Dáil Éireann Debate, Thursday - 14 June 2018
249. Deputy Barry Cowen asked the Minister for Housing, Planning and Local Government the way in which the €400 million proceeds from Bord Gáis was used; if it is still available for an off balance sheet housing model; if it has been allocated elsewhere in his Department; and if he will make a statement on the matter. [26050/18]
View answerPrior to the publication of the Rebuilding Ireland Action Plan for Housing and Homelessness, it was planned to establish a financial vehicle to facilitate the aggregation of private investment into a fund for subsequent lending as project finance. The intention was that this investment would be off-balance sheet and in Budget 2015, the Government announced that €400m of public investment would be made available, including the proceeds from the sale of Bord Gáis, to provide 2,000 homes. The objective was that this investment could leverage private sector finance from the EIB, ISIF, pension funds, credit unions and other financial institutions.
A structured, formal process was put in place to facilitate engagement with these bodies. A body called the Social Housing Investment Proposals Clearing House Group was established to examine and consider proposals and to meet with the companies, groups and institutions involved. However, despite a detailed investigation of options to use the available funding in this way, including a high level of engagement with potential social housing providers and potential financiers of social housing, no new model that would, of itself, be capable of providing and/or financing social housing on an off-balance sheet basis could be identified that would be capable of utilising the available funding.
In response to this outcome, it was decided to modify the original commitment in relation to the €400m funding to provide €10m per annum, indexed for inflation, over a longer period (20 years), which could be used to secure the development of a pilot affordable rental scheme, as envisaged in Rebuilding Ireland. Provision was made for €10 million to be allocated to my Department's Vote in 2017.
Furthermore and taking account of the work and analysis of the Clearing House Group, it was considered that it would be more constructive to use the existing social housing funding and support mechanisms and, where appropriate, make adjustments to those mechanisms, in order to provide a framework with more realistic prospects of harnessing private investment in an off-balance sheet manner.
This approach resulted in the design of an alternative delivery mechanism, the Enhanced Long-term Leasing Social Housing Scheme, which was launched on 31 January 2018. Funding is in place to support the delivery of this new scheme and the principal objective of the scheme is to encourage larger levels of private investment in social housing, while ensuring that the resulting leasing arrangement is off-balance sheet in respect of Government expenditure. The scheme is targeted at new build or new to the market properties to be delivered at scale and will complement the existing long-term leasing arrangements, which will continue to be available for leasing existing properties.
In respect of the commitment to develop an affordable rental model, this is now being progressed through an initial pilot project in Dublin, based on a cost rental model, where local authorities can release the value of their land, and also access funding for enabling infrastructure, to reduce the construction costs of providing such rental units and facilitate the delivery of the optimal number of affordable homes to rent for low- to moderate-income households, as part of mixed-tenure developments. Lands held by local authorities, particularly in urban areas where there are high rental costs and significant housing demand, are being identified for cost rental projects, including a large-scale cost rental site in Dublin city, details of which I expect to announce shortly.
