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Social and Affordable Housing Data

Dáil Éireann Debate, Wednesday - 28 November 2018

Wednesday, 28 November 2018

Questions (284)

Eoin Ó Broin

Question:

284. Deputy Eoin Ó Broin asked the Minister for Housing, Planning and Local Government the way in which leased Part V units operate in terms of funding, management and ownership; the number of leased Part V units by local authority; and the annual cost of leased Part V units in each year since the introduction of this funding method to date in 2018. [49806/18]

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Written answers

Part V of the Planning and Development Act 2000 (as amended) requires that a developer must provide up to 10% of the site for development, that has the benefit of planning permission, to the Local Authority for the purposes of social housing at a price equivalent to the existing use value of the lands on the date on which planning permission was granted. Part V obligations can also be fulfilled using a range of other options, subject to the agreement of the Local Authority, including the transfer of fully completed units at a cost reflective of the construction costs, existing use site value and a contractor’s profit. All Part V agreements must result in a “gain” or benefit being equivalent to the “net monetary value” of the land that the Local Authority would receive if the Part V agreement had provided for a transfer of land - the “net monetary value” being defined as the market value less the existing use value.

The Part V provisions were amended in 2015 to permit the obligation to be met by way of a grant of a lease of housing units to the Local Authority, either on the site subject to the planning application or on any other land within its functional area.

My Department has provided guidance to local authorities to the effect that the preference is for Local Authorities to acquire units in order to comply with Part V although, in some instances, it may be more appropriate for the Part V obligation to be fulfilled by the leasing of units to the local authority. When considering a Part V agreement a Local Authority is obliged to consider a number of things, including whether, inter alia;

- the proposed agreement will contribute effectively and efficiently to the achievement of the objectives of the housing strategy;

- the agreement will constitute the best use of the resources available to it to ensure an adequate supply of housing and any financial implications of the agreement for its functions as a housing authority;

- the need to counteract undue segregation in housing between persons of different social background in the area of the authority.

Where the Part V agreement is for the leasing of units to the Local Authority from the developer, the net monetary value must be realised in the form of a discount from the payable rent over the period of the lease. Such a discount is in addition to the normal discount on the open market rent obtained by the Local Authority through a lease agreement with a property owner.

Currently, my Department operates two principal leasing schemes that can be utilised for the purposes of Part V agreements; standard Long Term Social Housing Leasing and the Enhanced Long Term Social Housing Leasing Scheme. Both of these schemes are funded under the Social Housing Current Expenditure Programme (SHCEP). The SCHEP is a funding programme that supports the delivery of social housing by providing financial support to local authorities and Approved Housing Bodies (AHBs) for the long term leasing of houses and apartments from private owners and developers. Where the Part V negotiation between the Local Authority and the developer results in a long-term lease arrangement, there is no capital funding requirement and the annual cost of the homes are incorporated into the SHCEP budget.

In terms of the management of the individual units, each leasing scheme has different arrangements. In standard Long Term Social Housing Leasing, the Local Authority manages and maintains the individual units with the Lessor responsible for the structure of the building(s) and will pay the Lessor up to 80/85% of the open market rent (depending on the unit type). In the Enhanced Leasing Scheme, the Lessor retains the responsibility for the management and maintenance of the building(s) in exchange for up to 95% of the open market rent. As indicated above, the rents payable under the lease would have to reflect the net monetary value discount over and above the normal discounts for the relevant scheme. In both schemes, the Lessor remains responsible for any management company or other communal charges and the Local Authority remains the landlord to the tenant and collects the differential rent from them.

The details of Part V units currently leased under SHCEP are set out in the tables below:

Local Authority

No. of Units

Year of delivery

Dun Laoghaire – Rathdown

124

2017

South Dublin

18

2017

Full year cost of all leased Part V units

2016

2017

2018

€0

€2,019,661

€2,019,661

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