Eoin Ó Broin
Question:25. Deputy Eoin Ó Broin asked the Minister for Housing, Planning and Local Government the status of the delivery of cost rental and affordable purchase housing schemes. [26825/18]
Priority Questions
Social and Affordable Housing
Darragh O'Brien
Question:26. Deputy Darragh O'Brien asked the Minister for Housing, Planning and Local Government when the affordable purchase scheme will fully commence; the number of affordable purchase scheme units to be provided in 2018; and if he will make a statement on the matter. [26724/18]
This question relates to affordable housing. At budget 2018 last October, we were told that a cost rental pilot project would be delivered this year and €25 million would be made available for Ó Cualann-type affordable home schemes delivered through local authorities. We were also told that €200 million for the local infrastructure housing activation fund, LIHAF, would deliver genuinely affordable homes throughout the State. In addition, the Government made a significant announcement of €750 million funding for Home Building Finance Ireland. Will the Minister update the House on the progress of these schemes and indicate if any housing units will be delivered for affordable rent or sale through the schemes in this calendar year?
I propose to take Questions Nos. 25 and 26 together.
Under the Rebuilding Ireland Action Plan for Housing and Homelessness, the Government's commitment to an ambitious delivery agenda for social housing is clear and substantial progress continues to be made to expand the social housing programme significantly from a virtual standstill position a number of years ago.
As Minister, I have been clear that we also need to address issues of housing affordability, recognising the pressures that exist for low to middle-income households, particularly in Dublin and certain other of our main urban centres. To underpin progress in this area, I have commenced the relevant provisions of the Housing (Miscellaneous Provisions) Act 2009, the effect of which is to place the new scheme for affordable purchase on a statutory footing. From engagements with the local authorities in Dublin, the wider greater Dublin area and Cork and Galway cities, their initial estimates suggest they have lands with the potential to deliver some 4,000 new affordable homes. My Department is continuing to work with the key local authorities and the Housing Agency to identify sites which would see the level of ambition increase to at least 10,000 new affordable homes from local authority owned land. That analysis is progressing well.
I am determined that cost rental housing will become a major part of our rental landscape in the future. It is clear that there is a gap between social housing and the rental market that needs to be filled, making a sustainable impact on housing affordability, national competitiveness, and the attractiveness of our main urban centres as places to live and work.
The Housing Agency, Dún Laoghaire-Rathdown County Council and a number of approved housing bodies, AHBs, have been working to get our first cost rental pilot, at Enniskerry Road, ready for tenders to issue shortly. In parallel, Dublin City Council, my Department and the National Development Finance Agency are undertaking detailed modelling and financial appraisal on a major site, at St. Michael’s Estate in Inchicore, to assess its suitability for a significant cost rental development. The work of that multidisciplinary team is progressing well and should be concluded shortly.
To support local authorities in getting their sites ready for affordable housing, I have decided to provide additional funding for enabling infrastructure via the serviced sites fund. Given that housing related infrastructure will now be able to avail of funding under the €2 billion urban regeneration and development fund, I am redirecting the €50 million funding for phase 2 of the local infrastructure housing activation fund to the serviced sites fund, increasing the scale of the fund from the previously announced €25 million to €75 million. When local authority co-funding is included, an overall minimum investment of €100 million will be provided to those sites that require infrastructural investment in order for them to be brought into use for affordable housing. To drive early activity, I will invite applications for funding under the serviced sites fund by the end of next week.
The short answer to my question is that not a single unit will be delivered this year for affordable rental or affordable purchase under any Government scheme. While I welcome the commitment with regard to St. Michael's estate, the cost rental pilot has been in the pipeline since Deputy Alan Kelly was Minister. Not only has the pilot in Dún Laoghaire-Rathdown not been delivered, but we hear the homes will not be made available at an affordable rate. The Minister referred to funding of €25 million. Surely it would have been straightforward to put the scheme in place at the start of this year. The scheme has not been established and there have been no discussions about it with the joint committee.
