Tuesday, 3 December 2019

Questions (636)

Tom Neville

Question:

636. Deputy Tom Neville asked the Minister for Housing, Planning and Local Government the details of the affordable purchasing scheme. [50279/19]

View answer

Written answers (Question to Housing)

In line with the commitments in Rebuilding Ireland to support the delivery of discounted homes to buy or rent, this Government has allocated €310 million under the Serviced Sites Fund (SSF) over the period 2019 to 2021. This funding will provide for infrastructure to support the delivery of some 6,200 more affordable homes on local authority lands. SSF is being made available in areas where local authorities have demonstrated a requirement for affordable housing and a viability to deliver such housing on their sites.

Land utilisation and activation is, in the first instance, a matter for the local authority and its elected members including the development of its land for the delivery of more affordable private housing. To date, based on applications received under SSF Calls for Proposals, I have allocated SSF 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 affordable homes. I anticipate that a further Call for Proposal under the SSF will issue to local authorities in 2020.

Full details of the projects approved under the 1st and 2nd SSF calls can be found at the following links:

https://rebuildingireland.ie/news/minister-murphy-approves-10-local-authority-sites-affordable-housing-serviced-sites-fund/ .

https://rebuildingireland.ie/news/minister-murphy-approves-funding-of-e84m-to-support-delivery-of-1770-affordable-homes-under-the-ssf/ .

Homes delivered under the SSF are subject to the provisions of Part 5 of the Housing (Miscellaneous Provisions) Act 2009 which was commenced in June 2018. Under Part 5 housing authorities may make dwellings available for the purpose of sale to eligible households under affordable dwelling purchase arrangements and may acquire, build or cause to be built, or otherwise provide/facilitate the provision of, dwellings for this purpose. A housing authority may also enter into arrangements with an Approved Housing Body or a public private partnership in order to provide dwellings for sale to eligible households.

In order to be eligible for affordable dwelling purchase arrangements, a household’s income must be such that it is inadequate to meet the repayments on a mortgage for the purchase of a dwelling to meet the accommodation needs of the household, because the payments calculated over the course of a year would exceed 35% per cent of the annual income of the household, net of income tax and pay related social insurance. Eligibility is also generally limited to first time buyers. The maximum discount on market value that may be given to an eligible purchaser is 40%.

Each housing authority was required to make a scheme of priority to set out the priority to be applied as between eligible applicants for affordable dwelling purchase arrangements. I made regulations on this matter, and a number of other matters, earlier this year (the Housing (Miscellaneous Provisions) Act 2009 (Part 5) Regulations 2019).

When a dwelling is made available to a purchaser under an affordable dwelling purchase arrangement a charging order is made by the housing authority charging the dwelling (for a period that cannot be less than 25 years from the date of sale) with an amount equal to the difference between the purchase money and the market value of the dwelling at the date of the discharge of the charge, expressed as a % of said market value. Payments may be made by the purchaser to reduce this amount during the charged period (after the first 5 years). The amount outstanding on the charge must be repaid in full at the end of the charged period.

The selling price of discounted dwellings made available for purchase by a housing authority under the affordable dwelling purchase arrangements will be influenced by a number of factors, particularly the overall cost of each particular development (taking into account inputs such as the local authority land value and Serviced Sites Fund), which can vary significantly from one site to another, the tenure mix involved and the local housing market.

A number of other matters require to be prescribed under Part 5 (e.g. minimum amount of payments by the purchaser during the charged period) and I intend to make these Regulations in the coming months.

In addition to SSF, funding of €200m has also been made available under the Local Infrastructure Housing Activation Fund (LIHAF), which is also designed to activate housing supply by putting in place the enabling public infrastructure necessary to ensure that large scale development could take place on key sites in urban areas of high housing demand. 30 projects received final approval, at a total cost of €195.71 million, of which €146.69 million will be funded by the Exchequer with local authorities funding the balance. These projects will stimulate development of approximately 20,000 housing units across 14 local authorities and approximately 7,800 of these homes will be offered at a discount on open market prices.

These schemes will complement other key Government affordability initiatives, such as the Rebuilding Ireland Home Loan, and the Help to Buy Scheme, which have supported over 16,500 households nationally.