64. Deputy Fergus O'Dowd asked the Minister for Housing, Planning and Local Government the structure of the new affordable purchase scheme. [4568/18]View answer
Dáil Éireann Debate, Wednesday - 31 January 2018
64. Deputy Fergus O'Dowd asked the Minister for Housing, Planning and Local Government the structure of the new affordable purchase scheme. [4568/18]View answer
65. Deputy Tom Neville asked the Minister for Housing, Planning and Local Government when he expects the first houses to be available under the new affordable purchase scheme. [4522/18]View answer
75. Deputy Ruth Coppinger asked the Minister for Housing, Planning and Local Government if he will report on the affordable purchase scheme; his views on using public land for public housing; and if he will make a statement on the matter. [4570/18]View answer
87. Deputy Eoin Ó Broin asked the Minister for Housing, Planning and Local Government his plans for the €25 million affordable housing fund; the details of his announcement of local authorities taking out an equity stake in affordable housing developments; the location in which the announced 3,000 affordable homes are to be located; and when construction will commence. [4586/18]View answer
90. Deputy Paul Murphy asked the Minister for Housing, Planning and Local Government if a review of the affordable purchase scheme in order to use publicly owned land solely for social and affordable housing will be considered; and if he will make a statement on the matter. [4574/18]View answer
94. Deputy Aindrias Moynihan asked the Minister for Housing, Planning and Local Government the schemes under consideration to increase the number of affordable homes and homes available to rent in addition to the recently announced Rebuilding Ireland home loan scheme; and if he will make a statement on the matter. [4565/18]View answer
98. Deputy Richard Boyd Barrett asked the Minister for Housing, Planning and Local Government his plans to ensure that a mechanism is included in plans for affordable housing such that these houses remain affordable if sold in the future, including making it mandatory for the homes to only be sold back to the relevant local authority; and if he will make a statement on the matter. [4423/18]View answer
114. Deputy Barry Cowen asked the Minister for Housing, Planning and Local Government the estimated number of houses per annum to be delivered by his recently announced affordable homes scheme; and the location and anticipated price. [4548/18]View answer
120. Deputy Martin Heydon asked the Minister for Housing, Planning and Local Government the way in which the new affordable purchase scheme will work; the timeframe for completion of affordable homes; if they will be available nationwide; and if he will make a statement on the matter. [4572/18]View answer
When does the Minister expect the first houses under the new affordable purchase scheme to be available?
I propose to take Questions Nos. 64, 65, 75, 87, 90, 94, 98, 114 and 120 together.
The new affordable purchase scheme will be governed by the relevant provisions of the Housing (Miscellaneous Provisions) Act 2009, which will soon be commenced. It will be targeted at households with annual gross income of below €50,000 for a single applicant or €75,000 for joint applicants. The maximum discount permissible under the Act is 40% and the sale prices will vary, depending on costs, the discount given and other relevant factors.
Once the relevant legislative provisions are commenced, I will develop detailed regulations covering the operation of the scheme, including the full eligibility criteria. The elected members of each local authority will then determine the order of priority for the sale of affordable homes to eligible households.
The new scheme will see local authorities taking a fully repayable equity share, to the value of the discount given, in all homes that are sold. Importantly, this will provide for a sustainable funding stream for affordable homes into the future. The funds arising from repayment of the equity shares will be recycled into the provision of more affordable housing through the establishment of an affordable dwellings fund, which will be managed by the Housing Finance Agency.
I anticipate that there is significant potential for the delivery of affordable homes on local authority lands. Following the housing summit on 22 January, I asked local authority chief executives to submit, by mid-February, an outline of their respective affordable housing programmes, with a particular emphasis on Dublin, Galway, and Cork, where there is currently the greatest affordability gap, notwithstanding Limerick and the importance that both Deputy Jan O'Sullivan and I placed on it in our earlier discussion.
The Minister should tell his officials about that.
The overall scale of delivery, and timescales, will be informed by these responses.
