Paddy Burke (Fine Gael)
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I welcome the Minister of State at the Department of the Environment, Heritage and Local Government, Deputy Noel Ahern, to the House. Will Senator Ryan move the motion?

Brendan Ryan (Labour)
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Senator McCarthy will move the motion. There is a Government amendment to the motion but I am unaware of any supplementary Order Paper to that effect.

Paddy Burke (Fine Gael)
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I am informed that the supplementary Order Paper was circulated.

Brendan Ryan (Labour)
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Must not a supplementary Order Paper be made by the order of the House rather than just be circulated?

Paddy Burke (Fine Gael)
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No.

Brendan Ryan (Labour)
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Can the Government change the Order of Business at any time and circulate a document without formally notifying the House?

Paddy Burke (Fine Gael)
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The amendment to the motion does not need to be included in the Order of Business. It is only done out of courtesy.

James Bannon (Fine Gael)
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I welcome the Minister of State to the House and second the motion. I thank the Labour Party for giving us the opportunity to discuss this vital issue this evening.

Shelter and access to suitable housing are two of the most basic human needs. This area of social policy, however, is being wilfully neglected and mismanaged by the Government. There is a housing crisis where first-time buyers are now paying an average of €257,000 for their first home, with the average house price rising by 10.2% in the past year. The average house price nationally now stands at €287,664. According to the ESRI-Permanent TSB house price index, the average house price in Dublin is €384,247 — up almost 5% this year alone. The price of a house in 1996, the last full year during which Fine Gael was in office, was approximately €88,000 in Dublin and €75,000 nationally.

Earlier this year, official statistics showed that, on average, first-time buyers are paying over €250,000 for their first home. Young couples are forced to spend almost one third of their combined income on mortgage repayments, up from 29% this time last year, according to an EBS Building Society and DKM economic consultants affordability index.

As Senator McCarthy stated, first-time buyers in Dublin are spending almost €1,700 a month on their mortgage repayments, while those outside the capital are spending more than €1,300, which is equal to 27% of a couple's combined monthly income. To cap it off, interest rates are due to rise tomorrow, with the European Central Bank expected to set the increase at 0.25% or 0.5%. The rungs of the property ladder are getting further and further apart for young first-time buyers. It is a small step for the wealthy but a giant leap for the average young, first-time hopefuls whose dreams are being shattered by the inaction of this uncaring Government.

Affordable housing is virtually non-existent throughout the country, although the need for such provision is acute in certain locations, such as Dublin, Cork and Galway. Some 100,000 individuals are still awaiting local authority houses. The voluntary sector is underdeveloped and there are still enough homeless people in Ireland — more than 5,500 — to fill the Point Depot twice over. This is scandalous at a time when, as the Minister for the Environment, Heritage and Local Government said, the country is awash with money.

The biggest problem facing young people today is the complete and utter failure of the Government to get to grips with the housing crisis. Its approach to rocketing house prices has made Opposition Members of this House sick, as they witness the knock-on effects of the Government's right-wing policies. The average price of a new house stands at €287,000. Some 42,500 people aged over 30 are still living with their families. Some 50,000 families are on local authority waiting lists. Manifesto promises of more houses and a reduction in waiting lists are now a distant memory.

This disaster has been met by a Government response which included the abolition of the first-time buyer's grant, an increase in VAT on housing, and development levies. There have been so many taxes and charges that much of the price paid for a new house goes directly to the Government, particularly in stamp duty. Stamp duty is a regressive tax. It is perceived as a money-making exercise for the Exchequer.

Approximately 108,000 houses are sold in Ireland each year and every day we spend an amazing €85 million on house purchases, which works out at €31.5 billion per annum. Stamp duty made €2 billion last year for the Government from a total tax take of €40 billion. This is a stealth tax aimed at young people — a section of our society that is struggling on an unequal playing field.

The Government has engineered one of the biggest movements of wealth from the young to the middle-aged in our history. It should be thoroughly ashamed of itself. This Government likes to accuse Fine Gael and the Labour Party of having no policies. That is not true, as the Government will know to its cost when the next general election comes.

Fine Gael has already developed a three-point plan for first-time buyers and is committed to implementing it. The plan consists of the following: a house deposit savings scheme, similar to the SSIA scheme, to help young people who are saving for a deposit for a new home; the abolition of stamp duty on second-hand homes up to €400,000 bought by first-time buyers; and the front-loading of mortgage interest relief for first-time buyers to the first seven years of the life of a mortgage, thereby giving first-time buyers help when they most need it. This plan has been established Fine Gael policy for two years but we will not rest there.

We need to examine how the shared ownership scheme operates. Put simply, it is too hard to qualify for that scheme, as it is for the affordable housing scheme which was first announced amid great pomp and ceremony over seven years ago. We must ensure that more people can qualify for these schemes and can afford to make the necessary payments.

We need to deal with the pathetically low eligibility rates for these schemes. Currently, if one earns €37,000 or more one will not qualify. According to the Bank of Ireland, someone earning €37,000 per year qualifies for a mortgage of €175,000 which is nowhere near enough to buy a property in any city and certainly not Dublin, as the Minister of State knows. That has been the case almost since he came into Government.

Noel Ahern (Dublin North West, Fianna Fail)
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I will bring the Senator out to see some of them.

James Bannon (Fine Gael)
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Properties for €175,000?

Noel Ahern (Dublin North West, Fianna Fail)
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Yes. Affordable housing.

James Bannon (Fine Gael)
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That is nonsense. The Minister of State should not hoodwink the people.

Cyprian Brady (Fianna Fail)
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If the Senator comes out to Ballymun he will see them.

James Bannon (Fine Gael)
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The Government has hoodwinked the citizens of this country for the past eight years and they will not tolerate it any longer.

Noel Ahern (Dublin North West, Fianna Fail)
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I am opening them all the time. They are everywhere, except in Clonakilty where the Senator's party tried to block them.

James Bannon (Fine Gael)
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The Minister of State will have his chance to respond.

Noel Ahern (Dublin North West, Fianna Fail)
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I will and I hope the Senator will wait until then.

Paddy Burke (Fine Gael)
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Senator Bannon without interruption.

James Bannon (Fine Gael)
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Even a couple on a combined income of only €50,000 are considered too rich for the shared ownership and affordable housing schemes. In addition, we need to make it easier and fairer for people who are sharing ownership with local authorities. At the moment, we have a crazy system under which one not only pays a mortgage for the portion of the house one owns under the shared ownership scheme, but one also pays rent on that share of the house owned by the local authority. As the State will recoup the value of its share of the home when it is sold, the Minister of State knows the current system is grossly unfair.

The Housing Finance Agency says it has the borrowing capacity to provide more money than local authorities can spend on constructing new houses. The private sector is ready and willing to build them, while the National Building Agency can provide the expertise. The Centre for Housing Research is charged with identifying obstacles to housing output and longer-term trends. However, not enough affordable houses are being built. It is time to bring all these agencies together and provide one integrated, streamlined body to facilitate the construction of new social and affordable housing.

