Affordable Housing Bill 2021: [Seanad Bill amended by the Dáil] Report and Final Stages

I welcome the Minister, Deputy Darragh O'Brien.

This is a Seanad Bill that has been amended by the Dáil. In accordance with Standing Order 148, it is deemed to have passed its First, Second and Third Stages in the Seanad and is placed on the Order Paper for Report Stage. On the question, "That the Bill be received for final consideration", the Minister may explain the purpose of the amendments made by the Dáil. This is looked upon as the report of the Dáil amendments to the Seanad. For Senators' convenience, I have arranged for the printing and circulation of the amendments. The Minister will deal separately with the subject matter of each related group of amendments. I have circulated the proposed groupings to the House. A Senator may contribute once on each grouping. The only matters that may be discussed are the amendments made by the Dáil.

Question proposed: "That the Bill be received for final consideration."

I call on the Minister to speak on the subject matter of the amendments in group 1, namely amendments Nos. 1 to 3.

I thank the Senators. As the Chair has outlined, I am just reporting on amendments made in the Dáil. Amendments Nos. 1, 2 and 3 relate to section 6 of the Bill, which allows local authorities to enter arrangements with specific bodies for the provision of affordable homes. I previously accepted a Seanad amendment to subsection 6(4) to refer to the long-term sustainability of diverse communities, including the intergenerational sustainability of urban communities. The Government amendment — No. 3 — to section 6(4), as passed by the Seanad, removes the word "undue" and the amended provision will read:

In performing its functions under subsection (1), a housing authority shall have regard to the need to—

(a) counteract segregation in housing between persons of different social backgrounds, and support the long-term sustainability of diverse communities, including the inter-generational sustainability of urban communities.

These amendments had their genesis in the Seanad, whose views we took on board and brought to the Dáil. I am satisfied the provision adequately captures the requirement on housing authorities to consider the need to support diverse and sustainable communities.

On amendments Nos. 1 and 2, I previously accepted a Sinn Féin amendment in the Seanad to allow housing authorities to enter arrangements with co-operatives, community housing trusts and other not-for-profit bodies to make dwellings available for affordable dwelling purchase arrangements. This added such bodies to approved housing bodies, the Land Development Agency and public–private partnerships. While the principle of this Opposition amendment has been accepted, it was made clear that it would need to be refined and reviewed to ensure it was legally sound. Having done that, I tabled an amendment in the Dáil to replace the provision with "arrangements with a community-led housing organisation, a housing cooperative or a community land trust". I also proposed the inclusion of a new subsection (3) in the section, which allows the Minister to prescribe "minimum requirements in relation to governance, previous experience, financial management and financial reporting" to be met by such organisations, housing co-operatives or community land trusts.

These revised provisions have been drafted after consideration by my officials and in consultation with the Housing Agency and the Attorney General's office. I am satisfied that the amended provisions will be fit for purpose. They are significant. In fairness, there has been a broad welcome from the community housing sector. I believe this is the first time in legislation that it has been specifically referred to. That, in itself, is important. It shows we have genuinely taken on board the debates in the Seanad and the Opposition amendments. I brought the proposals to the Dáil and am now reporting to the Seanad that they have been taken on board. That concludes my comments on Government amendments Nos. 1, 2 and 3.

I thank the Minister for his comments on the amendments in group 1.

I thank the Minister. I acknowledge Senator Warfield, who tabled the initial amendment. In acknowledging that there was broad acceptance from the entire House, it is important to note that we particularly wanted to include the sector in question in the legislation. It is appropriate that the Minister has added the additional mechanisms on "minimum requirements in relation to governance, previous experience, financial management" because, ultimately, when it comes to the approved housing bodies, the councils and community trusts, all the transactions are on the State's balance sheet as a result of the decision made by EUROSTAT several years ago to reclassify approved housing bodies. We have to be prudent in every measure we pass in this House but the development is welcome. It ties in with what we are trying to achieve, which is to ramp up the production of affordable units by any mechanism possible.

I welcome the Minister to the House. I thank him for his explanation and rationale. I will not delay because we have a lot of work ahead of us. I wish the Minister well and thank him for his work. In particular, I thank his staff, who have supported him in this long, drawn-out process. We have had a lot of engagement so it is now time to roll out the show. The Minister has a lot of work to do on his own policies and plans regarding housing. I wish him well.

