Wednesday, 13 July 2011
Seanad Éireann Debate
Minister of State at the Department of the Environment, Community and Local Government (Deputy Willie Penrose): I thank the Leas-Chathaoirleach. I am delighted to have the opportunity to appear before the Members of the Seanad. I was here once before. I thank the House for giving me the opportunity to discuss this very important issue. I thank the Leas-Chathaoirleach for the opportunity to outline the background, recent developments and future plans that are in place to ensure clear, decisive and proactive actions are taken to progressively resolve the difficult issues with unfinished housing developments.
These developments have been left in an incomplete and unsatisfactory state principally because of the actions of developers and their funders. With the absence of capital, local authorities and, above all, residents are finding it very difficult to get developers and site owners to meet their legal obligations. Over the course of the past year, the housing and planning divisions of my Department have jointly undertaken extensive work in partnership with local authorities and other key stakeholders to explore how the issue of unfinished or abandoned estates can be tackled in a co-ordinated and proactive manner. Our focus has been to address the real difficulties being experienced by people living in unfinished estates in towns and villages right across the country.
Resolving these developments will not be easy and will take time. There is no one-size-fits-all solution. The developers and site owners of such developments must accept and take on the primary responsibility for addressing the serious difficulties that have arisen. As Minister of State, I am focusing on a number of actions that will ensure this will take place and will restore confidence in our capacity to deal with unfinished housing developments and help to achieve sustainable urban development.
The fact that the issue so clearly spans across aspects of my remit makes it imperative for me as Minister of State to initiate, encourage and promote all actions necessary to progressively resolve the issues before us. Following the completion of a detailed national survey in late 2010, during which 2,846 housing developments were surveyed, an advisory group on unfinished housing developments was established to bring forward a series of recommendations to address the issues.
On 9 June 2011, I published the final report of the advisory group, entitled Resolving Ireland’s Unfinished Housing Developments. The report, prepared by the advisory group and chaired by Mr. John O’Connor of the Housing and Sustainable Communities Agency, highlights the scale of the problem, identifies how the developments can be broadly categorised and how the different issues arising in unfinished housing developments can be best dealt with and resolved. I would like to once again take the opportunity to publicly thank Mr. O’Connor and the group for their efforts and dedication.
I also published my Department’s response to the advisory group’s main recommendations. They include: driving a more co-ordinated and partnership approach between stakeholders; tackling public safety as an immediate priority; strengthening the legislative and policy framework to incentivise real engagement by developers, site owners and funders in working with local authorities and residents in resolving unfinished housing developments; and building confidence in the housing sector.
I outlined a range of collaborative actions to address these objectives. They include: the urgent resolution of public safety and other critical issues seriously impacting on the living conditions and quality of life for residents of unfinished developments; the development of formal liaison protocols between the various stakeholders, such as developers, financial institutions, residents, local authorities, approved housing bodies and my Department, to facilitate the sharing of information; and the prioritisation by local authorities of a number of unfinished developments to act as lead projects to demonstrate what can be achieved, building on the best practice guidance manual on managing and resolving unfinished housing developments, which I will publish shortly.
At the launch of the reports, I highlighted very clearly the need for the various parties to work together in tackling a very serious problem that will take time to resolve. I emphasised that the option of sitting back and doing nothing by developers, banks, local authorities and others is not tenable and is not acceptable to me, the Government and most of all, the residents most affected. I also outlined that the public service is playing a key facilitating role in getting things moving again, particularly in providing leadership in solving this problem.
Given that resolving urgent public safety works is an immediate priority, I am pleased to note that progress is already being made with regard to the public safety works required to improve the living conditions of existing residents on some unfinished estates. To date, I have made allocations totalling some €1.3 million to 15 local authorities from the €5 million funding allocation made available to address immediate safety issues.
The reduction in drawdown from this fund from previous provisional allocations reflects the fact that planning authorities are already making progress in securing the co-operation of developers, financial institutions and-or bondholders, thereby obviating the need to use Exchequer resources to fund such work. The types of works that have been approved to date include: the fencing off of unsecured and hazardous areas; capping of pipes; installation of street lighting; and other works to secure sites. I will be making further allocations as applications are received from local authorities and assessed by my Department.
It is important that in seeking resolutions to unfinished housing developments we do not overlook the wider housing context. My Department has been pursuing a multi-stranded approach to obtain vacant unsold stock for use as social housing through a long-term leasing initiative that will support the delivery of sustainable communities, including through the leasing or purchase of units from NAMA. It is also important to recognise that whatever mechanisms are used in bringing unoccupied new housing stock into beneficial use, including meeting social housing needs, ensures a good mix of tenure in specific developments.
My primary concern remains the welfare of those who find themselves and their children in a very unsafe environment through no fault of their own. I am determined to ensure that the key stakeholders work together to improve these people’s quality of life in the immediate future, while considering what can be done to secure these areas and communities in the longer term.
In response to one of the key recommendations of the advisory group’s report regarding the need for central leadership, co-ordination and monitoring, I have established a national co-ordination committee with representation drawn from the key stakeholders involved in progressing resolutions for unfinished estates, including my Department, local authorities, the housing and sustainable communities agency, financial institutions and the construction sector.
I chaired the first meeting of the committee on 28 June 2011 and the second yesterday. We will be meeting on an ongoing basis to oversee implementation with the aim of publishing a report on progress within the next 12 months. The committee is focused on drawing up an implementation plan on the actions identified by my Department on foot of the publication of the advisory group report. The implementation plan will outline how, over the next 12 months, the various recommendations and measures are to be addressed. It will be focused on delivering progress under the advisory group’s main recommendations, which I have outlined, and lead to a report on progress made by next summer.
I again emphasise that the resolution of these developments requires the co-operation of all parties and the adoption of a pragmatic approach. We will continue to focus on resolving these unfinished housing developments now because waiting for the economy or market to change is not an option. Progressive resolution is the only option and not just for the residents but for the stock of developments because these developments are deteriorating day by day. We will work to get houses completed and occupied as soon as possible, but this will require the strong resolve of all the key stakeholders involved.
My Department will continue to prioritise the assessment of funding applications as they are received from local authorities. It is my intention that the majority of the funding allocated will be assigned as soon as possible, allowing for critical safety works to commence in the most serious unfinished housing sites within the coming weeks and months.
Senator Diarmuid Wilson: I welcome the Minister of State to the House. I am delighted that he has been elevated to this ministerial position. I am also glad that he attends Cabinet meetings. I know his record of protecting the most vulnerable in society over many years and I wish him well in his new ministerial portfolio.
The number of unfinished estates is clearly at a record high. The public consultation draft document, Managing and Resolving Unfinished Housing Estates, which was published in December 2010, showed that more than 2,800 housing developments were started but not fully completed as a result of the wider economic downturn. The report also highlighted the marked decline in housing construction with completions down from a peak of 90,000 housing units in 2007 to 26,500 units in 2009. An estimated 14,000 units were constructed last year.
Although this is an extremely worrying trend, it would be wrong of us to focus solely on the numbers of such estates. We need to look at the human tragedy, which is at the heart of this matter. Many of these estates look like building sites and have large numbers of families living in them. They are in need of immediate action to deal with public safety hazards such as unsecured construction materials, open excavation pits and uncovered manholes. In addition, partially completed buildings could be unstable where no current on-site work has been undertaken and the vacancy rate is over 50%.
Quite often there is no public lighting, in addition to problems with water and sewerage services, poor road surfaces, no pavements and no open areas. Like many colleagues in this House, when I was canvassing in the last local elections and the general election, I came across such estates. It was dangerous to canvass due to the lack of public lighting and unfinished footpaths. Something has to be done to make these estates safe and habitable so that these families — many of whom bought their houses in good faith and are now in negative equity — can raise their children with some dignity and in relative safety. As the father of young children myself, I am aware of the lure of unfinished and abandoned sites, and the potential for serious injury or even loss of life.
With regard to the report published this week, I am glad that the Department of the Environment, Community and Local Government has successfully investigated the situation and responded by laying out a set of actions, as outlined by the Minister of State. I welcome the proposal that legislation is to be reviewed with the intention of putting site resolution plans on a statutory basis and existing legislation amended to aid their implementation.
While I acknowledge the positive aspects of the Department’s response, I still have a number of real concerns. The first relates to the need for swift and speedy action. It has already taken an unacceptable length of time from the initial announcement by the Department of its intention to carry out a detailed national survey of all housing developments of two houses or more in the State in autumn 2010, to the production of a final report. Despite the time given to producing this report, many of the action points contained in the Department’s response document are still being assessed and formulated. That is unacceptable.
