22 June 2000 Edition

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Housing fix will not hold

Ahern's amnesty for speculators


How many different ways are there to solve the housing crisis? The Dublin Government stood up last week and offered us their third attempt at the quick fix with the launch of the Bacon III report on housing.

There were some small positive steps. However, the overall theme was that the private builders and developers who are one of the root causes of the crisis will be the ones now given a free reign to build in a fast-track, red tape-free environment.

Perhaps it is worthwhile to recap quickly on what exactly are the causes of the housing crisis. House prices are increasing rapidly, having risen by over 90% in the last three years and by 22.2 % alone in the 12 months to last April. Home ownership is now out of the reach of thousands of Irish families. These families are either in private rented accommodation where rents have also increased hugely as landlords cash in or they are in some unsuitable arrangement, often living with parents or in small cramped apartments.

Most of these people fell back on local authorities, which have seen their waiting lists double over the past three years. Long waiting lists, especially in urban areas, have been a feature throughout the 1990s as Dublin Government cutbacks curtailed house-building programmes.

Exacerbating the problem are property developers and home builders, who have been building up huge land banks on which homes could be built. They drip the number of new houses onto the market to keep prices high. Finally, there is a huge increase in one- and two-member households and a substantial net immigration into the state.

So how did the Dublin Government's interpretation of Bacon III help solve anyone of these problems?

Well, the small positive first step was the abolition of stamp duty for all first time buyers on homes worth less than £150,000. This was a measure proposed by Sinn Féin last November.

When it came to taking on the speculators, the Dublin Government basically offered an amnesty. There will be a new 2% annual property tax on owners of residential investment properties who buy homes after June 15. So, if you already were a speculator, don't worry.

Don't worry also if you have a lucrative land bank because the new levy of £3,000 per house for developers who sit on land zoned for residential development only applies to land not yet designated in the new Strategic Development Zones (SDZs).

The SDZs are to be set up to fast track house building. This will mean substantial de-regulation of the planning process, with the government taking up much of the costs of providing the road, power, water and sewerage services needed to build housing developments. For example, £200 million is to be made available for road building.

A further £800 million is being set aside for social and affordable housing developments. This is welcome but it does not hide the fact that the Dublin Government are not prepared to take on the vested interests in the building sector who have helped create this housing crisis. Nor are they prepared to face up to their own failures in planning housing provision over the past 15 years.

Bertie Ahern promised more radical measures if his current proposals do not work out. One wonders how long it will take before he realises that Bacon III is not a solution to the housing crisis. It is a builders and developers charter. Fianna Fáil and the Progressive Democrats have effectively absolved the building community of their past excesses and given them a new blank sheet to begin all over again.


Housing measures ``too little, too late''

Dáil divides on Sinn Féin amendment

Sinn Féin TD Caoimhghín Ó Caoláin has described as ``beyond understanding'' the refusal of the government last week to adopt his amendment to the Planning and Development Bill which would make the provision of social housing a key priority in local authority development plans.

Ó Caoláin tabled the amendment to include in the objectives of development plans ``the provision by the planning authority of social housing to accommodate, as far as possible, all in need, including, in particular, those on low income and the elderly''.

Minister for Environment and Local Government Noel Dempsey refused to accept the amendment. Deputy Ó Caoláin called for a vote and the Dáil divided on the Sinn Féin amendment. This was the first occasion on which a full vote of the Dáil took place on a motion by the sole Sinn Féin TD. The amendment was supported by Fine Gael, Labour, the Green Party, and the Socialist Party and was opposed by Fianna Fáil and the PDs. It was lost by 73 votes to 62.

The government voted down key amendments of Deputy Ó Caoláin and other TDs which would have removed a controversial fee from the Bill. All groups and individuals who make a submission to a local authority on a planning application will have to pay a fee, initially £20 but with the power in the hands of the Minister for the Environment and Local Government to increase it. Ó Caoláin also sought by amendment to remove the provision in the Bill whereby people will be unable to seek judicial review of a planning decision unless they have a ``substantial interest'' in the matter. This clause, and the one whereby people are barred from appealing to An Bord Pleanála unless they have earlier made submissions to the local authority, were described as ``restricting the rights of citizens to participate in the planning process'' by Ó Caoláin.



The Cavan/Monaghan TD described as ``too little, too late'' the measures on housing announced by the government last week. He said:

``I welcome the measure on stamp duty as far as it goes. I also welcome the tax, limited though it is, on investors buying residential properties for non-owner occupation. But to present these measures as the solution to the housing crisis is a travesty. It has taken three years for the government to come up with these proposals. It is too little, too late.

``Last night, Minister of State Molloy told us there have been `moderating house price trends since house price inflation peaked in 1998'. Yet we know the reality is that house prices have risen by over 70% since this government took office.

``The gross inequality in this society is seen as multi-millionaires compete at the top end of the market for so-called prestige properties, while people on average incomes are either crippled with huge mortgages, cannot afford a mortgage at all or, they qualify, join the ever-growing local authority waiting lists. Those on low incomes are in dire housing need and there is little or nothing for them in these measures. The local authorities should be leading the attack on the housing crisis. An extra 1000 local authority housing units for the next six years is simply not enough.''

An Phoblacht
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Dublin 1