Willie O'Dea
Question:79. Deputy Willie O'Dea asked the Minister for Housing, Local Government and Heritage the measures he is taking to reduce the cost of construction; and if he will make a statement on the matter. [23068/23]
Ceisteanna Eile - Other Questions
House Prices
One of the big challenges in delivering the targets in Housing for All is the cost of construction and the effect that has on the unit price. Will the Minister of State comment on the measures being taken by the Department to reduce construction costs?
The Government understands the major challenges facing the construction sector from high inflation, pressures on supplies, labour shortages and rising interest rates. Under Housing for All, the Department of Enterprise, Trade and Employment, supported by our Department, has established a modern methods of construction, MMC, leadership and integration group to support the development of MMC. The group also co-ordinates across the various entities that support MMC and innovation adoption, particularly in residential construction. These measures will contribute to a reduction in construction costs. This includes Construct Innovate, the national demonstration park for MMC, the build-to-innovate initiatives, the accelerated social housing delivery programme and the Build Digital project and training.
On 4 May the Minister, Deputy Darragh O'Brien, published the residential cost study report. It prioritises actions to deliver economically sustainable housing in the long term through productivity, cost reduction, standardisation, innovation and MMC. The Government also recently approved additional measures under Housing for All to incentivise the activation of increased housing supply to help to reduce housing construction costs, including the introduction of temporary time-limited arrangements for the waiving of local authority section 48 development contributions and the refunding of Uisce Éireann water and wastewater connection charges. Both of these measures have come into effect and will apply for one year to all permitted residential development that commences on site between 25 April 2023, the date of the Government decision, and 24 April 2024, and is completed not later than 31 December 2025.
I thank the Minister of State. I welcome some of the issues he detailed. I am aware of the report that was commissioned by the Department of Housing, Local Government and Heritage which found that construction costs in Dublin were significantly higher - between 15% and 30% higher - than other European cities. When the report was examined, labour costs and also additional specifications were key factors in that difference. I note that those cities that had specifications similar to the Irish standard came in at about the same figure. Still, we are effectively imposing additional specifications on building standards for good environmental and sustainable reasons.
They are having a significant impact, however, on the cost individuals have to pay in rent or purchase price. The Department needs to continually review the costs contributing to the cost of housing and reduce them where possible.
The residential construction cost study report to which the Deputy referred, which was a Housing for All action, considered a comparative analysis between a number of European comparator countries, including Denmark, Germany, the Netherlands and the United Kingdom. It focused on specific cities: Copenhagen, Berlin, Utrecht and Birmingham. As the Deputy rightly stated, the analysis provided useful information on cost disparities. In Birmingham, for example, the cost is 21% to 29% lower than that of a typical house built in Dublin but in addition, houses of 93 sq. m were common there whereas houses in Dublin are typically larger, at 110 sq. m, in terms of the requirements here. There are other elements relating to costs in other locations being 30% lower. Apartments in those locations were not finished, for example. They were finished with exposed concrete slab and without fitted kitchens, light fittings or fitted wardrobes. There is a significant difference between the finish standards of what was being constructed in other European countries compared with those in Ireland.
I thank the Minister of State for discussing the report. There is much to learn from it. In Dublin city in particular, a clear planning decision has been made that apartments will be the predominant mode. Planners are dictating that. It is for good environmental reasons but the reality is that, as we all know, apartments are significantly more expensive to build and we have to consider how we will provide a city that has affordable housing. The Government has already acknowledged that by providing up to €100,000 or €150,000 in the council-led affordable purchase scheme or the shared equity scheme, for example. All these schemes are, in effect, subsidising the cost of housing. We are in a tricky situation. The cost of constructing homes is well in excess of what those people can pay and seems to be in excess of what the people and the Government combined can pay. We have to consider the cost implications of environmental decisions and achieve balance in that regard.
The Deputy makes valid points. The report provided a set of recommendations that could help in developing standardised approaches to the design of housing for wider application, informing policy and encouraging simplified layouts and delivering training awareness programmes relating to the cost impact of materials and finishes commonly used in the residential construction sector. It addressed the development of standardised design specifications for student accommodation and part of the commitment from Housing for All to achieve a significant increase in the use of modern methods of construction in many of these developments and recommended a review of external wall build-ups to assess and test alternatives, including external leaf for Irish climatic conditions, for suitability. There are several good recommendations there along with the other measures we have in terms of development contributions that we hope will reduce that cost over time.
May I ask a supplementary question?
Not really. The Minister of State has concluded his reply. The Deputy may come in with a supplementary question on any other question.
I certainly will. I thank the Leas-Cheann Comhairle for the courtesy.