In addition, I am providing funding of €25 million over 2018 and 2019 for a targeted programme whereby local authorities will make low-cost serviced sites available to approved housing bodies or co-operative housing associations in specific areas. This approach has worked well in certain areas and I would like for it to be delivered on a greater scale in other areas, within the parameters of the overall scheme that will soon be set down in regulations. My Department is currently drawing up the criteria for access to this scheme, taking account of broader policy on affordable housing, and will be seeking submissions in that regard from local authorities and Members of the Oireachtas in the coming weeks.
As I stated, the Government is also determined to make cost rental a major part of the Irish housing system. Under this approach, rents are set at levels to recover construction costs and to facilitate the management and administration of developments. Accepting that this innovative concept will take time to test and deliver, a pilot cost rental project is currently being progressed in Dún Laoghaire-Rathdown County Council, in conjunction with the Housing Agency and an approved housing body, on publicly owned land.
The pilot project is providing significant lessons to the State in terms of the delivery of cost rental and, in parallel, discussions are ongoing with the European Investment Bank regarding its experiences in delivering cost rental and other affordable models in other jurisdictions that could also work in Ireland.
The delivery of affordable housing will rely on the State developing the full potential of its residential land bank. The residential land management and development group, which is now being established and which will be chaired by the Minister of State, Deputy Damien English, will play a key role in driving delivery as speedily as possible.
I welcome the initiative from the Minister. Obviously, we have seen there is a cohort, a particular demographic, who have been hit very hard in the crash in recent years. Having been hit that hard, such people would have applied to get onto a council housing list but, as circumstances have improved again, and as they are starting to get back into employment and starting to climb the ladder in that employment, their salary increases. This is pushing people out of the loop for social housing and into a bracket where they are unable to access a mortgage while being unable to stay on the council housing list. This is the middle group that is getting caught and these initiatives are very welcome in trying to target them. Will the Minister give a timeline for this and outline when he would foresee the first transactions taking place?
I thank the Deputy for welcoming the initiatives. People were hit very badly by the economic crash that occurred following the bank bailout in 2008 and the intervention from the IMF and ECB in 2010. What we saw was a collapse in property prices across the country of somewhere in the region of 54% from a very high peak. As we look at escalating property prices now, year on year, prices are only at about 71% of where they were in 2007, yet they are still pricing people out of the market. It is important, as we recover our economy and as we rebuild our housing sector, which was destroyed in the collapse, that we do so in a sustainable way and that we make sure affordability is at the centre of everything we are trying to do. That is why we introduced the Rebuilding Ireland home loan and why we talk about certain caps around that loan, namely, €320,000 in the greater Dublin area, Cork and Galway, although not in Limerick, which may please the Deputy, and €250,000 everywhere else. Up to the end of October 2017, roughly 67% of homes bought by first-time buyers in the greater Dublin area, Cork and Galway were bought for less than €320,000 and roughly 91% of first-time buyers buying homes everywhere else paid less than €250,000. There is affordability, although we need to help where we can.
In regard to houses under the affordable purchase scheme, we have identified lands and money. At sites like O'Devaney Gardens, we will see the first homes constructed this year. I have asked local authorities to come back and see if there are particular sites where, if we use technologies like rapid-build, we could get some of these completed this year. That is what I am going to hear in the coming weeks.
While much of the talk on the different schemes has been on the availability of houses to buy, I want to also look at people who want to be in the rental sector and the availability of houses for people who choose to rent. Rent rates are continuing to rise. In Macroom, for example, it is over €800 for a three-bed and it is €1,300 for a three-bed in Ballincollig. It is getting harder and harder for people to afford the rent, even if they can find a house. What kind of plan is the Minister considering putting in place to make available more rental properties? There are vacant units in our towns and villages, whether they are over shops or in houses. Has the Minister a plan to put houses into circulation and make them available for people? The renovation scheme for council houses had a very low take-up of only 30 houses overall. Clearly, that is not the route or, at least, some improvement needs to be made. There needs to be some way of making available more properties for people who choose to rent in villages and towns around the country.
I thank the Deputy. It is important he acknowledges that there are people who want to rent and that it is a choice that people want to make because it suits their particular lifestyle. Too often, when we have this debate, speakers do not acknowledge that cohort of people. I am glad the Deputy recognises them.
