Part 5 of the Housing (Miscellaneous Provisions) Act 2009 was commenced in June 2018 to provide a new statutory basis for affordable dwelling purchase arrangements. Initial regulations in relation to schemes of priorities were made subsequently and further regulations will be put in place over the coming months regarding eligibility and other matters.
In order to support the delivery of discounted homes to buy or rent, this Government has committed €310 million under the Serviced Sites Fund, from 2019 to 2021, to provide infrastructure to support the delivery of some 6,200 homes. To date, funding of €127 million, in support of 35 projects in 13 local authority areas, has been allocated for infrastructure works on sites that will support the delivery of almost 3,200 homes.
The overall cost and the timing of delivery for these projects is contingent upon the completion of design, planning and procurement in the first instance, and local authorities are working to achieve delivery as quickly as possible.
In addition to making discounted homes available for purchase, the Government is also committed to the development of a new ‘Cost Rental’ sector in Ireland. Under the Cost Rental model, rents cover the cost of delivering, managing, and maintaining the homes only, less both the profit margin seen in the private rental sector and any financial supports provided by the State/local authorities. With the resulting rents significantly below market levels, this would mean that many households on moderate incomes will have access to a more affordable and stable form of rental tenure than would otherwise have been the case.
The rents for Cost Rental units will obviously depend upon the overall cost of each development and will vary according to the site and design specifics. However, my Department has identified several factors that can put downward pressure on costs and make Cost Rental more affordable for tenants – these include low/zero land costs; a design approach with value engineering and long-term maintenance in mind; and capital subvention to individual developments through the Serviced Sites Fund.
More competitive rental levels under the model can also be supported by accessing low-cost, stable finance that is paid back over an extended period of time. This long-term financing has, for example, been accessed via the European Investment Bank (EIB).
A pilot Cost rental project is currently on site in Enniskerry Road, Stepaside, Co. Dublin. It involves a collaboration between the Department, Dún Laoghaire-Rathdown County Council, the Housing Agency, Approved Housing Bodies, Respond and Túath, and the Housing Finance Agency.
I officially launched the Enniskerry Road development earlier this month. It comprises of 155 homes, a community facility, along with green spaces and car parking (including underground car parking). The 155 homes include 50 cost rental units, all of which will be 2-bedroom apartments. It is anticipated that at €1,200, rents for these units will be significantly below the market rates for the area.
While the cost rental element of this project is relatively small in scale (50 units), it will act as the first example of how this model can work in an Irish context, and will provide us with invaluable lessons when designing a larger-scale system. It will help to shape the contractual model and specifications for future larger-scale projects.
The second Cost Rental pilot project will be delivered on a Dublin City Council-owned site at St. Michael’s Estate, Emmet Road, Inchicore. It is estimated that this site can accommodate over 470 homes in a high quality mixed tenure development. The current tenure mix as agreed with the Department will be 70% Cost Rental and 30% Social.
These new schemes are set in the context of significant moderation in the growth in house prices and complement other key Government affordability initiatives. Included among these are the Rebuilding Ireland Home Loan, under which over 1,000 loans had been drawn down by end June this year, and the Help to Buy Scheme, under which some 14,000 applications have been approved. In addition, the Land Development Agency's initial portfolio of sites will have the potential to deliver 3,000 affordable homes and the Local Infrastructure Housing Activation Fund ( LIHAF) will support more than 2,300 affordable homes on mainly publicly owned lands, while 5,600 further homes will benefit from a LIHAF-related cost reduction, some of which have already come on stream. Details of all SSF and LIHAF funded infrastructure projects can be found on the www.rebuildingireland.ie website at
In overall terms, programmes are in place under which some 18,000 affordable homes or homes with a LIHAF-related reduction will be delivered, with 15,000 households already supported under the Rebuilding Ireland Home Loan or the Help to Buy Scheme.