Dáil Éireann - Volume 531 - 22 February, 2001

Ceisteanna–Questions. Priority Questions. - Local Authority Housing.

1. Ms O. Mitchell asked the Minister for the Environment and Local Government if he is concerned at the recent downward trend in housing starts; and if he will make a statement on the matter. [5198/01]

Minister of State at the Department of the Environment and Local Government (Mr. Molloy): The overall position in relation to hous[327] ing output and leading indicators was positive in 2000, whether we look at total housing output, HomeBond registrations, progress in relation to serviced land availability or planning permissions.

HomeBond registrations, which are a leading indicator of private new housing starts, last year totalled 34,600 units, up more than 2% on the 1999 total. Almost 50,000 housing units were completed last year, an increase of 7% on 1999 and the sixth consecutive year of record housing output. Other leading indicators of housing output, such as planning permissions and availability of serviced land, are also positive. Some 86,500 housing units received planning permission in 2000, an increase of 13% on 1999.

Local area plans were adopted in Dublin during 2000 for a significant number of key sites and the stock of serviced residential building land available is encouraging and is set to improve. There is currently 4,500 acres of zoned serviced land in Dublin, which could provide more than 67,000 housing units, and a further 3,500 acres of zoned serviced land in the Mid-East Region with an estimated yield of about 28,500 housing units.

The housing supply measures put in place by this Government, in servicing land and alleviating bottlenecks in the planning system, are clearly having the desired effect. Further measures, including the designation of strategic development zones for residential development, completion of local authority housing strategies and pro-active recruitment of construction professionals, should have similar positive effects. In tandem with my Department's housing supply unit, a cross-departmental team on housing has been established to ensure the urgent implementation of key water, sewerage and roads infrastructure projects necessary to maximise housing output over the coming years.

Ms O. Mitchell: I am aware that output rose last year in the housing sector, although it was slower in the cities where demand is greatest. I am concerned about the consistent drop in recent months in registrations, which are a better indicator of what is about to happen as opposed to what has happened in the past. Is the Minister concerned that the level and type of interference, both by way of regulations and by way of fiscal measures, are working against increasing the supply of housing? There is evidence which we read about regularly in the papers that the two-year life span of a planning permission is introducing huge uncertainty for builders, particularly small builders who feel they cannot comply and are leaving the sector. Also, the banks are reluctant to give financing for housing in these circumstances. The requirement for 20% in relation to social housing seems to be introducing uncertainty. I support the social objectives of that, but it does not increase supply, and it shifts the cost of social housing from the State where it always rested to the first time buyer in the same estate. That increases the cost to first time buyers to the [328] point where it is it is pushed beyond their means, particularly in Dublin and other major cities. Would the Minister agree there is now considerable anecdotal evidence to suggest that traditional builders are leaving not just the sector but the country and building in Belfast, Great Britain and Spain where there seems to be greater certainty, rather than here where they simply cannot produce houses that the buyer can afford?

Mr. Molloy: It is amazing, if the builders are leaving the country, that we are managing to achieve an increased level of housing output – 50,000 houses last year – and that 86,500 planning permissions were granted last year. Why would I have gone to the bother of going through the whole system to obtain permission with that development. There is evidence of continuing strong demand into the future for housing. The building industry is working at full capacity and extraneous measures are being taken to attract construction professionals to assist in achieving even higher levels.

A change was made in respect of HomeBond registrations last year which had the effect of bringing registrations forward early in the year. This resulted from the issuing of a circular by HomeBond in December 1999 informing its members that developments must be registered before work begins on a site so that foundation inspections can be made, and that a penalty would be applied in cases of late registration. Prior to that many, developments were registered only at the mid-construction stage. Thus, the Deputy is not really comparing like with like given that the threat of a penalty brought forward a large number of registrations. However, we are keeping the situation under review because we would be concerned if there was evidence of the trend suggested by the Deputy, but there is not any hard evidence.

The Deputy referred to the social housing requirement of 20%. That is not yet in operation. Housing strategies have yet to be completed by local authorities and development plans amended to take account of the housing strategies. It is not, therefore, having a major impact at the moment. I accept that many of the measures designed to increase the construction of new houses aimed particularly at the first time buyer require much thought on the part of developers in order that they may focus their building programmes where the biggest social need exists.