Tuesday, 5 November 2019

Questions (32, 38, 48, 53)

Richard Boyd Barrett


32. Deputy Richard Boyd Barrett asked the Minister for Housing, Planning and Local Government the number of affordable homes which will be delivered in 2020; when the income eligibility criteria for such homes will be defined; and if he will make a statement on the matter. [45220/19]

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John Curran


38. Deputy John Curran asked the Minister for Housing, Planning and Local Government if appropriate regulations regarding the sale of affordable homes will be reviewed and introduced; and if he will make a statement on the matter. [45008/19]

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Darragh O'Brien


48. Deputy Darragh O'Brien asked the Minister for Housing, Planning and Local Government the estimated final average cost of an affordable home under the new affordable purchase scheme; and if he will make a statement on the matter. [45198/19]

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Bríd Smith


53. Deputy Bríd Smith asked the Minister for Housing, Planning and Local Government the measures he is taking to ensure the availability of affordable housing units in view of Central Bank rules and the income limits that apply to qualify for inclusion on social housing waiting lists; and if he will make a statement on the matter. [45149/19]

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Oral answers (13 contributions) (Question to Housing)

The income thresholds for affordable housing must be established clearly. Certainly, what the Minister has said to date indicates that there are huge numbers of people we cannot identify or say how they will access affordable housing. The Minister promised a review of the income thresholds for social housing. When will that review take place?

I propose to take Questions Nos. 32, 38, 48 and 53 together.

Arrangements for homes to be made available for purchase at a discount on open market rates are now provided for under the affordable dwelling arrangements and Part 5 of the Housing (Miscellaneous Provisions) Act 2009, which I commenced in June 2018.  As Deputies will be aware, provisions in Housing Acts and the Planning and Development Act 2000 relating to affordable housing were repealed in 2011 in view of the fact that house prices had halved in the period between 2008 and 2011.

I signed regulations in respect of the making of a scheme of priority on 12 March 2019 and these were issued to local authorities on 22 March 2019.  The purpose of a scheme of priority is to set out the affordable purchase arrangements at local authority level.  This includes the methodology that will be applied by local authorities to determine the order of priority to be accorded to eligible households in instances where the demand for homes under the scheme exceeds the number of homes available.

Further regulations will be put in place over the coming months regarding income eligibility and other matters. When the operational procedures for the scheme have been finalised and before affordable homes are made available under the scheme, a programme of communication will be undertaken by my Department and local authorities.

In order to support the delivery of homes to buy or rent at rates which are discounted on open market prices, this Government has committed €310 million under the serviced sites fund, or SSF, from 2019 to 2021 to provide infrastructure to enable the delivery of some 6,200 homes.

To date, I have allocated funding of €127 million in support of 35 projects in 14 local authority areas for infrastructure works that will see 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.  I confirm that the first SSF supported affordable homes will be delivered on a site in Boherboy, County Cork, in 2020. Delivery across the country will increase incrementally on an annual basis thereafter.

The selling price of homes made available for purchase by local authorities will be influenced by a number of factors including the cost of each particular development, which can vary significantly from one site to another, and the housing type involved.

While the Central Bank's macro-prudential rules must be applied to banks providing mortgages to the purchasers of what will be private homes available under the scheme, significant discounts of up to 40% of market prices will mean that these homes will be available to individuals on moderate incomes who would otherwise not be in a position to purchase their own home.

In addition to making more affordable homes available for purchase using the cost-rental model, the SSF will also play an important role in making homes available for rent at levels which are significantly below market rates.  I have convened a working group within the 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 examining how a sustainable financing structure can be established to commence delivery of units at the scale required to get this new category of housing off the ground. The work of the group is being assisted by a consultancy and research support that is being undertaken by the European Investment Bank on our behalf.

This work is being informed through two cost-rental pilot projects at the former St. Michael's Estate in Inchicore and at Enniskerry Road in Dun Laoghaire-Rathdown, respectively. The latter project has already commenced construction, supported by EIB funding, and the first homes are anticipated to come on stream from 2021.

To assist local authorities to progress projects that have been submitted under the SSF, my Department hosted an affordable housing workshop last Thursday. The workshop was attended by representatives from the 19 local authorities who were included in the first and second serviced sites fund calls.

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 has the potential to deliver 3,000 affordable homes while the local infrastructure housing activation fund, or LIHAF, will support more than 2,300 affordable homes on mainly publicly owned lands. A further 5,600 homes some of which have already come on stream, will benefit from a LIHAF related cost reduction.

