Dáil Statements on the Housing Strategy

Wednesday, 20th July

CHECK AGAINST DELIVERY

Closing Statement by Minister of State Damien English

I want to thank everyone for your contributions today and yesterday on the new Action Plan for Housing and Homelessness – Rebuilding Ireland. Judging from the feedback here in the House, and from what I have seen and heard in the media and elsewhere, the Plan has been broadly welcomed. It is regarded as an ambitious and comprehensive starting point in the Government’s efforts and resolve to really deal with both housing and homelessness.

I must say that I have found the debate around housing and homelessness to be very well informed. I think members of this House, from all parties and none, have rightly prioritised these linked issues as the number one societal challenge facing the country. The setting up of the Special Oireachtas Committee, its sessions and its Report has helped to inform the debate.

 

Minister Coveney and I have also met with a very broad group of stakeholders in these areas. We hosted two very-well attended stakeholder forums, both of which generated constructive debate and feedback. This process has greatly added to our understanding of the housing system and how its difficulties are leading to homelessness for many people.

The housing system is a broad and inter-connected set of markets and sectors. Importantly, each sector and market impacts on a different group in society. In developing the Action Plan, Minister Coveney and I were acutely aware of the need to deal with each part of the housing system individually, but also to address the inter-connectivity and cross-dependencies as part of shaping the overall solution – to build more homes. In taking this approach, we have the dual objective of repairing the broad housing system, while at the same time providing real solutions for people.

 

For this reason, I was most pleased with the responses to the Plan that referenced the fact that, for the first time, Government was looking at housing in its entirety. That is really at the heart of this Plan. To really restore the housing system to a sustainable level, you need to deal with all the component parts. We looked under the bonnet of each sector and market of housing, and came up with key actions to help repair what is broken or what can be done more effectively in each.

It was through this analysis that we arrived at the five key Pillars:

  1. Addressing Homelessness;
  2. Accelerating Social Housing Delivery;
  3. Building More Homes for the wider housing market;
  4. Improving the Rental Sector; and
  5. Making the best use of the housing we have.

 Homelessness:

On homelessness, we have set a very clear target to have no families in hotels by mid- 2017, except in very limited circumstances. Long-term hotel accommodation for families is not acceptable and we will end it. The challenge here is to provide alternatives and trebling the Rapid Build programme to 1,500 homes is the key action.

 

In the meantime, we are going to ensure that services for families, and particularly children, in hotels and other emergency accommodation is far better including:

  • Enhanced liaison on family support, child welfare and child protection, including Family Resource Centres;
  • Access to early-years services;
  • School Completion Programmes;
  • Enhanced locally available practical supports for daily family life;
  • Access to free public transport for family travel and for school journeys; and
  • Practical supports and advice for good nutrition for those without access to cooking facilities.
  • The other side of homelessness is rough sleeping which is often compounded and tied in with mental health and addiction issues. This is a complex area that really requires close co-operation with both the Department of Health and the HSE. For that reason, we are trebling the funding for mental health and primary care services for homeless persons from €2 million to €6 million in Budget 2017.

In examining the social failing that is homelessness, one point was made again and again – that prevention is far better than cure. We are therefore targeting families and individuals worried about, or at risk of, homelessness with a new awareness campaign. For the families and individuals in mortgage arrears, we are providing more and better services, including free expert legal and financial advice and supports.

 Social Housing:

The link between a lack of sufficient social housing and homelessness is clear. The lack of social housing options is also putting pressure on the rental sector, with a third of renters now supported by the State. Again, the target here is very clear – 47,000 new social housing homes by 2021 at a cost of €5.35 billion. It’s worth clarifying these figures once and for all:

On the money side, the Social Housing Strategy 2020, published in November 2014, committed to the delivery of some 35,600 social housing units in the period 2015 to 2020, supported by investment of some €3.8 billion.  The social housing element of the Rebuilding Ireland Action Plan proposes a significantly increased level of ambition, aiming for the delivery of 47,000 social housing units, through build, refurbishment, acquisitions and leasing, over the 2016 to 2021 period, supported by Exchequer investment of some €5.35 billion; a further €200 million is being provided for the Local Infrastructure Housing Activation Fund.