On the €750 million to be provided through Home Building Finance Ireland, the relevant legislation was only published this week and will take some time to get through the House. As such, the funding will not become available until next year at the earliest. Probably worst of all is the position in respect of the local infrastructure housing activation fund, for which the Minister has given us figures. The average price of a LIHAF house on private land in Dublin is €318,000 based on 2017 prices. Given that these houses will not be ready for two years, we may factor in house price inflation of between 10% and 20%. Similar, albeit slightly lower, figures apply in the rest of the country and there are no guarantees that housing built on public land will be affordable.
The Minister keeps telling us about future announcements and projects but we do not have any clear sense of homes being delivered at prices of between €170,000 and €260,000, which is the level of genuine affordability.
There is no commitment in regard to delivery this year. Will the Minister commit to the delivery of genuinely affordable rental or purchase homes in 2019?
I thank the Deputy for his question. It is important to note that the problems we are facing in the housing sector were 15 years in the making and they cannot be fixed in two years. However, we are seeing some interesting developments in the housing market. For example, house prices were still falling in 2012 and while they are dramatically increasing again, they are still 21% below the peak of 2007. There are still a number of people in very difficult circumstances in terms of negative equity. In the first four months of this year, there has been a slowdown in price increases. If this trend continues this year, there will be single digit price growth this year, which is a welcome development.
We started with social housing because we have to look after our most vulnerable people. Rebuilding Ireland sets out the ambitious plan of the provision of 47,000 - now 50,000 - homes using the €6 billion funding made available. At the same time, we recommenced building in the private sector. Last year, 14,500 homes were built, which is very welcome. Many commentators and bodies had underestimated the level of building. This year, the stock of social housing will increase by approximately 7,900 new homes. I have signed the commencement order which means that in the next four weeks, working with the local authorities and the joint Oireachtas committee, work can commence on the regulations in terms of access to the affordable schemes and on designation of the lands to be used for these schemes. In light of the additional €50 million, we now have a much bigger fund for affordable purchase homes. I hope to see affordable purchase homes delivered this year. Provision of 4,000 homes is our minimum ambition from local authority land only.
If the Minister brings proposals to the committee we will work constructively with him on them. We have been told, for example, that 550 affordable homes would be delivered in the Poolbeg strategic development zone. The Department of Housing, Planning and Local Government was helpful in assisting Dublin City Council and councillors in the community in getting that target. However, I am told by the residents that there is no clarity as to whether these houses will be genuinely affordable. In other words, will they be priced at somewhere between €170,000 and €260,000? The concern is that the benchmark in Dublin of €320,000 will become the Government's definition of affordability, which even with the Rebuilding Ireland home loan scheme is not going to be accessible because, as we know from the figures we have today, people looking to buy homes through that loan scheme cannot get sufficient loans. Does the Government believe affordable rental or purchase homes will be delivered next year? If the answer is "No", the Minister needs to say that and tell us they will be delivered the following year.
A sum of €25 million has been made available for Ó Cualann-type developments. We know the specifics of the Ó Cualann scheme. We needed only to issue a direction to the local authorities in Dublin on the basis of existing legislation and that money could have been used this year. The Minister is telling us now that he intends to engage with us on the matter and that, perhaps, something will happen before the end of the year. This means the money announced for expenditure this year will not be spent until next year. When will affordable rental and purchase homes be delivered and at what price will those two forms of housing be delivered?
This is about building Ó Cualann-type housing at scale. To do this, I have increased the amount of money available from €25 million to €75 million, plus €25 million from the local authorities. Some of this money will be drawn down this year to meet the cost of site preparation works. I hope to see some affordable purchase homes accessed this year but we will certainly have affordable purchase scheme homes accessed next year.