Housing Schemes
Joan Collins
Question:80. Deputy Joan Collins asked the Minister for Housing, Local Government and Heritage the period for which the waiver of development levies (details supplied) will apply; if he will provide an exact outline of how all local authority funds and developments connected to levies will be guaranteed by the Government; and if he will make a statement on the matter. [20781/23]
Cian O'Callaghan
Question:104. Deputy Cian O'Callaghan asked the Minister for Housing, Local Government and Heritage the measures that will be put in place to ensure the waiving of development levies results in more affordable homes for people rather than an increased profit margin for developers; and if he will make a statement on the matter. [23446/23]
Michael Moynihan
Question:109. Deputy Michael Moynihan asked the Minister for Housing, Local Government and Heritage his proposals for development levies; and if he will make a statement on the matter. [23069/23]
On 25 April, the Taoiseach stated the Government would waive development levies for one year. The day before that, however, he stated in a press briefing that the waiver would apply for a couple of years. For what period will the waiver apply? How will all local authority funds and developments connected to levies be guaranteed by the Government? I ask the Minister to make a statement on the matter. Dublin City Council has a €2.4 billion capital budget, of which 9.3% is covered by levies. It makes up a significant part of the budget.
I propose to take Questions Nos. 80, 104 and 109 together.
Section 48(2)(b) of the Planning and Development Act 2000 provides that a development contribution scheme applied by a planning authority in respect of its functional area may make provision for payment of different contributions in respect of different classes or descriptions of development. The level of contribution and the types of development to which development contributions should apply, including any exemptions from charging in specific circumstances if that is deemed appropriate, are determined, therefore, at local authority level, in accordance with the powers vested in elected members in respect of the adoption of local authority development contribution schemes.
As the Deputy noted, on 25 April 2023 the Government approved additional measures under the Housing for All plan to incentivise the activation of increased housing supply and assist the achievement of the housing delivery targets set in Housing for All, while also addressing cost and viability issues faced by the construction sector. These measures included the introduction of temporary time-limited arrangements for the waiving of local authority section 48 development contributions and the refunding of Uisce Éireann water and wastewater connection charges. It should be noted that the Uisce Éireann water and wastewater connection charges referenced in the new Government support package will still have to be paid upfront by developers in the normal manner, with the moneys being subsequently refunded by Uisce Éireann on notification of the commencement of works. In effect, the Uisce Éireann piece is a rebate rather than a waiver.
The new schemes apply for one year to all permitted residential developments that commence on site between 25 April 2023, the date on which we approved the decision, and 24 April 2024. These developments must be completed no later than 31 December 2025. This end date is to facilitate large schemes to be speedily brought forward and progressed, while also incentivising their completion as quickly as possible within a reasonable timeframe and delivering additional urgent housing supply.
We are currently working on the detailed arrangements relating to the operation and administration of the waiver and refund schemes. These arrangements have already been communicated to local authorities and Uisce Éireann. I am cognisant that the development contribution waiver scheme does not impact on the ability of local authorities to fund the ongoing provision of necessary infrastructure to support development by local authorities to prevent delays to development works. It will be necessary, therefore, to put efficient administrative arrangements in place to ensure local authorities are promptly compensated by the Department for development contributions. In effect, we are refunding the moneys. The development contributions that are waived will be paid fully back to the local authorities. The local authorities will invoice the Department on a monthly in-arrears basis in respect of development contributions payable that are applicable under the waiver further to receipt of the commencement notices from the developers.
Furthermore, a number of financial safeguards are in place to prevent profiteering by the sector, thus ensuring the measures will benefit purchasers by boosting supply. Developers are already subject to compliance with specific regional price caps in the context of the first home scheme and a cap generally applicable under the help-to-buy scheme. In addition, the Department applies unit cost recommendations on proposed social and affordable housing developments to ensure value for money. These requirements will remain in place as a price control mechanism.
No local authority will be out of pocket. They will be paid monthly in arrears. It is an activation measure. We have already received a number of schemes, small and large, that were on the cusp of viability and are now able to start. The average saving is approximately €12,700 but, for apartments, it is up to €20,000. It is for schemes where we all want additional supply, or say we do. This is an opportunity to get that additional supply through a short-term time-bound measure. The local authorities will be recompensed fully for the waiver of development levies.
I thank the Minister. There was a certain amount of clarity in his reply. I am seeking a commitment from him that the waiver will be for one year only and will not be extended. That is a matter of trust and I do not know how much trust we have in the context of many of these deals. At the committee, the Minister stated that just under €20,000 per unit is expected to be passed on but he later made the point that he could not say that all of these levies and connection charges will be passed on. There was a sort of doublespeak there and I am seeking clarity on that important point. If the scheme is being set up to bring down the sale price of homes, we need to be certain the saving will be passed on. I am seeking clarity on that point. What measures are in place to ensure developers pass on the saving of up to €20,000 per house on development levies that are not going to the councils?
