Government plans to increase the State's stock of social or affordable housing were criticised yesterday by the Construction Industry Federation which insisted that new planning legislation was seriously flawed.

The CIF particularly condemned the section of the Planning and Development Bill, 1999, which provides that local authorities may stipulate that a proportion of land or houses should be reserved for social housing. The power being given to the local authorities, said Mr Ciaran Ryan, the newly appointed director of the CIF's Irish Home Builders' Association, to insist on an element of social housing "on every or any residential development, without reference to the circumstances" was both inappropriate and unworkable.

Unless amended, the proposal legislation - now at Committee stage in the Seanad - would mean that "the resources of private industry will be in part diverted" to meeting the needs of those on council housing lists. This was an abrogation of local government responsibilities and would reduce the supply of private housing needs, he argued.

Given the estimated demand for 500,000 houses over the next 10 years, in tandem with ESRI predictions of restored equilibrium in supply and demand, the proposals "at this critical stage" were counter-productive.

The result, said the CIF, would be:

A reduction in the supply of new private housing.

More house buyers turning to the second-hand market which currently accounts of seven out of 10 house loans.

Increases in the prices of second-hand houses which will in turn impact on land and new house prices.

He urged that the 1997 guidelines on site selection issued to local authorities should be maintained. These stipulated smaller manageable building sites - moving away from the sprawling developments that were common in areas such as Finglas and Ballymun, for instance, in the late sixties and seventies.

Public housing has not been adequately resourced by governments in recent years, said the CIF. With the demand for houses currently at unprecedented levels, the number of public housing completions had fallen from 3,971 in 1995 to 3,256 in 1998.

"It is for this reason alone that the number of households included on the latest Assessment of Housing Needs published recently stands at 39,000 compared to 26,000 in 1996," said the IHBA director.

The CIF also conceded that the ability of the construction industry to meet demands in specific locations had been constrained by infrastructural deficiencies.

The support of the planning authorities was essential if the chronic "supply side" problem facing new house-buyers was to be alleviated.