Tuesday, 9 April 2019

Questions (67, 74, 78)

Joan Burton

Question:

67. Deputy Joan Burton asked the Minister for Housing, Planning and Local Government his views on the implications of rent, house prices and mortgage costs for public sector workers; his views on the lack of affordable housing for low-paid public sector workers, in particular members of the Defence Forces; and if he will make a statement on the matter. [10637/19]

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Darragh O'Brien

Question:

74. Deputy Darragh O'Brien asked the Minister for Housing, Planning and Local Government the status of the affordable home scheme; the number of sites identified; the timeframe for delivery; and if he will make a statement on the matter. [16254/19]

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Barry Cowen

Question:

78. Deputy Barry Cowen asked the Minister for Housing, Planning and Local Government the role he is playing to facilitate the construction of affordable housing on State-owned land; the number of housing units built on such land to date; the proportion of units that are deemed affordable; and if he will make a statement on the matter. [10566/19]

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Oral answers (8 contributions) (Question to Housing)

This question is about the plight of low-paid civil and public servants. How are they supposed to afford to buy a house? How are they supposed to afford to rent a house with the kind of prices over which the Minister is now presiding? For example, soldiers who serve this country with great distinction and bravery are walking out of our Defence Forces every day because they simply cannot make enough money to be able to afford to rent or buy.

I propose to take Questions Nos. 67, 74 and 78 together.

One of the Government’s key priorities is to address issues of housing affordability, including for low to middle-income households and workers. A multi-stranded approach is being taken to support such households in achieving home ownership, particularly those households earning annual gross incomes up to €50,000 for single applicants and €75,000 for dual applicants.

In terms of affordable purchase, I commenced the relevant provisions of Part 5 of the Housing (Miscellaneous Provisions) Act 2009 to provide a statutory basis for the delivery of an affordable housing for purchase scheme.  I also made regulations last month on foot of which local authorities are now moving ahead to develop schemes of priority for the allocation of affordable housing in due course.

 The new scheme will be set in the context of moderating growth in house prices and rental levels in the market and will complement other key Government affordability initiatives.  These include the Rebuilding Ireland home loan, which has seen 720 loans to a total value of some €127.5 million drawn down, and the Help to Buy scheme, under which some 10,500 applications, to a value of €153 million, have been approved.

 In order to support the affordable housing programmes of local authorities, the Government has committed €310 million, over the three years 2019 to 2021, under the serviced sites fund to support the provision of 6,200 affordable homes to purchase or rent.  An initial ten projects, with the potential for 1,400 affordable homes, have already been approved with an allocation of €43 million under the first call for proposals, and a second call for further projects has now issued to 19 local authorities where economic assessments have been carried out by the local authorities concerned and affordability issues have been identified.

In addition, approximately 2,350 affordable homes will be delivered on mainly publicly owned lands supported through the local infrastructure housing activation fund, LIHAF, while 5,600 further homes will benefit from a LIHAF-related cost reduction, some of which are already coming to market and are being advertised. The work of the Land Development Agency will also be of crucial importance in terms of delivering more affordable housing.  The initial portfolio of sites that the agency has access to will have the potential, over the short to medium term, to deliver 3,000 affordable homes in line with the Government policy of achieving 30% affordable housing on State lands generally.

In parallel, the Dublin local authorities continue to progress a number of other significant housing projects on publicly owned lands, including the redevelopment of O'Devaney Gardens and a site at Oscar Traynor Road in Dublin city, yielding approximately 280 affordable homes. In addition, 380 cost rental homes will be delivered between projects at the former St. Michael's Estate in Inchicore and at Enniskerry Road in Dún Laoghaire-Rathdown.

Taken together, programmes are in place under which nearly 18,000 affordable homes or homes with a LIHAF-related reduction will be delivered, with over 11,200 households also supported through the Rebuilding Ireland home loan or the help to buy scheme.

My question was very specifically about members of our Defence Forces, particularly privates, corporals and perhaps, given how prices are escalating, sergeants. I do not know whether the Minister is familiar with what people in the Defence Forces earn, but it is not a huge amount. The Minister did not once mention ordinary soldiers and how they are supposed to afford current market rents or purchase prices. Last year rents increased by over 7%, with slightly smaller increases in the Dublin region. I am not aware of members of the Army having received a wage increase which even closely matched those numbers. The increases the members enjoyed was probably somewhere around 2% to 3.5%. How are they supposed to make ends meet?

The Minister's cost rental price, as announced by the South Dublin County Council recently, is €1,200 a month. How can an Army corporal or private with a family, perhaps two children and a spouse, afford a rent like that? It is gouging.

My question focused on an element of housing policy that I have been focusing on for a number of years now. I refer to the affordable purchase scheme. I am not disputing what Deputy Burton said: I agree that there are issues on affordable rent. We have heard for years about the Enniskerry Road development and the pilot project there. I have heard that project has just gone to tender and that Focus Ireland and other groups are involved. It will be good to see such a scheme up and running.

