Deputy Anthony Lawlor: I welcome the progress in housing legislation. This is a step along the way, and we have a long way to go to rectify the problems that developed under the previous Fianna Fáil Administration. I am delighted Deputy Troy said the only construction that will happen under his watch will be the tent at the Galway Races where his developer friends will be. I am sure he would welcome such a scenario again. The Minister of State knows my views on Part 5.
I have always said that while Part 5 was an instrument to aid development and build houses, it never built communities and I have always argued against it. Deputy Troy has suddenly developed a social bent regarding building social housing. He never mentioned it in the past three years when no houses were delivered to local authorities under the Part 5 scheme. It is one of the reasons the Government should take more control of house building for people on the housing lists. Part 5 has not delivered on that, particularly in the past five years. I will welcome any changes to that piece of legislation, which was brought in a number of years ago.
In Kildare this morning, 6,047 people are on the housing list. While the Bill will help in some regards, I am concerned about how the HAP will replace the rent supplement scheme. In Kildare very few properties are being made available for rent supplement to the local authorities. Will the HAP, which is replacing it, improve this? It is probably a matter for the Minister for Social Protection, Deputy Burton. We have a serious issue regarding rents. Competition is coming from the private sector, which is strong in Kildare, not only in my constituency but in Kildare South. In view of the strong jobs growth, particularly in my area, there is strong competition for accommodation and therefore people on waiting lists are unable to acquire properties. We tried to dictate previously. Unless we bring the allowances into line with the open market, more tenants on waiting lists will be unable to acquire properties.
I would like a quicker turnaround of vacant local authority properties, and while I welcome the funding the Minister of State allocated, we need to speed it up. There are boarded-up houses in local authority estates and it is vitally important we make those available to tenants as quickly as possible. Can we strengthen the ability of the offspring of long-term local authority tenants to take over their parents’ properties? I know of a number of cases in which a tenant passed away and the local authority cannot make a decision to allow the son or daughter to live in the house afterwards.
Perhaps we could do some legal work in that respect.
The Minister of State has heard me argue before that this is really an issue of house building and we need more houses to be built. The Minister for Finance is looking to provide some sort of assurance for first-time buyers for new houses but as of this morning, there are only 34 new houses available on www.daft.ie for the entirety of County Kildare. If many people secure loans through banks with the aid we provide through assurance, there would be much money chasing too few goods. We must consider how we can incentivise developers to start building. It may be radical but I have an idea which relates to a term in rugby, which the Minister of State would know as she comes from Limerick. It is “use it or lose it”, and I contend that if land is zoned but not used, for example, if no planning permission is sought or a development is not built, in a five-year period, the land should be rezoned to previous use, which may have been agricultural purposes. Something radical like that may shift developers into building more houses.
I understand from a building perspective that the cost of building a house when compared to the market price leaves a differential. We may need to consider some tax elements to incentivise builders to produce houses. It costs approximately €100 per square foot to build a house, with a 1,500 sq. ft semi-detached house costing €150,000. On top of that are levies charged by local authorities, taxes and site development costs. The final build cost would be between €220,000 and €250,000 but new houses for sale are currently not achieving that price. Somebody must make up the difference, so we must incentivise builders to develop housing which we need. The Economic and Social Research Institute has indicated we need 25,000 to 30,000 houses per annum but only 12,000 were built last year, meaning there is a deficit in the area, particularly on the eastern side of the country. Should we stimulate building rather than facilitating people in accessing finance, which will come later? The cost of money is also an issue, and only yesterday I discovered there is a difference of 1.4% in the cost of borrowing money here as opposed to borrowing money in Germany. We have the same EU rate across the board, with a basic ECB rate of 0.25%. We must address this difference in the cost of money when people are buying properties.
I have been completely opposed to the Part V provisions from day one, as they would build houses rather than communities. It was a ridiculous part of the legislation, which amounted to a cop-out by the previous Administration. It took the house building role of local authorities away from them and put it into the private sector. We can now see the results with, for example, 6,047 people in Kildare on the housing list as a direct result of Part V provisions. Nothing has been delivered to local authorities in the past three years and I cannot see how anything will be delivered in the next two years under these provisions. The initial concept was watered down, and I have always believed that a contribution should be made to a local authority when somebody is seeking land to be zoned. I have always believed in land being handed over so it could be used by local authorities for amenities, schools, roads, libraries and other elements for developing communities.
I welcome the legislation, which is a step forward; we are going in the right direction but we must consider areas in which the housing assistance payment may not work out because of the rent differential between what the Department of Social Protection is willing to pay and what the market demands. I welcome the legislation and I approve of the tenant purchase scheme. Local authorities need access to finance so they can provide loans to tenants. I welcome this Bill and I wish the best to the Minister of State.