While local authorities remain best equipped to ensure that social and affordable housing is built, it is clear that we need someone to step in where they have failed. That is why Fine Gael recently proposed to merge the Housing Finance Agency, the Centre for Housing Research and the National Building Agency, empowering the new agency to step in where local authorities are not meeting social and affordable housing needs.

The new agency, to be known as Housing Ireland, will be empowered to work directly with the private sector in tandem with local authorities to get houses built. It will be permitted to provide funding not just for new housing construction but also for services such as roads, water, sewerage and communications which are vital to ensuring that new housing comes on stream. Housing Ireland would also lend directly to voluntary housing agencies and would provide funding for land purchase and seed capital, based on a value for money audit.

Fine Gael will also end the practice of selling valuable State land when it could be better used to provide social and affordable housing. We will instruct housing Ireland, in tandem with the Office of Public Works, to conduct a full audit of State-owned lands to identify whether or not that land is necessary to the further development of the Department or the agency. If not, and if it is suitable for housing development, it will be developed for a mix of social, affordable and private housing by the State or through public private partnerships. The Government would do well to listen, for once, to what the Opposition is saying on this vital matter. People need and deserve a roof over their heads and, as I said, they deserve a strong Minister for the Environment, Heritage and Local Government, not a Minister for philosophy or, perhaps more aptly, empty words. The Minister should take note and act.

Cyprian Brady (Fianna Fail)
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I move amendment No. 1:

To delete all words after "That" and substitute the following:

Seanad Éireann supports the efforts of the Government in:

—increasing housing supply as the key response to the broad range of housing needs and demands resulting in over 500,000 houses, equivalent to one third of Ireland's total housing stock, being completed in the past ten years;

—investing in serviced land to the extent that we now have some six years supply of serviced residential land nationally;

—bringing forward five-year housing action plans by local authorities for the period 2004 to 2008 to co-ordinate, accelerate and bring greater integration to action on housing at local level, with particular reference to social and affordable housing measures;

—initiating the development of active land management strategies by local authorities in order to support the achievement of the ambitious scale of social and affordable housing envisaged in their action plans;

—providing for the needs of almost 100,000 households since 1997 through various programmes, including through affordable housing measures with some 2,900 affordable housing units delivered last year;

—prioritising and advancing the special initiative on housing and accommodation under Sustaining Progress which will deliver more than 10,000 affordable houses through the affordable housing initiative and Part V;

—establishing the affordable homes partnership to accelerate delivery of affordable housing in the greater Dublin area;

—launching a new housing policy framework, Building Sustainable Communities, to provide an integrated approach to guide housing policy and investment over the coming years; and

—pursuing prudent fiscal policies to respond to housing demand and provide a stable economic climate.

I welcome the Minister of State to the House. I welcome the opportunity to speak on this matter, which arises as a direct result of the success that the Government and the previous Government have brought to the country. The issue is not about supply but about demand. The figures suggest that in the last quarter of 2005 alone, 26,563 houses were built, with 81,000 built in the full year, which is a 5% increase on the previous year. Some 248,100 people are now employed in the construction industry. These figures are phenomenal and do not only apply to Dublin.

Yesterday we welcomed the Minister's announcement of the financial allocations for local authorities, which will be in excess of €1 billion, and include €942 million for the provision of housing, €45 million for Traveller accommodation and €48 million for remedial works. This constitutes an increase of over €100 million on last year's allocation. We are dealing with supply issues but demand continues to grow. Population growth and the influx of workers from abroad feed into that demand. These issues must be managed and, to be fair, the steps we have taken recently will deal with these demands in time.

The local authorities will build or acquire 6,000 units this year alone. My experience is with Dublin City Council. I take this opportunity to congratulate the housing section of the city council, which is one of the most progressive councils in the country and has done great work in the north inner city in particular. The Minister will refer to Ballymun and other areas but my experience in the north inner city is that there has been significant change. Through proper planning and investment, all the work done by Dublin City Council has paid off. In Dominick Street and Mountain View Court, the council plans to demolish decrepit flat complexes which, while they served their purpose, have become uninhabitable over time. The council has taken a policy decision to replace these complexes with state-of-the-art housing, in many cases with own-door housing. I have encouraged city officials to continue down that road because the more own-door housing that is provided in the inner city, the better. We do not want to go back to the 1950s and 1960s, when people were literally put in boxes and left there for many years. That practice has changed.

I have studied the plans for places such as O'Devanney Gardens, where a major public private partnership is planned and about 800 units will replace 1950s and 1960s flat complexes. This will feed into the issues concerning the supply of houses in Dublin.

Successful projects have been undertaken in the city, particularly the inner city. Much of the co-operative housing that has been provided has proven successful. Killarney Court in Killarney Street was probably one of the most notorious flat complexes for drug dealing and so on but it has been completely turned around. There is now a settled community with all necessary facilities, security and local schools — children are feeding into Larkin community college. This is a major change for that area, given the problems it had during the heroin epidemic of the 1980s and early 1990s. That change came about through proper planning and investment. If we continue with such programmes, particularly with regard to housing, including local authority housing, and associated facilities, matters can only improve.

The management of social and affordable developments is essential. We could rush into this process and provide boxes left, right and centre but that is not sustainable. Communities need schools, access to transport and services. Whether in the inner city or the suburbs, if these issues are not dealt with properly at the planning stage, significant problems will result. Therefore, management and planning is essential.

A development is under way at Spencer Dock on the north quays, in the area of the Irish Financial Services Centre. Discussions on this development began a number of years ago, which resulted in a new school for the North Wall area to deal with the influx of residents who will move to the area. The discussions at the planning stage considered family housing, including not only apartments for individuals but two and three-bedroom apartments, as well as the provision of shops, crèches and leisure facilities. This approach will pay dividends.

Mistakes have been made in the past, from which we must learn. In the past, Cherry Orchard had no facilities — not a shop, a school or a telephone box. That has changed. Dublin City Council recognised the challenges. It accepted that issues had been neglected over a long period and decided to tackle them. As a result, areas have been transformed. There are now football pitches, schools, leisure facilities, clubs and organisations in places like Cherry Orchard, which had been neglected for many years.

I have visited cities such as Glasgow to study sustainable models of high density urban housing, from which we must learn. It is possible to balance development with the right of people to an acceptable quality of life, which is what we must aim for.

The issue in this country is not with supply but with demand, with which we will have to keep up. Major initiatives have been put in place, including with regard to affordable housing and shared ownership schemes. In north County Dublin, thousands of private and public housing units are being built. Many of the Part V houses will only come on stream this year and next year, and the Dublin Docklands Development Authority will have an input into the location of such houses.

I support the amendment and welcome the opportunity to discuss the issue.

Shane Ross (Independent)
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I wish to share time with Senator Norris.

Pat Moylan (Fianna Fail)
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Is that agreed? Agreed.

Shane Ross (Independent)
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I do not understand how anybody with sympathy for the young people of this country could disagree with the sentiments expressed in the motion. It is one of the great problems of the success of the Celtic tiger that the property market has taken off to such an extent that so many people cannot afford to buy houses. It is an issue the Government has been unable to address successfully. The motion expresses an aspiration which everybody in the nation has to own their own house, regardless of whether it is cheap or expensive. That aspiration is difficult to fulfil in this booming market.