I thank the Minister. As he said, these amendments were really initiated in the Seanad. I understand that wording may need to be changed to get the meaning across and to be legally sound. Everybody recognises that.

Amendment No. 1 is core to Green Party values. My colleague Deputy Duffy was keen to have it inserted. I thank the Minister for taking it on board. He has also taken on board views of Sinn Féin.

I have spoken here before about the importance of sustainable communities. It is not just about housing; it is also about homes. It matters who is living in those homes when it comes to building up an entire community. We need to ensure intergenerational sustainability because it is important that children meet older generations and that we all learn from one another.

It is about diverse backgrounds but also different age groups. City centres have been hollowed out. This Bill acknowledges that the Government is building sustainable communities in our cities and towns to ensure it is not a flash in the pan. These are well-thought-out policies. I thank the Minister for bringing forward the changes but also the amount of work he has done. We have been in government a year. Look at what has been achieved in housing. Several Bills have gone through this week on housing. Nothing is a quick fix but this will give people a lot of solace.

Does the Minister wish to respond?

No, we have a fair bit to get through. I appreciate that everyone is working on this co-operatively throughout. I might just come back in my closing remarks.

I now call the Minister to speak on the amendments in group 2, which are Nos. 4 and 5.

Amendments Nos. 4 and 5 relate to consequential amendments. Amendment No. 4 deletes the previous section 26. Section 26 contained three amendments to Part V of the Planning and Development Act 2000. My amendments Nos. 8 to 12, inclusive, insert a new Part 6 into the Bill containing a number of amendments to Part V of the 2000 Act. As such, the three amendments that were in section 26 have been moved to the new Part 6.

On amendment No. 5, section 10 of the Housing (Miscellaneous Provisions) Act 2009 is the general provision listing the various types of housing services with which local authorities may be engaged in providing. It was considered that the provision of cost rental housing could be read into section 10 of the 2009 Act, since section 10(a)(ii) refers to the provision of “affordable housing”. However, to avoid any ambiguity and after consultation with the Office of the Attorney General, amendment No. 5 was added as a consequential on Part 3 of this Bill introducing cost rental housing as a new form of tenure because the involvement of local authorities in the provision of this type of housing is envisaged. Accordingly, this drafting amendment will insert into section 10 of the 2009 Housing Act a new paragraph (e) referencing cost rental dwellings as an additional type of housing service that a local authority may provide. This will provide a clear statutory basis for local authorities engaging in the provision of cost rental housing.

While it is a technical amendment, it is very significant. The Bill means there will be a national cost rental scheme for the first time which will initially be rolled out through our partners in the approved housing bodies. Last week I had the pleasure of opening the first 25 homes, which tenants will occupy in around four weeks. It has moved very quickly. This amendment also ensures that as a housing tenure, cost rental is seen as one that can be provided through a local authority. In the very near future, they will have a role in delivering cost rental.

The Minister rightly points out that, though technical, it is a very significant amendment to allow the cost rental sector to be accessed by local authorities. I have spoken to him before about an idea I put to him on the use of the repair and lease scheme and how it could be combined with the cost rental scheme. On the double, it would remove dereliction from our cities, towns and villages and provide them not only as social homes but provide an option whereby they would also be provided as cost rental. We do not want to have just one tenure of social housing. We are now able to provide cost rental homes and get the mix of all incomes into the city centres. The amendment is very welcome and I compliment the Minister on it.

I thank the Minister for all his work on this. People should be clear on the importance of cost rental and how we are pioneering something new for Ireland that has been done very well elsewhere. I commend Deputies Matthews and Duffy on their work on this. It is important to see when a smaller party can make a good contribution that can be listened to and taken on board. We appreciate the Minister's work on this. Social housing is a certain type of housing. Cost rental will also be available to people who do not qualify for social housing. It is a whole new ball game in some ways. It will not be rented at a profit. It is a non-profit way of renting houses. The rent is priced based on the cost of building the house only. It does not set out to make any profit and does not take the cost of the site into account. It is good for the local authorities. They will be well capable of doing this. It is more of the Government's commitment to public housing on public property and I thank the Minister for the work he has done to date.

