Tuesday, 8 October 2019

Questions (508)

Willie O'Dea

Question:

508. Deputy Willie O'Dea asked the Minister for Housing, Planning and Local Government the reason there is building of expensive private homes on public lands at a location (details supplied) in view of the fact the existing cost rental mode of building being piloted at another location could provide affordable and secure public homes to low and middle income earners in Dublin city; and if he will make a statement on the matter. [40736/19]

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Written answers (Question to Housing)

The development of publicly owned lands for housing remains a priority for this Government, and my Department is working closely with all local authorities to support the development of their sites. Decisions regarding particular developments and any tenure mix for new housing on local authority land are, in the first instance, a matter for each local authority, including its elected members.

Mixed-tenure developments are an important policy objective in Rebuilding Ireland and uphold the principle of sustainable mixed communities. These developments also provide an opportunity to see major sites developed more quickly, and integrated into existing communities and areas.

With regard to the O’Devaney Gardens site, I understand that an exhaustive process has been undertaken over the last number of years to allow Dublin City Council to identify the current delivery model as the most effective way to develop the site, from a mixed tenure perspective and in terms of financial viability. Following a decision by Council members, the Council's intention is to provide 768 new homes, comprising a tenure mix which includes 411 private homes, 192 social homes and 165 homes which will be sold at prices which are discounted on open market values to make them more affordable.

While the final price points on the discounted homes have yet to be fully determined and are being put to the elected members for consideration, I understand that it is intended that the average price of new homes will be in the region of €300,000 and prices will not exceed €320,000. Such provision would obviously allow many households and families, who would not otherwise be able to do so, to purchase homes and establish themselves within the community of their choice in this city centre location.

In relation to St Michael’s Estate, this is one of two Cost Rental ‘pathfinder’ projects (the other being Enniskerry Road in Sandyford). A core objective of the Cost Rental model is to offer more moderate income households the choice of a more affordable and stable form of rental tenure. Over the longer term, as homes are delivered at scale, it is envisaged that cost rental will have a stabilising effect on the broader private rented market. The current tenure mix proposed by Dublin City Council for St. Michael’s Estate is 30% social housing and 70% cost rental. While the proposal for the site development has not yet been brought to a conclusion, it is understood that the aforementioned tenure mix will remain over the longer term.

In tandem with these pilot projects, my Department is developing a national policy approach to Cost Rental as a new form of tenure for Ireland. This requires that serious consideration is given to the many delivery options possible, and the challenges posed, in order to ensure that a coherent Cost Rental model can be delivered at a scale and in a manner that will have the desired positive impact on the Irish housing sector.

To this end, I have convened a working group within my Department, in conjunction with the Land Development Agency, the Housing Agency, and other expert bodies. This group is developing the policy framework for the broader Cost Rental model and to consider how a sustainable financing structure can be established to then commence delivery of units at the scale required to get this new category of housing off the ground. The work of this group is being assisted by a consultancy and research support that is being undertaken by the European Investment Bank on our behalf.

The selection of further sites for Cost Rental consideration will be informed largely by the financial and operational model that will emerge from this evidence building. Given the 30% affordability requirement that the Government has agreed must be met on State lands that are to be utilised for housing, including those to be brought forward by the Land Development Agency, I anticipate that Cost Rental will have an important role to play in the development of these lands.