The average age of home ownership is now 35 years, up from 26 years in 1991. On the level of home ownership, I heard the Taoiseach bemoaning the fact that home ownership levels have now dropped to a record low of 67.6%. We have a major affordability problem. The Minister knows that: I have said it to him many times. I am interested in the delivery of the affordable purchase scheme. It is interesting to hear the Minister's response to Deputy Burton concerning the number of land banks that have actually been offered by local authorities. I want to see a start being made on those affordable homes.

My responsibility is to provide an affordable housing sector, not for the benefit of any one public sector worker or any one worker in the economy, but to everyone in the country. We must have a functional housing sector that provides not just social housing or general housing but affordable housing as well. I am not responsible for the pay and conditions for anyone working in the public sector.

If we are not building more homes then conversations around people in emergency accommodation or affordability, whether in terms of rent or purchase, become moot because there would not be enough supply. Supply is now increasing. The focus of Rebuilding Ireland in its initial years was to rebuild those parts of the housing sector that were broken so that more homes could be built. As those homes were built more social housing homes were built at the same time. Last year, one in four of all homes built was for social housing.

We have a very ambitious pipeline for building affordable housing currently, whether affordable to buy, affordable to rent or cost rental. Recently, notwithstanding the huge affordability challenge we have in this country, house prices have begun to moderate due to the increase in supply. Last year rents began to fall in consecutive quarters. The big increase in supply has made a positive impact, but notwithstanding that we have to drive affordability at the heart of public policy. That is why we have the help to buy scheme, which has helped over 10,000 people buy a home. The Rebuilding Ireland home loan has helped over 700 families and individuals get a mortgage for their first homes. I will refer to a number of other schemes in more detail in my next contribution.

I do not know if the Minister is aware of the trauma that the near collapse of the Rebuilding Ireland scheme has caused people, after having made six month or eight month applications to some local authorities. In Fingal the waiting time was six or seven months. The Minister is totally out of touch. I asked him about soldiers because they serve their country, yet we have lost 20% of them in recent times because they cannot afford to live. The cost rental model in south County Dublin is offering future cost rental at around €1,200 a month. Can the Minister tell me of an Army private or corporal who can afford €1,200 a month in rent? We are supposed to have Defence Forces in which 10,000 or more people are expected to serve. In the main people in the ordinary ranks are not very wealthy or well-off. How are they supposed to get a home to rent or buy? The Minister does not seem to recognise this fact. He said that he has no responsibility for individual people. The Government should feel an immense collective responsibility for our Army.

We could talk about affordability all night: there are many aspects to it. On the affordable housing scheme, the criteria has been assigned. I provided my thoughts on some of it and did not agree with parts of it. We should look again at the upper limits of €75,000 for couples. I am anxious to understand the price the Department is considering selling the affordable homes at. The average price of a home currently is around €380,000, which is not affordable for most people, particularly considering the pressures on supply mentioned by the Minister.

In recent weeks we have been made aware of the number of built units that have been purchased by real estate investment trusts. That is affecting the market because some houses in my area which are within the reach of normal families to buy have been hoovered up by REITs and what are now referred to as "cuckoo funds". That is not a recent phenomenon in the past couple of months. When will the scheme open for applications and what will the prices be?

I thank the Deputy for his questions. One of the later questions deals with institutional investors. They are not hoovering up properties to the extent people think they are. We need to rebalance our housing sector away from over-reliance on individual landlords with one or two properties; we need to find a balance there.

On the serviced sites fund, the second call has gone out from my Department to 19 local authorities. In answer to how much a home will cost under that serviced sites fund, it is a maximum of 40% off the market price and that will vary across the country. Now that we have done the regulations it will be open to each local authority to open its scheme depending on when it sees the houses coming to market through its own local authority lands and what it has programmed.

In response to Deputy Burton, I did not say I do not have responsibility for individual people. I said that as Minister for Housing, Planning and Local Government, I have responsibility for ensuring that everyone in the country has housing security - that they have a home. We are working to do that through social housing, affordable housing or housing more generally in the economy. It is very important that we do that. If the Deputy had been here the earlier contribution on the Rebuilding Ireland home loan, she would have heard it is not closed; it is open. There is plenty of funding within it and drawdowns are happening. We are working with local authorities where they are finding difficulty in drawing down that funding. The objective is to help people get affordable homes, with more than 10,000 people on the help-to-buy scheme and about 750 people through the Rebuilding Ireland home loan.

We have put in place a number of different programmes to help members of the Defence Forces, teachers, members of the Garda and nurses to be able to afford to buy a home or to be able to rent a home at a rate below the market rate. That is now coming through the local authorities and the housing bodies. We are working with them in conjunction with the European Investment Bank to make that more of a reality for more people.