This sounds like a technical amendment, which sounds boring, irrelevant and maybe unimportant, but it is critically important to the work the Minister and the Government are doing around changing housing policy. Affordable cost rental is a brand new model of housing in Ireland that will provide both affordability and security of tenure for renters. That is critically important and nowhere more so than here in Dublin where many people do not qualify for social housing because their income is just above the social housing income threshold but they cannot afford to live and to pay rent. The introduction for the first time in the State's history of affordable cost rental housing, not only in Dublin but nationally, is very welcome.

It is an issue I and my former colleagues on Dublin City Council championed two years ago. The Minister will be familiar with O'Devaney Gardens, which is in my local area and which has the capacity to deliver more than 1,000 homes. That is a site where we, as councillors tried to amend the proposal for the site to ensure there would be a minimum 80% social and affordable on the site, including 30% affordable cost rental. We were challenged by the Opposition. In fact, we were threatened by legal action by the Opposition. I very much appreciate that the Minister is taking the action to legislate for affordable cost rental. It has been spoken about for a very long time by many politicians but the Minister and this Government is implementing it and will make it available throughout the country. I accept others, such as sustainable or ethical investment funds, will be in a position to provide affordable cost rental. They are important but our local authorities are closest to our local communities. In undertaking their housing needs assessments, they will now be able to include affordable cost rental in those. I welcome this development.

I thank the Minister for all the work he and his officials have done. I urge him to use his position at Cabinet to influence the Ministers for Finance, the Minister for Public Expenditure and Reform and others to ensure the local authorities are funded because we need to scale this up greatly. As the Minister said, 25 affordable cost rental homes were made available last week and there were more than 500 applications. That validates the Minister's action to change the provision of housing in the country, but it also sends a strong message to all of us that we need to scale it up massively. I am sure that is what the Minister plans to do in Housing for All and I wish him well in his work.

I thank colleagues for their comments. Cost rental is incredibly important. Like Senator Fitzpatrick, I also want to see it scaled up massively. This is a start. We wanted proof of concept and that is why the first 25 units were so important. We will have eight schemes across the country in the coming months.

I would always encourage all Members to use their influence with the Ministers for Finance and Public Expenditure and Reform because the more resources I get, the more of this we can do.

I invite the Minister to speak to the subject matter of the amendments in the third group, namely, Nos. 6 and 7.

The amendments concern cost-rental provisions. Amendment No. 6 will insert language to illustrate matters that, under section 33, the Minister may prescribe as mandatory terms in every cost-rental tenancy agreement. As with social housing, it will not be the Minister who is the landlord for cost rental. However, the power to prescribe mandatory terms in tenancy agreements will allow the Minister to ensure there are common standards throughout the sector. It is our intention that there will be only one cost-rental sector in Ireland, subject to the same regulation irrespective of who the landlord is.

It was always intended that these mandatory terms would cover key points such as the setting and review of rent and security of tenure in line with provisions in the Bill. It is prudent, however, to make this explicit and to provide that the Minister may prescribe other incidental matters, that is, the little details that need to be concluded for cost rental to become a working reality. We will have, by the time this legislation has passed, a national cost-rental scheme and will publish the regulations and criteria for eligibility in the coming weeks, both for this and the affordable purchase scheme.

Amendment No. 7 clarifies a point concerning limited rent increases under the cost-rental model. A tenant will make his or her first monthly rent payment at the new, higher rate at least 28 days after receipt of a valid rent review notice, rather than the date on which it was issued. A tenant will, therefore, have at least four weeks in which to make, for example, arrangements with a bank to alter a standing order. The notice will run, as is most prudent, from when the tenant has received the notice document. Even though a monthly rent payment will fall within the four-week notice period, tenants will not have to pay the new, higher rent rate. They can pay at the old rate and settle the small difference with the landlord at any time during the following three months. While this may differ from the rent review system in the private rented sector, this should not be surprising. We should think of cost rental as a new system with its own processes and timetables, and this amendment will make the process run much more smoothly for tenant and landlord alike.

