Dáil Éireann Debate, Wednesday - 13 May 2020
1227. Deputy James Browne asked the Minister for Housing, Planning and Local Government his views on the fact that permanent secondary school teachers are unable to afford housing rents or mortgages; and if he will make a statement on the matter. [4084/20]
View answerThe Government has recognised the need to increase the supply of housing and to take measures to address the affordability of housing supply. It is also recognised that the challenge of housing affordability is not one that manifests across the entire country and the targeting of affordability measures and resources to priority areas is therefore important.
The assessment of an individual's capacity to borrow from commercial lenders is governed by the macro-prudential rules set by the Central Bank of Ireland. While every application for a mortgage would be assessed on its own merits, banks and other lending institutions do have the freedom to make a limited amount of exceptions to lending limits. For those who find themselves unable to secure a commercial mortgage, local authorities nationwide operate the Rebuilding Ireland Home Loan Scheme (RIHL), which enables credit-worthy first-time buyers to access sustainable mortgage lending to purchase new or second-hand properties in a suitable price range.
In addition to the RIHL, the Help to Buy (HTB) incentive was first introduced in February 2015 and is designed to help first-time buyers of newly built homes to assemble the required deposit. The HTB scheme provides for a refund of income tax and Deposit Interest Retention Tax (DIRT) paid over the previous 4 tax years, up to a maximum of €20,000. 17,200 first time buyers households have been supported to buy or build homes since the inception of the HTB Scheme and, in Budget 2020, the Minister for Finance and Public Expenditure and Reform extended the initiative in its current form until 31 December 2021.
Other supply side measures are also in place to address the issue of affordability. In line with the commitments in Rebuilding Ireland to support the delivery of discounted homes to buy or rent, the 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. the SSF has been made available to local authorities who have demonstrated a requirement for more affordable housing and a viability to deliver such housing on their sites.
To date, I have allocated SSF funding of €127 million, in support of 35 projects in 14 local authority areas, for infrastructure works that will facilitate the delivery of almost 3,200 more affordable homes. I anticipate that a further Call for Proposals under the SSF will issue to local authorities in 2020. Details of the projects approved under the 1st and 2nd SSF calls are available on the Rebuilding Ireland website 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/
Taking, as an example, the first of these developments in Boherboy Road, Cork City, which will see delivery of SSF supported homes this year, I can confirm that an individual or couples on salary levels equivalent to that of a secondary school teacher(s) would be in a position to buy the 2 and 3 bed homes at the prices ranging from €195,000 to €225,000. I can also confirm that SSF grant funding to date includes a project in Ramsfort Park, Gorey, Co. Wexford, which will support the delivery of 23 affordable homes.
The timing of delivery for SSF projects is contingent upon the completion of planning and procurement in the first instance, and local authorities are working to achieve delivery as quickly as possible. It is intended to issue a 3rd call for proposals under the SSF to local authorities later this year.
In tandem with the 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 up to 20,000 homes across 14 local authority areas and the local authorities involved have indicated that approximately 40% of the homes delivered will be offered at a discount on open market prices. Details of the projects approved under LIHAF are available at the following link:
https://rebuildingireland.ie/lihaf/
In addition to the provision of affordable homes for purchase, and acknowledging that renters are facing significant housing access and affordability challenges, the Government is committed to the introduction of a Cost Rental sector in Ireland. Cost Rental is housing where the rents are set at a level to cover the cost of delivering, managing, and maintaining the homes only. This is different to private sector rentals where rents are set by the market, which may lead to high rents in high demand areas. A core objective of Cost Rental is to offer 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 rental market. Together with delivering more affordable and predictable rents, Cost Rental can make a sustainable impact on the attractiveness of our main urban centres as places to live and work. SSF funding is also available to local authorites to support the delivery of Cost Rental projects.
The Land Development Agency (LDA) also has a role in the delivery of more affordable housing and a minimum of 30% of housing on LDA sites must be affordable, with the balance contributing to additional new supply to meet the high levels of demand in the wider housing sector. This is consistent with a Government Decision in September 2018 that any State lands, in Ministerial ownership and deemed suitable for housing, being sold on the open market must deliver affordable housing on at least 30% of the site.
The suite of measures outlined above will mean that homes will be available to very many individuals and families on more moderate incomes who would otherwise not be in a position to own their own home.