Since the Minister took office, almost €1 billion allocated to the housing budget has not been spent. This was money that could, and should, have been used to build social and affordable homes. The measures that he announced recently, involving the spending of €1 billion, included more subsidies and handing over of public money to private developers, including the waiving of development levies. Subsidies to developers have increased and their profits have soared. Since the Minister took office, the profits of the largest developers in Ireland have quadrupled. At the same time, house prices have reached record levels. Why has the Minister not acted to ensure that the waiving of development levies is passed on to people and housing becomes more affordable?
The waiving of development levies and the refund of Uisce Éireann connection charges apply to all, including the single one-off homes of families who have saved and want to build their own homes as well as small developments. I will provide an example. We were contacted by a 44-home scheme in a rural village that was not going to start but will now do so because of these cost-saving measures. This is an activation measure. We built nearly 30,000 new homes last year and we want to build more. Deputies will understand that this Government will continue to do everything it can to ensure that happens. We are reducing the upfront cost of construction, which is approximately €308.5 million. It is not insignificant. We will be able to track progress, as commencement notices will have to be submitted by each local authority every month in order to receive refunds of those payments.
Last year, our capital expenditure on housing was €3.5 billion, which is the most we have ever spent. There was an underspend over the previous two years. We know why that was. We cannot wish away an almost five-month shutdown of residential construction owing to the Covid pandemic. That had an effect. Some might also want to wish away the impact on the supply chain of the war in Ukraine, but it had an effect last April, May and June in particular. The cost of funding has increased, affecting delivery.
We have other measures in place. For example, the cost-rental viability measure makes a subvention of up to €150,000 available across the board to AHBs and any cost-rental-designated developments. It will allow us to increase the delivery of cost-rental homes. We have approved more than 1,000 tenancies already.
Since we want more homes for our people – everyone in the Chamber says he or she does – we must take measures to ensure that happens. The waiver is a practical measure to achieve that on a time-bound, one-year basis. I have outlined the scheme's criteria to Deputy Joan Collins.
The Minister has still not explained how the approximately €20,000 per unit will be delivered to people on the ground. Some €308.5 million, which is taxpayers' money, is being invested in this. What is in place to ensure that developers pass it on to home buyers? That is the crucial question. There is no point in activating a measure like this if it does not deliver on the ground.
That is the crucial question. In the years since the Minister took office, public subsidies to developers have increased, as have their profits. Here is another measure that we do not know will be passed on to people buying homes. There is no transparency around developers' profits. The largest developers are publicly listed, so we can see how their profits have increased in recent years, but there is no transparency around the other companies availing of these subsidies and the development levy waiver. Will the Minister introduce measures so that developers availing of public subsidies like this waiver must have transparency around their profits and publish their profits so that we can see whether there is a link between the increased subsidies and their increased profits? Will the Minister investigate this link to see whether there is an issue? What measures is he going to take to ensure that public subsidies actually make housing more affordable as opposed to just increasing profits for developers?
The Government's policies are working. The Minister referred to the first home and help-to-buy schemes. He visited Drogheda recently, but he may not be aware that, under those schemes, houses are being advertised for sale today at a mortgage rate of just under €1,000 per month, making them more affordable than renting there. We need more of the same. The schemes are working because Government policies are working and spending is happening. That is welcome.
Fundamentally, this is an activation measure to increase supply. I thank Deputy O'Dowd for his kind comments. This measure is taking effect on the ground. Consider the measures the Government has introduced to support first-time buyers in buying at affordable rates. The help-to-buy grant gives them back €30,000 of their own taxes. I cannot imagine why anyone would be opposed to such a refund of tax that has been paid by hard workers-----
It is because it pushes up house prices. The Minister knows the answer.
Actually, it does not. The equity under the first home scheme is not a second mortgage, which is what others claimed. Under it, we are providing approximately €69,000 in equity. Combined, these come to nearly €100,000. People who have been renting or living at home have a real way now to buy their homes at an affordable rate, with mortgages of €1,000 or €1,100 per month. That is happening. Some may wish it was not happening. The main Opposition party inexplicably wants to scrap both schemes. Last year saw the largest number of first-time buyers since 2007, with them purchasing one in every two new homes. The issue in that space is supply.
This time-bound measure, which will be kept under review, will get development schemes that were on the cusp of viability moving so that people will have more choice and can get out of the rental trap or their folks' box rooms. I expect a large portion, if not all, of the levy reduction to be passed on. We are earnestly requesting that this be done.
If there was transparency around profits, we would know.
We have already seen new schemes starting because of this measure. The commencement figures for quarter 2, which will be published this afternoon, are the highest in ten years. The commencement and completion figures for quarter 1 were the highest since we started collating these records. Everything is not perfect, but momentum is building, and we will take measures like this if they provide affordable homes for our people.
