Cullen stresses importance of housing supply

SEANAD REPORT: Inflation in house pricing had dropped quite dramatically, the Minister for the Environment and Local Government, Mr Cullen, said.

But it was not where he would like it to be. "Because, if you look at things going forward in terms of any of us, net income is not going to change that dramatically in the next few years, given the tax system.

"We have given back so much that I think we're at the bare bones at what the tax system should be delivering."

People's income was now pretty finite, the Minister said. Would-be house purchasers were not going to be able to gallop in pursuit of ever-spiralling house prices. So now was the time to maintain supply within a sensible framework.

Minister Cullen was responding to a Labour amendment to the Planning and Development Bill. The measure brought in by the Government extends the ways in which developers can comply with the 20 per cent social housing requirement under the 2000 Act.

The Labour amendment, which was not passed, sought to bring under the social housing requirement 80,000 planning permissions which had been exempted from the original Act.

Ms Kathleen O'Meara (Labour) said the exemptions had let builders off the hook.

The Minister said he had included the permissions in question because he wanted to ensure the supply of housing. An easier option would have been to take the chance that the permissions should be kept alive and take an unlikely chance that this approach would survive a High Court challenge.

Alternatively, the permissions could have been allowed to survive and then face a new round of local authority scrutiny.

Mr Cullen said he had chosen another approach, which was to ensure continuity of housing supply while obtaining a "community bonus" through the payment of a levy by the developers of the 80,000 units concerned.

Ms Ahern said that the levy payment could yield upwards of €80 million in the year ahead.

On the supply of housing, Mr Cullen said that the outcome this year would be around 55,000 units, which would be another record. The expectation was that we would need around 50,000 to 55,000 houses a year consistently over the next 10 years to meet demand.

That was the absolute way of maintaining the right balance in the market, by getting supply up.