I understand the sentiments of the Labour Party, particularly given the figures that were released today in a report by DKM and the EBS. The report showed that the proportion of people's income going to pay their mortgages was continuing to rise and that the amounts being paid are unparalleled. The motion identifies and addresses the problem very successfully but the difficulty is how it will be solved.

It is important to note that it is not just people on the modest incomes mentioned in the motion who are excluded from the housing market. It is also people with middle and high incomes. There are people at every level of income who cannot get on the property ladder. The problem here is not necessarily one which the Government can immediately resolve.

People are using the most extraordinarily devious means to get on the property ladder. These means are forced on them by the price of houses. They include going to the bank and telling a pack of lies about their incomes and expenses. The banks accept those lies, knowing quite well that they are lies, and give them the loans. There is massive competition for mortgages, which means the housing boom is being fuelled by the banks.

The main problem is not the Government which, to a large extent, is sitting back and letting the market operate. One of the great problems is that the banks are bending over backwards to lend money to people who cannot afford it. The rise in interest rates in the last few days signals the beginning of a difficult period for many young people in this country whose mortgage repayments will become far more difficult to pay. Then the banks will demand payments which people will be unable to pay.

I do not blame the Government for the boom in the property market but, to some extent, those who are lending money recklessly to people who, one day, will be unable to afford to repay that money. All sorts of bogus stress tests are conducted on people. We know these are bogus because the amounts that the banks are prepared to lend to people to get into the property market are now from six to nine times their income. In more prudent days, the amounts were two or three times their income. The banks pick out those to whom they lend but some people cannot borrow from lending institutions at all and cannot get on the housing ladder as a result.

We are dealing with a pretty unscrupulous industry. We should not necessarily seek increased taxation and I note the motion does not mention that. It refers to control over development land so perhaps it is implied in that regard. It would be dangerous to increase taxation. In particular, it would be dangerous to increase the level of capital gains tax. However, it should be acknowledged that the Government has an interest in the property market continuing to boom. It takes an enormous amount of money from it through capital gains tax, stamp duty and VAT. Could the Government examine ways — and I do not believe the stamp duty argument — whereby it could reduce taxation and thereby free up property in the property market?

David Norris (Independent)
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I am grateful to Senator Ross for sharing time. I, and probably all Members of the House, share the Labour Party's concerns about the enormous increase in house prices. The house my father bought in Ballsbridge in 1946 and where I was reared was recently on the market. It was withdrawn at €3.5 million and the sale was negotiated for a substantially higher figure. It probably was sold for more than €4 million.

Senator Ross is correct about young people spending disproportionate amounts on mortgages. Approximately 33% or one third of their income goes on repaying mortgages. A rise in interest rates is expected on Thursday from the European Central Bank. That is likely to be not 0.25% as originally expected but 0.5%. It will add several hundred euro to the mortgage repayments of the average family. We might eventually reach the point indicated by Senator Ross, where banks will start to repossess properties. That will lead to the problem that arose in the British market some years ago, negative equity.

However, that might not reduce the price of houses in Dublin. According to the construction industry there is still a substantial under-supply of houses in the Dublin area. The market, therefore, will squeeze the price further up. There is also the problem of gazumping, where people make an offer for a house which appears to be accepted but, within a matter of days, the price increases in a fashion that is difficult to justify morally, whatever the legal constraints might be. An interesting case of gazumping was aired recently on Joe Duffy's "Liveline". The person involved was absolutely adamant and eventually secured the apartment at the original stated price.

There is enormous pressure on young people who cannot afford to acquire a house. Communities are being destroyed because young people cannot afford to buy houses in the areas in which they were reared, where the prices have been forced up not just by market forces but also by people coming into the area and investing in the housing market for profit. One good feature of the market is the exemption from certain types of duties for first-time buyers. That is a good idea. Affordable housing is also a means whereby young people might be able to get on the property ladder. However, even then it is difficult because they must get sufficient money together for a deposit.

It is worrying that so many builders have managed to get around their obligations by making payments. The Government should insist on the correct proportion of affordable housing. The greed of the construction industry has been clearly signalled by the fact that among the people with enormous incomes who have been under investigation recently by the Revenue Commissioners for non-payment of tax, a significant proportion of them generated these enormous sums from the housing market. However, that was not enough for them. They also sought to fiddle the banks.

While Senator Ross took on the banks, in which I am usually happy to join him, on this occasion I concentrate my fire on the construction industry. There are practices in the industry which must be examined. The price of housing in this country is absurd and will only lead to misery for young people.

Michael Brennan (Progressive Democrats)
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I second the amendment. The subject of the motion, like many of those before us in recent weeks, reflects a source of genuine anxiety and concern among the public, not just among first-time buyers but also their parents and families, and among the many people coming to live in our country. The Labour Party motion is welcome in that it provides an opportunity to discuss this serious topic. I would have preferred the motion to be a little more extensive. To compare it to a story, the Labour Party motion presents only "the middle", says little about "the beginning" and worst of all does not even suggest "the end" or a path towards it.

It would be useful to set out some of the context to the problem of land and house prices. The House should be aware that the overall objective of Government policy on housing is to enable every household to have available an affordable dwelling of good quality, suited to its needs, in a good environment and as far as possible for the tenure of its choice. In general, the principle applied is that those who can afford to provide for their housing needs should do so either through home ownership or private rented accommodation. In tandem with this, supports should be available and targeted to others, with due given regard to the nature of their need. I doubt there is much disagreement on either side of the House — even from the Labour Party — with that approach.

This policy objective has to be pursued in a demanding environment. A person's home is his or her castle, so to speak. It is people's shelter and is where they and their families grow and share in the experiences of life. Whether for historical, social or cultural reasons, Ireland has a high rate of home ownership and Irish people see owning a home as an important element in their lives. There are other less obvious considerations. The provision of quality housing is fundamental to our economic development. In the past the Minister has outlined how housing is an important element of our national infrastructure and thus has a key role to play in maintaining Ireland's competitiveness. As a quality of life indicator, good quality housing is a factor in inward investment decisions for example.

The most pressing demand comes from our expanding population and thriving economy. After a slight fall between 1986 and 1991, the upward trend in population resumed in the early 1990s. This trend has strengthened further still in this decade, with the 2002 population being the highest recorded since the census of 1871. Our economic performance must also be taken into account. The national accounts for the end of 2005 show GNP to have increased by 7% since the same period in 2004. The figures point to an economy that is performing well and better than some had previously thought. The ESRI believes this strong performance will continue into 2006.

People are showing an increasingly positive perception of their current environment and their economic expectations. Despite the recent spike in fuel prices and well-aired concerns about personal borrowing, the overall consumer sentiment index published by the ESRI was 98.8 in April compared to a figure of 92.3 in March. Consumer optimism is strong.

When these population and economic factors are added to the aforementioned mix of high rates of home ownership and our age demographic, the result is similar to that reflected in the Educational Building Society and DKM economic consultants' report published yesterday. Its housing study has found that couples buying a house for the first time spend almost one third of their monthly income on mortgage repayments.