The response document also indicates the Government’s establishment of a national co-ordination committee to oversee the implementation of action on unfinished developments. This committee is chaired by the Minister of State, Deputy Penrose. I am glad to know that the committee has already met twice, but it should achieve a resolution as speedily as possible. We owe it to families across the country who are confronted on a daily basis with grave health and safety issues, to proceed with as much speed as possible to remedy the dreadful situation in which they find themselves. I know that some local authorities and developers or receivers have already made efforts to address some of these concerns. However, this has only happened since the first €1.5 million of the €5 million funding allocated in February this year by the former Minister of State, Michael Finneran, was released to local authorities to tackle issues on the worst 230 identified estates. This funding was made available on foot of a recommendation by the advisory group on unfinished housing developments to prioritise action on 400 of the most problematic housing developments where there were critical issues, and to resolve them as soon as possible.
I also note from the Department’s response document that its aim is to have 300 site resolution plans in place by the end of the year. That is 10.5% of all estates or, on average, nine per local authority. I am not clear whether the intention is to have 300 site resolution plans drawn up by the end of this year or to be engaged in the process of implementing them. Perhaps the Minister of State will clarify that matter. I am seeking clarity on this point because it is imperative that we reach the implementation phase across the country sooner rather than later. Speed is of the essence, as the Minister of State is aware. Nonetheless, I acknowledge the efforts he has made to date.
Finance is another concern because finishing estates is going to cost a considerable amount of money. The national survey has shown that there are 1,655 estates where a substantial amount of work remains to be done. Can the Minister of State tell the House where the money will come from to finish these estates? If the €5 million from the Department is split across 1,655 estates it will result in a sum of €3,200 per estate. That is a drop in the ocean and will make no obvious improvement. Additional funding is required and, while I appreciate it will be difficult to source, it will have to be obtained because this is a major health and safety issue.
Some 38 unfinished estates were identified in County Cavan and my colleague, Deputy Brendan Smith, has made representations to the Minister of State about them. Having spoken personally to Cavan County Council, I understand it has identified 12 housing estates that urgently need to be dealt with. I ask the Minister of State to fast-track the application by Cavan County Council, which is seeking approximately €500,000. This work needs to be carried out urgently.
Can the Minister of State outline the criteria used to identify these estates? My understanding is that if a person has two unfinished houses, they will fall into this category. Is that part of the criteria used in putting together this report? Perhaps the Minister of State could also outline how many of the identified 1,655 estates that are in real difficulty will be rectified or safely secured by the end of this year.
Once again, I welcome the Minister of State to the House. He has hit the ground running and I believe he is doing an excellent job. The necessary finances should be provided to him because this is an urgent matter that needs to be rectified for those families living in unfinished housing estates, including their children who find themselves playing in dangerous conditions.
Senator Cáit Keane: Cuirim fáilte roimh an Aire Stáit go dtí an Teach le haghaidh díospóireachta ar an ábhar tábhachtach seo. I commend the Minister of State on his very proactive approach since taking up office in introducing proposals on housing estates. I am referring to the advisory group he established which eventually led to the publication of the report, Resolving Ireland’s Unfinished Housing Developments. Having read the report, I recognise a considerable amount of work remains to be done and the Minister of State outlined some of the initiatives he has taken.
The prevalence of these housing developments is a very tangible and concrete remnant of what was termed the boom times or the Celtic tiger, which we now know was not a tiger, but a tiger running away, with the houses built on very shaky foundations, as it were, which have now collapsed. We need to ensure this kind of thing will never hit this country again, not only on the economic side but also on the planning and development side. In his contribution the Minister of State referred to the payment of €1.3 million of the €5 million allocated in the first tranche for dealing with the most problematic unfinished housing developments.
When he launched the report in June, he expressed some concern about the feedback from local authorities on unfinished developments and getting positive engagement from developers, site owners, financial institutions and others dealing with the issue. I thank the Minister of State for chairing the advisory committee. Has he received satisfactory co-operation? There was strong consensus in the advisory group on what should be done. It is important that the various stakeholders involved in the troubled developments, including banks, developers and departmental officials, should roll up their sleeves and work with the local authorities and residents involved. I know the priority for the Minister of State at the moment is the immediate safety element and he outlined some of the issues he is pursuing in the problematic estates. The previous speaker spoke about the issues we have all seen. I have come across people who are crying because they are living in building sites — they could not be called housing estates. We must ask what we can do to resolve the problems they are living with as quickly as we can.
Representatives of NAMA addressed the Fine Gael Parliamentary Party recently. I hope NAMA is placing the same priority on the issue as the Minister of State. It has a major role to play in the estates that are under its control rather than the control of the Minister of State. How is that agency co-operating with the Minister of State? In theory the €5 million allocated to address immediate safety issues is to be paid back eventually by the developers, but I would not hold my breath. We need to find money but I do not know where. Obviously there is work that can be done without money. There are unemployed builders whom we could bring in to work with us on some schemes. There is more than one way to skin a cat. I ask the Minister of State to pursue every avenue. When I was first elected to a local authority in 1991, we often talked about rogue builders not finishing estates. That was at a time when they had plenty of money, yet they often walked off without finishing an estate, leaving the local authority with problems. It is not just rogue builders with whom we are dealing. There was reckless lending to builders and to others.
The Minister of State said that along with the advisory committee he was keeping an eye on how things are moving with local authorities. He mentioned the national co-ordination committee and said he would have a report in 12 months. I look forward to receiving a detailed report outlining where we are at this time. We are not talking about regeneration of estates; it is just a stopgap. We have been required to step in and do something because we cannot wait for the builders to do it. Evidence indicates that regeneration must be people focused. The people suffering in these estates often need more than just the physical environment because many of them have also lost their jobs. While I commend the Minister of State on making safety his paramount priority, I hope the advisory committee will also provide for support on the social aspect. That should be borne in mind for people who are abandoned or in distraught situations when the Minister of State is prioritising future funding for ghost estates.
Necessary action needs to be taken to address those estates because we do not want in five years’ time to have some of the social problems we have seen in certain urban areas as a result of bad planning. Planning as a whole needs to be people focused. The previous speaker gave some statistics and I will outline one of them. Leitrim had 91 houses built per 1,000 of population, which was almost three times the number for County Wicklow at 31 per 1,000 of population or Dublin at 33 per 1,000 of population. Such building was led by tax breaks and did not represent sustainable development. I heard the Minister of State and the Minister, Deputy Hogan, say that sustainable development in planning is a priority for the Government, on which I commend them. There is an impact on residents from bad planning, and the planners and banks need to be and are being reined in.
The Minister of State has said this is the beginning, but we need to get it resolved and the previous speaker spoke about the resolution. We find ourselves in a unique situation. Often in the past when we were talking about unfinished housing estates, we might have been talking about one or two developers, which is why the Planning and Development Act 2000 introduced the legislation on rogue developers. We are now dealing with a national disaster with these houses, not only in the funding but also in planning. The Minister of State mentioned some of the initiatives on which he is working with the Department of Social Protection. Houses represent a valuable asset, regardless of whether they are half constructed or fully constructed. Many people have asked what will happen to those estates and whether they will be knocked down. I believe demolition would be a resolution of last resort because many people need houses. In his contribution, the Minister of State mentioned the different types of facilities he is considering. I hope the upcoming report will outline where we will go from here.
I believe the Minister of State said that 15 local authorities had taken up the option of dealing with it, with immediate plans for public safety. The management companies in some unfinished estates have simply pulled off site and left the residents high and dry. What is the status of legislation on management companies? The advisory group reported that 2,846 developments were surveyed, of which 58% had substantial construction work. As we do not know where we can find money, we need innovative ways to address the issue. Within the 1,655 developments, there is a further cohort of developments with serious completion issues and residents are significantly affected. While not everybody in the House might have dealt with it in person, we have definitely all seen it on television. However, we do not need to see it on television because every second person in the country is talking about it as well.
With regard to the taking in charge by local authorities of housing estates, naturally enough, local authorities cannot take them in charge because they do not have the funding and are strapped for cash. This brings me to the issue of planning enforcement. When we talk about completion, planning enforcement is a priority. Builders should not be allowed to move on with a development until they have finished, say, ten or 15 houses to a high standard. Planning enforcement should be done in such a way that it is seen as better to have ten units finished than to have 500 half-finished, where a developer has said he can build 500 units cheaper but then runs away from the whole lot.
This is not a completely new problem but it is a serious problem none the less. I thank the Minister of State, Deputy Penrose, for attending and for his proactive approach to addressing this matter in a very short time.