What mechanism has the Government put in place to ensure that developers pass it on?
None.
And no transparency around their profits.
The Deputies do not want houses at all. They want to take away every support from first-time buyers.
No. We want to be sure that this support is passed on.
We want houses to get commenced.
The Deputies will take people's tax back off them and abolish the first home scheme.
Housing Policy
Richard Boyd Barrett
Question:81. Deputy Richard Boyd Barrett asked the Minister for Housing, Local Government and Heritage if he has considered grants for mid-to-low-income households that wish to expand their bedroom space through extensions or attic conversions to help address the current housing crisis; and if he will make a statement on the matter. [23569/23]
Whatever about the debates, no one doubts the continuing severity of the housing and accommodation crisis. In this question, I am relaying a suggestion that came to me and that I believe is worth considering. It is not by any means the panacea to the housing crisis, but might we consider making grants available, particularly to low-and-middle-income families, to do attic conversions and extensions to their homes where they could increase bedroom space and make some contribution towards dealing with the problems of overcrowding and the housing crisis?
Housing for All - A New Housing Plan for Ireland is the Government's housing policy to 2030 and the most effective way of accelerating housing supply. Pathway 4 of Housing for All specifically looks at making the most efficient use of our existing housing stock.
My Department provides private housing grants to assist older or disabled people who wish to stay in their own homes or those on low incomes who are on social housing lists. For example, up to €30,000 is available under the housing adaptation grant for people with disabilities, which can be used for extensions. More than €83 million is available in 2023 to support the suite of housing adaptation grants available from local authorities. My Department also provides funding under the improvement works in lieu of local authority housing scheme, IWILS. This scheme allows a local authority to improve privately owned accommodation as an alternative to providing local authority housing.
While I am not considering a broader grant for extensions or attic conversions at this time, my Department has recently reviewed the current suite of housing adaptation grants.
I will give careful consideration to the review report and expect to make a decision on its recommendations as soon as possible.
The Minister of State told us about a lot of stuff that we already know. It is a new suggestion that we develop a grant scheme, particularly for those who do not have the resources to do it, to build attic conversions and extensions that would create additional bedroom space and so on, in the face of a very severe housing crisis, one aspect of which is very severe overcrowding. It is not just about disability adaptations and so on but creating a new scheme to provide funding for people who would not otherwise have the means to extend their homes to create additional bedroom space. I am not saying that is a magic bullet, but it is a practical suggestion that could assist in the current severe situation.
We have many measures that provide additional supply, including 30,000 new homes last year. The Minister referenced record commencements and completions in the first quarter of this year. Nearly 1,800 applications to date have been made to the Croí Cónaithe scheme. The target was 2,500 applications up to 2026 but 1,800 have come in to date, of which 702 have been approved. We want to bring old buildings back into use where they were built prior to 2007 and, effectively, have been vacant for two years. That scheme can be used in respect of renters as well as owner-occupiers and has been in place since 1 May.
I noted the point the Deputy made. As he will probably be aware, there are SEAI grants, including insulation grants for attics and so forth. At present, defined measures are in place that are structured around generally getting activation and getting new projects under way, including the repair and lease scheme through local authorities and, more particularly, Croí Cónaithe, to bring older properties back into use to deal with people who want to provide that excess capacity for rentals.
A new idea has been suggested, so I ask the Minister of State not to just repeat what the Government is already doing. I know there are SEAI grants for insulation. One of the problems with them is that they are only useful to people who are already fairly well off. The proposal that has come to me, which is a good one, is that we have a grant scheme particularly directed at lower- and middle-income households to do attic conversions and expand their homes to provide extra bedroom space. In the same way we are giving lots of handouts to developers and wealthy people, let us give that money to ordinary people who could not otherwise afford to do it, to help ease the housing and overcrowding crisis. It is a sensible, practical proposal that I ask the Government to seriously consider.
Before the Minister of State responds, a number of contributors want to come in.
To follow on from the point made by Deputy Boyd Barrett, the local authority in the area where I live, Cork City Council, does not build extensions for people and its criteria for housing allocation are very tight. I am dealing with a number of families. One man has a notice to quit and the house he is in is not fit for his family. Local authorities should be able to build extensions or convert attics so that families do not go on the transfer list. Cork City Council does not do that. As a result, hundreds of people are living in overcrowded accommodation. An individual who wants a transfer out of overcrowded accommodation, from a two-bedroom to three-bedroom unit, or a three-bedroom to four-bedroom unit, could be waiting for up to ten years. Children then live in overcrowded accommodation at a time they need a proper home.
There are two more contributors. I ask Deputies to be brief.
There was a grant some years ago - perhaps my colleague, Deputy Durkan, might recall it - where in lieu of a housing application, the extension was built and the council then deemed that the housing need had been met. That might be worth looking at.
