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Social and Affordable Housing

Dáil Éireann Debate, Thursday - 28 January 2021

Thursday, 28 January 2021

Questions (82, 83, 84, 85, 86, 87, 88)

Emer Higgins

Question:

82. Deputy Emer Higgins asked the Minister for Housing, Local Government and Heritage the details of the introduction of a new form of tenure in cost rental (details supplied). [4592/21]

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Emer Higgins

Question:

83. Deputy Emer Higgins asked the Minister for Housing, Local Government and Heritage the locations in which the 400 cost rental homes will be built; and his plans for future developments in the years thereafter. [4593/21]

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Emer Higgins

Question:

84. Deputy Emer Higgins asked the Minister for Housing, Local Government and Heritage the eligibility criteria for the cost rental scheme; and the income thresholds for single applicants and couples. [4594/21]

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Emer Higgins

Question:

85. Deputy Emer Higgins asked the Minister for Housing, Local Government and Heritage if the cost rental homes will be new dwellings or if existing dwellings will be repurposed and used for these developments. [4595/21]

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Emer Higgins

Question:

86. Deputy Emer Higgins asked the Minister for Housing, Local Government and Heritage the role that local authorities will play in the provision of cost rental homes; and the agency which will have oversight for the provision of cost rental homes. [4596/21]

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Emer Higgins

Question:

87. Deputy Emer Higgins asked the Minister for Housing, Local Government and Heritage the other jurisdictions with cost rental accommodation which have been examined in drawing up legislation. [4597/21]

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Emer Higgins

Question:

88. Deputy Emer Higgins asked the Minister for Housing, Local Government and Heritage the amount of funding from his Department that will be allocated to the roll-out of cost rental affordable accommodation. [4598/21]

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Written answers

I propose to take Questions Nos. 82 to 88, inclusive, together.

The Programme for Government, Our Shared Future, contains a commitment to develop a Cost Rental model for housing delivery. Cost Rental is a new tenure option for Ireland, designed to assist households currently facing affordability pressures in the private rental market. It is defined as housing where the rents charged cover the cost of delivering, managing, and maintaining the homes only. Although the current focus is on implementing Cost Rental in newly constructed homes, in order to contribute to an overall increase in supply, the re-purposing of existing homes can be considered in the future.

A range of work is already ongoing to deliver Cost Rental housing, with State support, through a number of avenues. We are utilising the expertise of Local Authorities, the Land Development Agency (LDA), and the Approved Housing Bodies (AHBs) to deliver three initial Cost Rental projects that are already underway: two developments in Dún Laoghaire–Rathdown at Enniskerry Road and Shanganagh, and a third at Emmet Road (the former St Michael’s Estate) in Dublin City. The 50 units at Enniskerry Road are under construction, supported by a grant from my Department’s Serviced Sites Fund, and are currently scheduled for completion in Q3 this year.

In addition, Budget 2021 allocated €35m for a new Cost Rental Equity Loan (CREL) scheme, under which the Government will make loans on favourable terms to AHBs for up to 30% of the cost of new homes for Cost Rental. CREL will leverage the proven expertise and capacity of the AHBs, demonstrated in their development and management of social housing units. This €35m will support AHBs to deliver c .350 new homes for Cost Rental, at rents below market levels. It is expected that the remaining development or acquisition costs for the homes will be met by long-term commercial loans from the Housing Finance Agency, which has confirmed it will make a corresponding €100m available next year.

CREL will accelerate delivery in this new sector, in advance of the LDA’s planned future output and the delivery of Cost Rental homes by Local Authorities. The forthcoming Affordable Housing Bill proposes that the making of loans to AHBs under the CREL scheme will be managed by the Housing Agency, given its expertise and close working relationship with the AHBs and Local Authority sector in relation to housing.

The intention is that Cost Rental will be informed by National Planning Framework priorities. It will be focused, at least initially, in densely populated urban areas where rental affordability pressures are particularly acute and where State resources can have the biggest impact. A Call for Proposals under the CREL scheme was issued for my Department to AHBs in December 2020, and the assessment process is currently ongoing. Following completion of the selection process, which is expected shortly, the locations of CREL-supported projects will be made available.

The forthcoming Affordable Housing Bill defines a Cost Rental tenancy in Ireland for the first time. The provisions would allow me, as Minister, to designate such a tenancy where the rent is set at a level to cover the costs of delivery (including financing), management, and maintenance of the property. This rent would increase on an annual basis only in line with consumer inflation, which would ensure that rents continue to cover ongoing management and maintenance costs while remaining stable in real terms.

It is envisaged that the primary means of eligibility would be maximum household income, to ensure that Cost Rental benefits a target cohort of moderate-income households who face affordability pressures in the private rental sector. These income limits are currently being developed by my Department as part of the detailed drafting of the Bill.

In relation to examples from other jurisdictions, my Department’s work has been informed by examination of the Austrian and Danish housing models in particular. These systems have mature Cost Rental sectors which have developed over a long period and demonstrate the progressively positive impact that such a model can have over long periods. In addition, the European Investment Bank, which has extensive experience in supporting the delivery of affordable housing across Europe, has sponsored an ongoing research report on Cost Rental in Ireland, which includes an assessment of relevant European comparisons.

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