Senator Sean D. Barrett: I welcome the Minister of State, Deputy Penrose, to the House and wish him every success in dealing with this problem, which is literally a blot on the landscape. It is a testament to how we got into this situation. The effects can be seen in every county of reckless lending by financial institutions, more so in the western part of the country, and of a building industry which expected property prices to rise by 20% per annum ad infinitum, which could not happen.
This problem should be taken away altogether from the banks. The Minister of State has to deal with the physical problem on the ground, as he sees it. The prices of these properties should be allowed to fall as low as possible until we find some other uses for them. We are not propping up the value of pension funds, bank shares or NAMA either. I hope NAMA has a short life and I do not want it to hang around as the Land Commission did, giving out land for 114 years from 1885 until the late 1990s. NAMA must come to an end quickly. If we got these houses on the market at very low prices, which is all most of them are worth, it would immediately improve the competitiveness of the Irish economy in that workers would be spending a much smaller proportion of their budgets on housing than they were at the peak of the boom, when house prices were high.
Is there leeway in the plan for the Minister of State under the planning Acts to get planning permission to complete X number of houses rather than leaving, as Senator Keane said, so many half-finished houses? Could the position of half-finished houses be approached under dangerous and derelict buildings legislation, of which I am sure the Minister of State’s Department has adequate supply? This would mean we would get these houses at whatever the knock-down price is. Perhaps we should have some auctions just to see what the knock-down price is and get these houses lived in at low cost. I agree with Senator Keane that the last thing we should do is consider knocking any of them down.
The builders and bankers will have to realise they will not get their money back on these properties because they were built with such vastly unrealistic expectations. We need a market in which the price of these properties and sites falls to some level at which there will be activity, including, as the Minister of State said, social housing and bargain houses for young people. Perhaps they are in out-of-the-way or inconvenient places but if the price is low enough, they will be taken up.
I ask the Minister of State to consider measures such as changes of ownership where people are sitting on assets and almost trying to have a battle of wits with the Minister of State that it is necessary to acquire ownership at some notional price based on the peak of the boom. We should have the power to acquire at current prices sites and buildings that are not being completed.
Ireland must lose its property fixation. Unfortunately, many of the tax breaks will take a long time to run out of our tax system but we must never again get into that property fixation, which, by the way, deprives the Exchequer of badly needed tax receipts at this stage. If we can get some market price for these properties and sell them subject to completion requirements in accordance with planning laws, they can fulfil a valuable role up and down the country and not be the kind of dereliction Senators Wilson and Keane spoke about, which is literally a blot on the landscape.
Senator Aideen Hayden: I welcome the Minister of State, Deputy Penrose, to the House and I particularly welcome the discussion we are having on unfinished estates. I agree with my colleagues that ghost estates are the most visible scars in the country today of the excesses of the Celtic tiger. We cannot ignore the plight of those who are suffering in these estates and we cannot kick the can forward. The Minister of State, Deputy Penrose, has taken expedient action to deal with this matter, which is not of the Government’s creation.
It is important to remember when we talk about ghost estates that not all of these developments are in the towns and villages of Ireland. While Cavan has 802 completed and vacant houses, Dublin city has 2,538, Dún Laoghaire has 1,477, Fingal has 1,517 and south Dublin has 1,286, and this figure does not include numbers near completion. All in all, the greater Dublin area has 9,131 houses complete and vacant or near completion. I also believe these numbers are understated. The advisory group’s report only relates to estates where work was commenced after April 2007 with a vacancy rate of over 10%. This survey does not include estates with a vacancy rate below 10% or estates built in 2005 and 2006, where I have no doubt there are significant vacancies.
I am afraid I must disagree with other speakers. The harsh reality is that some of the unfinished housing in our ghost estates will have to be knocked down. They are in the wrong locations and it will take more resources than would be justifiable to keep them. There are, however, good reasons why taking ownership of the best stock in urban areas would be the smart thing to do. At present, aside from pressing housing need, we know the latest census reveals that Ireland’s population is growing strongly owing to high numbers of births. We also know there has been little or no social housing or private construction in recent years, with none expected in the medium term. The Irish State also pays more than €500 million in rent supplement to people in the private rented sector, with a number of these units reported to be below minimum standards. In this regard, I welcome the Minister of State’s recent initiative to give extra resources to local authorities to ensure that rented housing is fit for purpose. We also have 5,000 homeless individuals and families in this country at present.
In the face of all of this, it is difficult to see how we cannot insist on some social dividend from this debacle — a NAMA for the people by another name. The reality is that once the current overhang in the market, estimated by the Minister of State’s Department to be around four years supply, is exhausted, we face a potential housing shortage in as little as five years time. It would be a disaster if the existing vacant units were sold off to some overseas carpetbagger in a bargain basement sale paid for by the taxpayer. The least we can expect is some social dividend for the people from this unmitigated disaster.
The Allsop auction, I point out to Senator Barrett, showed a 70% decline in Irish house prices relative to 2007 prices. Surely, this is the time to realise this asset for the Irish people. It was the foresight of previous Ministers in the 1930s, 1940s and 1950s which saw an end to the slums. The same clear thinking today could be a significant help to future generations. I urge the Minister of State, Deputy Penrose, to take whatever steps are necessary, including nationalisation, to save the housing stock of Ireland.
We now have houses built in locations where no one ever intended to live. They were built purely for the tax reliefs which could be gained with no interest paid to the towns and villages all over Ireland which are blighted by high-rise apartments and suburban sprawl. Villages are now surrounded by empty houses where previously these tax-led developments drove up local land prices and local people could not afford to compete against the spectre of speculation and what would become the cynical irony of our ghost estates.
While I understand that most of the developed world has suffered since the crash of 2008, we cannot and should not forget that it was the previous Government’s policy that led to this particular problem. Rewarding speculation by cutting capital gains tax by half, making it more profitable to speculate in housing than to do a decent day’s work plus unnecessary tax incentives driven by the location of votes and not by housing need have contributed to where we are today.
I welcome the recommendations of the report that local authorities should compel those responsible for this problem to shoulder the burden. While we will support the Minister of State in every way where this issue is concerned, we must think outside the box and consider utilising suitable vacant houses for social housing. The Department will also need to provide local authorities with the powers and finances to take on developers who are unwilling to co-operate and are leaving in the lurch householders who have invested significant amounts in their family homes. This last is unacceptable and we will give the Minister of State our full support in taking on the challenge.
The other issue raised was that of the tax incentive schemes, about which I have reservations. One would assume that so many vacant houses were built because of tax incentives, but it has been shown that only 10% of vacant properties were supported under such schemes. That 90% were not supported indicates that the issue is much wider than assumed. Many counties did not receive the benefit of a tax incentive scheme.
Senator Paul Bradford: I welcome the Minister of State, Deputy Penrose, to the House. He has a challenging and interesting portfolio, one in which he will succeed. I suspect his experience of many years as a member of a county council gives him the types of insight that are important in terms of addressing the current problem.
The Irish have had an extraordinary relationship with housing and house ownership. Perhaps this stems somewhat from our colonial past but, apart from our neighbours in Great Britain, the Irish people’s relationship with house ownership is unique. For generations, the auctioneer’s maxim has been “location, location, location”. Often, this has resulted in one’s entire education, career and life options being dominated by one’s address. It has put a premium on housing and the value of a house, resulting in the extraordinary economic crisis we are facing. During the past ten or 15 years, we built an entire economy around the housing industry. When one considers the number of houses built in the Republic compared with similar sized countries, we should not wonder why we are where we are. To the Minister of State and the Government falls the challenge of addressing this difficult dilemma.
Some years ago, we would have expected unfinished housing estates to be a problem in large urban centres, but it is a problem across the entire country, including in some small villages. Given the number of unfinished houses and how many people desperate for housing are on our housing lists, one must ask whether it is possible to marry these problems into a productive and worthwhile solution.
In one sense, the most important part of the Minister of State’s contribution was when he outlined clearly that he was pursuing a multi-strand approach while recognising that any mechanism must be introduced in a manner that ensures a good mixture of housing. Many of our housing and social difficulties stem from a bad housing mix. In a rush to solve the housing problem, previous Governments devised a system that has not worked and has caused many social difficulties in some of our major urban towns. We must try to avoid a recurrence of this problem. What will we do with the tens of thousands of vacant houses and the many ghost estates when so many people are desperately looking for accommodation?
Most of the Members present have been members of local authorities. Almost every local authority has a significant housing list. When constituents ask us why vacant houses cannot be allocated to them, it is difficult to respond and we must try to suggest various reasons and excuses. I hope the Minister of State will be able to put some of the jigsaw together.