I will refer to what the Minister of State said regarding the review of housing adaptation grants. We need that very soon. This week, it was announced that more money would be made available for County Louth but Louth County Council decided it would not accept any more applications under the housing adaptation grant scheme from this week. This was because it has a backlog of 300 priority cases. It is not good enough that that is happening. The Minister of State needs to examine every allocation for every county, find out the number of special-needs people that need the supports, and give them the money. The Government has the money in the coffers. The needs of people with disabilities, serious illness, heart illnesses and all sorts of problems cannot be met. It is not good enough that applications are being put in the bin by Louth County Council.
The solution being suggested is a very good and practical one that needs to be looked at. Is it ideal or a substitute for building more housing? Absolutely not, but there are families where there is a lot of overcrowding at present. There are situations in my constituency where three families are in a regular house, all using one bathroom and one toilet. They have space to extend and put in another toilet or bathroom, which would take a massive stress out of the situation, but they just do not have the money or ability to do it and there is nothing they can apply for. If this proposal could just be looked at, it would be very helpful.
We are always open to good ideas. If the Deputy could flesh out his suggestion a little more and come forward with the actual proposal, the Department will consider it. We very much take that on board.
Deputy Gould has left the Chamber. It is open to local authorities to build extensions, although they may take different decisions. It is something local authority members should take up with their management and executive. There is no reason local authorities cannot do extensions. Some choose differently but that decision is taken at local authority level.
I am aware of the situation in County Louth, as raised by Deputy O'Dowd. There are two elements to it. One is that Louth County Council is not accepting applications at present. The Deputy asked whether the council had made contact with the Department; I think it already has. It is something we will look at in the context of this current year but, more particularly, we are now very much considering, and forensically engaging, with the view provided by officials regarding the housing adaptation grant.
Deputy O'Callaghan supported Deputy Boyd Barrett's proposal. It is something we will bring forward in a more detailed way and that the Department will consider.
Housing Schemes
Cormac Devlin
Question:82. Deputy Cormac Devlin asked the Minister for Housing, Local Government and Heritage how he is financing the construction of affordable apartments under cost rental; and if he will make a statement on the matter. [23641/23]
This question concerns affordable cost rental. The matter of affordable housing was raised, as was cost rental in its own right. As the Minister will be aware, in my constituency of Dún Laoghaire, ground has finally been broken and progress made at Shanganagh Castle, which comprises nearly 600 units, and 42 units are under construction in Loughlinstown, to name but a few. However, many middle-income earners are obviously hard-pressed. Will the Minister outline the financing arrangements for affordable cost rental?
I thank the Deputy for his question and his support of Government in its rolling out of these measures. As he knows, cost rental did not exist 18 months ago. We have rolled it out and well over 1,000 tenancies have been approved. The Deputy referenced Shanganagh Castle, which is a very important and significant site, where ground has been broken. It is the largest social and affordable housing site in the country.
Rents for cost rental are a direct function of the costs of constructing, financing, managing and maintaining the development. Exchequer funding is being used to assist in reducing the cost of construction of cost-rental apartments making the rents ultimately more affordable. Support is provided to approved housing bodies, AHBs, through the cost rental equity loan, CREL, and local authorities through the affordable housing fund. The CREL scheme provides AHBs with loans of up to 45% of the cost of a development or acquisition. Local authorities are now able to avail of capital grants of up to €150,000 per unit for cost-rental delivery under the affordable housing fund. We increased that from €100,000 to €150,000. The remaining capital costs are financed through long-term borrowing and preferential rates to local authorities by AHBs from the Housing Finance Agency.
Cost-rental apartments are also delivered by the Land Development Agency, LDA, through Project Tosaigh, which is designed to unlock planning permissions that are not yet developed in the private sector.
I expect to make significant announcements in the coming weeks in that space which will be pertinent to the Deputy's own area and to the cities. Funding to acquire these homes is sourced through access to €1.25 billion of capital funding from the Ireland Strategic Investment Fund, ISIF, and commercial borrowing.
Following the recent Government decision, I will also bring forward a cost-rental viability measure that will apply across the board where schemes are designated cost rental. We basically said that would also be a subvention or equity of up to €150,000. We have high financing costs and we want to reduce that to keep the rents low. This has been successful so far but I will bring forward further change and I expect that to be in place from the start of July.
I thank the Minister for that reply. He mentioned the rents for cost rental and it is a very attractive prospect for many people. For instance, I have been contacted by a number of individuals who are at the higher end of the social housing threshold. They are eligible for social housing support but they are really keen on the cost-rental model. Can flexibility be given to the local authorities to try to ensure those individuals can avail of cost-rental housing? As the Minister said, 18 months ago the scheme did not exist. People are now finding out about it, are very interested and want to avail of it. Can he outline the prospects for Dublin, in particular, but also some information in respect of the rents, which he mentioned earlier on? The cost-rental rents are very attractive.
