I think the Minister is guilty of presenting too rosy a picture. I would appreciate it if he could address two specific issues, the first of which is private housing output. One of the most worrying aspects of the recent report of the Housing Supply Coordination Taskforce for Dublin is the indication that in the third quarter of last year, there was a 50% decrease in total construction activity in Dublin city and a 20% decrease in such activity in the Dublin region as a whole. I would like the Minister to explain this very worrying development. Does he think this trend will continue?
The other issue I would like him to address is the social housing supply pipeline report, which we have discussed previously at the joint committee. According to the report, just 35% of last year's target number of new-build social houses had been built by the end of the third quarter of 2018. I am not a great fan of the leases that represent a large component of the Minister's targets. The report in question indicated that just 20% or 25% of the leasing target had been achieved. Can the Minister guarantee that all social housing targets will be met in full by the end of this year? Will he respond specifically to the concerns that have been expressed about private sector output in Dublin city and in the Dublin region?
The report mentioned by the Deputy in his first question represents a snapshot in time, rather than a trend over a 12-month period. There was a reduction in the statistic in question because completions were up, which is a very welcome development. As I said in my initial reply, over 25,000 new homes were made available to live in over the 12-month period up to the end of September 2018. There is no getting away from the fact that this marks a dramatic improvement on what was delivered in the previous 12-month period, up to the end of September 2017, and in the year before that. It is not about painting a rosy picture; it is about speaking to the facts which show that supply has been increasing dramatically.
The Deputy also asked about the information that is available with regard to social housing completions up to the end of the third quarter of last year. Between 35% and 40% of the build programme for the year had been completed by that date. Significantly, this marked an 80% increase on what had been achieved by the third quarter of 2017. This shows that local authorities had done a significant amount of additional work in a similar time period. We also saw that much more activity was happening in the fourth quarter of 2017. A big number of completions happened in that quarter. Similar questions were asked about third quarter data in 2017. We saw a dramatic increase in completions in the fourth quarter of that year because of the way the build programme is programmed and budgeted towards a strong level of delivery at the end of the year. As I said in my initial reply, in a couple of weeks I will be able to verify exactly what the 2018 output was in respect of build, acquisition and leasing, as well as other targets under Rebuilding Ireland.
The questions being asked by my colleague and me are probably being asked in the dark. The Minister has said it will probably be another two weeks before we know to what extent the 2018 targets were delivered on in that period. I would like to know what indications the Minister may already have. He has spoken about the delivery of housing solutions in the social housing category. One of the features of Rebuilding Ireland is an over-reliance on the housing assistance payment and on short-term letting as ways of deeming that people have had their housing needs met. Rental solutions and housing assistance payments were used to deliver two thirds of all homes delivered up to the third quarter of last year. I ask the Minister to provide an update on that.
I would like to ask a specific question about affordable homes. Has the Minister set a target for 2019? What will that target be? When will he publish the criteria governing how people can apply for an affordable housing scheme? Will such applications be made? When will such a scheme open?
The Deputy asked about the 2018 output. At the moment, we have an indicative idea of returns from some local authorities. We are compiling those returns with a view to publishing them before the end of the month. I can give that commitment today. I expect we will see in those returns that some local authorities have exceeded their targets for the year across the different streams, and others have not done so. The reason I said at the housing summit in January of last year that I would commit to targets for each local authority was that I wanted full transparency on exactly what is happening. We know from the work we have done here in this Dáil that funding has been made available, the policy is there and the resources are there. Some local authorities have been very quick to ramp up their delivery of social housing, but others have not been as quick. In a couple of weeks, we will publish the outputs against the targets that were published last year. This will enable us to see exactly where each local authority is succeeding - for example, on the builds side. Some local authorities might be doing more leasing than other local authorities. We will be able to see where other local authorities are not as successful. I hope this type of transparency will enable us to help local authorities that are not doing as well to up their games and match those local authorities that are doing well, for example in the context of the increase in social housing we are now seeing.
I expect that because of the increase in social housing stock that happened over the course of 2018, we will find that fewer housing assistance payments were made in 2018 than in the previous year. Again, I will be able to verify that very shortly.
