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Social and Affordable Housing Funding

Dáil Éireann Debate, Thursday - 27 September 2018

Thursday, 27 September 2018

Questions (10, 12)

Joan Collins

Question:

10. Deputy Joan Collins asked the Minister for Housing, Planning and Local Government if there have been discussions or agreement on providing capital funding from budget 2019 for a local authority and cost rental housing pilot scheme at an estate (details supplied) or other local authority cost rental housing schemes nationally; and if he will make a statement on the matter. [30956/18]

View answer

Darragh O'Brien

Question:

12. Deputy Darragh O'Brien asked the Minister for Housing, Planning and Local Government if the pilot project cost rental scheme has gone to tender; if so, when construction will begin; and if he will make a statement on the matter. [38900/18]

View answer

Oral answers (16 contributions)

I ask the Minister if the pilot project-----

(Interruptions).

Hold on. Lest there be any doubt, these two questions are linked. We will get there. Deputy Wallace, in fairness, has been-----

No, I have the next question. Just do not take all day.

In fairness, I think I have kept to the time, like most people, but I might not this time.

Come on. The clock is ticking.

He is delaying it now.

I will be brief but this is a very important issue. It is to ask the Minister if the pilot project on the cost rental scheme has gone to tender; if so, when construction will begin; and if he will provide an update on it. I have asked this question a number of times. I hope we will get a positive response to the effect that there is some progress this time.

I propose to take Questions Nos. 10 and 12 together.

I thank the Deputy for the question. Acknowledging that renters in Dublin and other urban centres are currently facing significant affordability challenges, this Government is committed to the introduction of an affordable, not-for-profit cost rental sector in Ireland. Together with delivering more affordable and predictable rents, cost rental will make a sustainable impact on national competitiveness and the attractiveness of our main urban centres as places to live and work.

Taking account of the expected population increase of almost 1 million extra people by 2040, we will need around 500,000 new homes over the next 20 years and the State must be proactive in identifying and delivering the types of new homes that our changing population will need. We need to offer something different to renters on moderate incomes in Dublin, who are currently facing average rents of over €1,500, and I believe the cost rental model can deliver just that. From the extensive debates on the issue in this House, I welcome the broad agreement on all sides that cost rental needs to form a significant part of our future housing system.

It is now crucial that we identify and support good projects to prove the cost rental concept in an Irish setting and to inform the development of a framework for further projects. In this regard, there are now two pilot cost rental schemes being advanced, one at Enniskerry Road, in Dún Laoghaire-Rathdown and one at St. Michael’s Estate, in Inchicore. It is expected that 50 affordable units and 105 social homes will be made available on the Enniskerry Road site, while the site at St. Michael's Estate can accommodate over 470 homes.  While the final tenure mix on the Inchicore lands will be decided by Dublin City Council and informed by the detailed site development process, it will likely include 140 social housing homes, with the remaining 330 homes predominantly provided by the city council under cost rental arrangements.

The Enniskerry Road project has now gone to tender and it is anticipated that, once the procurement process is completed, construction will commence in the first quarter of 2019. With regard to St. Michael's Estate, while this project is at an early stage of development, Dublin City Council has appointed a dedicated project manager and a project team to drive the project forward. In addition to pre-existing consultative arrangements, the council is also facilitating the establishment of a special Inchicore regeneration consultative forum specifically for this project.

With regard to the funding arrangements, I have made it clear that direct Exchequer funding will be provided for any social housing element of these mixed-tenure developments. My Department is engaging directly with the Department of Public Expenditure and Reform, as part of the budgetary process, with regard to housing funding more generally. In addition, my Department is in regular discussion with the European Investment Bank with regard to financing options for the Inchicore project and also leveraging the bank's vast experience and knowledge in developing and supporting public housing projects in other member states.

I thank the Minister. I am glad the tender has been received. The pilot project for Enniskerry Road was announced in 2015, which is more than three years ago, so it is important that we move on with it. The Minister is right, and I and many other Members believe, that the cost rental model will be part of the solution but we need to start delivering supply again in this area. The Minister will have seen the report today that average rents in Dublin are almost €1,600 per month, which is 26% above the peak in 2008. There are individuals and families across this country paying up to 55% of their net take-home pay as rental payments. The market is broken, so a cost rental scheme is an absolute must. Can the Minister expand on when the income limits will be announced? He is running a pilot scheme but that construction does not start until quarter 1, 2019. Can he announce the parameters of the scheme?

I am pleased about the decision for St. Michael's Estate, and I commend that group and the residents for the work they have done, but have any changes been made to the St. Michael's Estate plan on foot of the recent hurried discussions with the Minister's colleague, the Minister of State, Deputy Catherine Byrne, in advance of Tuesday's motion? Have any concessions been given to her vis-à-vis St. Michael's Estate?

No changes have been made in terms of our ambitions for St. Michael's Estate. I can be quite clear on that. What I am not clear on is Fianna Fáil's position in the constituency in terms of supporting this project. When I launched the plan in June, the Deputy's party's representative turned up. It was the first time I ever heard her speak about it and it was in negative terms. The Deputy might clarify the position on it with his colleague.

The Minister might answer the question.

On the timeline for St. Michael's Estate, we are talking about the project team being fully in place, Part 8 planning in November 2018, project funding to go to the European Investment Bank, EIB, which has said the project is eligible, for December of this year, and construction procurement in quarter 1 of next year. We then go to expressions of interest, also in quarter 1 of 2019, with construction beginning later in the year.

When we talk about income limits around our cost rental project, what we are talking about is a reduction of the current market rent of 15% to 25%, depending on the site. The income limits will be the same as those which applied to the affordable purchase scheme, namely, €50,000 for an individual and €75,000 for a couple.

The Deputy referenced the rent index report we saw today. It is clear that people are paying too much for rent and that rents have to be better controlled. One of the positives we saw is that one in four rent agreements entered into in the last quarter was for more than 12 months. We are seeing some stability in that regard but we need to see more, and longer-term leases. That is what cost rental can deliver but other measures can deliver it as well.

We must do more to incentivise longer-term leases and improve security of tenure for tenants by way of legislation.

The residential tenancies Bill which was due to be brought forward in July of this year was delayed. Will it be put before the House this month or next? It is urgently needed. I acknowledge the budget is coming up in ten days but I ask the Minister to clarify the current status of the residential tenancies Bill.

The residential tenancies Bill is incredibly important, particularly given the data we have seen today. It will give more powers to the Residential Tenancies Board, RTB, and provide a rent register, more rent transparency and RTB inspections and greater security for tenants, who will be entitled to a longer notice period before having to quit their accommodation. All of those things will happen under that Bill. It was delayed in the last Oireachtas term. Deputy Darragh O'Brien may remember that there was a significant amount of filibustering of other legislation so the Bill could not be brought forward.

It underwent pre-legislative scrutiny by the joint Oireachtas committee. I have been very closely engaging with the Attorney General on the Bill in the past week and a half. There is one particular legal element which we must clarify but it is my intention to publish it in the next two weeks.

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