Regarding more immediate problems, I am not 100% sure of my facts but it may have been suggested that legislation allowing certain extensions to planning permission might cause a difficulty in terms of drawing down of bonds. The Minister of State might address this issue. I do not have experience of a large number of cases but, in many instances, local authorities are not inclined to draw down bonds because the value of those bonds are not sufficient to carry out the required works. This leads to negotiations between the developer and the local authority because the authority frequently tries to procure a better solution.
Senator Hayden referred to the need for a type of NAMA for the people. Many of the estates in question are owned by NAMA, the workings of which we have debated and will continue to debate. It is too early to assess NAMA’s potential for success, but the fact that it owns so many houses gives the State a significant role in putting a new housing policy in place. The recent census figures were interesting, in that they showed surprising growth trends in certain areas. Given the vast number of unoccupied houses, a case can be made for the future occupation of the majority of them.
On the basis of a visual examination, virtually every county appears to have estates that were commenced four or five years ago and are now in such a state of disrepair that one wonders whether completing them is possible. Sadly, the only outcome in some areas may be for housing estates to be demolished. Several years ago, one would not have envisaged houses being built, not being lived in and then being knocked down. I would not advocate demolition, but it may be the only solution from a health and safety perspective in a small minority of cases. I do not want to name estates, towns or villages, but I know of a few places in County Cork where this would appear to be the only option.
I concede that the money available to the Minister of State is limited. We all know the economic times in which we live. It is ironic that we are trying to solve a housing crisis in the midst of an economic crisis caused in the main by that housing crisis. This is the interesting challenge lying ahead of the Minister of State. We have a moral obligation to remember the tens of thousands of people whose lives have been blighted by not having homes. We must proclaim them as having a higher priority of need than those living in unfinished estates. Our first priority must be to try to house them. Since unfinished and some finished estates contain vacant houses, we must try to tackle the two problems together.
I wish the Minister of State well in his deliberations. His work will require a hands on approach and the full weight of his Department must be brought to bear. Unfinished and ghost housing estates are symptomatic of our economic tragedy. During the coming years, we must try to reverse the trend in this regard.
I thank the Minister of State for being with us and offering us his initial thoughts on this issue. It will be a rolling process. There will not be a “one size fits all” solution to this. Different regions, counties and towns will have different requirements and there needs to be flexibility in the approach taken. We obviously need finance but we must politically prioritise the people currently who do not have a house of their own in which to live and who are paying hugely inflated rental prices every week. Taxpayers’ money is being poured down the drain with the subsidisation of rent under the rent allowance scheme while there are many vacant houses available. Finding a single solution to those myriad problems is a huge challenge but I look forward with confidence to the Minister of State’s response to it in the next few years.
Senator David Cullinane: I welcome the Minister of State to the House. Like previous speakers, I acknowledge that he has inherited a real mess which must be sorted out. He should be given the time, space and support from all political parties to make sure that we deal with the real issues with which he has to grapple. It is important to set a context for today’s discussion.
I welcome the report on unfinished housing estates and remind Members of some of the figures in it. There were 23,250 complete and vacant dwellings, 9,976 dwellings were near completion, 982 developments were substantially complete, 150 developments were 90% complete, no construction was commenced on 109 developments and substantial works were outstanding on 1,655 estates.
Like the Minister of State, I was a member of a local authority, Waterford City Council, for seven years. I saw at first hand the relationship between decisions we had to make as local elected representatives and what was happening nationally in terms of the construction bubble, the drive towards development and where all of that was going. I remember that when we had to compile our city development plan we had to make decisions on the zoning of land and making millionaires out of landowners and individuals overnight and all of that was fuelled by people who simply wanted to make money. I can give examples of where that occurred across the country but County Waterford is one region where I can certainly cite that there was overzoning of land. Huge amounts of land were overzoned and that has led to its own problems.
We must put this debate in context in terms of what is happening in the economy. We have this problem because the property bubble was fuelled. Too many houses were built, developers borrowed cheap money from banks and banks here borrowed money from banks in foreign countries and from the bond markets and far too much was built far too quickly. We were building this house of cards that we all knew would collapse and we were told there would be a soft landing but that was not what happened. We now have to borrow billions of euros to sort out the problems in the banks. We had to establish NAMA and it has acquired many of these properties and now the taxpayer is being asked to foot the bill.
Arising from the Minister of State’s report, I note he has set aside €5 million for health and safety works that need to be done. That figure can be compared to what we are paying back in terms of NAMA and the interest alone on the bailout. It is phenomenal. The amount of €5 million is what we are giving back to those communities who we all agree are suffering, yet we are paying tens of billions of euro to speculators and gamblers who are partly responsible for causing this mess in the first place. It is truly shocking but that is where we are at.
I have a number of concerns about the report. It refers to the role the Health and Safety Authority, HSA, should have in respect of some of these unfinished estates. There is a difference between unfinished estates and ghost estates. There are many estates in which many people are living but on which the work was simply not completed. I understand the HSA has responsibility only for active estates and not inactive estates and I wonder how they will be dealt with.
This brings us back to the relationship between developers, local authorities and politicians and the fact that developers were able to get away with murder in these estates in terms of what they did. I can cite two examples in my county of Waterford. I remember visiting two housing estates in the Ballinroad area of Dungarvan a year ago, the Grianan estate and that of Pairc Na mBlath. I talked to people at their front doors who were in tears. They had paid huge amounts of money for their properties. There is a problem with the water supply there. In terms of the well that was dug, the water pressure is not sufficient, which means there is a problem with drinking water supply and elements in showers, kettles and other appliances are being burned out. There was also an absence of street lighting. There is a fantastic amenity in the area, which is linked from the Ballinroad roundabout to Clonea. Ballinroad is straddled between Dungarvan town and Clonea. At the roundabout at Ballinroad there is a fantastic walkway and cycleway leading to Clonea but there was no footpath to enable the people from the housing estate to avail of that amenity. This is what was happening in Celtic tiger Ireland. People paid huge amounts of money for their properties, part of which were development levies, but the money accruing from them were not ring-fenced to carry out these works. A disgraceful decision was made by the previous Government to allow developers to opt out and buy out of their Part V responsibilities. That money in many cases was not ring-fenced to build more social housing or to invest in local communities. I accept that all these problems are a hangover from the past but many of them still persist.
I welcome the proposed site resolution plans. It is crucial that the people living in these estates are part of the consultation process and that a framework is established to allow them to have a say. I would like the Minster of State to respond to this point.
The Derelict Sites Act was cited as a measure that could be used. I am sure the Minister of State in his experience as a local councillor had major battles with his county manager over many years about using the powers under the Derelict Sites Act and was told it was a blunt or crude instrument, it was not what should be used and was rarely used, and asked to cite a handful of examples of where it had been used. I welcome the fact that we can try and use this Act but I do not see how we can effectively use it to deal with some of problems in unfinished housing estates.
I spoke about the bailout, that we are in this position because of mistakes made by developers, politicians and regulators who should have known better. NAMA was established but there has been no social dividend to the people from that process. The best way to give people a social dividend is to ensure that all those properties which are now vacant are used for the purposes of providing homes for people who need them. I was disappointed the Minister’s recent statement on future housing policy did not indicate anything new. There is no new departure from what was put in place by the previous Government where we now have privatisation of social housing and no funding for it. When I was a member of Waterford City Council I recall being told by the city manager that there was no capital funding for this year, next year and probably the year after, and he could not tell me when the next local authority housing estate would be built. It is all long-term leasing and again we are supporting developers. They can lease their properties to local authorities and make profits on the back of people’s housing need. Hundreds of millions of euros are being spent subsidising people in private rented accommodation throughout the State and yet there are housing estates that have not been completed, and there are vacant houses in others into which people could move. We should implement the imaginative proposals, including in the area of housing, put forward by the Minister of State’s party and about which its members spoke vociferously prior to the election to bring about the kind of changes the Minister of State promised. Some of the imaginative proposals put forward in the context of the election campaign by the Minister of State’s party while in opposition, as well as by Fianna Fáil and other parties, should be implemented to deal with unfinished housing estates and ensure a social dividend for taxpayers and a return on the mess, created by others, which landed us in this situation. The best way to provide a return is to ensure these houses are used for the purposes for which they were built, namely, to house people. The Minister of State has an opportunity to grasp that nettle by providing the funding to allow that to happen. I hope he can respond to the issues I have raised.
Senator Marie-Louise O’Donnell: The Acting Chairman will be delighted to know I do not intend to use all of the eight minutes allotted to me because much of what I wanted to say has been raised by other speakers.