The affordability index also found that Dublin buyers spend at least 32% of their income on mortgage repayments, an increase of three percentage points since last year. Spending across the rest of the country averaged at 27%. As a proportion of disposable income, mortgage repayments are at an historic high. There is also the likelihood of a large interest rate increase tomorrow, perhaps as much as half of 1%, double what many expected. This could add €56 to the repayment cost of a typical first-time buyer's mortgage, on top of the €56 increase already levied this year.

Immense pressure is being put on the housing market. More important, immense pressure is being felt by people across the country and young people, in particular. The Government's policies are having a positive impact but in the face of the sheer demand, relief is difficult to identify. We know that tinkering around the edges of the problem achieves little. This was tried in the mid-1990s, but it was only when we started to get serious about supply that progress was made. A massive number of new houses are being constructed. The total number of house completions for the first three months of 2006 was 22,000, an increase of 15% nationally. Contrary to the impression given in the Labour Party's motion the figures show that Government policy continues to facilitate strong housing supply.

The Government has, correctly, made clear that the focus is and will continue to be on maintaining the high levels of housing supply for all members of society, in tandem with targeted policies aimed at increasing the provision of social and affordable housing. On this front, I commend the Minister and the Government on the announcement yesterday of record funding of more than €1 billion for social housing and an extra €100 million for the main housing programme. Contrary to the thrust of the Labour Party motion, this announcement will provide €942 million for local authority housing, €45 million for Traveller accommodation and support, and €48 million for remedial works to local authority dwellings, all of which is necessary, welcome and commendable.

On maximising the monetary value and value to the public of publicly-owned land, it would seem wise that the State, via each local authority would have a comprehensive and up-to-date inventory of lands owned, or in any way controlled, by local authorities. I suggest that a full audit of such land, its use, and its zoning would help to inform proper planning decision making. It would at least ensure that local authorities can honestly say they are using all appropriate resources available to them to fulfil their duty in regard to providing housing.

The Opposition motion refers to the successful provision of affordable housing by Irish firms operating in the UK. They are not the first to recognise this. I understand an Oireachtas committee made a visit to one such scheme in recent weeks. I also understand that work is being done to look into how schemes and practices abroad can be adopted and adapted for use in Ireland with a view to having the same benefits accrue to Irish home buyers. The Progressive Democrats firmly support this work.

There is no doubt that we have some way to go in addressing the problem of house and land affordability. The National Economic and Social Council has said that given the remarkable strength of demand, a significant increase in house prices is inevitable. This is no comfort to those first-time buyers, their parents and families, the many new people coming to our country and the groups I referred to at the outset of my contribution. Neither is it any comfort to them to hear that house price increases have moderated greatly since annual house price inflation peaked at an incredible 48% eight years ago. They will not be impressed by the fact that the quality of Ireland's housing stock is high. The vast majority, 92%, of households surveyed during the national survey of housing quality expressed satisfaction with the general condition of their accommodation, their area and their neighbourhood.

Nevertheless, the achievements did not happen by accident. It has taken policy and action by Government, over years rather than months, to provide the conditions for greater housing supply, increased construction employment, moderated house inflation, €1 billion funding for social housing and good quality housing. Further steps are needed as is clear from the Labour Party motion. However, it is a pity its motion was not more comprehensive and constructive.

Paul Coghlan (Fine Gael)
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I welcome the Minister of State at the Department of the Environment, Heritage and Local Government, Deputy Noel Ahern, and look forward to what he has to say on this subject and how he will apologise for the shortfall that exists in this most basic provision. There is an obvious truth in the Labour Party motion. There is no doubt about the continuing rapid rise in the price of new houses and the failure to take effective measures to control the price of building land. While I am not sure how it could be done effectively, something should be done in that area. The motion also expresses concern about those on modest incomes who are effectively excluded from the housing market or, at a minimum, find it increasingly difficult to get on the first rung of the housing ladder. There is a need, as the motion suggests, for a radical solution from the Government on the home ownership crisis. I look forward to hearing what the Minister of State has to say on that aspect.

The right to a home is a basic right. In regard to affordable and social housing, I support Senator Brennan's call for a full audit of local authority lands. However, I suggest that all lands in State control should be included in such an audit. A debate took place here recently, in which I did not have the opportunity to participate, on hospital lands. The pros and cons of the rush to sell off all those vast acres that surround some hospitals and other institutions were aired. The State, especially the Department of the Environment, Heritage and Local Government, should ensure that many acres of those lands be made available to local authorities because there are huge housing waiting lists in every local authority area. A full inventory should be done as soon as possible to facilitate what is necessary to meet the evident demand.

The number of homeless people on the streets of Dublin is appalling. What agency is grappling with this problem, tending to these poor, unfortunate people who are begging on the streets at night? The State is now very well off and surely hostels could be provided to allow these people a place to stay at night where they would get a meal and shelter.

I strongly support Senator Bannon's assertion that the Government should urgently examine the removal of stamp duty on houses at the lower end of the market. This could cover houses valued at up to €400,000, perhaps, and if the Government could make a start on this it would be welcome.

Senator Ross expressed his sympathy with young people trying to enter the housing market and I would like to hear the Minister of State address the subject. Our sympathy could be demonstrated in a practical way by removing the ban on stage payments. I do not understand why the Minister of State has not acted on this since he expressed his intention to do so when he spoke on the topic in the Seanad in May 2004. There is no uniformity on this issue across the country; I do not believe it exists at all in Dublin, and that is why it should be abolished. It seems to apply mainly in Cork and some other counties.

Why should young people, or anyone for that matter, have to pay up to 90% of the price of a new house before it is completed? They could be out 90% of the cost over the course of a year, they cannot get a proper mortgage and are subject to bridging finance — they are being screwed, let us be honest. Banks and other institutions are prepared to make the money available. People engaging in this type of purchase run a frightful risk of ruin should the builder go bankrupt, although that is unlikely to happen nowadays. In the last year I have heard of cases where such buyers believe they are about to move in to the house only for snags to arise which render it impossible. It is an appalling mess to which the Minister of State can no longer turn a blind eye. It is an unnecessary burden on first-time buyers that forces them to begin mortgage repayments months before occupying their home. This system is of no benefit to the buyer and is designed solely to accommodate the builder or developer. The economy is going well, from which builders are the first to benefit, and no builder needs this practice in the counties that it exists.

In today's Ireland there should be no need for a buyer to foot the costs of building materials for a new house. This is an outdated method of payment and provides no protection to the consumer. The Minister of State surely believes that this is an unacceptable practice and I would like to hear his opinion on it. I do not want to go into the Peelo & Partners report but it showed that consumers are paying an extra €175 million because of this practice. This figure has probably increased because that report dated from 2004. I look forward to hearing the Minister of State address this sore point.

Noel Ahern (Dublin North West, Fianna Fail)
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I welcome the opportunity to outline the Government's approach to housing and to point out progress and achievements in this important area. The Government's strong record on housing is proven and stands in contrast to some of the superficial and unfounded comments made this evening and enshrined in the motion.