When I talked about the peaks in 2007 and how we are off the peak in terms of house prices, it is the case that rents are above the peak level of 2007 because of the dramatic shortage we have and the way the housing sector was destroyed in the crash. There is a real affordability challenge around people who are trying to rent and that is why we are trying to progress the cost rental model as quickly as possible.
The rent pressure zones were an affordability measure that was put in place. While it is still very new, from the evidence we have to date, it is working, although we need to review how it has worked and what improvements can be made. In the priority legislation for this term, we are bringing in some changes around rent pressure zones as part of the change management programme for the Residential Tenancies Board, of which we spoke earlier. I am looking at an initiative around working with landlords in an incentive-based way to develop longer-term leases for tenants. I have discussed this with some of my colleagues and am going to progress this with the Minister, Deputy Donohoe, over the coming months. We have the new build-to-rent guidelines that are to encourage more professional landlords and larger landlords, and more investment into the rental sector in order to have a more mature rental market. I and the Minister of State, Deputy English, introduced the change-of-use regulations for units over shops in towns and villages whereby people can now take a vacant commercial premises over the shop and turn it into a home without the need for planning permission. I believe this will be very successful in getting life back into towns and villages but also in terms of providing new accommodation for people who want to rent. We have reformed the repair and leasing scheme and we are expecting a much greater uptake this year as a result of the changes made.
This is my third go at this. The Minister has an impressive ability to reel off statistics indicating the effectiveness of his programmes but to resolutely refuse to address the problems I am raising about particular sites and about affordability generally. I will repeat this for the third time. In whole swathes of Dublin and other areas, the Minister's affordable schemes will not work because he has not ensured that private developers set an affordable price that is actually affordable, or committed them to any percentage, having abandoned a 40% percentage. I would like the Minister to tell me what is the percentage on Cherrywood or any other site where the prices are currently way in excess of prices on any of the Minister's schemes. In addition, for the affordable schemes on public land, will the Minister guarantee they will stay affordable into the future or will "affordable" become a stalking horse for privatisation of public land? The only way that will not happen is if the Minister ensures that affordable houses on public land have to be sold back to the local authority and cannot be sold onto the market in the future. Will the Minister make that commitment?
Every time we talk about numbers and statistics, behind that are individuals and families. When we talk about HAP, the Deputy will mention an individual who is having a difficulty with HAP, and I understand that and we try to work to resolve those difficulties. When I talk about 32,000 families and individuals who are in HAP, those are families and individuals for whom HAP is working. I have just been down at the HAP offices in Limerick, where we talked about some of the cases and queries that are received in the call centre and some of the difficulties they have. While I am trying to remember the percentages off the top of my head, in something like three out of four calls the problem is resolved during that call. HAP is working for people.
For a few months, maybe a year.
These statistics are important because they tell us something about our policies and whether we are moving in the right direction, and that is why I give them. It is also important that we talk about individual cases - hard cases as well as good cases, because we have both. The hard cases will help us make sure we have more good cases, which is why it is important we talk about them.
What about affordable housing?
The median house price up to the end of October last year was around €340,000 to €350,000 in Dublin. Under our Rebuilding Ireland home loan, where a couple is earning less than €75,000, they will be able to buy a house at about €320,000, and it is capped at that. To take first-time buyers last year in Dublin, Galway and Cork, 67% of homes were sold for less than €320,000 for first-time buyers-----
I am talking about Dublin.
-----so people are able to afford to buy homes and apartments in Dublin. The figures tell us that people can afford to buy homes in Dublin and they did last year, which is what is happening.
I will give the Deputy the figures around affordability on Cherrywood, as I committed in the Oireachtas committee, when I have finalised the Adamstown agreement. LIHAF 1 will then be finished on 30 sites and I will be able to give as much detail as I can, while obviously respecting the fact that LIHAF 2 will have some commercial sensitivities around it as well.