The €5.35bn investment proposed for the social housing area over the 2016-2021 period comprises some €4.5 billion in capital funding and €844 million in support of programmes funded from current expenditure.  In terms of capital funding, the €4.5 billion being provided, represents a very significant assignment of resources towards addressing housing needs.

In summary, Minister Coveney has secured €2.2 billion of the available €5 billion capital fiscal space over the 2017 to 2021 period, €2 billion of this funding is being assigned to support the delivery of the 47,000 social housing units as set out in the Action Plan; and €200 million is for the Local Infrastructure Housing Activation Fund (LIHAF) which will provide much-needed enabling infrastructure on key sites to open up lands for early development.

This reflects a very clear demonstration on the part of the Government of the high priority that it assigns to tackling, in a comprehensive manner, the range of interlinked housing issues outlined in the Action Plan.

In relation to the output numbers

Of the 47,000 units, over 26,000 units will be built exclusively for Social housing, 11,000 will be acquired from the market, a portion of which will be newly built units and approximately 10,000 units will be leased by LAs and AHBs.

Building More Homes:

When the housing market is working well, there is a good supply of a range of new and second-hand homes for purchase, which cater for the entire span of the market from starter homes upwards. At the moment, we are producing half the 25,000 houses a year we need. Similarly, due to this shortage of new homes, the second-hand market is half what would normally be seen. The key graph on output is on page 30 of the Plan. It shows output predictions with the various elements of the Plan implemented versus the “business as usual” without these measures. If we don’t act decisively, we predict a continued scraping along the bottom in terms of output, or making small increases as the market slowly recovers. All the while, pent-up demand and our growing population is flying ahead.

We must get production of housing for starter homes and trade-ups back on track. At the moment, the landscape facing potential first-time buyers and expanding families looking for a bigger home is really challenging. A significant amount of analysis has been undertaken on the housing market, and the Plan addresses three key elements:

  1. Land,
  2. Costs, and
  3. Realisable demand.

In terms of land, the State has to be more active, at both central and local levels, in terms of deciding where our new houses are going to be. We also have to work to keep the cost of land down, as it will impact on the eventual sales price and the affordability of these homes. In the Plan, we are going to champion the best use of State lands for housing. We will take immediate action to boost supply, as well as taking the more strategic view under the new National Planning Framework.

However, contrary to some views expressed across the floor, we are not “giving away” publicly-owned lands to private developers to make exorbidant profits on – we are looking to extract the maximum value for the State in terms of securing social units at a reduced rate, tying in developers to provide a minimum percentage of homes at affordable prices, as well as balancing these mixed-tenure developments with other private housing.

We have very good data on local authority sites and we are going to work with them to help bring housing on stream quickly. And we’re also in discussions with other State agencies and entities about the potential of their lands, many of which are in prime locations that are already well serviced. This will also create opportunities for builders and land owners. This is an area where a key link with social housing exists. How do you create truly integrated communities? You plan and build them like that.

Using incentives such as the €200m infrastructure fund and the new affordable rental model, we are going to run competitions for the best new developments. These will be attractive places to live and at affordable prices and rents. Private, rental and social housing will be designed and built together. We are going to challenge local authorities, land owners and developers to be innovative and to deliver quality product, at affordable prices and at scale.

After land, construction, finance and taxation are the significant costs of delivering a house. We are dealing with part of these costs through the €200m Infrastructure Fund, which should help to reduce some of the up-front costs for builders and have a knock-on impact on the price levels they’ll be setting. The NTMA and ISIF will also prepare an offer for developers to facilitate on–site costs. This is separate but complementary to the €200m Infrastructure Fund. Again, given the cost reductions, housing at more affordable prices should be achievable.

We will also reduce costs by taking some time and risk out of the planning process. Housing development proposals of over 100 units will go straight to An Bord Pleanála for priority decision within the 18-week statutory period. This is not, like some have said, to silence or dismiss local views and input in considering these applications – indeed, all developments will need thorough pre-application consultations with the relevant local authority to understand how this proposal will fit within the wider strategic context of local plans, and individuals will of course be able to submit observations on any applications to the Board, just as they can do under strategic infrastructure planning applications.