On affordability and the Poolbeg development, taking into account the Rebuilding Ireland home loan scheme, the help-to-buy scheme and the affordable home purchase scheme, houses will be affordable. We will provide a maximum of €40,000 per home on a site and the local authority will then work out the land cost in that regard and, if determined to be €30,000, this would equate to a knock-down on the price of €70,000 which, depending on the area, would be quite significant. It could be more than that. Each local authority will have to do a study and decide what needs to be done. As a result of the knock-down price, the local authority will take an equity stake in the house with the person buying it, which will be resolved over a number of years but not in the first five years. As a result of this, we can then maintain a rolling fund to ensure we are always building affordable purchase homes to ensure that in the next economic crisis we will not have to shut down any provisions around affordability and so on. This is about Ó Cualann at scale. Cost rental is not as simple as some people try to make out. What one is trying to build into a cost rental scheme is a guarantee that the management costs, life cycle costs and build and maintenance costs will not be such that the type of cost inflation linked to rent increases will not have to be changed at any time in a future cycle.
My question is about the commencement of an affordable home purchase scheme, to which the Minister responded, in part, in his response to Deputy Ó Broin. The Minister also mentioned that we cannot fix this problem in two years. However, this problem has been around for almost eight years. My concern is around when an affordable home purchase scheme will commence. The Minister indicated he had signed the commencement order for the affordable scheme, which I welcome. When will the regulations be introduced? On 17 May, I brought a motion to the House dealing with the commencement of an affordable housing scheme and it was voted down. We need this scheme urgently. The additional €50 million is welcome but the €25 million already in place equates to approximately 400 units. If the target is 400 affordable purchase units, the €25 million equates to about €16,000 per site. I am not sure if that would actually make a dent in affordability. How far down the line is the Minister with regard to the regulations for an affordable home scheme and setting the parameters for the scheme in terms of income thresholds and who will be eligible to apply?
This crisis is not eight years in the making. House prices were still falling in 2012. The affordability scheme was stood down because there was no affordability issue in the country at that time. We exited the bailout in 2014. In 2016, the Fine Gael-Labour Party Government put in place Rebuilding Ireland, a dedicated Ministry and, for the first time, ring-fenced funding to restore the housing sector but in such a way that we would not repeat the mistakes of the past. As part of this process, local authorities were tasked with building social housing rather than outsourcing same to the private sector and we also removed some of the obstacles to private sector building. We are now addressing the issue of affordability. I refer the Deputy to the example I gave to Deputy Ó Broin. If a €40,000 subvention is provided by the Department to a local authority for site works and the local authority then estimates the land value at €30,000 or €40,000, this means €80,000 would come off the price of a house. If the market price for that house is €320,000 or €350,000, there would be a significant drop in the price of that house and it would be affordable.
On eligibility, similar to the undertakings in the Rebuilding Ireland home loan, an individual earning a gross income of €50,000 or a couple earning a gross income of €75,000 will be eligible for the scheme. Each local authority will have to run a lottery scheme in its area as each scheme comes online.
On the regulations, next week I will put out a call to local authorities for the sites on which they want to utilise this fund. They have already identified the sites and there will now be a formal process of them identifying to me the ten key areas where affordability pressure is greatest. A great deal of work has been done on the regulations as well. The Act prescribes what can and cannot be done. I will be writing to the joint committee this week seeking its input on some of the parameters. We can do this in the next four weeks. The local authorities know this money is available and they are doing the necessary work around their sites.
I welcome the clarity. I am glad the Minister is at last moving to develop regulations to establish the scheme. However, I am still unclear about the site selection process and the income thresholds. The Minister stated the income thresholds will be similar to those that apply under the Rebuilding Ireland home loan scheme. Couples in Dublin, Galway and Cork earning €70,000 or €80,000 per annum cannot purchase houses now. They are the people who are paying €1,600, €1,800 and 2,000 per month in rent and thus unable to save for a deposit. There must be flexibility in the thresholds. There are some people in this House who believe that a couple earning €80,000 or €90,000 per annum are loaded but they are not. These are the couples who are paying rent, childcare costs and so on. We should all work together to establish a scheme that works and to do so quickly.
On the Minister's point that we had to do social housing first and he is now moving to affordable housing, we have not done social housing yet. In terms of expectation, will this scheme be up and running before the summer and is the Minister open to looking at regional affordability? As wage levels differ across the country we will need different thresholds in terms of affordability. The greater Dublin area may have a different regional affordability than the midlands or Ulster. We need to have flexibility to ensure no cohort of people is locked out of home ownership which, at 69%, is now the lowest it has been in generations. I do not want a generation of people condemned to a rip-off rental market.