Senator Marie-Louise O’Donnell: The Minister of State is aware of the myriad problems befalling us in respect of housing estates. I welcome him to the House. This is an interesting House. It is so beautiful, so qualitative, so historic and so magnificent in architecture, which makes it even more poignant considering the subject of our discussion. Some of these housing estates were built without heeding the fact that human beings would live in them. Some of these unfinished housing estates must be the greatest ugliness to befall our towns and heartlands. It never ceases to baffle me how this ugliness receives planning permission, leaving aside the actual architectural construction. I congratulate the Minister of State on his initiative in this regard. Every time I drive home to County Mayo, I am ashamed about what was allowed to happen because of greed in the guise of tax incentives. If it was not tax incentives, the previous Government was even more reprehensible and lacking in foresight.
Many of the reports on these sites refer to securing the sites but does securing sites and their ugliness aid and abet putting the real problem on a long finger? In other words, if we make them safe, the job is three quarters done and we can abandon them. What is the timeframe for the national co-ordination committee in the progression of the resolution? What will we do if developers and site owners who have abandoned their properties do not take on primary responsibility for addressing the difficulties? Have the developers and site owners been given a timeframe to respond adequately?
Missing from the report, Resolving Ireland’s Unfinished Housing Developments, was a creative attempt at a solution. It addressed issues such as containment, safety and co-ordination of the various interests concerned but there was little on what could be done with the developments afterwards. Perhaps an open competition could be organised along the lines of Your Country, Your Call to come up with creative uses in the future. We could take a giant creative leap in this regard.
Senator Labhrás Ó Murchú: The Minister of State has been honest and transparent in laying out his stall. He is correct in pointing out the extent of the problem. As is evident from today’s debate, there is no easy fix for this problem but I hope we can contribute towards the search for a way forward. I recall going to America in the late 1960s and the early 1970s and meeting members of the first generation of Irish emigrants, some of whom were quite elderly. They spoke to me about the homesteads they left behind in certain parts of Ireland and which were being left to crumble. Some of my colleagues are old enough to recall driving through Mayo and other parts of the west and wondering about the human story behind these homesteads. The general feeling at that time was of despondency. There was no hope for rural Ireland and it was virtually a desert. Subsequently, various people came forward with their vision for the future, such as Canon John Hayes, the founder of Muintir na Tíre, Fr. James McDyer in Glencolmcille, who came up with the co-operative movement, and Monsignor James Horan, who decided to build an airport in a soggy, boggy part of Ireland. One can see the effect these movements had in their time and we need to take a similar approach. However, when the resurgence came to rural Ireland, with young people trying to build one-off houses in rural areas and emigrants in America, Britain and Australia wishing to return, all kinds of problems, difficulties and ideologies were put in their way. They were pushed into congested areas, often destroying the character of the villages and towns in which they were made to live.
History has an obscene habit of repeating itself. This can be seen in our discussion of the housing developments that are left standing as a monument to greed and the lack of constructive vision. We will have to live with the legacy of the building frenzy which spawned the Celtic tiger for many years to come. We have to solve the multifaceted problems these sites give rise to, including safety and anti-social behaviour. This anti-social behaviour is spilling over to terrorise adjoining communities. We must also think about the unfortunate people who wanted homes of their own and bought at fixed interest rates at the peak of the boom. When interest rates came down, they did not benefit and they are stuck with 8% or 9% interest rates on houses that are not worth half of what they paid for them. Furthermore, the estates in which they live are not even sufficiently developed to justify the money they are paying on their mortgages.
Unlike the rural difficulties, which largely arose from deprivation, the urban issue is the result of the availability of cash from the banks. I will not address the issue of the banks or the unfortunate elderly people who are suffering from the destruction of their pension funds. However, if we do not take a radical approach to the problems we are discussing we will not solve them. We must have joined-up policies because this is not about a single issue. There are many factors involved, with some Members correctly making reference to people currently on housing lists. Some of these people have an income and a vision or ambition to ensure they have a family home. They must be brought into the equation. I will return to the issue of developers in a moment and the responsibility lying with them. We should have a radical policy that puts aside some of the legal constraints, and we can do this in a legislative manner. If we do not act, we will tinker with the issue for the next 50 years. The Land Commission, which has already been mentioned, exceeded 100 years. This is not a fallacy; it will happen.
Our current bad position will get worse. I recall sitting on a town council in the bad old days when money was pretty scarce. People paid rent on council houses but those with a vision within the local authority system, and those who were elected with much to offer, came up with the idea of giving an incentive to tenants to look after a house. When people paid rent, even if there was a scratch on the door a tenant would ask the council to repair it. We had a constant stream of people with such requests. The idea was to give such people ownership, allowing the rent to become part of a loan to be repaid for the house, so that at the end of a period the tenants would own it. That is exactly how we should be thinking.
There are people currently on housing lists and I hope we can lay aside legal constraints to tackle this issue. A skilled tradesman on such a list could be prepared to work within a policy framework to finish a house. We do not like personal ideas in the House but I recall at one stage the urban council in Cashel purchased the local dance hall in order to make it into a community hall. It was bought for £14,000 but it was in a bad state of repair and there was no way we could get money to refurbish it. Our idea was that anybody who wished, such as electricians, painters or carpenters, could donate hours of service. This was overly subscribed and the hall was finished to a standard to use as a community centre.
If we brought this idea to the individual we can only imagine the enthusiasm there would be if somebody was allocated a house at a cost but on the understanding that it would be finished to a particular standard. Members may believe this is off the wall but what other options have we? How often have we seen communities act when people have seen enough, with tenants sweeping outside their own premises when the council did not do it, for example? Whole areas were cleaned up as a result. Why is there a Tidy Towns competition, which we can be so pleased with and happy about? That has elevated the people of the country. We have trusted the individual and individual idealism.
I go back to Fr. McDyer and others who have been mentioned. Unless we return to such idealism we will not succeed with policies that do not have courage, vision and ambition built in. I am with the Minister of State, although I know he has a difficult task. He has an enviable record at local level and we are probably preaching to the converted. He knows the problems. As I noted at the outset, I hope in some way that the contributions we make will give some idea of a new form of thinking. We do not want partisanship in the Chamber at the expense of human ambition, and we must all work together to a certain timescale.
Senator Susan O’Keeffe: I thank the Minister of State for coming before the House. I have a great and interesting vision of him riding with Senator O’Donnell along the motorway with a bulldozer. There is merit in that argument. As my colleague, Senator Hayden, pointed out, there will be a need to bulldoze some of the buildings or estates. It is far too simplistic to say that all of them can be matched with homeless people, as the Minister of State knows. If the Minister of State had a euro for every piece of advice he was given about matching empty houses with homeless people since he took the job, he probably would not be sitting here.
I will not add to the advice but I remember during the general election going to an estate in Kinlough, north Leitrim, where many estates were built as it was seen as a nearby place for cheaper housing for people working in Sligo. It is a beautiful corner of the country. I knocked on a door and a young woman who was pregnant and due to give birth on the same day as the election answered, so the canvassing did not go too well. As she looked out from her house there was nothing but an empty field as the estate was not finished; only seven people were living there. This is the same story heard by the Minister of State time and again.
On that day I spoke to somebody who lived in America for some time and told me that in the US the amenities are built first and people are not allowed to build a house until parks and swings are installed and the area is cleaned up. We are now discussing the mess that has been left but we should also take cognisance of the future. Perhaps we could act more practically in future so that we could eliminate all the problems of developers supposedly putting money into safe places to be used to finish estates but in reality running off with the funding. Every future plan should learn from this.
With regard to Kinlough, I draw attention to the fact that Leitrim, one of the most beautiful counties in Ireland, has the most ghost estates per head of population. I am sure the Minister of State is more than well aware of that figure and knows the source of it. Unfortunately, we are not making it up. I doubt there was a house built recently in the counties of Sligo, Longford, Roscommon and Cavan not involved with the upper Shannon renewal scheme and with tax relief. Those counties were exploited in that way, and such places now face particular levels of emigration. They are the locations where people flocked to work, mainly in the construction industry.
If we can consider piloting housing projects, we should examine the case in Leitrim. Even in the so-called good years there was higher unemployment in that county and fewer people received third level education. More young men were reliant on one industry than another and there was a greater ageing community. The county did not benefit in the way other counties did from the so-called boom, and now the people find themselves as inheritors of more ghost estates. It is a cruel irony that has occurred in the area.