We are very focussed on supply but realisable demand is a key component of the equation. In our extensive engagement with stakeholders, the ability of people to secure the funding to buy homes and the length of time this takes was raised again and again. Simply put, the increased uncertainty around buyers, particularly, first-time buyers, leads to house builders being more cautious in terms of the amount of product they build and sell at any time.

 

In order to incentivise supply of starter homes at scale, the Government will bring forward in Budget 2017 a Scheme to help first-time buyers. It will be back-dated to the announcement yesterday and therefore builders and buyers can factor it in now – there is no need or value in stalling plans to build or buy – decisions that people take today will be able to reap the benefits of these measures from the Plan launch date (19th July).

I’m personally very committed to growing jobs in construction and encouraging young people to get an education in construction skills and disciplines. We are going to work very closely with SOLAS to this end. There are great opportunities and we need to ensure that the system can adapt and accommodate the likely increased demands for these professions. I’d also be very hopeful that people that had to emigrate might be encouraged to come home, once we get building at scale again.

Rental Sector

As Minister Coveney said yesterday, there wasn’t time to develop a full rental strategy in this Plan, so it will follow later in the year. We will bring early actions through to ensure where sales of large-scale single developments take place, tenants will have the right to stay in their homes. We’ll also ensure that the resolution service is fair and balanced between tenants and landlords.

As I mentioned earlier, we are also going to deliver a new affordable rental scheme as an early action. The Scheme will help low-income families and individuals with rental costs and will also help boost supply. The use of affordable rental on multi-tenure sites will be encouraged as part of the bid process for the €200m Infrastructure Fund.

 

When we examined the rental market, the link to student demand for accommodation was raised. Where there is an unmet demand for student accommodation, it displaces into the rental market which is already creaking in places. We are targeting the production of an addition 7,000 student places by 2019, in partnership with the Department of Education and the Higher Education Institutes, and other stakeholders.

Vacant Housing:

Another consistent message we received from stakeholders was that the Plan needed to tackle vacant properties. These vacant properties are having a very negative effect in urban and rural locations around the country. This was one area where there was broad agreement that vacant properties, particularly, in our cities, towns and villages need to be tackled.

 

Again, we are going for a two-pronged approach of immediate action to boost housing supply and a longer-term strategic approach. In the short-term, we are going to provide the Housing Agency with €70 million in ring-fenced funding to initially buy 400 vacant distressed properties from bank and investment portfolios. The Agency will then sell on the properties to local authorities or approved housing bodies and use the funding to buy more homes. We are targeting the provision of 1,600 by 2020.

We are also introducing a new Repair and Leasing Initiative. This will allow local authorities to provide grant funding to property owners to bring vacant properties up to standard. The local authority can then lease the properties for social housing. The grant being offset against lease costs.

 

Importantly, a lot of the problem vacant units are not houses but commercial properties. To deal with these, we are going to look at the Planning Code to see if we can make turning these units into residential simpler and faster.

I have a particular interest in urban and village renewal, given my areas of responsibility. I will lead an Urban Renewal Working Group to bring forward plans to use housing and community schemes in a collaborative way to improve city, town and village centres. We’ll also work with colleagues in the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs to co-ordinate their schemes with ours and to bring forward joint demonstration projects.

 Conclusion

While the Plan was broadly welcomed, there was also a consistent message that implementation is the key. I agree with that, as does Minister Coveney. As we were developing the Plan, we had already started on implementation.

We are putting in place a new Housing Delivery Office. This Office will support and assist the excellent staff in my own Department who have been working tirelessly to put together this comprehensive Plan and who will be central in delivering the key aspects across all five Pillars. There is a huge challenge ahead for all of us and I want to make sure that we have the system and supports in place in my Department, in local authorities and in the various agencies and bodies to ensure that projects and programmes are delivered.

 

What people want to see most flowing from this Action Plan is increased delivery of housing on the ground. The Action Plan for Jobs is a very successful model where time-bound and clearly assigned actions were a key feature. The Actions in this Plan are equally time-bound and assigned. Progress will be reported in monthly and quarterly Reports on progress under each of the 80+ actions, as well as progress on the pathfinder projects to test and demonstrate the Action Plan’s effectiveness. The reports and key statistics on progress will be available on the dedicated website www.rebuildingireland.ie

 

Thank you.

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