Home ownership rates have decreased for a variety of reasons. For example, people are staying longer in education, households are forming later in life, smaller households are forming and people are more mobile in where they work and how they live. We need to ensure that owning a home continues to be an aspiration for many people and that we can provide for it.
In the first quarter of the year we saw a 35% increase in house sales on the figure for last year. There is activity in the market. Housing has to be affordable in order that people can access the market. The average house sale price in Dublin in the past 12 months was €360,000. The median price, when irregular sales which can be very expensive or very cheap are excluded, was €330,000. That speaks to an affordability problem. A couple, both of whom are earning over €50,000, will be able to afford these prices, but it will be difficult for those on less money. When one takes the 10% deposit requirement, the help-to-buy scheme and the Rebuilding Ireland home loan together, not even all three factored in together would enable someone to reach those prices. In Galway the average house sale price is €169,000. Therefore, there is not as much of an affordability issue.
It is a regional issue.
We are asking local authorities, apart from the ten areas in which we know there is a difficulty, to prove the case for having an affordability scheme. Each local authority will have to do this under the scheme. I think I have answered all of the Deputy's questions.
We will revert to Question No. 24.
I did not get to reply.
The Deputy asked a second supplementary question.
Time flies when one is having fun.
Social and Affordable Housing Funding
Darragh O'Brien
Question:24. Deputy Darragh O'Brien asked the Minister for Housing, Planning and Local Government the status of the development of a special purpose vehicle to enable credit union fund investment in social housing; the timeframe for its launch; and if he will make a statement on the matter. [26723/18]
Question No. 24 was my first priority question, for those in the Irish League of Credit Unions who may be watching proceedings. I want to ask the Minister about the progress made or lack thereof in the development of a special purpose vehicle. For almost five years the credit unions have been advocating utilising about €10 billion worth of assets for investment in the social good, but not one cent of that money has been used to date. The Central Bank announced on 1 February this year that it had granted approval and changed regulations to diversify the classes of investments for credit unions which can play a really big role in investing in social and affordable housing. When will the special purpose vehicle be set up to allow credit unions to invest in social and affordable housing?
The Government's Rebuilding Ireland: Action Plan for Housing and Homelessness emphasises the need to look at new ways of funding social housing delivery, in particular, the need to provide structural, funding and policy supports to increase delivery of social housing by approved housing bodies. Against that background, credit union representative bodies put forward proposals for how credit unions could provide loan finance for approved housing bodies for social housing. In February, following the publication of a consultation paper and a period of consultation, the Registrar of Credit Unions who is responsible for regulatory oversight of credit unions amended the regulations to allow credit unions to invest in tier 3 approved housing bodies under certain conditions. Tier 3 approved housing bodies are the larger ones.
In May 2017 my Department announced that funding of €49,000 would be provided for the Irish Council for Social Housing, ICSH, to support an initiative through which it would develop proposals for special purpose vehicles and a mechanism that would enable the sector to attract investment in social housing projects from potential investors, including the credit union movement. Work has been ongoing between the ICSH, a number of larger tier 3 approved housing bodies and their financial advisers on the development of such a vehicle, taking account also of the recent EUROSTAT decision on the reclassification of the approved housing bodies sector. The ICSH anticipates that this work should be completed in the third quarter of the year. My Department and I have met the credit union movement on a number of occasions to discuss its wish to invest in social housing. The Department has also facilitated engagement between the credit union sector and the ICSH with a view to encouraging links between the two sectors and allowing credit unions to share the benefits of the work under way.
While it remains the case that the development of specific special purpose vehicles to enable the credit unions to make investments in the sector is a matter credit unions have to resolve, my Department will continue to be available to engage with the sector, as required.
