The Government recognises the housing affordability pressures in certain areas and is determined to see increases in the supply of high quality social and affordable homes, to buy or rent, as quickly as possible, particularly in the major urban areas where demand is greatest. This is one of the issues I will be considering in the context of the recently announced review of Rebuilding Ireland, one year on from its publication, with an emphasis on building on the progress made, strengthening the measures already in place and identifying new initiatives that add value and raise ambition.
As part of the review process, my Department will focus in particular on the broad issue of housing affordability, building on the measures already being advanced, for example through initiatives to use State lands to deliver mixed-tenure housing. In this context, my Department intends to consult with local authorities and other key stakeholders in the coming weeks, as part of the broader review process.
At a strategic level, under the new 20-year National Planning Framework, there will be an emphasis on managing and utilising State lands to deliver housing and to ensure an active and healthy market for development land. In this regard, an important policy intervention in the delivery of new housing supply under Pillar 3 of Rebuilding Ireland is the development of State-owned lands for mixed-tenure housing, particularly in the major urban areas, where demand is greatest. On 27 April 2017, details of some 2,000 hectares of land in public ownership were published, with the potential to deliver up to 50,000 homes nationally. In practical terms, the development of sites such as these will mean accelerating social housing delivery and securing more homes for sale and rent at lower and more affordable price points.
Rebuilding Ireland also commits to the introduction of an affordable rental scheme to enhance the provision of affordable accommodation for households currently paying a disproportionate amount of disposable income on rent. As set out in the Strategy for the Rental Sector, this commitment is now to be progressed through kick-starting supply in rent pressure zones. Lands held by local authorities in such 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, and in particular targeting middle-income households, in mixed-tenure developments.
In relation to cost rental, a range of measures to improve the supply of rental accommodation that meets the needs of ordinary households are being progressed under the Strategy for the Rental Sector including:
- build to rent models;
- use of State-owned lands to deliver affordable rental in areas of high demand;
- measures to increase the supply of dedicated student accommodation to free-up units in the general rental market;
- supports to bring vacant stock into use;
- consideration of tax and fiscal incentives to encourage additional supply.
In addition to these measures, the Strategy for the Rental Sector noted that the Programme for a Partnership Government contains a commitment to develop a "cost rental" option, taking account of work already completed in this area, including by NESC and others.
In line with this commitment, Action 12 of the Strategy for the Rental Sector provides that my Department will lead an expert group to develop a cost rental model for the Irish rental sector, addressing issues such as funding mechanisms, the need to grow the necessary institutional capacity, particularly within the AHB and not for profit sector (whether through mergers, new entrants or strategic partnerships), the households to be targeted and the appropriate regulation mechanisms. The expert group will assess the benefits that a larger and more developed not-for-profit segment would bring to the rental sector and the housing system, and examine the feasibility and effectiveness of different approaches to achieve the desired change. A proposal to establish the Expert Group - including membership and terms of reference - is currently being prepared in my Department.
There are currently two house purchase loan offerings available to lower income first-time buyers from local authorities. The first is a standard annuity mortgage available from all local authorities. A first-time buyer unable to get adequate loan finance from a building society or a bank, may be eligible for a mortgage from the local authority concerned to purchase a new or second hand property or build their own home in cases where the gross income (before tax) is €50,000 or less for a single income household or €75,000 or less in the case of a double income household. The loan can be up to 97% of the price of the house subject to a maximum loan of €200,000.
The second option for first-time buyers unable to secure adequate loan finance from a bank or building society to purchase a new or second-hand property or build their own home is the Home Choice Loan. Home Choice Loan provides up to 92% of the market value of a property purchased, subject to a maximum loan amount of €285,000.
