Housing target not viable says Ahern

TAOISEACH Bertie Ahern yesterday questioned whether 10,000 affordable houses could be delivered as part of a new national pay deal.

The trade union leadership has been citing the proposal as one of the key selling points in its bid to get the deal approved by its members.

However, Mr Ahern said while unions were seeking to have 10,000 houses built under the initiative, he believed this was not possible.

"The department does not believe 10,000 new houses is possible but we should try to get to as high a figure as is possible," he told the Dáil yesterday.

"Separate to that, we are sitting down with the social partners to see what other initiatives we can implement to increase the supply of affordable housing."

The affordable housing proposal was a key element in the pay talks last month and was floated by ICTU as way of opening up the prospect of home ownership for people on low and middle incomes.

It involves the State making land banks available so individuals can buy houses at cost price.

Labour leader Pat Rabbitte, however, said the proposal seemed to be heaped in confusion and questioned how it would work without using State funds.

He said: "Will IBEC build them and will Fr Seán Healy pay for them? I do not understand this. How are we to build 10,000 houses without that having any impact on Government finances?"

He also said community organisations involved in the pay talks were not happy with the progress and questioned what the shape of the final proposal would be.

Mr Ahern, however, said various options were being considered to free up land for cheap housing and it would become clear quickly whether they could be implemented.

It is not the first time such a measure has been proposed. Similar initiatives were used in the 1930s and even as late as the 1970s. The 1970s scheme was a less ambitious one in which the State intervened to give money to the Housing Finance Agency.

Mr Ahern said it would be possible to operate a similar scheme again to help increase the supply of affordable housing.

He also hinted a modified compulsory purchase order could be introduced to buy up land banks and allow houses be built at cost price without a developer.

Mr Ahern said: "The problem all the time, even with affordable housing provided by builders, is that the land value is so excessive that costs are too high even with affordable housing. The only way to intervene is for the State to supply the land."

The Construction Industry Federation and house builders say they are prepared to work on the scheme outlined by the unions, if affordable land is provided.