I might touch briefly on the regulations that will be published in the coming weeks. I have received many queries about the cost-rental units that the Minister launched last week in Fingal and the €53,000 figure, which I understand is the net figure as opposed to gross. It is important that this be clarified and he might do so. In the context of ramping up the cost-rental equity loan that was launched to deliver those aid schemes this year, it is important that we also examine other schemes that were not successful, apart from the other eight. I have spoken about this previously. There are two in my county, Waterford, that are on the ground, building and delivering units as we speak. They are able to come in under the cost-rental system and provide homes this year, and the developers certainly want to play their part with the AHBs in doing that. Anything that can be done to speed up that process for a second tranche of applicants who were not successful in the first tranche, to get them out and to deliver more homes this calendar year, will be welcome.

I welcome the amendments. As I said when I was talking about affordable cost rental, the two benefits it will bring to renters are security of tenure and affordability. In order for that to be delivered to every renter in an affordable cost rental, it has to be uniform and standardised and there cannot be local vagaries and variations. This is all about trying to improve the security of people's tenure in their own home. It is a brand new scheme and a new way of providing homes in our country. Those two elements, namely, security of tenure and affordability, being standardised throughout the system on a uniformed basis, is critical. It builds on the work the Government has done in improving and enhancing protections for renters, the continuation of the RPZs and the capping of rent increases at inflation, which has been welcomed by renters. It gives them certainty and should certainly improve affordability. I urge the Minister, when the Bill and the regulations have passed, to have his Department conduct a wider information campaign. There is an awful lot of interest but, as Senator Cummins said, there are questions. It would be beneficial, therefore, if the Department were to undertake an information campaign.

The Minister is not getting off too lightly, unfortunately. When local authorities take over houses from private landlords under the HAP scheme, the standard is often a C3 building energy rating, BER. If the landlord does not live in the house, it may kind of be left up to the tenant to deal with that standard. With the cost-rental model, we should look at best practice regarding BERs in order that tenants will not have significant outgoings to heat their houses. If we are building new houses, they should all have air-to-water or fossil-fuel-free systems since we are now in 2021 and that is the way forward.

Senator Cummins mentioned the regulations. As I raised previously in the House, I would like to see tenancies in perpetuity as a matter of course, but that has not been included in the Bill, to the best of my knowledge. The Minister envisages dealing with that through regulations. I would like to hear some commentary from him on that. We have to accept we are living longer, for one, and we do not want somebody to go into a cost-rental unit aged 20 and, in line with a previous amendment, have to leave aged 60. We want to ensure they will have that security of tenure, particularly in those older years when we do not want anybody to be worrying. In the case of someone who has died, for instance, what kind of succession path is there in regard to the property?

I intend to have the regulations for cost rental published in three to four weeks. As we explained in the Dáil, the reason for having regulations for cost rental and affordable purchase is they will be easier to change as opposed to primary legislation. I envisage there will be changes as we roll out the scheme and as we see how it works. We will go on a net-income basis, which will be sufficiently high to take in low- and medium-income families and individuals, the cohorts we are targeting. That is why there is no distinction between and an individual and a family.

We are in July, and we should expect to have them published by mid-August, given that the first tenants coming in through the first few schemes will operate under those regulations. They will be published and laid before the Houses of the Oireachtas. We are still doing a little work on them, but when they are complete, it might be useful in September to discuss them when we come back to the Houses. They will mean it will be more flexible for us. Some issues have been flagged and Senator Cummins, for example, mentioned his county in the context of median prices and so on. These are new schemes and there are some aspects we will need to work through as we embed them, which is why regulations are the more appropriate way forward, as opposed to having an arbitrary cap on salary or net income. We will work that through.

On the other point, I envisage that cost-rental homes will certainly be new homes. They will be nearly zero energy buildings, NZEB, top-rated homes. Any of the ones I have visited have been built to the best standards. This is a new form of housing tenure. I am excited about it because of the capacity and the interest in it from both the Government, which is supporting it, and ethical pension funds such as those in operation in Vienna, for argument's sake, where they are involved in delivery.

I also expect the Land Development Agency to deliver a significant level of cost-rental homes. I believe that the capacity that we have and the potential in this area is vast. We could be looking back on this period when we established this in legislation, in three, four or five years' time, when we have hundreds of thousands of cost-rental tenancies in every part of the country. I want to see a good regional spread of such housing.

