Wednesday, 31 January 2018

Questions (84)

Mick Wallace


84. Deputy Mick Wallace asked the Minister for Housing, Planning and Local Government the number of approved housing body units nationally his Department is paying rent on at 92%; the number of approved housing body units nationally his Department is paying rent on at 95%; and if he will make a statement on the matter. [4578/18]

View answer

Written answers (Question to Housing)

Approved Housing Bodies (AHBs) have a critical role in the delivery of new social housing as identified in Rebuilding Ireland, and as evidenced by the range of funding support mechanisms available from my Department and local authorities to support this ambition.

One of these supports is the Capital Advance Leasing Facility (CALF), which assists AHBs in accessing private or Housing Finance Agency (HFA) finance for the purchase, construction or refurbishment of units, which are then made available for social housing purposes through the Social Housing Current Expenditure Programme (SHCEP).  This loan facility can support up to 30% of the eligible capital cost of the project, where the units will be provided to local authorities for social housing use under long-term lease arrangements known as Payment and Availability Agreements (P&As). The on-going costs of these agreements are funded by my Department under the SHCEP.

In addition, AHBs can direct lease dwellings from private owners, and subsequently enter into a P&A agreement directly with a local authority to make that dwelling available to that local authority for social housing purposes. My Department recoups the cost of these P&A agreements with AHBs to the local authorities under the SHCEP.

The level of payment to AHBs under P&A agreements may be set at up to 92% of market rent and is agreed through negotiation with the local authority. In the case of the acquisition or construction of apartment complexes, where there are service charges that would result in a net additional cost to the AHB, the availability payment may be set at up to 95% of market rent. An availability payment in excess of 95% of market rent may be approved by my Department on a case by case basis in exceptional circumstances where there are additional costs accruing to the AHB in respect of the management and maintenance of the units.  The rent discount is applied to take account of the fact that the property owner is paid for vacant unoccupied periods, rent is paid in advance and the normal landlord tasks associated with filling voids are eliminated.

At end 2017, the number of AHB dwellings in respect of which my Department is making a payment under a P&A agreement at 92% of market rent is 1,740; payments in respect of a further 979 dwellings are made at the rate of 95% of market rent. These figures include dwellings funded by my Department under the Mortgage to Rent scheme.

In addition, the Rental Accommodation Scheme (RAS) is a social housing support, operating since 2005, targeted at households who have been in receipt of Rent Supplement long term (i.e. greater than 18 months) and have been assessed as having a social housing need. The scheme is delivered by local authorities who, under the RAS model, source accommodation from the private market and, in general, enter into a tenancy agreement with the landlord and the RAS recipient. AHBs can also contribute to the scheme; in some instances, an AHB may either lease a property directly from a private owner and enter into a RAS agreement with a local authority, or alternatively, an AHB may own the property and similarly make it available to the local authority for a RAS tenant, under a RAS contract with the local authority. Where possible under RAS tenancies, as per guidelines set out by my Department, an 8% discount on market rent is secured on the basis of the security of the RAS payment. At end December 2016, there were 4,467 AHB tenancies existing under RAS. A breakdown of the exact discounts secured in respect of individual tenancies is not available.

The Government is committed to continuing to support AHBs to contribute to the delivery of increased social housing and the achievement of the targets set out in Rebuilding Ireland.

Question No. 85 answered with Question No. 61.