On 27 February the Irish League of Credit Unions met departmental officials shortly after the Central Bank had given its approval for the diversification of the classes of investments. We understand it applies to tier 3 approved housing bodies. There is €700 million available to be invested that could be invested in the provision of about 5,000 homes. The Minister is talking about the third quarter. When will the regulated investment vehicle set out in the credit union regulations be established? Are we setting a target date? When will the special prupose vehicle be set up? I know that work is ongoing on it. The Minister is saying it will be completed in the third quarter. The Department had originally told the Irish League of Credit Unions it would be ready in June or September to receive the investments. Are we still working towards it being ready in September? I hope we are. I noted the Minister's comments earlier in the week. I welcome the discussions he is having with the European Investment Bank on investing in social housing. It is something I welcome. There is €10 billion available in Ireland in the credit union sector, with €700 million ready to be used. Discussions with the European Investment Bank are great, but there is Irish finance available for community good. Will the Minister give me a target date for when he wants the special purpose vehicle to be established and up and running?
It is very important as we resolve the housing crisis that we look to new finance vehicles. The Deputy is absolutely correct to emphasise the role the credit union sector can play. There are also a number of funds we are looking to get involved in the provision of social and affordable housing. We can leverage these streams of funding to make sure we put secure housing in place and at less cost to the taxpayer. That is why when we talk about housing delivery, it is very different from 30 or 40 years ago. There are different streams we can use to maximise value for the taxpayer, while also securing homes for people. We have to be very careful with the credit union sector as it went through its own difficulties during the financial crisis. We have to recognise that regulation of the credit union movement is a matter for the Central Bank, with which we do not want to interfere. It was a very welcome decision when it stated tier 3 approved housing bodies could receive funding from the credit union movement. It is a substantial amount of money, at just under €700 million. There are two classes of credit unions that could become involved. We are aiming for September to have clarity on the special purpose vehicle. We have to be careful in the Department because we cannot get directly involved with an approved housing body and a credit union. It is for the Irish Council for Social Housing to work with the innovative funding available to put the special purpose vehicle in place. The third quarter of this year is the deadline to which we are working in having clarity on the matter and moving forward to leverage the investment.
I appreciate the Minister's answer, but I am not sure for what clarity we are looking. The Central Bank has given its approval. This is about establishing the investment vehicle. The Minister has mentioned that we need to be careful with the credit unions because of their past history, but the Central Bank has given its approval for this form of investment. Therefore, no clarity is needed. The Department allocated funding to work with PwC to establish the special purpose vehicle. Establishment of the special purpose vehicle is needed to accept finance from credit unions to invest in tier 3 approved housing bodies. The Minister may want to advise separately on the need for clarification. If there are outstanding matters that need to be clarified, the credit union sector needs to be so advised. I certainly need to be so advised. There is an absolute desire for the credit unions for the common and community good to become involved in building social and affordable housing and investing in approved housing bodies, but we are dragging our feet. I am asking what clarification is needed. If the Minister is saying September, does it mean that the special purpose vehicle will be set up and established and that the credit unions will be able to start to invest from September? Is that what the Minister's response means?
We have to remember that it is a decision for the approved housing bodies to make with the credit union sector. We cannot force them into making it.
I know that.
Phase 3 is about the technical work required to put together a special purpose vehicle. It is not simple to put a special purpose vehicle together. There are a number of technical requirements. It has been indicated to me that further clarification will come from the approved housing bodies to my Department on how exactly they can do it. We have to bear in mind the separate work happening in the Department of Finance on EUROSTAT's decision on reclassification. What we have said is that it will not stand in the way of delivering the houses we need to deliver through the approved housing body sector under Rebuilding Ireland, but that does not mean that it is a straightforward question as to how exactly the finance will be secured in terms of the balance sheet. It is technical work and there are further questions coming from the approved housing bodies. It will be up to particular approved housing bodies working with particular credit unions to put a special purpose vehicle in place. They will be in a position to do so from the third quarter of the year when the final step is completed. If they choose to enter into an arrangement, because there are other finance houses looking to undertake jobs with approved housing bodies, they will be able to do so from that point on.