The people were given promise by the upper Shannon renewal scheme, which was a great idea to bring prosperity to those counties. It was a fine idea but it has not worked. In the destruction of Leitrim and other counties, we find ourselves with almost empty counties. What can be offered in their place? We certainly do not want any more schemes with a monetary or tax relief basis. I echo Senator Ó Murchú’s comments on joined-up thinking and the need to think creatively. We must be thinking about the legacy for that county and extend such work.
We need active re-engagement with the community to gauge strengths, which would require the recognition that the housing issue is not just the problem of empty houses but it is the underpinning of our society, in effect. We see this concept mostly in a place like Leitrim. It has great strengths in agriculture, food and tourism, with all surveys showing a very high level of the community involved in caring and volunteering activities there. Surely we can build on that through a social innovation centre that could be linked to the institute of technology in Sligo. There are strong links between Leitrim and places across the county bounds. The co-operation between Sligo Institute of Technology and South West College in Enniskillen presents opportunities for Leitrim. Some possible creative solutions for rebuilding these developments or making them safe have been hurled at the Minister of State in the months since he took up his post. There is a need to ensure the specific communities that have been abandoned are reactivated by other Departments. The Minister of State needs to contact those Departments and join the dots along the line. He should remind the Departments of the poor legacy these communities have inherited and ensure they are at the top of the heap when decisions on regenerating rural communities are made.
I will always remember the woman in Kinlough. She moved there with the aim of bringing up her family in a community. Instead, she is looking at an empty field from an estate with about four people living in it. That woman and others will be abandoned unless we find ways of helping to rebuild these communities. There may be some merit in looking creatively at the JobBridge scheme for interns. I welcome the scheme and the policing of it that we have seen in recent days. I do not know whether there is merit in extending it specifically to cater for those interested in ways of doing up houses, as suggested by Senator Ó Murchú. Perhaps we can put in place a scheme for a year or two to employ people who are looking to learn and improve their skills and thereby deal with some of the safer and better houses. We are not talking about the houses that will be bulldozed by Senator O’Donnell as she goes down the motorway.
Senator Cullinane and his Sinn Féin colleagues are not the only people who are outraged by the fact that we are unable to give as much money as we would like back to these communities. I do not doubt that the Minister of State has scoured the pockets and the seams to see how much money can be provided for the restoration of houses. The idea that the Government somehow prefers to give the money to the banks is quite ridiculous. Not a single person in this room or in the Government enjoys having to give money to the banks when it is needed by other people. The Senator is not in sole possession of that kind of outrage. We are all concerned. The Government will do its best to try to find ways of dealing with the challenges that have been created. I thank the Minister of State for his efforts to date. We look forward to seeing him in the House again.
Senator Colm Burke: I welcome the Minister of State to the House. I thank him for the efforts he is making to deal with this difficult problem. A number of months ago, I was asked to speak at the historical society of UCC. The society was having a debate on comparisons between the recession of the 1980s and the current recession. I spoke from my perspective as someone who comes from a legal practice. I mentioned that in the 1980s, a guy with four young children came to my office and said he wanted to buy a new three-bedroom semi-detached house. The deposit on the house was £100, which he did not have. I was able to send him to the bank to borrow £100 and, as a result, he was able to buy the house. If a person with €100,000 in the bank came to me now to buy the same house, they would not get a loan to be able to buy it. I suppose that is the big difference. Even though we were going through a recession in the 1980s, it is interesting that we were still able to keep the flow of house sales and purchases going. At the time, many people availed of a scheme that created social problems in some areas. I refer to the provision of a £5,000 grant to those who were willing to surrender their local authority house and buy their own house. It is unfortunate that we are unable to offer a similar scheme during these times to keep the market moving.
My colleague, Senator O’Keeffe, spoke about the need to have services in place before starting to build estates. I have seen a copy of the planning permission that was granted for a development in Edinburgh a number of years ago. The developers in question, who had acquired 200 army houses for refurbishment, were required to assess how many new families would be moving into the area. Not only did they have to provide all the services before any of the houses could be sold, they also had to assess the number of children who would be living in the area and build or extend playgrounds and additional classrooms in primary and secondary schools on that basis. It is interesting to note that this system has been in place in Edinburgh for many years.
I would like to raise two issues that relate to the taking in charge of estates. I will give a simple example of a problem with the system that has been in place for many years. Four months ago, I came across an estate of seven houses for which planning permission was granted in 1997. The developer built roads, footpaths and lampposts before selling seven sites. Some 13 years on, the estate does not have any lighting. I wrote to the local authority on a number of occasions before eventually telephoning an official to make the case. The problem came to a head at the end of last year during the frosty weather. One has to drive downhill to get into the estate, but that was impossible due to the weather conditions. People had to park on the main road. If they wanted to go out at night, they had to walk out of an estate with no lights and with ice on all the roads and footpaths. I suppose it really brought it to a head. I contacted the local authority to ask why this was not sorted out. It seems that the bond which was in place was not adequate to cover the cost of the additional work that had to be done. The question of the inability of local authorities to follow through arises once more. The attitude of the local authority official was that I should not be complaining because the case in question dated to 1997 and much older estates have not been taken in charge. It is a question of accountability. Local authorities are answerable to the Minister of State and his Department. Not only are we letting builders and developers off the hook for not completing estates, we are also letting the local authorities off the hook for not enforcing the rules. The problem in this case is that the bond is not sufficient to cover the costs that have arisen. At the end of the day, taxpayers will have to pay for the local authority to finish the estate.
The second issue I want to speak about is the question of compliance with the Part V regulations. I raised this matter on the Adjournment last week. The problem is that lands or houses which are supposed to be made available to local authorities under Part V when estates are built are not being made available. In some cases, the parcel of land that was promised to the local authority is mortgaged to a different financial institution that is not involved with NAMA. I referred last week to 160 apartments that have been built. The development is mortgaged with a bank that is not part of the NAMA process. A second lot of property, which should have been given to the local authority, is mortgaged to a different bank that is no longer co-operating. The local authority is saying that none of the apartments can be sold because the builder or developer — there is a receiver in there now — is not complying with Part V. This has been going on for over 12 months. If the receiver wanted to get money by selling the properties, he would be prevented from doing so. We need to be proactive in dealing with such cases. I accept that there is a problem with Part V compliance, but I am concerned that local authorities are not responding to the need to deal with this issue. I understand their argument that the legislation governing this area means they do not have an option in this matter. On the legal side the purchaser’s solicitors maintain they have not been furnished with an engineer’s declaration of compliance with planning permission because those involved have not complied with Part V. Therefore, the solicitors cannot certify the title. This is a problem that must be remedied because otherwise these properties will remain as they are until it is resolved. I am unsure exactly how it can be resolved but it must be resolved. This may not be taking place in a great many cases but it is taking place and I am aware of that one example where it is happening. I am also aware of other cases in which the builders are involved in NAMA and there is a slow response with regard to co-operation between NAMA and the local authority with regard to Part V compliance. This issue can be resolved. We may need amending legislation although I am unsure. However, in the case to which I referred it appears the hands of the local authority are tied legally unless it waives the condition in the planning. I call on the Minister of State to examine the position in this case. We must deal with the issues, including the old system and how local authorities ensure that developers are accountable. In addition, it is important the Department ensures that local authorities carry on and implement the role they have. I thank the Minister of State for giving us his time this evening.
Senator Rónán Mullen: Cuirim fáilte roimh an Aire Stáit. The Minister of State is welcome. As chairman of the national co-ordination committee, the Minister of State has the unenviable role in the management of what is a difficult issue to have to deal with. The Minister of State will be working with bankers, developers, the Department of the Environment, Community and Local Government and local authorities. The Minister of State has already referred to the work of that group. What is the position with regard to the laying of a progress report of the committee before the House before next summer when, as the Minister of State has suggested, the report will be completed? The committee is involved in the directing of spending of public moneys and his predecessor committed to spending the sum of between €3 million and €5 million allocated. Many people are keen to know which sites are being prioritised and selected for spending. When one considers the relatively small sums of money involved and this is contrasted with the large number of properties and estates which need urgent improvement, it is appropriate that the House should be informed of the actual spending decisions of the committee.
It is frightening to consider the scale of the problem which the Minister of State, the committee and all of us face. The recent report on the subject by the advisory group on unfinished housing developments outlined that there are more than 23,000 complete and vacant dwellings and an additional 10,000 are almost complete. The issue of unfinished dwellings in new housing developments is a matter of major national concern. We should not forget the serious impact this issue has had on those most affected, namely, the residents of these developments.