The Deputy's final question related to affordability schemes. It is important for those schemes to open in a time horizon that is significant to the actual houses that are being completed.
True.
The first few sites have been awarded in those local authorities. The second sites are now going through a process. Other local authorities are doing economic analyses of the affordability requirements in their own areas. As they come through, the Department will be able to work with local authorities on individual schemes.
The quarter-on-quarter comparisons are a valuable way of looking at this issue, particularly because building is affected by the climate. That is one of the reasons the task force report makes such comparisons. It is a concern that the total level of construction in the city of Dublin, where housing need is greatest, is 50% lower than it was this time last year. I am not clear on why that reduction is the case. Rather than dismissing the question, it would be better for the Minister to give us an explanation, if he has one, of why there has been such a dramatic reduction by comparison with the same quarter in the previous year. It is clear from the CSO figures that the total number of completions did not increase significantly in the third quarter of 2018 by comparison with the third quarter of 2017. The number of units was 900 in each year. While 900 extra homes is welcome, I do not think the Minister can call it "dramatic". I will ask the same question again. Is the Minister concerned about the central figure which shows that the total level of construction of new homes in Dublin city was 50% lower in the third quarter of last year than it was in the same quarter the previous year? The year-on-year reduction in the Dublin region as a whole was 20%. Does he have an explanation for that? Is he confident that the drop in total construction is a one-off? Is he confident that when we see the figures for the fourth quarter, we will see a levelling off or possibly an increase?
I want to follow up on what has been said about the timeframe for the affordable housing scheme. As the Minister knows, one of Fianna Fáil's major requests with regard to the housing budget prior to budget 2019 was that an affordable housing scheme would be established. Since 2012, house prices have exploded by approximately 90%. The average house price in Dublin is approximately €368,000, which is six and a half times the average household income. This shows that an affordable housing scheme for working people is urgently needed, especially in our urban centres. Such a scheme would be of particular benefit to first-time buyers because it would give them some hope. I am trying to get a handle on whether the Government has set a delivery target for 2019. I understand that it takes time to get sites. I also understand that a number of local authorities responded to the first call, although some of them did not. Questions need to be asked about why some of them did not respond to the call for housing.
I want to get some specific targets and timelines regarding when we will see delivery of affordable homes for working people.
I thank the Deputies for those questions. It is important to note that while the Government supports subsidised housing schemes or affordable schemes, this does not mean that there are not affordable houses currently available in the market separate from those schemes. If we note the number of transactions in housing up to the end of October 2018, including first-hand and second-hand homes, there were 53,000 transactions. One in two of those transactions would have involved amounts of less than €250,000. Obviously, as we look more towards somewhere like Dublin, one in two of such transactions would have been for less than €320,000 - the median price. There are more challenges there and that is the reason we directed the first call at those local authorities in whose areas the affordability challenge is the greatest. There are targets in those first schemes that were approved and we are now working with the second tranche in order to get them in line in terms of providing those schemes and getting houses built. We are also looking at other ways of being able to deliver the serviced sites fund in a more truncated timeline than had previously been envisaged, even when we were having our discussions on the budget. Affordability is a key concern for everyone in the House. There is more that we have to do and we are constantly examining the position in order to see how we might improve matters.
I do not have the quarter 3 report in front of me. However, I recall thinking at the time that the way in which the material it contains was dealt with was funny and that perhaps it might have been misleading because what it seemed to imply was that construction in Dublin was down when this is simply not the case. Construction, planning permissions and completions are up. My understanding is that the reason matters looked like that in quarter 3 was because more completions had been done and therefore those active sites had closed. I put a caveat on that because I do no have the report in front of me, but it is true to say that when we look at construction in 2018 and when we have the final figures for quarter 4, we will see that it is up dramatically in every part of the country on what it was in 2018, particularly in Dublin. Planning permissions continue to increase as do commencement notices and completions. We like to use the new CSO completions data which I requested when I first came into office. We will have those figures. The Central Bank is estimating 19,000 completions for 2018. We believe the figure will be between 18,000 and 20,000. We will wait for those final figures and the number will be up again in 2019.
