Dáil Éireann debate -
Tuesday, 30 Jan 2001

Vol. 529 No. 1

Written Answers. - Local Authority Housing.

Ivan Yates

Question:

807 Mr. Yates asked the Minister for the Environment and Local Government the resources available to each local authority under the affordable housing scheme; the variable subsidy per site; the precise financial clawback arrangements that apply to local authorities which make available subsidised houses and sites; the situation in relation to the existing landbank of local authorities whereby they may have had land in their ownership acquired many years ago at a low cost but the replacement value of this land would be very high; the basis on which they will be compensated; and if he has any proposals to increase this level of subsidy or the operational details of the scheme. [1422/01]

Minister of State at the Department of the Environment and Local Government (Mr. Molloy)

Local authorities may borrow from the Housing Finance Agency to acquire land for the provision of housing under the affordable housing scheme. The cost of land acquisition, together with the rolled up interest charges up to a period of seven years may be charged to the scheme.

As part of the measures to increase the supply of affordable housing set out in Action on Housing, I introduced a site subsidy for houses provided by local authorities under the affordable housing scheme and also in respect of new houses sold by local authorities under the shared ownership scheme. This subsidy enables local authorities to provide housing under the schemes at an affordable price and at a discount from the market value of similar houses in their areas. The maximum subsidy available is £30,000 in the major urban areas of Cork, Dublin, Galway, Limerick and Waterford and £25,000 in other areas.

I also brought the provisions of the claw-back under the affordable housing scheme in line with the claw-back provisions under Part V of the Planning and Development Act, 2000, and I extended those provisions to the shared ownership scheme for new houses sold by local authorities at a discount from market value. The claw-back provisions provide that if a house purchased under the affordable housing scheme at a discount is resold before the expiration of 20 years from the date of the purchase, the person selling the property shall pay to the housing authority a percentage of the proceeds of the sale. This percentage is equal to the percentage discount allowed by the local authority on the original sale of the house where the house is resold within the first ten years. The amount payable is reduced by 10% in respect of each complete year after the tenth year during which the person who purchased the property has been in occupation as his or her normal place of residence. The provision of a subsidy financed from public funds is necessary to enable eligible low income households to attain home ownership while the provision for a claw-back is necessary to ensure that there is no short-term profiteering on the resale of a subsidised house or site.

Where local authorities use land which has been in their ownership for some time, the historic value of the land plus any loan charges on borrowings for a period of seven years can be recouped by way of the site subsidy. Where local authorities have to buy replacement land for social or affordable housing the site costs plus loan charges will be recouped when schemes are developed on this land subject to the subsidy limits referred to above. While I have no current proposals to increase the level of subsidy or to alter the operational details of the affordable housing scheme I will keep the matter under review.