I mentioned the Minister of State’s predecessor, the former Deputy Finneran, allocated up to €5 million to rectify the most serious safety hazards on unfinished housing estates. At the time, this was probably seen by cynics as an attempt to buy votes. However, I am concerned that the funds committed work out at approximately €14,000 per afflicted estate. This is a derisory amount in terms of the ability to implement proper safety precautions and to address these concerns. At the time, the Minister of State indicated that he was committing the funds because he felt a moral responsibility to residents of ghost estates. I am sure the Minister of State feels a similar responsibility but he will be unable to do much about it unless the funds are available. We must remind ourselves that there is an aspect of human dignity with this issue. It is dreadful to think of people living in housing estates which resemble Grozny or Sarajevo after a battle. Thousands of people are caught in the bind of living in what are, in fact, abandoned building sites with all the risks these entail, especially for children.
The residents are doubly aggravated by their plight because so many are living with negative equity as well as a dispiriting or even dangerous environment. I am concerned that the €3 million in emergency funding provided by the Department is merely a tiny first tranche of what will be needed to deal with these ghost estates. Of course, this is a problem which the Minister of State has inherited. We should recall the upper Shannon rural renewal scheme introduced by Charlie McCreevy in 1998 which resulted in a proliferation of unfinished estates in Leitrim, Longford, west Cavan, north Roscommon and south Sligo, all of which were covered by tax incentives. It was a classic example of planning failure and lack of foresight which reminds me of a Ben Bernanke remark about having to be the person to come in while the party is in full swing and take away the punch bowl. Clearly, the punch bowl was not taken away in time in this case. A quick calculation reveals that in excess of 12% of the complete and vacant dwellings are in the five counties that were subject to the rural renewal scheme section 23 incentives, a remarkably high figure considering the local population.
My colleagues have outlined the problems arising from the existence of these sites, including piles of rubble, open pits, uncovered manholes and unstable structures. These are among the hazards to be addressed by local authorities. Will the Minister of State clarify the avenues open to local authorities to recoup the emergency expenditure from missing developers or by securing a lien on the future sale of houses? Will this require legislation? Has the committee of which the Minister of State is chairman made any recommendations in this regard about which he could advise us?
A further issue arises in respect of the reported non-co-operation of banks with the task of cleaning up the mess left in the wake of the building boom. A report in the Irish Independent on 10 June suggested the banks are choosing to avoid their legal responsibilities for cleaning up hundreds of unfinished housing estates. The article also stated that some 230 unfinished and dangerous estates have been abandoned by developers. The banks which funded these projects have decided not to appoint receivers in an attempt to claw back the money. If receivers were appointed in these cases, the banks would be legally responsible for cleaning up the mess. In the same article, the Minister of State remarked that in some cases efforts by local authorities to meet banks and developers to discuss the problem had met with no response. The Minister of State warned that he would consider introducing legislation to force banks to take responsibility or to face the prospect of being fined. Have the banks changed course and begun to co-operate with the Department and local authorities? If not, what legislation does the Minister of State propose to table to compel their co-operation? Under the Derelict Sites Act, the Minister has the powers under section 12 of the principal Act “to make provision with respect to land to prevent it being or becoming a derelict site, to enable local authorities to require the taking of measures on derelict sites by the owners or occupiers and, in certain circumstances, to acquire derelict sites compulsorily” and to levy fines.
In light of the report of the advisory group on unfinished housing developments we know there are more than 1,600 developments with outstanding works needed. Of these, 230 have effectively been abandoned and the developer or site owner is not contactable when the receiver is appointed. Considering the significant planning, building control, compliance and public safety issues to be addressed, is it not after time to consider amendments to the Derelict Sites Act with a view to increasing the Minister’s powers to levy fines and to compel banks and developers to co-operate with local authorities?
Senator Marc MacSharry: I welcome the Minister of State to the House and thank him for taking the time to give us so much of the afternoon. I am sorry I missed some of the other contributions and I am conscious that Senator Hayden has significant expertise in this area. I have been involved in the auctioneering business in recent years, a profession which, along with the developers, has contributed to the problems we have had in overheating the economy. It is a fact that the punch bowl was not taken away in time. However, it may be a case of having 20-20 vision in hindsight for many of us. I appreciate the Minister of State’s commitment to deal with this issue. The brief point I wish to make was echoed in the newspapers today. Let us consider the number of people on housing lists and the number of people homeless throughout the country. However difficult it may be to bring these issues together, we have a major responsibility to do so and it is one on which we should be focused singularly.
It is clear there is empty housing and apartment stock. While it is difficult to directly retrofit a housing list to a particular estate and so on, I would turn to the academic sector for assistance. Perhaps postgraduate students could suggest how best this could be done. They could be marked for so doing in a contribution towards their educational qualifications, while at the same time gaining solutions to the problem of how best to deal with these estates nationwide, many of which are the subject of receivership at present while others are involved directly with NAMA. An attempt should be made to embrace such an approach.
While I have the Minister of State’s attention, I wish to raise another planning-related issue. I note that last April, Wicklow County Council had a discussion in respect of An Bord Pleanála on many issues pertaining to the council’s section 140 motions and other planning permissions granted by that county council. I refer to instances that have been replicated throughout the country, whereby An Bord Pleanála’s home inspectors recommend the granting of planning permissions that have been appealed, only for them to be overturned by the board. I have a major issue with this practice and had I the money to engage people from the Minister of State’s former profession, I would love to test it in the European courts, because I suggest it is unconstitutional for the planning process to operate as it does. This is not to suggest it is desirable for people to build here, there and everywhere but I am sure all Members have files — Senator Comiskey mentioned this issue during the week — concerning such cases. I refer to farmers with children, who have applied for planning permission on lands that initially has been granted by the county council. In such cases, inspectors from An Bord Pleanála have recommended continuation of such grants only for, as a Wicklow county councillor described it, the exercise of faceless elitism by people in ivory towers, who dictate that a stop must be put to it because of ribbon development and their view of how that area should be. While actively considering improvements in this area, Senator Comiskey made a worthwhile recommendation on the regionalisation of An Bord Pleanála and this must be done.
I note the Minister of State’s private secretary replied to Wicklow County Council quoting the letter of the law, which to me constitutes government by autopilot. When I was on the Government benches, I regularly criticised the autopilot button that was switched on far too often. Before he gets into the habit of it, I appeal to the Minister of State to turn off the autopilot button and to examine this issue personally. He should avoid falling into the trap from which many members of Government from all parties have suffered. This issue must be dealt with north of a line from Dublin to Galway and west of Mullingar. The people living in that part of the country wish to continue living there. They have a particular culture and I believe it is possible to embrace and allow for that culture, while at the same time ensuring responsible planning guidelines and rules are in place. I ask the Minister of State to consider this matter.
I wish to promote at every opportunity the Family Home Bill 2011, which was published on Tuesday last and which I drafted with Senator Thomas Byrne and others. The Bill has been informed by debates in this House, by the work of Senator Hayden’s organisation, of organisations such as New Beginning and the Prevention of Family Home Repossessions group, as well as the media in recent years, in seeking to prevent the repossession of primary family residences. I ask the Minister of State to use his good offices to ensure that when the Whips within the Labour Party and the Government as a whole make a decision on this non-adversarial Bill and the sensible provisions proposed therein, it may be embraced on Second Stage on 27 July 2011 in a non-partisan fashion. I acknowledge that advices could be accepted from the Attorney General’s office or amendments tabled by Government parties or Independent Members on Committee Stage. That would be sensible and I would greatly appreciate the Minister of State’s co-operation in this regard.
Acting Chairman (Senator Terry Leyden): Before calling on the Minister of State, Deputy Penrose, to respond, I thank him for his attendance in the House and for listening to Members’ views. It was very useful and helpful and I thank him for his availability at all times.
Minister of State at the Department of the Environment, Community and Local Government (Deputy Willie Penrose): I thank the Acting Chairman and as he is aware, I was present for every second of the debate. I had intended to go elsewhere but I called it off. I am heartened to note the key points and contributions raised in a non-partisan way in today’s debate have been broadly captured in the context of the advisory group’s report and my Department’s response to it. It gives me confidence the Government has undertaken a robust scoping of the problems with unfinished housing developments but at the same time, one cannot suggest the Government has all the solutions. Any innovative suggested solutions put forward, for example, involving synergies for providing employment and resolving these developments, to which some Members referred, will be considered fully by the national co-ordination committee. I do not care from where solutions come, as long as they are workable and practical. Were a Member from any side of this House to come up with an idea, the Government would be prepared to consider it. It makes no difference, as I have always worked in a non-partisan way. Party politics can be played outside but in these Houses, one must work with all shoulders to the wheel. This is an approach I adopted in the early 1980s and have continued to take. Consequently, I am greatly encouraged by what is happening.