We have been specifically discussing cost rental but there has also been a significant expansion in the first home scheme for first-time buyers. As I referred to earlier, one in two new-built homes bought last year was bought by a first-time buyer. Between help-to-buy and shared equity, the average equity we are providing is between €69,000 to €100,000 to first-time buyers and to households to buy their homes. At the end of the first quarter we had just short of 1,400 approvals under that scheme. We have more approvals in the first three months of this year than we had since the inception of the scheme last July. I expect that the further changes I will make on cost-rental viability will unlock quite a significant portion of additional developments where planning permission has already been granted and they have not yet been able to start.
Development funding is constrained at the moment, rates are high, so measures like this are required to be able to make these schemes viable.
Cost rental has been very popular. We have seen most of our schemes more than ten times oversubscribed with long-term, secure, State-backed rents with minimum tenures of 50 years and we are absolutely determined to roll this out further this year.
I thank the Minister for all that information. In particular, he mentioned the first home scheme. I am aware of constituents coming to my office regarding the various new schemes, including, first home and help-to-buy. All those initiatives that have been reformed over the past while are helping.
Returning to the original point on the cost rental, it is very welcome and necessary that those schemes are proceeding across Dublin, and the country as well, so that people can avail of cost rental.
Before the Minister contributes again, I have two more contributors who wish to speak. I am conscious of Members who have tabled questions and are waiting patiently so I ask the Deputies to be brief. I call Deputy Ó Broin.
I have a technical question. In a response on this issue earlier, the Minister indicated that the cost-rental subsidy would be available to approved housing bodies. He has not said that before so is that the case?
Second, does the Government envisage on certain projects a combination of the cost-rental subsidy and, for example, the affordable housing fund, AHF, or the CREL to increase the subsidy? I am thinking, in particular, of Poolbeg. Is that in the Minister's thinking in respect of the cost-rental subsidy scheme?
There are a couple of issues I wish to raise with the Minister which, again I believe, are practical suggestions. We need a portal where people can get the information about cost-rental and affordable housing. Many people just do not know what is out there, where they go for it, how they apply for it, and all that kind of stuff. A one-stop shop where all of the cost-rental and affordable information would be available would be a good idea.
The other matter I wish to raise is that given that some people are in homeless accommodation for a long period and others have been knocked off housing lists, notwithstanding the lookback where some people still got knocked off housing lists, I ask that the Government give a little priority to people who have been waiting a long time through some scheme where some of them could have a first shot at some of the cost-rental schemes, rather than it just being a completely random lottery? That should be considered.
The cost-rental viability measure will be available to AHB and across the sector. It will also be available to private developments if they are designated as cost rental and part of the condition will be that they will be designated as cost rental on an open book basis. We are working through those changes with the AHB sector also. It will apply and that is absolutely the intention.
On the question of the portal-----
Is it the combination of the two subsidies?
Yes, we are looking at that and I believe they can work together. We have done that with regard to the AHF funding that local authorities can access at the moment. For example, with regard to South Dublin County Council and a new scheme we have started there, that is just about viable and we can get that out there. We will look at the combination of both and how that can practically work.
The other thing we are doing in the next number of weeks is making the first announcements on Croí Cónaithe cities, which are apartments to purchase in our cities. We have the first number of schemes out on that, which are again a subvention to make them affordable and to bridge that viability gap. That raised some hackles in the Opposition at the time but that will provide real homes for people.
To answer Deputy Boyd Barrett's question, he is correct in that there are many schemes out there and there can be a great deal of confusion around them. They are good schemes. There will be an affordable housing portal and it is being worked on right now and has been for the past number of months.
In conclusion, because the Deputy was not present earlier, I want to mention where we talk about good suggestions. We have now received the first approvals for tenants who have received notices to quit on the cost-rental in situ scheme who are above the social housing lists and who now have cost-rental in situ provision. To be fair, the Deputy has raised this proposal on a number of occasions. We have listened to that suggestion from him, and from other Deputies on the Government and Opposition sides, and we have now the first families being able to secure their homes through that.
Housing Policy
Richard Boyd Barrett
Question:83. Deputy Richard Boyd Barrett asked the Minister for Housing, Local Government and Heritage what actions he intends to take to close the gap between HAP thresholds and market rents; and if he will make a statement on the matter. [23566/23]
Violet-Anne Wynne
Question:94. Deputy Violet-Anne Wynne asked the Minister for Housing, Local Government and Heritage if he will review the HAP bands with respect to a growing housing crisis in order to bring HAP bands into line with current market rents; and if he will make a statement on the matter. [23563/23]
Argument aside, I do not believe that anybody could doubt that there is a very significant gap between the housing assistance payment, HAP, threshold limits and the actual rent being charged out there. The highest homeless HAP rate in my area is €1,950. The normal highest rate is €1,755. The average rent in my area is now €2,586.