The rent control zones were meant to be helping the tenant and keeping some control on rents. However, the scheme is a blunt instrument and is not working the way it should. There was meant to be a review. Has that review been conducted? When will the information be available? Clearly, there are serious deficiencies in the rent control zones.
For example, the estate of Classes Lake is split between two areas. One side of it is inside the rent control zone and the other is outside it because it is based on electoral areas. There are so many other deficiencies. People do not necessarily see the rent that the last tenant was paying and do not know whether it has been increased by over 4%. This was meant to be reviewed previously. Is that review going to be conducted any time soon or has it already been done? Will it be published and can we get action on those deficiencies?
I restate that the rent pressure zones, RPZs, are new. It is important with any new policy that we keep it under review. We try to keep it under review almost constantly. I have had a number of engagements with the CEO of the Residential Tenancies Board, RTB, to keep talking about what exactly is happening in the RPZs. If we look at the change from quarter 2 of last year to quarter 3, we saw some surprising things in terms of the rate of inflation in Dublin, which is under RPZs. We also saw an increase of about 5,000 or 6,000 new tenancies on the RPZ registration database. It is not yet clear if that is new stock coming onto the market or existing stock that had been registered under a different person's name and that was sold to another landlord or for which a different person in the relationship registered the tenancy for that year. Part of the change management programme that we have under way with the RTB is to give it annual registrations of tenancies so that it can have much better data as to the number of landlords that are in the market so that we can see the number of new landlords coming in and the impact that might have on the RPZs.
The RPZs have been reviewed. That work is now being finalised with the RTB and when I have it I will be able to bring it to the relevant Oireachtas committee or here to the Dáil. We can then discuss the implications of the review. It is a very new policy. Almost every quarter, new areas have come under RPZs because they have met the two sets of qualifying criteria. In the last quarter, they did not, which I thought was interesting. That tells us a story in and of itself.
I understand the complaints some Deputies are making about the effect an RPZ is having on an area adjacent to it that is not classified as an RPZ. We are looking at that as well.
I welcome the newly announced affordable house purchase scheme. It is a really important element of everything the Minister is trying to do in Rebuilding Ireland. What detail has the Minister in respect of lands that Kildare County Council might have available for the affordable house purchase scheme? Does he have a projection of how many houses might become available in County Kildare as part of it? Affordable housing is becoming available and I think the scheme applies to a value of up to €320,000 in Kildare. The Minister might clarify that.
The focus in the media has very largely been on homelessness and the different challenges the Minister faces in his Department. However, I have a lot of constituents who are working and who aspire to buy and live in their own home in the future. That is not always attainable. The affordable purchase scheme will allow those people to aspire to own their own homes within the communities where they were born and raised, with all the family supports that go with that. It is really important for us in Kildare, where we have seen a very significant increase in house price pressure. I very much welcome the scheme and look forward to seeing it being rolled out in Kildare.
Under the affordable purchase scheme, we have already identified land and finance for at least 3,000 homes. At the housing summit we had with local authorities last Monday, I talked about our ambition for reaching 10,000 under the affordable purchase scheme, which is achievable because of the way it has been set up. By taking an equity stake, when the home is sold or part of the equity is paid back, that money will go into a rolling fund for more affordable purchase homes. I have asked each local authority chief executive to look at the land banks they have and to see what proportion of that land can be developed for affordable schemes, bearing in mind our commitment to mixed development - social, affordable and private. I think there are about 135 ha in Kildare where we have identified the potential for building social, affordable and perhaps some private homes as well. I have asked the local authority chief executive to come back on that front.
There is obviously going to be high demand for this. It is important, going back to 2007, to remember that was the only year that Part V delivered more than 3,000 homes across the country. That was a year in which we were building more than 70,000 homes. As we rebuild our construction industry and rebuild homes here, we are going to have the affordable purchase scheme. It will come on line to a greater extent as we are building more homes each year. The first affordable purchase scheme homes will begin construction towards the end of this year. I have asked some local authorities in areas of particularly high interest to identify a piece of land that is serviced and has planning and to consider whether, if they use rapid technologies, we could actually have some affordable purchase schemes this year. I think it is possible. We are going to try to achieve it.