Social and Affordable Housing Provision
Richard Boyd Barrett
Question:27. Deputy Richard Boyd Barrett asked the Minister for Housing, Planning and Local Government if he will give a commitment, in view of the housing emergency and the abundant availability of public land in the State, to initiate an emergency building programme of public and affordable housing on public land; and if he will make a statement on the matter. [27122/18]
Is it not time to admit that Rebuilding Ireland is failing disastrously? Wexford and Dún Laoghaire-Rathdown County Councils which are not controlled by the left have both passed motions to the effect that Rebuilding Ireland is failing. The reliance on the private sector has been exposed. The Minister's figures for private sector completions are not accurate. There is far less coming from that sector than the Minister had hoped. The delivery of public housing is pathetic. Last year 1,058 local authority houses were delivered and the target next year is 5,900. Only God knows if it will be met, but I would say it is unlikely. It is just not good enough. It is not working. Is it not time, therefore, to take a different approach and have an emergency programme of public and affordable housing on our own land?
Developing the State landbank for housing is a key priority. Importantly, we have large sites in Dublin, Cork and other key urban areas where housing and homelessness pressures are greatest. We now have a good picture of all local authority residential lands and authorities have well-developed plans for many of their sites. This is backed by €6 billion in Exchequer funding, and significant progress is being made in ramping up the social housing programme. At the end of 2017, there were 13,400 social housing homes in the construction programme, up substantially on the 8,500 homes in the programme just a year earlier, and this continues to grow weekly.
In addition, the local authorities in Dublin are bringing forward major sites for mixed tenure development such as the 900 homes at Kilcarbery in Clondalkin, where procurement will be finalised in the autumn, and O’Devaney Gardens, a 600 unit site in the city council area where the procurement process is moving into the competitive dialogue stage and should be finalised in early 2019. Proposals for other key sites across Dublin are also being developed.
As I indicated in my reply to earlier questions, I have commenced the statutory provisions for the new affordable purchase scheme. Early indications from key local authorities have identified lands for 4,000 affordable homes and we are working to increase this ambition to 10,000 homes from local authority lands only. To support local authorities to get their sites ready for affordable housing, I am providing, via the serviced sites fund, increased funding of €75 million for enabling infrastructure. I will be inviting applications under the fund by the end of next week.
In my area, there is nothing happening in Shanganagh. We have been demanding for about five years that public and affordable housing be built there. There has still not been a sod turned. There is also nothing happening in St. Michael's Estate, on the Oscar Traynor Road site or in Clonburris. People have been calling for public housing for years on all of these big sites but there is still nothing happening. Part of the problem is the affordable housing issue, the Minister's failure to define what that is and to guarantee that money will be made available to make affordable housing genuinely affordable.
I did not understand the Minister's earlier answer. Is the affordable housing on these schemes going to be affordable based on income or is it going to be linked to the market? If it is going to be linked to the market, it is not going to be affordable, certainly not in my area. Shanganagh cannot move forward until the council there knows that the Minister is going to provide the funds to make that genuinely affordable. If he is not going to do that, then we should just build council houses and stop messing around with all of these things that he has failed to define.
I thank the Deputy for the question. If there was a difficulty in the response Deputy Boyd Barrett heard, that was because of a difficulty in the question. It flies in the face of reality. This crisis is 15 years in the making. This Government has put together a €6 billion war chest to fix our housing sector under Rebuilding Ireland and to fix it in a way so that we do not make the mistakes made in the past.
Motions passed by councils do not build houses. Local authorities seeking funding from this Department, using their landbanks and engaging with builders is what builds houses, and that is what is happening throughout the country. Deputy Boyd Barrett does not want to see that but that is what is happening. There were 2,200 or 2,400 social housing homes built last year. That was a threefold increase on the previous year. We will build 3,800 this year between local authorities and housing bodies and roughly another 500 to 600 from the Part V commitments. That is a doubling of social housing homes being built on local authority land again this year.
I provided an additional €50 million for local authorities to bring forward their landbanks for affordable homes. We know we need affordable homes because we have acute affordability pressures, particularly in those ten local authorities that we know of in Dublin and the greater Dublin area, Cork city and Galway city. That will work with designated income criteria for accessing the affordable purchase scheme. We will also provide, roughly, depending on the site, €30,000 to €40,000 per home as a discount. The local authority will decide what the land value is, that will be a further discount that will come off the price of the house and that will make it affordable.