House price increases reflect, primarily, intensified demand for housing resulting from unprecedented growth in Ireland's population and economy. Both of these factors have had a major impact in the last year. A report referred to 90,000 extra jobs in the economy and 50,000 extra people in the country. We await the new census figures, but one of the most striking statistics in the last census showed the number of people in the 25-34 year old age bracket had increased by 18%. This increase is extraordinary as this cohort represents the bulk of people buying houses and setting up homes.

It is not true that first-time buyers have been priced out of the market. The number of first-time buyers in recent years is higher than ever before. It is estimated that approximately 45% of all new house purchase loans taken out last year were attributable to first-time buyers. They may be under pressure, depending on their income bracket, but they are buying, they are getting by and they are a significant part of the market.

The Government has taken action to respond to increased housing demand, particularly through measures to promote an adequate supply of housing. There is clear evidence that this policy is having an effect. Last year was the 11th year of record house completions with nearly 81,000 finished. Ten years ago that figure was under 31,000 and in the early 1990s it stood at just 21,000 to 22,000. It has gone up by 400% since then. Senator Norris said these figures hide the fact that building on such a scale is not going on in Dublin. It is, last year 18,000 of the overall figure of 81,000 were in Dublin and approximately 28,000 were in the greater Dublin area. I accept that over ten to 12 years Dublin was slower to get running but the figures in more recent years have been significant and that is where the affordability problem lies. We are providing new homes at a faster rate than any other country in Europe. Such statistics are maintained in an international table. We are currently at an output figure of 20 new houses per year per 1,000 of population, while the UK figure is about five, and Sweden is about one. We are way ahead of other countries regarding output, based on demographics and the increased number of young people in the country.

Senator Bannon said there are more people than ever before living with their families, more 30 year old sons and daughters. There may be, but 15 or 20 years ago they were not living with their families because they were living in Australia, America and elsewhere throughout the world. Which way does one want it? Certainly such people who might be ready to leave the nest are still living with their parents — we might all have that problem to some extent — but in many regards it is a good problem to have because 15 or 20 years ago such people were living abroad.

Our achievement has not happened by accident. One of the central roles of Government is to facilitate the provision of housing, and our record speaks for itself. Since 1997 we have improved the planning regime to ensure it operates in full support of housing policies, and have invested in serviced land to the extent that we now have some six years supply of serviced residential land nationally. We will continue to support investment in infrastructure to deliver high levels of housing output and improve affordability and availability of housing for first-time buyers.

A number of concerted measures have been taken through targeted affordable housing programmes to increase the availability of affordable housing. These include the shared ownership scheme, the 1999 affordable housing scheme, affordable housing under Part V of the Planning and Development Acts 2000 to 2004 and the affordable housing initiative agreed as part of Sustaining Progress.

Politicians and media people continually misquote, deliberately or otherwise, our output of affordable houses per year. We have four schemes — which is perhaps part of the confusion — but the output of affordable houses last year was just 2,900, which is very significant.

Brendan Ryan (Labour)
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That is a figure of 2,900 out of 81,000.

Noel Ahern (Dublin North West, Fianna Fail)
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Yes. It is very significant, yet people just quote a figure from one of the four schemes, and there is no need to do that. Senator Bannon spoke about prices. The 200 or so houses we got as part of the Harcourt Square land swap — I do not know if they are all sold yet — were selling just a few weeks ago at prices of €142,000 for two-bedroom homes and €172,000 for three-bedroom homes. This is in Dublin. Of course there is a clawback involved, but that does not matter if one is looking for a home. We hear of all these average prices, which mean nothing because they are average prices of very expensive homes. There are homes out there for first-time buyers. Indeed, many first-time buyers do not even bother with our affordable homes because they feel they can make a normal purchase.

Last year we provided 2,900 affordable homes and over the next three years we expect the total will reach approximately 15,000, an average of 5,000 per year. We will not reach the figure of 5,000 this year, but I hope we might reach a figure of 3,500 to 4,000, perhaps 5,000 next year and maybe 5,500 the following year. That output will increase considerably, particularly as the output from Part V comes along. Earlier this year, we improved some of these schemes by increasing the income eligibility limits and the subsidy levels. Currently, we are further developing schemes in order to simplify and streamline arrangements.

There are affordable homes in many areas. Senator McCarthy spoke earlier about Clonakilty and I am grateful for his comments. I am sorry I will not accept the Labour Party motion but I thank Senator McCarthy for his comments and his support for those Clonakilty homes, because the Labour Party's would-be partners in Government have been acting disgracefully in this regard. The NESC report already referred to has shown that Clonakilty is the town in Munster with the highest house prices, yet the local Fine Gael representatives want to see them stay that way.

Brendan Ryan (Labour)
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We will sort out Fine Gael while the Minister of State sorts out the housing crisis. He need not worry about the distraction.

Noel Ahern (Dublin North West, Fianna Fail)
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I do not know if the Labour Party will be able to sort out Fine Gael. I wish it luck, because historically, the interests of the Labour Party and of Fianna Fáil are much closer.

Brendan Ryan (Labour)
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The Minister of State is starting again.

Noel Ahern (Dublin North West, Fianna Fail)
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Even with regard to Part V, for example, I remember——

Brendan Ryan (Labour)
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We do not turn up in the tent at the Galway races.

Noel Ahern (Dublin North West, Fianna Fail)
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I do not know why the Labour Party sends in nice guys like Senator Coghlan to argue about this.

Paul Coghlan (Fine Gael)
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I am all for affordable housing. That is what I am arguing for.

Noel Ahern (Dublin North West, Fianna Fail)
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It is hard to listen to some of what Senator Ryan says.

Brendan Ryan (Labour)
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I would not blame the Minister of State for everything done by Fianna Fáil councillors.

Pat Moylan (Fianna Fail)
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Allow the Minister of State to continue without interruption.

Noel Ahern (Dublin North West, Fianna Fail)
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A significant amount of the expanded output of affordable housing over the coming years will be delivered through the affordable housing initiative. A key factor in meeting the 10,000 units proposed for this initiative has been the release of State and local authority lands. More than 70 projects planned for State and local authority lands together with the 2,500 affordable housing units under Part V of the Act will deliver this targeted number of units. All projects are now being progressed as a matter of urgency through procurement options that seek to deliver quality housing at reasonable prices as soon as possible.

Part V is an important instrument, and will continue to be in the future, in expanding the supply of affordable housing. The NESC report, which was quoted extensively, suggested that Part V was "the single most important policy development in recent decades". Output under Part V is dependent on the level and commencement of private sector residential development, but will be significant in the future. The old planning permissions which are there are fading out, though some of the big ones with ten-year permission will obviously take some time. However, with regard to Part V, some people take a simplistic view, just using arithmetic, 20% of 81,000, coming up with a figure of about 16,000. This was never meant to apply to one-off housing around the country or to developments on unzoned land, but applies to developments of a minimum of four units. Part V was always meant to apply to a segment of the total output, not the entire output. However, its output will increase over the years.

Paul Coghlan (Fine Gael)
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Its application is uneven.