In response to Senator Cummins, as we move the cost-rental equity loan, CREL, scheme forward, we will review it. There were eight sites selected in the first tranche of funding. With the affordable housing fund and CREL scheme open, we can look at schemes again as they go forward. I am particularly anxious about near-time delivery. I want to see people in these homes as quickly as possible. I want to see homes being delivered now. That is why the Affordable Housing Bill in general will also allow for mixed tenure turnkey housing. There will be affordable, social and cost-rental housing all in the one development. It will really broaden the opportunities for the delivery of homes for the real people who matter, who are stuck in unaffordable rental traps, living at home with their folks into their 30s and 40s, and who either want to buy or rent at an affordable rate.

I now call on the Minister to speak to amendments Nos. 8 to 12, inclusive.

These amendments relate to Part V of the Planning and Development Act 2000. During the Second Stage debate, I flagged that these amendments, whose purpose is to expand the use of Part V in accordance with the programme for Government commitment, would be added to the Bill, to include the provision of affordable housing on top of the protection of the 10% social housing, during its passage through the Dáil.

The changes we are making to Part V entail a number of amendments to sections 93 to 97, inclusive, of the 2000 Act. These have all been included in a new Part 6 within the Bill, with a separate section in the Affordable Housing Bill for each of those sections in the planning Act 2000. Consequently, the three Part V amendments already included in section 26 of the published Bill have been moved to the new Part 6, and what was section 26, has been deleted.

The effect of the substantive amendments to sections 93 to 97, inclusive, of the 2000 Act will be to implement the programme for Government commitment in relation to expanding Part V to encompass affordable purchase and cost-rental units, and introducing affordable homes requirements to Part V. It is particularly pleasing for me. I was involved in the negotiations and putting together the programme for Government. It is pleasing that in respect of housing, we are seeing a lot of what we said we would do as a Government in the programme for Government coming to fruition. I particularly want to thank my own team within the Department and also the Attorney General and his staff for their work on it.

The provisions amend the Part V requirement to a mandatory 20% in all cases, for social and affordable requirements. Colleagues will recall that that was changed a number of years ago. They were different times and such a change was fine then. Now it is time to change it back and ensure that we are protecting the 10% social housing and adding the 10% affordable housing. The provisions remove the link to a specified percentage need in the housing strategy reflected in the development plan objectives, require a minimum social housing contribution of 10% and include cost rental housing within the housing need for estimation in the housing strategy and for provision using the Part V requirement in appropriate cases. That means that the 10% social housing in private can be varied. That can be done, but within that, cost-rental and affordable purchase housing can also be provided. The provisions also apply a transitional five-year provision for land purchased between 1 September 2015 and 31 July 2021, during which time the requirement will continue to be at 10% with all to be applied to social housing provision and revert back to an exempted development size of fewer than five dwellings from the current figure of fewer than 10. The provisions apply the Part V contribution to developments granted planning permission on land not zoned residential as a material contravention of the development plan and provide for the estimation of social, affordable and cost rental need breakdown by the chief executive during the period until the next housing strategy subsequent to the changes being made. It is significant that within the housing need demands assessment, the local authorities will provide an estimation of the social, affordable and, indeed, cost-rental housing need. In addition, the opportunity was also taken to make some technical amendments to Part V that apply the site purchase and lease options and the house purchase price calculation provisions to approved housing bodies as well as to local authorities, remove the unnecessary eight-week time limit on the ability to refer disputes to arbitration, update some references to subsequently amended statutory provisions and correct an anomaly in the exemption certificate provision.