This problem presents enormous difficulties for residents and their children, especially those who face immediate public safety issues. However, the Government is taking immediate and further planned action to resolve those issues. The important message is that I remain encouraged by the strong consensus and commitment among the key stakeholders who are participating on the national co-ordination committee, as evidenced by its productive meetings thus far.
I now intend to refer to the various points made by Members. The Government is finalising with urgency a roadmap in the form of an implementation plan. The plan is fairly significant and does not merely comprise two or three pages, but consists of plans, followed by actions and then results. This is the way it will be and is the reason I took personal responsibility in chairing the committee. I have many other things to do, as one might argue the place is always on fire as far as housing and planning are concerned. I decided to take this on because one element of politics I have always hated is that no matter who prepares a report, it is either thrown in the bin or thrown outside, never to see the light of day again. I was determined this would not happen in this case because the issue is far too serious and it affects every community and the residents in particular.
In this context, those who will be centrally involved in site resolution plans will be the residents and communities, who should be part of the site resolution process. As Senator Barrett noted in respect of estates in receivership, it is great to have someone there. The same is true of liquidators. As for developers, some simply need a boost in the form of a few bob to enable them to get going again. I note that sometimes, developers and site owners are not the same entities and even the occupiers may not be the same as the site owners or the developers. There are all sorts of legal complexities and were these problems simple, they would have been solved long ago.
However, there is a multitude and a myriad of complexities. As someone who was a barrister, in common with several Members of this House, I understand the legal complexities and the last thing I wish to do is to land the Government in a legal mess. There are enough problems all over the place and enough money is being expended on legal issues without me adding to it. I would be letting down all Members were I to engage in so doing. However, a roadmap is in place and the Government will work progressively to resolve the issues facing it in respect of unfinished housing developments.
Senator Wilson made a point in respect of site resolution plans. The aim is for 300 plans to be submitted by the end of 2011 and the Department will also work through 2012. This constitutes a significant number, although Senator Wilson may think otherwise in the overall context. However, an interesting development since the report was issued is that a significant amount of work is now up and running in various areas. It is not earth-shattering but the acorn seeds principle suggests some light is beginning to be seen. Some Members have made the point that of 34 local authorities, 28 have identified issues. However, eight local authorities have now indicated they will not need any State money because developers, receivers or whoever are coming on board and are working. Perhaps the report issued on 9 June was the switch to fire them into action, as action now appears to be taking place. The important point is I will seek reports to ascertain how much action is taking place. One could have action for a week before drifting back into old habits. While I acknowledge Senator Wilson’s mathematical skills, the calculation of €3,000 per estate is a little unfair as it is for 242 such estates. The Government asked for the identification of the most serious estates in which significant difficulties were going to arise in respect of safety, technical issues, building compliance and so on. My concern was that as summer approached, an estate could have been built up to a level offering access for children onto roofs. All Members are aware of how alluring that can be for children.
Those are the issues which cause me concern. I refer to uncovered manholes. I know of one incident in an estate which houses many children, where an elderly woman walked on a board covering a manhole and she fell through and broke her elbow. One can imagine the danger to children and the impact such an incident would have on a person. The elderly lady and her husband had bought a house in an estate on returning from abroad. Such situations cause untold misery. The State could not be expected to pick up the tab, not even in the time of the Celtic tiger, for developers who overshot the runway and who were encouraged to do so by various incentives.
I agree with Senator Barrett and refer Members to the framework document on housing. We must not stimulate house prices because this would create a false market again, the very thing that caused us problems. We must allow prices to reach their own floor by themselves. The last thing we must do is create an artificial level as this would lead to disaster.
Acting Chairman (Senator Terry Leyden): With apologies to the Minister of State, I am required to have the time for this debate extended for five minutes to allow the Minister of State to finish his contribution.
Deputy Willie Penrose: The real funding will come from developers, banks and financiers. The funds are not for completion of the houses because that is for the developers and the banks but public safety works are the first priority and we have to deal with these as best we can. Based on their concerns, the local authorities have categorised all estates and of 655 estates with works to be completed, a total of 242 were in category four and are of most concern. Approximately 28 of these are within NAMA. This might not be a true reflection. The co-ordinating committee is made up of representatives of the local authorities, the county and city managers, the sustainable communities agency of which Mr. John O’Connor is the chairperson, the Irish Bankers Federation, NAMA, and a representative of the rural dwellers to present the views from the rural perspective, which is of particular interest to me.
The committee has identified 28 estates. It is important that people have a contact and that there is a contact person in every local authority. Very often residents and communities do not know who to contact and they are sent from Billy to Jack. There is a contact person in NAMA and in the banks. This is the liaison protocol procedure. The communities are the most important component but it is often difficult for them to negotiate the bureaucratic system. I have cut this out by asking for a contact system to be established and the contacts have been identified and the system is working.
The communities are already up and running. I appeal to people not to use the term, “ghost estates”. It is preferable to refer to “unfinished housing developments”. The term “ghost estates” casts an aspersion upon people who have expended considerable moneys to buy a house. I prefer to refer to them as unfinished housing developments. In that context, I ask residents of such estates to take action by setting up a residents’ or a community association.
On the question of how this issue is to be resolved, a site resolution plan is being set up for each of the 28 estates. It may well be — as some Members are masters of finance and economics and will know — that it may not be worthwhile finishing off some of these estates. At that stage I would be very reluctant to knock houses. However, where there is no other solution or where only foundations have been built, I would advocate giving them back to the community who may wish to build crèches or doctors’ surgeries or community halls. NAMA has been set up under an Act of the Oireachtas and its remit is commercial in the main, followed by the social dividend which was added late at night during the passage of the legislation. We plan to purchase from NAMA approximately 60 housing units in south Dublin. We cannot afford to purchase because this is part of the 3%, the general government deficit. Approved housing bodies will have a significant role to play in this. These bodies will be regulated and the Department will have a supervisory jurisdiction over them. They will be permitted to borrow money from the housing finance agency——
Acting Chairman (Senator Terry Leyden): I apologise to the Minister of State but the time has been exceeded and I suggest he return on another day. I have no choice in the matter. It is an order of the House and I am restricted.
Deputy Willie Penrose: Approved housing bodies are the way forward. An assessment was carried out at the end of March and approximately 100,000 will be on the list when it is released in August. A total of 100,000 people are being supported by rent supplement of €500 million. I intend to change the system and to give responsibility for rent supplement to the local authorities. There is no sense in having rent supplement formerly administered by the HSE administered by the Department of Social Protection. It should be an integrated system. The local authorities will pay the rent and will enforce the standards. There will be no more unsuitable, substandard accommodation being offered by landlords who were being paid for it. However, in some cases the landlords never received any payment and they suffered as well.
I want to bring balance into the system which will be subject to the PRTB which will be amended to include these provisions. I hope Senators support me in this work. It is hoped that exorbitant rents will be driven down. Landlords will be required to register with the PRTB and every month, the local authority will be in a position to send a letter to the local Revenue office to certify that rent has been paid to individual landlords. There will be no more of the nonsense that a person cannot be accountable and neither will there be under-the-counter payments because the local authority will pay directly the rent supplement of €85. It will not be the case of a rent of €100 with €15 coming from the person’s own pocket. I look forward to this House supporting this work because there will be squeals and backlashes and complaints. We do not have the money. We are borrowing it. We have to make the most productive use of it to ensure that the 100,000 people on the list are facilitated with quality accommodation.
On the question of the leasing initiative, if the leasing initiative was that good for developers, why have only 1,300 units become available since its introduction? For example, if Senator Hayden is the tenant under the long term leasing initiative and she builds up a score of equity, unlike the hire purchase or leasing agreement, at the end she pays a proportion of what is left. This might build up to 30% or 33% equity. I cannot say this up-front, but that then becomes part of the general government deficit under the 3%. It is only at the end that it becomes achievable. Equity will be part of the leasing initiative. That will also mean the approved housing bodies will have to change their perspective. I would like to see a tenant purchase scheme within that structure because many people have been in situ for ten or 12 years. Senator Labhras Ó Murchú would know more about this than I would. However, some of those involved do not want to sell. It is time for a change to ensure equity and choices.
I have a lot more to say, but I know the Leas-Chathaoirleach gets cross whenever anyone goes over time. I am glad to be here and will be delighted to return. It will be 12 months by the time we have an opportunity to progress this, but I want to report that significant progress was made yesterday. I will not stop in my efforts to deal with unfinished housing developments. I thank Senators for their ideas which will be examined constructively.
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