Noel Ahern (Dublin North West, Fianna Fail)
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Increasingly, that will no longer be the case. Output is now gathering momentum. Last year, 1,400 units came under Part V, 600 the year before, and the total to date is about 2,100. In addition, local authorities, using the various flexible options now available to satisfy Part V obligations, have acquired land, or partially or fully serviced sites, and funds which will assist in the delivery of social and affordable housing options in the coming years.

All developers are now fulfilling their legal obligations in this regard. I do not mind if they do so by means of cash or sites or whatever, as that is part of the law. Developers can offer anything they like to the local authority but the authority decides, and such authorities know it is houses that people want. However, if a local authority decides that in accordance with its housing strategy, it will allow a developer to fulfil his or her legal obligations otherwise, so be it.

The Government has been alive to the particular affordability issues in the greater Dublin area and has responded comprehensively. A key initiative in that regard was the establishment of the affordable homes partnership last year, with a focused mandate to co-ordinate and add impetus to the delivery of affordable housing in and around the capital. We can talk about the Kenny report until the cows come home, and the all-party committee's comments last year, but it is a case of spending one's life in the Supreme Court arguing a case or getting on with it.

Brendan Ryan (Labour)
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Just once.

Noel Ahern (Dublin North West, Fianna Fail)
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One can either do that or get on with the job of providing houses. That is what we are doing under the affordable homes partnership, because that group, chaired by Des Geraghty, is making good progress on the implementation of its work programme, including advancing certain affordable housing initiative projects on State lands. I mentioned Harcourt Square in that regard. Given that the pilot project has yielded value for money, and resulted in significant time savings in the delivery of completed affordable units, the partnership will be employing the swap mechanism in further areas.

At national level the Department initiated a comprehensive programme of active land management by local authorities. The affordable homes partnership invited submissions last November from parties interested in providing and developing land primarily for affordable housing. Several of the submissions received are considered to be appropriate from a planning point of view. The partnership is now engaged with the promoters of these proposals in order to work up more detailed development agreements. The basic purpose is that land will be made available at a cheaper cost per site.

I accept Senators' remarks on house prices and there is no doubt they have risen sharply. In the past several years I noted a 10% rise in one year and then 7.5% in the following, with experts declaring the rise would be further reduced to5%. In the middle of last summer, house prices took off again. We are in a spiral of increased house prices which I am concerned about. Depending on who one listens to, the rise varies between 13% and 15%. I hope this upward spiral does not last much longer. I agree with Senator Ross that much of it is due to the financial institutions. In Ireland many people borrow from the banks when in other countries they do not. The institutions are shovelling money at people.

Senators referred to the affordability index contained in yesterdays' newspapers. Although it is difficult for many people now, homes were less affordable in 1992. It did not last long as the punt was devalued and homes subsequently became more affordable. Another factor that must be remembered is that people have eased their affordability problems with 30-year old and 40-year old mortgages. All the extra gimmicks offered by the institutions such as 100% mortgages, interest-only and inter-generational mortgages, can help someone's affordability problem in the short term but they add a large amount of debt in the long term. I no longer blame the developers for increased house prices. It is the fault of the financial institutions. If people can secure larger mortgages, they would be foolish not to avail of whatever is going. I am concerned about the annual house price increase of 15%. I hope this spiral will end quickly. A 0.25% or 0.5% increase in mortgage interest may bring people to their senses. That should not create large difficulties if these mortgages have been properly stress-tested. All along we are told they have been but I sometimes wonder.

I announced yesterday that funding of €942 million, an increase of €100 million, is to be provided for local authority housing. Senator McCarthy referred to the difficulties with social housing in Bandon, Schull and Skibbereen. It is up to the local authorities to bring forward housing schemes which the Department will fund. However, many local councillors want their areas to remain exclusive and are not proposing local authority housing projects to the Department.

Much cheap social housing was built in the 1960s and 1970s. I refuse to take that route. Every year €250 million is spent on remedial works and regeneration schemes, trying to put right many of the problems in these older estates. In the 1970s vast estates, some with up to 500 units, were built on greenfield sites with no proper facilities, such as a footpath to a bus stop.

Paul Coghlan (Fine Gael)
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That was an awful mistake.

Noel Ahern (Dublin North West, Fianna Fail)
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Good homes are now being built. I am not passing comment on any houses that people went to in London. I am resisting the temptation to build cheap social housing. While it would bring the waiting lists down and make me look good, it would not be a sustainable and long-term answer.

Approximately €50 million is spent each year on homelessness. It is a much more complex issue than having a roof over one's head or money.

Brendan Ryan (Labour)
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Money can help.

Noel Ahern (Dublin North West, Fianna Fail)
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Beds are provided for those who want them. Many of the homeless——

Brendan Ryan (Labour)
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Is it that they do not want the offer of the bed?

Noel Ahern (Dublin North West, Fianna Fail)
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That is another matter. Many of them have addiction or psychiatric problems and will not take up accommodation. There will always be homelessness. The real answer in dealing with——

Paul Coghlan (Fine Gael)
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There is an agency to deal with homelessness.

Noel Ahern (Dublin North West, Fianna Fail)
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Yes there is. The real judge of the effectiveness of Government policy is how quickly one can turn these people around. Homelessness is the safety net for every other situation in life. It is not whether there are 50 or 150 persons sleeping rough in Dublin city, it is about how quickly they can be turned around and brought off the streets. Much good work is being done in this area. In a time when there is an increase in the house-buying age group, we are bound to be under pressures. With the policies the Government is pursuing, we can get on top of the matter.

Brendan Ryan (Labour)
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My problem is that I like the Minister of State at the Department of the Environment, Heritage and Local Government, Deputy Noel Ahern, and will, therefore, be inhibited in what I say on the motion. I always find him to be a man who responds to what one says. He does not just recite his script and ignore the issues raised. He seems to come from a family where the senior members are more left-wing than the younger members. Socialism seems to be generally popular in the Ahern family, judging by some of their utterances.

Listening to the EBS spokesperson yesterday, the most telling remark she made was when the building society switched from measuring affordability per individual to per couple. If it had stayed with affordability for the individual, the market would have gone through the roof. Affordability is now based on the combined income of two people. The problem with this is that couples tend to have children. The purpose of many relationships is to have children. The affordability measure, however, cannot be separated from that consequence. If both partners must work, they will inevitably have child care costs. This is the fundamental flaw in the methodology used for measuring affordability. If one is to measure housing and affordability, one either factors out a significant part of one partner's income or factors in the indisputable fact of high expenditure on child care. The figures quoted of 29% to 32% exclude an inextricable link between child care and housing.

I am intrigued that no Member has addressed the fact that most of our ambitious city and county managers have a singular desire to get out of the house-renting business. I am not sure whether it is because they believe they are bad at it, it is a distraction or whatever, but it is difficult to accept that city and county managers, who are notoriously uninterested now in expanding the stock of rented housing within their area of responsibility, will suddenly line up, as the Minister of State suggested, to take up all these opportunities to provide more non-ownership based social housing.

It seems that a large part of our current devices are to do with avoiding the possibility of local authority rented accommodation. There may be good arguments for that. If the Minister of State does not have a strategy constructed, however, one may end up with gaps such as the 40,000 or 50,000 households who are now on local authority housing waiting lists and who are condemned to remain so.