The main effect of the changes is that a mandatory 20% Part V requirement focuses on capturing the full amount of the planning gain for the State on every applicable site, in every local authority area, by breaking the link between the Part V requirement on each site and the social and affordable requirements of the local authority, as set out in its housing strategy. Under these changes to Part V, if a local authority does not require 20% of properties in a permitted development for social or affordable housing, it can take the lower number of properties it does require and apply the balance of the equivalent net monetary value as a discount on the cost of those units. That is a significant change. In the very unlikely event of a planning permission for a housing development at a location where there is no requirement for any type of social, affordable purchase or cost rental housing, the Part V requirement can be satisfied by a transfer of land or the transfer of houses elsewhere in the local authority area. If the former is the case, the local authority can use the land for another of its functions or sell it on the open market and apply the proceeds to its housing functions. If the latter is the case, the cost of the acquisition of units elsewhere in the area will be reduced by the net monetary value of 20% of the land. In this way, once these changes take effect, the State will capture 20% of the planning gain from every applicable housing development. That is a very significant change.

This is a welcome move. It was well flagged in the Minister's Second Stage speech here that it was going to be brought forward as an amendment in the Dáil. I have a slight concern that it may increase the price of houses in the remaining 80% of the development, but I accept that it is one of the quickest mechanisms for the delivery of affordable housing by attaching a 10% affordable housing requirement within a development in addition to the 10% social housing requirement. The fact that it also includes the cost rental is a welcome move. Perhaps the Minister could offer some assurances that the scenario outlined, whereby there is not a demand for that 20%, will not arise particularly often. I cannot really see that happening. There is such a demand out there in terms of both social and affordable housing. Perhaps the Minister could comment on that issue briefly.

I welcome the move. I think it is going to have a big impact in terms of affordable housing provision. I ask the Minister to comment on when it will come into force. Will it come into force when the Bill is signed into law by the President or when the Government issues a commencement notice subsequent to that? When will new planning applications be subject to this additional 10% requirement?

We support the amendment. We opposed the removal of affordable housing from Part V when it occurred. We are delighted to see that this legislation is going to ensure that in every new development there will be a minimum of 10% social housing and with a potential of up to another 10% affordable housing. It is critically important to support would-be homeowners in securing their home, a home that they can own outright over time, but purchase at an affordable rate. It is appropriate that the Government, on behalf of the State, is supporting would-be homeowners and people on modest incomes who have been priced out of the market and who desperately want to own and purchase their own home.

It is appropriate that the Government, on behalf of the State, supports would-be homeowners, including people who are on modest incomes who have been priced out of the market and desperately want to purchase their own home. I commend the Minister on this. We support it.

The changes will take place from the time of the commencement notice being signed for new permissions. A transition period is allowed for someone who has purchased already. There is a period of five years when the 10% will apply but there is an activation measure where if it is not developed, an additional 10% will apply to the land. For any new land purchase after the commencement order is signed, where someone lodges a planning application later this year, for example, there will be a requirement of 10% social housing and 10% affordable housing. Existing permissions were granted on the basis of the legislation that was in place at that stage. This change applies to future permissions. It will ensure that we will have affordable housing as well as the social units across the country, wherever housing is developed. I have been at pains to say that we support people in the honest, just and noble aspiration that they have to own their own home. This will help. It is another measure on top of the shared equity scheme and affordable housing directly built by local authorities. This is Part V housing, which ensures that the private sector also delivers affordable homes as well as social housing.

Question put and agreed to.

When is it proposed to take next Stage?

Question proposed: "That the Bill do now pass."

I congratulate the Minister and thank all Members for being so co-operative. Does the Minister want to make a final comment?

I thank all Senators and Deputies. This is a significant day, with the Bill having passed the Oireachtas within just over a year of the formation of this Government. I thank the team in the Department, who have done an incredible job throughout. I thank all the members of the joint committee for their input from pre-legislative scrutiny onwards. This puts affordability back at the heart of the solution to our housing problem. It is priority, primary legislation and it will support young and not-so-young people to get on the housing ladder or to be able to rent at an affordable rate and to give them more options. I see these as activation measures that will help to increase supply, which we need. I thank all Senators for the constructive way in which they have gone about their business, as always. I have taken on board Opposition suggestions and amendments too and I thank Opposition Senators for their interest in bringing them forward. It is a good day. I thank the Acting Chairperson. I am pleased that we can we move on to publishing the regulations and getting people into affordable purchase and cost-rental homes this year.

This is a Seanad Bill and it is a good day to have it passed. Well done to the Minister and to all Senators involved.

Question put and agreed to.
Sitting suspended at 7.13 p.m. and resumed at 7.45 p.m.