In Budget 2015 the Government announced that €400 million of the proceeds of the sale of Bord Gáis Energy was to be made available to establish an off-balance sheet financial vehicle to provide financing to Approved Housing Bodies, with the aim of facilitating the provision of additional housing units in support of the Government's Social Housing Strategy. Work on this activity was carried out by my Department in consultation with the Department of Finance and Department of Public Expenditure and Reform. However, despite a high level of engagement with a wide range of potential providers and financiers of social housing, no new model of provision and/or financing of social housing on an off-balance sheet basis could be identified.
In response to this outcome, it was decided instead to commit €10 million per annum from the Bord Gáis proceeds, over a longer period, which could be used to secure the development of a pilot affordable rental scheme. Action 4.6 of the Rebuilding Ireland Action Plan provided for the introduction of an affordable rental scheme to enhance the capacity of the private rented sector to provide quality and affordable accommodation for households currently paying a disproportionate amount of disposable income on rent. Provision was made for €10 million to be allocated through my Department’s Vote in 2017.
As set out in the recently published Strategy for the Rental Sector, the commitment on affordable rental is now to be progressed through kick-starting supply in rent pressure zones. Lands held by local authorities in rent pressure zones are to be brought to market on a competitive tendering basis, with a view to leveraging the value of the land to deliver the optimum number of units for rent, targeting middle income households, in mixed tenure developments. The cost of providing rental units is to be permanently reduced by lowering the initial investment and development costs for providers - AHB or private - allowing the rental units to be made available at below market prices without the need for ongoing rental subsidies.
Accordingly, the provision of €10 million allocated for 2017 is being redirected to support additional activity under other housing programmes within my Department.