The issue of the cost of building land arises continually. Nobody objects to compensating people for the value of their property to the extent that they are responsible for that value. One can understand the position of people who work in agriculture. There is the idea that the fortuitous fact that one happens to own land which turns out to be rezoned for housing transfers one from a position of minimal compensation to one of a spectacular return which will make oneself and one's family rich forever, is inevitable and a consequence of the market. It is not a consequence of the market. It is a consequence of public policy, which, by a deliberate decision, makes some people rich at the expense of others.

The Minister of State, Deputy Noel Ahern, commented to the effect that one wanting to go the route of the Kenny report may look forward to spending long hours in the courts. Of course Part V, which we all agree was a significant development to be welcomed, was challenged in and singularly and vigorously vindicated by the courts. This made it quite clear that on an issue as fundamental as the provision of housing and shelter for our citizens, the exigencies of the common good would override any special claims of property. Incidentally, there are no rights of property in the Constitution. What the Constitution contains is a right to property. Property is not mentioned as a thing of itself, other than as something that individuals have the right to own. If we want to go the route of the Kenny report, of course there will be a court challenge. There will be one court challenge, just as there was one court challenge to Part V. I believe, more than I did 20 years ago, that such a court challenge would be thrown out, in which case we could deal with the issue.

I am deeply concerned about homelessness. While it is not directly adverted to in the motion, Senator McCarthy and the Minister of State mentioned it. Voluntary organisations are entering into commitments to provide high-quality services for homeless people. Without breaching confidence, all I will say is that I would appeal to the Minister of State, Deputy Michael Ahern, who is present, and to his colleague, Deputy Noel Ahern, who was present up until a minute ago, to keep their promises and ensure, in particular, that the HSE keeps its promises. When the HSE agrees to provide multiannual funding on a particular level, it cannot suddenly discover a budgetary problem and retreat from that agreement. That is a recipe for enormous problems for well-intentioned and honest voluntary organisations and there are unfortunate suggestions that there is some sliding from what are meant to be multiannual commitments, particularly to fund services. The Minister of State, Deputy Noel Ahern, was correct in this much at least. Homelessness is not just about housing. One cannot deal with homelessness without providing shelter and housing, but one will not deal with it just by providing shelter and housing. That is where the funding, not just on a capital basis but on a current basis, is needed and unfortunately there is evidence that there is some retreat from that.

I will really believe the Government is facing up to the issue of extraordinary profits in housing when Fianna Fáil's tent at the Galway races closes down and the assembled rich builders are not welcomed into that hospitality, as they have been every year as long as I can remember.

Cyprian Brady (Fianna Fail)
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They all go to Mullingar.

Jim Walsh (Fianna Fail)
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Senator Ryan was logical enough up to his latter point.

Brendan Ryan (Labour)
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I always have a bit of an aberration.

Jim Walsh (Fianna Fail)
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It is a cheap political shot——

Brendan Ryan (Labour)
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Fact.

Jim Walsh (Fianna Fail)
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——often thrown out by the Labour Party.

Cyprian Brady (Fianna Fail)
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Union subsidies.

Jim Walsh (Fianna Fail)
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I remind Senator Ryan that the party which brought in Part V, which was probably the biggest imposition on developers that I have seen in legislation or, indeed, in taxation, came about through Fianna Fáil and the last Government. Therefore, his point does not stand up to any great scrutiny.

The Minister of State, Deputy Noel Ahern, outlined the number of house completions in 2005 at 81,000. The rate of house completions is four times that in the rest of our EU partners, which is a phenomenal output. I recall the time when we stated there would be a massive improvement if we could increase the output to in excess of 50,000 or 55,000. It is significant that we have reached 81,000 house completions.

Undoubtedly, it must be recognised that there is a problem of affordability. The Government has striven to tackle this issue by increasing the output. This, to some extent, has addressed the issue. It has not addressed it completely and we must recognise that.

As the Minister of State, Deputy Noel Ahern, correctly stated, this matter is a product of the economic success that we have been enjoying — immigration, more people at work and the demographic changes of people moving into the age bracket where they are looking to purchase a home. Those issues are positive. We should recognise them as such and then attempt to deal with the difficulties to which some of that success gives rise.

I do not agree with the ideological argument on controlling the price of building land in the motion from the Labour Party and the Fine Gael Party. That is the same type of argument we heard when an innovative decision was made by the former Minister for Finance, Mr. Charlie McCreevy, to reduce capital gains tax from 40% to 20%, which released large parcels of land which would not otherwise have been released for development and which significantly enhanced the Exchequer returns. While those who were hung up on these historic ideological philosophies view such measures as negative, in fact, the effect of the measure to which I refer has been very positive.

Many issues arose in the past about the controversies over rezoning land. There were councillors of certain political parties who made a virtue of opposing all rezoning. They contributed enormously to the current problem because insufficient land was zoned to meet the housing demand, even in the 1970s and 1980s, and it certainly did not meet the growing demand that appeared in the 1990s.

I very much welcome the investment now being made in servicing land. That is really the way to meeting the growing demand for housing which will exist for a considerable number of years to come. There are those who predict that our population will grow to in excess of 5 million by 2015 or 2020, and we must now be putting in place the infrastructure which will be able to deal with the housing requirements of the predicted population.

One issue that concerns me somewhat is that to some extent Ireland's GDP is becoming attached to the construction industry, which is notoriously cyclical.

The scale of development is now having a greater impact on GDP. Any change in the cycle for whatever reason could impact on the economy and we must be mindful of this.

The cost of housing is probably reflected in inflation, particularly with rising interest rates, and in wage demands, which all affect competitiveness. All these issues are connected to our overall economic well-being. I welcome a debate on this area to ensure the issue is managed carefully and that we avoid some of the pitfalls that have occurred in other countries as a consequence of negative equity, to which some Members referred. While no economist has predicted this will happen, nonetheless we should be mindful of the dangers and risks in this area.

I very much welcome the Minister of State's commitment that we will not return to the policy pursued in the 1960s of providing cheaper houses. What we need is better value in the housing market, not cheap houses. The cost of subsequently having to renovate and modernise substandard housing is something we should avoid.

The Department is seeking to increase housing density in rural areas. From a social perspective it is important to have sufficient space. Ultimately, we will pay a price if we confine people in small spaces with inadequate play areas for children.

Although I supported the introduction of Part V, I would welcome a review of it. A certain amount of housing has resulted from it but we should examine to what extent it is impacting on housing inflation, particularly for first-time buyers. We must ensure our policies are geared towards facilitating people with reasonable incomes to access housing.

In the past, a low-rise mortgage scheme was developed and we should consider reintroducing it. I do not remember in detail how it operated but after a local authority approved a loan, one gradually paid an increased amount over a 12-year period until one was eventually paying full interest. It was feasible to do this as one's income had increased in the meantime.

The shared ownership scheme should be revisited. The price of the portion owned by the local authority should remain static with interest being paid on it and, subsequently, people should be allowed to buy their homes from the local authority at the original price. The fact that the price escalates has led to the scheme not realising its full potential.