Nothing is happening in my area. I mentioned four other sites around Dublin where nothing is happening on public land. Do not tell me that is because I do not want to see success. I can see that nothing is happening in Shanganagh, in Cherrywood, on the Oscar Traynor Road site, in Clonburris or in St. Michael's Estate. We can go through the list.
What the Minister just said about affordability is very worrying. It is about the income level at which a person can apply for an affordable house, but it also raises the question of the point in applying for an affordable house that is not affordable. Average house prices in my area are now €600,000. Private developers are selling the 10% of so-called social housing back to the local authority and are looking for prices of up to €450,000. That is not affordable. Is affordable going to be affordable and will local authorities be guaranteed that money will be made available so that affordable housing on public land will be affordable? If that is not going to be the case, we need to build council housing on those sites.
There is not enough money. There is €1.14 billion in capital spending for social housing this year. According to the Minister's targets, that is going to deliver 5,900 houses. It is not enough. We need a minimum of 10,000 council houses a year. The budget is going to have to be doubled to get close to addressing the extent of the housing crisis and to begin to make an impact on the figure of 144,000 on the housing lists.
This is not a question of money or resources. They are in place. There is a €6 billion ring-fenced fund over the life of the Rebuilding Ireland programme. When I needed an additional €100 million last year, I was able to secure it and that went into homes and emergency accommodation. Last year, when I also went looking for €500 million for Rebuilding Ireland, I was able to secure it so that we could hit the target from the Oireachtas Joint Committee on Housing, Planning and Local Government of putting 50,000 homes into the social housing stock. That is happening. Work is happening, and the different figures we have tell us that is happening, but not every site can be developed at the same time. Some of the larger sites in Dublin, in particular, are the more difficult sites because they have many legacy issues. Those, however, have been resolved over time and we are now in a position to start work on many of those sites.
On a site like St. Michael's, a key site in the city, there is great potential for public housing that could really benefit many people on lower incomes who are locked out of the rental market or the housing market. We want to do that, but if we get it wrong when we do it for the first time at scale, then it will not happen again. We have to make sure that we get it right. I will be in O'Devaney Gardens next week as well because progress is being made on that site. We have a pipeline of works to be done. Housing will be built on these big sites, but on the social housing side of things, there are dramatic increases in house building as well as on the private side. We are now talking about affordability, which is key. This new funding is there and it will deliver it.
Housing Policy
Joan Collins
Question:28. Deputy Joan Collins asked the Minister for Housing, Planning and Local Government if a proposal by a group, details supplied, will be supported as a pilot scheme; if the land will be taken out of Dublin City Council's land initiative proposal; and if funds from capital expenditure in budget 2019 will be provided. [27060/18]
I ask the Minister for Housing, Planning and Local Government if a proposal by the St. Michael's regeneration group will be supported as a pilot scheme, if the land will be taken out of Dublin City Council’s land initiative proposal, and if funds from capital expenditure in budget 2019 will be provided.
The housing land initiative, HLI, includes the regeneration of a number of significant development sites on lands in the ownership of Dublin City Council, including St. Michael's Estate site in Inchicore. Feasibility studies on the sites, which were presented to and passed by the elected members of Dublin City Council on 9 January 2017, included the council’s agreed optimum mix of 30% social, 20% affordable and 50% private homes on these lands. The studies also agreed the methodology for community consultation. The council is staggering the procurement process for the sites and a project board, including representation from my Department, and individual project teams have been set up and are working to progress the HLI programme.
As part of this Government’s reform of the Irish housing system, it is clear that we need a third sector to complement social and private market housing delivery. That is why the development of a new cost rental sector is so strategically important. Delivery of cost rental homes into the market at scale will make a sustainable impact on housing affordability, national competitiveness and the enhancement and liveability of our cities as places to live and work.