I propose to take Questions Nos. 83 and 94 together.
The housing assistance payment is a form of social housing support available for people who have a long-term housing need. Any household assessed as eligible for social housing is immediately eligible for HAP. Eligible households can source their own accommodation in the private rental sector, which should be within the HAP rent limits provided to them by the local authority. Maximum rent limits for the HAP scheme are set out for each housing authority area by the Housing Assistance Payment (Amendment) Regulations 2017.
Under Housing for All, my Department was tasked with undertaking an analytical exercise to examine whether an increase in the level of discretion available to local authorities under HAP is required. The Housing Agency carried out this analytical exercise on behalf of my Department to better understand what level of discretion should be made available to local authorities under HAP to maintain adequate levels of support.
Since 11 July 2022 the HAP discretion rate has increased from 20% to 35% above the prescribed maximum rent limit and, for new tenancies, the couple's rate has been extended to single person households. It is, of course, a matter for the local authority to determine if the application of the discretion is warranted on a case-by-case basis and to decide the level of additional discretion applied in each case.
A separate review of the discretion available to homeless HAP tenancies in Dublin, which is up to 50% above the prescribed maximum rent limits, is currently being undertaken by my Department, in conjunction with the Housing Agency.
My Department continues to keep the operation of the HAP scheme under review and closely monitors the level of discretion being used by local authorities, taking into account other sources of data, including RTB rent data published on a quarterly basis.
The Minister is committed to decreasing our reliance on the HAP scheme and central to that is significantly scaling up our social housing supply. Housing for All is the Government's plan to increase the supply of new homes to an average of 33,000 per year over the next decade. This includes the delivery of 90,000 social homes, 36,000 affordable purchase homes and 18,000 cost-rental homes. As new build supply of social and affordable housing ramps up, there will be reduced reliance on the HAP scheme.
We should not have to rely on HAP. It is €1 billion a year into the pockets of landlords but until we have the level of public and affordable housing necessary, sadly, we are going to end up relying on it.
It is not the case that reliance on it, in my area, is going to decline when we consider the housing targets. The delivery plan for my area is 2,318 houses by 2026. There are currently 4,000 households on the list and the council has said that another 2,825 will join the list before 2026. We will have more people on the housing list in Dún Laoghaire at the end of Housing for All than we have currently, even with the new delivery under Housing for All. In that context, the HAP limits must be somewhere approximating the rents that are out there. At the moment, trying to find a place that is affordable for the HAP limits is like looking for a needle in a haystack.
I acknowledge the work done in increasing the discretionary HAP - but that is only in the instances where there is risk of homelessness, or in the case of homelessness - and the extension of the couples rate to single people. This, however, is not enough, especially for those on the lowest incomes. There are 2,831 families on the Clare County Council housing list now, but there are also 1,186 HAP tenancies. I welcome that the council is currently working on adding additional social housing of 290 units across the county, but again it is just not enough. The most recent daft.ie report places average rents in Clare at an astronomical €1,239 per month. This is an increase of 11.7% on last year. The most recent snapshot from the Simon Community points to an 11.2% decrease of availability of properties under HAP. There is no denying that there is a need to bring the HAP rates into line with market rents in an indexed way.
I acknowledge the contributions of both Deputies for their respective areas. On the discretion levels, if including Dublin Region Homeless Executive area, the households in receipt of the discretionary HAP comes in at approximately 62%, and the average rate of discretion is at 25.5%. Excluding the Dublin Region Homeless Executive area, the average household in receipt of the discretionary rate is 56%, with an average rate of discretion of 19.4%. The increases in the discretionary HAP have been effective. It is important to note that. We must also note that some HAP recipients are making payments directly to their landlords beyond the amount of HAP that is being paid on their behalf. There is no legislative provision precluding HAP-supported households from making that contribution towards the monthly rent requirement by the landlord. Local authorities have a responsibility to ensure that tenancies are sustainable and that households in HAP are in a position to meet the rental costs involved. The Deputies are absolutely correct that the Government is committed to reducing our reliance on HAP overall. The way to do that is through the delivery of the Housing for All in social, affordable and cost-rental, and the schemes that are in place. I welcome the points made by Deputy Wynne about the delivery of social housing in Clare. Over time, that is how we will reduce the reliance on HAP. The discretionary rates are in place and the local authorities, the tenants and the landlords are availing of them.
