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Rental Sector Strategy

Dáil Éireann Debate, Tuesday - 15 January 2019

Tuesday, 15 January 2019

Questions (1131)

Róisín Shortall

Question:

1131. Deputy Róisín Shortall asked the Minister for Housing, Planning and Local Government the progress he has made on providing cost rental housing units; and if he will make a statement on the matter. [54247/18]

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Written answers

It is acknowledged that renters in Dublin and other urban centres are currently facing significant access and affordability challenges. Therefore, the Government is committed to the introduction of a not-for-profit, cost rental sector in Ireland which will be targeted at households earning low to moderate incomes up to a maximum annual income of €50,000 for single applicants and €75,000 for dual applicants.

Under the cost rental model, rents are set to recoup development and maintenance costs with a minimum amout of retained earnings. Minimising retained earnings, land and other delivery costs, while securing competitive low-cost financing, means that affordable rents can be achieved. The final rents, for any given project, will be set after all associated costs are determined, following on from the competitive construction and management tender processes. However, in its appraisal of initial cost rental projects the National Development Finance Agency (NDFA) estimate that rents of between 15-25% below market could be achieved.

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.

Cost rental is new to Ireland and, in order to drive delivery, a number of important early mover projects are being advanced, delivering important lessons in terms of cost rental in an Irish setting. There are two pilot cost rental schemes being advanced: one at Enniskerry Road, in Dún Laoghaire-Rathdown, and one at Emmet Road in Inchicore.

It is expected that 50 cost rental homes (33% of the total) will be made available on the Enniskerry Road site. The tenders are currently being assessed for this project, and it is anticipated that construction will commence later in the first quarter of 2019.

The current tenure mix for Emmet Road, as agreed with my Department, is 30% social and 70% cost rental, which equates to 330 cost rental homes. While this project is at an earlier 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 a special Consultative Forum specifically for this project. It is expected that the procurement process will get underway later in quarter 1 of 2019.

Cost rental will initially be managed on an administrative basis, and my Department is preparing a draft administrative cost rental framework in collaboration with the Housing Agency and the local authorities involved in these pilot projects. The invaluable learning from these pathfinder projects will inform further cost rental projects to be rolled out across other suitable sites. My Department is also working with the European Investment Bank to leverage its advisory and research capacity so that broader international lessons on the operation of cost rental can inform Ireland's approach.

My Department is also engaging with the new Land Development Agency to examine the optimum funding and delivery options to support cost rental delivery at scale.

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