My Department and I remain committed to working with Dublin City Council and other councils to ensure we make the delivery of this model a reality. To advance this, we are learning from a pilot project in Dún Laoghaire-Rathdown and the detailed examination of similar models operating elsewhere. We are also working with the European Investment Bank and other key stakeholders. Dublin City Council, my Department and the National Development Finance Agency, NDFA, have carried out detailed modelling and financial appraisal on the St. Michael's Estate site to assess its suitability for a significant cost rental development. The work of that multidisciplinary team is progressing well and this will be of significant assistance in rolling out a broader cost rental programme across Dublin and certain other large urban areas.
I am glad to see that there is some progress on this. What is the Minister's thinking on this? The council has to make a key decision on this site, with the community. The regeneration team is looking for 300 houses to be built on the site as a practical reality from a sustainability point of view - 150 local authority houses and 150 on the cost rental model. They have to be taken out of the land initiative. There is general support for that now among the different parties, including Fianna Fáil, Sinn Féin, Independents etc. I believe the council will have an emergency motion soon to take St. Michael's and use it as a pilot scheme.
It is hoped that it will be moved into other local authority, OPW and State lands to tackle the issue of affordability and allowing people access to security of tenure.
There is much interest in the St. Michael’s site because it provides opportunities to deliver cost rental, affordable homes close to the city centre, close to key infrastructure, such as transport, and close to where people will want to live and work. It can do that in a way where people who are not able to qualify for social housing, but also cannot get access to the private rental market, will then be able to live in a community. We also want to ensure people from the community can live there too.
I have met with two different representative groups and have been on the site. Some fantastic work has already happened with Richmond Barracks and Goldenbridge cemetery. There are challenges facing the school in terms of some of the situations in which some of the children find themselves. There are also 52 new living with care homes which have been delivered. Much is happening at the site. There is a great opportunity to provide cost rental accommodation at scale there. That will add further improvements for those people coming to live in the area.
However, I have a problem with the level of ambition coming from the community, namely the proposal to limit the development to 300 homes. I have said to the two representative groups that we have a housing shortage and an affordability challenge. These issues are coming together in an acute way in Dublin city. The idea that the St. Michael’s site would only have 300 new homes delivered on it is disappointing. The site can take more public housing and more affordable homes to rent without impacting on the level of ambition for social housing provision. We are working with several different stakeholders to see what exactly that model will look like and what would the affordable rents mean for people moving into these houses.
Is the Minister saying the public land on St. Michael's Estate will be used for public, cost rental and affordable homes? Will no private housing be built on that site? This is the key point for people in the area. This is public land. It is an asset to the State which can be paid back to the State over the next 30 years if it is set up and delivered properly. I believe it can be. I know there was a proposal for 300 homes in this area. While I accept density is an issue, there is also sustainability within projects which has to be taken on board, as well as amenities and people wanting to live in the area. The residents and the regeneration team will negotiate with the housing officer in Dublin City Council.
Will this public land be used for public housing, social and local authority housing, cost rental and affordable homes?
Every time we talk about fixing our broken housing sector, we talk about doing it in a way that does not make the mistakes of the past. That is why we always talk about a mixture of tenure on any site. It is the right way to go to have social and affordable homes and private homes on the same site. We know on the St. Michael's site that we can accommodate all three with a much greater proportion of social and affordable than had previously been envisaged. That is what we are trying to achieve.
In Thornton Hall we already have 74 social housing units. We have to bear that in mind as well. We also have great amenities there. There is a senior citizens’ complex, Richmond Barracks, which I want to go back and look at properly, Goldenbridge cemetery and a sports centre. I want to work with the local community groups so they can see the ambition we have. I do not believe going higher than 300 units will have the type of impact some people fear it will. We can go for a higher density in a way that will provide accommodation for, say, singles or couples starting off a family together. Not every home that we build has to be the same size because people are at different stages of their lives.
If we use some of the new design standards which I introduced at the end of last year, we can get more than 300 homes on that site and a greater proportion of affordable cost rental homes. The work we are doing is around the financial model. Can we build something to ensure the rents are affordable, not just tomorrow but for the next 20 years? It is not simple but we can do it because it has been done elsewhere.