I want rent controls. The Government is not going to do that. I think the Minister of State should but he has set his face against it. We need public and affordable housing to replace HAP but, in the meantime, there is a problem. In Dún Laoghaire today, three one-bedroom units are available for €1,895, €1,507, and €1,900 per month, respectively. The rents for two-bedroom units are in excess of €2,000, €2,500 and €3,000. The one-bedroom unit maximum homeless HAP rate is €1,350, which is well below the highest priced one-bedroom unit. It is a similar picture all the way. If someone is told that he or she must go out to find a HAP tenancy, it is an exercise in despair and futility because they do not exist and, therefore, something has to be done to bridge the gap. If the Government will not bring in rent controls, it must raise the HAP rates to the rates rents are actually pitched at.
One in five HAP tenants in Clare is in receipt of the higher discretionary rate of payment. I do not know what it is in other constituencies but I imagine it is similar, if not higher. It is a clear indication there is a need, whether it is wanted or not, to increase and index the payment. I understand there was a concern with setting too high a floor on rents in the private rental market but HAP is now so far away from market rates that it is loading the weight of the housing crisis in the private rental sector onto the shoulders of our most vulnerable. This is completely unacceptable.
Will the Minister of State extend the scope of HAP to provide a potential tenant with the deposit for the rental agreement, with a view that the money would go back to the Government when the tenant receives the deposit back at the end of the tenancy? I have received a number of distressing calls where people have said they cannot afford the rent for the properties on daft.ie so they cannot even apply, and they are really struggling to get the deposit and are taking out loans to do so.
Deputy Boyd Barrett referred to his constituency in Dún Laoghaire. It is one of the local authorities, across all the local authorities, with the highest use of the discretionary HAP.
We are still approving 680 HAP tenancies per month. We have committed to reducing reliance on HAP, as we have stated, and that relates to delivery of supply of social, affordable and cost-rental housing.
Given the points made earlier by my colleague, the Minister, we are buying out 1,800 HAP tenancies with the use of the tenant in situ scheme. We are making considerable progress across the State in all local authorities, including Clare and in Dún Laoghaire, to try to reduce our reliance on HAP.
The discretionary rate is in place, and local authorities also have discretion in respect of local market conditions to exceed the maximum HAP rate rent limit by up to 35%, or 50% in the Dublin region, for households at immediate risk of homelessness. They should be proactive in the use of this discretion. It is also critically important that we continue the supply to reduce our reliance on HAP.
Question No. 84 taken with Written Answers.
Housing Policy
Bernard Durkan
Question:85. Deputy Bernard J. Durkan asked the Minister for Housing, Local Government and Heritage given the increasing demand and pressure for housing, the extent, if any, to which he might look at the housing requirements on a county basis with a view to appointing professional builders on contract to the respective local authorities to provide and accelerate a housing programme; and if he will make a statement on the matter. [23508/23]
This question seeks to ascertain the extent to which the Minister might encourage a review of the housing needs on a county-by-county basis, given that there may be differences in the demand from county to county, and whether or not it might be possible to set up a new scheme or adapt one of the existing schemes in order to cater specifically for them.
I thank the Deputy for his question. Under Housing for All, in the period 2022 to 2026, the Government will deliver: 47,600 new build social homes; 3,500 social homes through long-term leasing; and 28,500 new affordable homes. Housing for All is supported by an investment package of more than €4 billion per annum, through an overall combination of €12 billion in direct Exchequer funding, €3.5 billion in funding through the LDA and €5 billion funding through the Housing Finance Agency.
Under Housing for All, each local authority was required to prepare a housing delivery action plan. This plan sets out details of both social and affordable housing delivery as appropriate over the period 2022-2026, in line with targets set under Housing for All. In preparing the plans, local authorities were required to include details of lands available to deliver housing, and details of land acquisition requirements. A €125 million fund is available to local authorities to acquire land, which is administered through the Housing Agency, and which is currently under way. There appears to be a great demand in that regard. The plans also include details of the locations and delivery streams for social housing schemes. The plans have been published on local authority websites.
Under my Department’s social housing investment programme, funding is available to all local authorities and AHBs to deliver additional social housing stock through direct construction or in partnership with developers through turnkey projects. As such, housing developments are constructed by professional contractors and developers in line with those agreements. Significant progress is being made to deliver the ambitious targets contained in Housing for All and my Department is working closely with the local authorities, AHBs and other stakeholders to accelerate the delivery of social and affordable housing.
I am aware my time is limited. The point made by the Deputy is one he has raised consistently. We have an integrated model through the local authorities. The point raised by the Deputy about accelerating the programmes is something we are actively pursuing with the local authorities. We very much take that on board.
Might it be possible to consider also the reintroduction of the private sites scheme or individual subsidised sites in a number of counties to cater for that part of the market that is not being catered for at the present time by virtue of a number of issues?
Such a scheme is in place in terms of the rural site scheme, which is administered through the local authorities. It is something that I can discuss with the Deputy at a later date. I know it is something he is very interested in.
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