I have approved a Local Infrastructure Housing Activation Fund (LIHAF) project for the South Docks in Cork City for the construction of road infrastructure and parks at a total cost of €15.50 million. This public infrastructure will stimulate associated housing delivery of approximately 620 housing units by 2021 and it is expected that these apartments will be primarily for the rental market.
The LIHAF cost reduction element is currently structured around the provision of approximately 40 apartments for use by Cork City Council as part of an affordable rent scheme that they will develop, using a rent credit to provide affordable rent to persons nominated by Cork City Council over a 25-year period. The homes will revert to the developer at the end of this period.
This model was developed specifically for the LIHAF project at South Docks and is being considered as a potential pilot approach in the context of providing affordable rental solutions.
As part of a package of initiatives announced earlier this month to help alleviate affordability pressures faced by households, I am proposing to develop a new affordable rental scheme, to be based on a cost rental model. Further details on the suite of initiatives announced can be found at http://rebuildingireland.ie/news/min-murphys-statement-on-affordable-homes/.
The cost rental model provides that the rent paid covers the cost of building the property, together with on-going management and maintenance charges, but with only a minimal profit margin included. This provides greater certainty around the rent, regardless of what is happening in the market. A pilot cost rental project is currently being progressed by Dún Laoghaire-Rathdown County Council, in conjunction with the Housing Agency, and an Approved Housing Body, using land owned by the Agency. I expect this pilot to go to the market later this year to secure a development partner and the best value for the State and prospective renters.
