Thursday, 5 May 2016

Written Answers Nos. 119-121

Social and Affordable Housing

Questions (119)

Eoin Ó Broin

Question:

119. Deputy Eoin Ó Broin asked the Minister for the Environment, Community and Local Government for a progress report on the €400 million allocation in the Social Housing Strategy 2020 for a new Housing Finance Agency; the structure, the individuals and organisations involved; the number of meetings held; the number of housing projects agreed, and rejected; the quantum of additional moneys leveraged; the spend to date; the number of houses built or bought; and the number of new tenancies created, in respect of this Agency. [9230/16]

Written answers

Minister for the Environment, Community and Local Government

The Social Housing Strategy 2020 includes a commitment to commence work on a financial vehicle or other ways to raise funds for the social housing sector.

Work on the development of this new funding model is being progressed under the oversight of a group which has been put in place to develop the financial aspects of the Social Housing Strategy. This group - the Finance Work Stream - comprises a range of key stakeholders including my Department, the Housing Finance Agency, the National Development Finance Agency and the Departments of Finance and of Public Expenditure and Reform.

The objective of this work is to try to deliver an investment mechanism for social housing that does not negatively impact on the General Government Balance.

Arising from the opportunity offered by the Strategy, a range of developers, investors, financiers and others expressed interest in being involved in the provision of or investment in social housing. A protocol was put in place in March 2015 under the auspices of the Finance Work Stream to facilitate individuals and entities seeking to engage with the State to provide investment for the delivery of social housing.

During the course of its work, the Clearing House Group received 25 proposals for funding social and affordable housing, using both existing mechanisms and new approaches. The Group reported in November 2015, and arising from its work a number of measures are being developed with a view to better facilitating private investment into social housing. These include:

- amendments to existing arrangements under the Social Housing Current Expenditure Programme to facilitate investment by institutional investors; and

- an affordable rental scheme.

The Social Housing Current Expenditure Programme currently provides a means whereby properties can be built or bought by Approved Housing Bodies (AHBs) with the use of private funding and leased through AHB’s and Local Authorities, for the provision of social housing. This scheme is underpinned by a lease and other legal agreements which provide that rental payments are made by the State over an agreed long-term time period, typically 20 years, in return for which the housing unit is made available for social housing. Changes are now being proposed to this scheme to provide revised arrangements which serve to expand these mechanisms to facilitate larger institutional private investors to come into the social housing market.

On 2 February 2016, Government approved the over-arching principles which will underpin these revised arrangements and the arrangements being developed to give effect to an affordable rental scheme.

The Affordable Rental pilot scheme was announced as part of Budget 2016 which will utilise some of the €400m being made available from the proceeds of the sale of Bord Gáis Éireann. The scheme is currently being developed in my Department. €10m has been made available for the scheme in 2016. This is to be an on-going annual commitment to secure a long term increase in the supply of housing for affordable rental.

Social and Affordable Housing

Questions (120)

Eoin Ó Broin

Question:

120. Deputy Eoin Ó Broin asked the Minister for the Environment, Community and Local Government for a progress report on the €300 million allocation in the Social Housing Strategy 2020, for a housing public private partnership; the structure of, the individuals and organisations involved; the number of meetings held; the number of housing projects agreed, and rejected; the quantum of additional moneys leveraged; the spend to date; the number of houses built or bought; and the number of new tenancies created, in respect of this public private partnership. [9231/16]

Written answers

Minister for the Environment, Community and Local Government

The Social Housing Strategy 2020, launched in November 2014, provides for an investment with a capital value of €300 million in social housing through the public private partnership model. In total the programme is expected to deliver 1,500 social housing units. PPP units take a minimum of 3 years to be delivered. To enable delivery to commence as quickly as possible, the PPP programme is being rolled-out in three bundles.

The first bundle of PPP sites which is to provide over 500 units in the greater Dublin area was announced in October 2015. The social housing is being developed at these six sites in co-operation with the local authorities in each area. Two of the sites are located in Dublin City with one each in South Dublin, Kildare, Wicklow and Louth.

Dublin City Council has been appointed to act as the lead local authority for the delivery of the social housing PPP Programme in respect of this first bundle. The delivery and governance arrangements for this bundle have now been put in place and the Project Board held its first meeting on 29 April 2016. The Project Board is chaired by the Chief Executive of the City Council and includes representatives of my Department, the National Development Finance Agency and each of the Local Authorities concerned (in this case, Dublin City Council, South Dublin County Council, Louth County Council, Wicklow County Council and Kildare County Council).

Site selection for the second bundle is close to finalisation with a third bundle to be finalised by end of 2016. The identification of sites is being overseen by a sub-group of the Finance Work Stream - a structure which operates as part of the implementation arrangement for the Social Housing Strategy 2020. This sub-group includes representatives of my Department, the Department of Finance, the Department of Public Expenditure and Reform, the National Development Finance Agency and the Housing Agency.

The units to be delivered under the programme will use what is termed an ‘availability-based’ PPP model, in which a private sector company designs, builds, finances and maintains the social housing units in return for a ‘unitary payment’. The ‘availability based’ model being applied has been used successfully in Ireland for over 15 years to deliver roads, schools and courthouses.  It involves the procurement of a consortium to design, build, finance and maintain, for 25 years, social housing units on sites provided by the State. The housing units are then handed over to the State after 25 years in a predefined, good quality condition. No expenditure has been incurred to date in respect of the PPP project.

The relevant local authorities will retain responsibility for tenant management during the contract period. Tenants allocated to PPP units are drawn, in the normal manner, from the local authority social housing waiting list in accordance with that local authority’s allocation scheme.  The tenants are subject to standard arrangements as apply to other social housing allocations, including in respect of the charging of differential rent.

Question No. 121 answered with Question No. 115.