Paul Bradford (Fine Gael)
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I am pleased to have an opportunity to speak on this motion. I welcome the Minister of State, Deputy Michael Ahern, to the House.

Housing is one of the most interesting political topics with which we are faced. Regardless of what Government is in power or what resources are available, the Government of the day always has a choice when it comes to housing policy. Within the next 12 months or so the country will elect a new Government. We do not yet know the hue of that Government but housing will again become one of the top political issues, not just of the election campaign but, I hope, one of the main political priorities of the new Government.

I hope the next Government will provide a full Cabinet portfolio for a Minister for housing. I am like a long-playing record on this issue as I have referred to it on numerous occasions in this House and elsewhere. Senator Jim Walsh referred to our huge economic dependence on housing. Approximately 240,000 people work in the construction sector. It is important from a social as well as economic point of view that housing is given top priority at Cabinet level.

We still have a housing crisis although it is not the same as that experienced in the 1970s and 1980s. The issues that currently arise in this regard relate to land use, house design, rural planning, land zoning and affordability. All of these issues must be addressed in the next five to ten years by a Cabinet Minister. Currently, the Minister of State with responsibility for housing is part of the Department of the Environment, Heritage and Local Government but given the importance of housing, a full Cabinet Minister should be appointed for at least a five or ten-year period.

The Government often refers to the record supply of housing stock, which is laudable. New housing construction is evident in every townland, village and town around the country. In spite of that, significant housing problems remain. Local authority housing waiting lists are still a fact of life. Social and affordable housing schemes assist persons to purchase houses but these schemes require streamlining.

I agree with what the previous speaker said about the shared ownership scheme. That scheme is in place for the past ten or 12 years and, although it was slow in taking off, it has worked well. It was initially difficult for public representatives to explain to their constituents but it is now a popular scheme that allows people to get on the property ladder. After three or four years the vast majority of people take out a bank or building society loan to purchase their property outright and leave the shared ownership scheme.

Senator Jim Walsh's point about the local authority's share of the equity is valid. It is a penalising factor and must be examined. The income limits and some of the other rules must also be examined. We must encourage the maximum possible number of people to avail of the scheme. The combination of shared ownership loans and affordable housing can contribute positively towards addressing the housing needs of thousands of people if we can get the equation right. Not enough is done by local authorities to sell the housing policy. Staff shortages mean that insufficient people are available to do this work. We must ensure there is always an adequate response to social housing needs, but social and affordable housing and shared ownership must be seen as the route forward for many people on lower incomes. Minor adjustment to some of the rules governing the scheme is required.

Another issue which I would urge the Minister of State to examine is a throwback to the mid-1980s — the housing reconstruction grants and loans scheme, which became a prisoner of its own success. A small number of units of accommodation are still occupied by people who are probably on a local authority waiting list and whose needs could be looked after in a more constructive way, if one will pardon the pun, if a grant scheme or favourable loan scheme were available. Tens of thousands of people qualified for the house improvement grants scheme of the mid to late 1980s. The problem on that occasion was that the scheme was not means tested. If we could revisit this scheme and possibly examine means testing it, it might take care of the housing needs of a certain number of people. All of our individual housing policies have a role to play. Where we fall down is in co-ordinating these policies and piecing the jigsaw together. This is why we need a more streamlined and politically stronger machine driving housing policy, which is why I return to my earlier suggestion that the post of Minister for housing be created. Having said that, I appreciate the work being carried out across the country. Private developers are carrying out outstanding work and local authorities are beginning to make an impact. I accept that Part V is now about to come into play and produce the numbers we need. We must continue this work because given our booming Celtic tiger economy, it is unforgivable that tens of thousands of people have no prospect of housing themselves without State assistance. We, as State representatives, must come to their aid and try to ensure that the basic right of housing is made available to all citizens.

Eamon Scanlon (Fianna Fail)
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May I share time with Senator Cox?

Pat Moylan (Fianna Fail)
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Is that agreed? Agreed.

Eamon Scanlon (Fianna Fail)
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I am glad to have the opportunity to comment on this issue. I acknowledge the allocation of housing grants to Sligo County Council and Sligo Corporation in recent days. Sligo County Council received €11.6 million, while Sligo Corporation received €11.5 million. This is a total of €23 million for house construction and purchase. In addition, Leitrim County Council received €6 million. I understand that the phenomenal grants received by both Sligo and Leitrim County Councils are the highest ever received by both.

I concur with Senator Coghlan's point about stage payments, which usually relate to first-time buyers. I am aware that it was a very common practice at one point but this is certainly not the case in my county of Sligo. Today, somebody will pay a booking deposit, a 10% deposit upon signing the contract and the remainder of the money when the house is completed. This practice should be the norm across the country. A system of stage payments is hard on young couples who must pay these payments because they probably have a 90% mortgage and must pay rent as well. This system is unfair and the Government should insist that people should only pay a booking deposit, a 10% deposit and the remainder of the money when a house is completed.

The shared ownership scheme is an excellent scheme and I know of many young couples who have benefited from the scheme and got on to the housing ladder. I noticed that after a year, these couples bought out the council's share, which usually involved remortgaging the house. This scheme should be encouraged more. I agree with Senator Jim Walsh's argument that the council's share of the mortgage should remain static because the scheme is slightly restrictive at the moment in respect of the price of the house and the qualifying income.

I do not believe county council housing lists are accurate. I know of large numbers of people who are on housing lists to get rent allowance. Many of these people will never look for a local authority house. An audit should be carried out of all county councils to ascertain the true numbers on county council housing lists because they are inaccurate at the moment. I am aware the Minister of State does not fully agree with 100% mortgages. I know of certain people who have qualified for such mortgages who would not otherwise have been able to get on to the housing ladder.

Margaret Cox (Fianna Fail)
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I thank Senator Scanlon for sharing his time with me, given that it was so short. I am delighted to have the opportunity to bring certain issues to the attention of the Minister of State. It must be admitted that there is a crisis in respect of housing. Many people around the country do not have the opportunity to buy their own homes, nor do they know when they will be in a position to do so. In that context, it is important to drive home a very focused and joined-up approach to the provision of proper housing for these people.

I have previously addressed a number of issues relating to housing, the first of which is rent allowance. It is wrong for the State to pay out rent allowance on a weekly basis to private landlords throughout the country in order to allow people to live in their properties. Such a policy creates profit for private developers. We should use the money spent on rent allowance to finance the purchase of houses through local authorities. These houses can then either be rented out from the local authority's housing stock or used in joint ownership schemes or new schemes which could be developed to give people a chance to buy their own homes through partnership with the local authority.

My second point concerns an idea which I understand is credited to Fr. Seán Healy. He argued that if the €600 million currently being put into SSIA accounts was unilaterally funnelled into our housing budget for the next five years, it would make a considerable difference to the people of this country. This is a very genuine idea which should be examined.

We must introduce a process between county and city councils in areas such as Galway which permits joint ownership in respect of buying houses for the affordable housing scheme. Under such a process, Galway City Council could buy a house from Galway County Council and vice versa. We should buy new houses and transfer them under the social housing scheme.