FG housing policy calls for three new cities

Three medium-sized towns should be developed into cities to help solve the housing crisis and ease pressure on the existing major population centres, Fine Gael has suggested.

In a new policy document on housing, the party calls on the Government to invite local authorities to bid for city designation, on the basis that those selected would qualify for major infrastructural and industrial development.

Fine Gael says the proposal to steer development towards three new cities was originally outlined in the Buchanan Report of 1968, and should now be revived in conjunction with continuing decentralisation of the public sector.

As part of a package of specific measures to ease the housing crisis, the party is calling for the abolition of stamp duty for first-time buyers purchasing second-hand houses, and for the first-time buyer's grant to be increased from £3,000 to £5,000, without square footage restrictions.

The party also wants to see development of the private rental sector in line with other European countries. It proposes a tax incentive for landlords prepared to let accommodation on a fixed-lease basis, with three-year leases as a minimum.

Under the proposals, tenants could be given credit for improvements to accommodation by means either of reduced rent or a lump-sum payment at the end of their tenancy.

The Minister for the Environment, Mr Dempsey, said the Fine Gael plan to increase the first-time buyer's grant was "off the wall" and, if implemented, would lead to even higher house prices.