In overall terms, programmes are in place under which some 18,000 affordable homes or homes with a LIHAF-related reduction will be delivered. To date, 15,000 households have also been supported into more affordable homes under the Rebuilding Ireland home loan or the help-to-buy scheme.

The following are some examples of the cost of homes under the affordable scheme. In the Boherboy housing estate in Cork, for example, two-bedroom houses will be delivered at €200,000 or less. A single person earning €36,000 could afford to buy such a house using the Rebuilding Ireland home loan. In Ballymun, two-bedroom homes will be sold for between €148,000 and €168,000. A single person earning €31,000 would be able to afford one of these homes using the Rebuilding Ireland home loan. In Ballyfermot, one-bedroom homes will be available for approximately €136,000 which will be affordable to a person on €25,000. In O'Devaney Gardens, two to three-bedroom homes will cost €300,000. A couple earning €55,000 could afford such a home. A sum of €55,000 would typically be the combined income of a new teacher and a nurse living together and buying that home together. That is the type of affordability we plan to deliver on sites in Dublin, Cork and at the cost-rental site in Deputy Boyd Barrett's constituency, which will see two-bedroom apartments for rent at €1,200, or €600 per person. That is how we are trying to drive affordability by using the serviced sites fund to deliver homes that are affordable to buy as well as cost-rental housing.

We were told the Enniskerry site would commence two years ago but it still has not commenced.

Due to the fact that the Minister is linking affordability to market and cost issues, people on low incomes will not be able to afford these houses, in particular in areas like mine where market prices are very high. Given the income thresholds for social housing, thousands of people are having their hopes and dreams, to use the Minister's phrase of earlier, dashed because they are being thrown off housing lists after years of waiting when their incomes marginally exceed the income threshold whether temporarily or simply on foot of the lapse of time. When they are thrown off the housing list, they may lose ten, 15 or even 20 years of waiting time while their incomes still mean they do not have a prayer of buying or renting anything in their area and cannot expect that the affordable housing, which has yet to appear but which the Minister promises will come, will ever be affordable to them. What does he say to those people?

I want to look at this from a Dublin perspective as house prices here are considerably higher than in many other parts of the country. There is a substantial cohort of people who are squeezed out of the housing market and consigned to life in private rental accommodation.

The irony is that often the rent they pay is greater than a mortgage repayment. The Minister has clearly identified schemes that will come on and has given examples. The problem is that is a drop in the ocean compared with demand. My specific concern is that the big housing solutions that we see, the big planning applications that are going directly to An Bord Pleanála, are all build to rent. That seems to be where the future lies. Our concern is that there are people who are working whose incomes are higher than the entitlement threshold for social housing who are missing out and are not able to purchase their own houses.

Out of curiosity, I looked online before I came to the House and found that in Dublin today, of new houses for sale under €300,000, 12 are listed publicly. That is the scale of the problem and that is the group that we are trying to address.

To respond to Deputy Boyd Barrett, the Enniskerry Road development has commenced. It is a pilot project that will operate on a cost rental model. It involves two housing bodies, the Housing Finance Agency, the Housing Agency, my Department, and the local authority. If we get it right, a two-bedroom apartment in a great location that is very well serviced will be available for €1,200. That is very important in terms of affordability. For €600 per person, rent in that type of location is very positive. If that works as a pilot, we can expand it throughout the country. That is what the working group is there to do.

On what might be affordable for someone looking to buy, I gave the example of O'Devaney Gardens, which has new two or three-bedroom homes that a starting teacher and nurse living together could afford to buy. These are the types of people we are trying to target with the affordability provisions.

The next question was how we help those who cannot qualify for social housing. We do so with these schemes. We also help them with supply. We know the increase in supply has driven down house prices in parts of Dublin or stabilised them in other parts, but we must throw off the old thinking that supply alone will bridge the affordability gap, particularly in our cities, because it will not and has not in other areas. That is why we have these affordability schemes, the Rebuilding Ireland home loan and the help-to-buy scheme to help people out of the rent trap into new homes.

That concludes questions to the Minister.

I thought we had a second round of supplementary questions.

We do not, actually.

I apologise but all the time is gone. That concludes questions to the Minister for Housing, Planning and Local Government. It is not that I am being particularly obstreperous today but we must stick to the rules.

The rules do not seem to be working very well for some of us.

Written Answers are published on the Oireachtas website.