Dáil Éireann Debate, Wednesday - 5 May 2021
293. Deputy Catherine Murphy asked the Minister for Housing, Local Government and Heritage if a value for money evaluation has been carried out with respect to leasing of social housing; if so, if he will publish same; his plans to seek independent valuations in advance of entering into long-term lease arrangements; and if he will make a statement on the matter. [22993/21]
View answerA spending review and analysis of capital and current expenditure on housing supports has been carried out by the Irish Government Economic & Evaluation Service (IGEES) staff within the Department of Finance and Public Expenditure and Reform, published in July 2018. This report focuses on the comparative analysis of delivery streams particularly related to cost effectiveness, including leasing. This report can be found at the following link:
https://igees.gov.ie/wp-content/uploads/2018/07/19.-Current-and-Capital-Expenditure-on-Social-Housing-Delivery.pdf
This Report found that the net present cost (NPC) of delivery through leasing varies nationwide and can, in specific areas, be above or below the NPC of delivery through construction or acquisition. There are a number of factors to consider, along with cost, when considering whether leasing is good value in the long term for the State, such as the overall mix of delivery, the speed of delivery, the quality and appropriateness of the accommodation, sectoral capacity and flexibility, the availability of capital and the availability of land.
While the Government’s objective is to focus strongly on local authority led build activity, long-term leasing is an important option available to local authorities to supplement delivery and secure high quality social housing on a long-term basis. Lease payments are paid to the property owner based on a discounted market rent, with the level of discount reflecting the variation in maintenance and management responsibilities taken on by the owner. The maximum lease term is 25 years and rents are reviewed every 3 years linked to the Harmonised Index of Consumer Prices (HICP).
The standard long-term leasing programme has been in operation for over 10 years and has a well-established assessment protocol. Local authorities have delegated sanction to lease up to four dwellings. All proposals to lease five or more dwellings must be submitted to my Department for approval. These proposals must be accompanied by an independent valuation of the market rent for the properties, carried out by, or commissioned and paid for by, the relevant local authority. The Enhanced Leasing Scheme was launched in 2018 and all potential proposals are submitted by the proposers to the Housing Agency for initial assessment and co-ordination with local authorities. The proposal is then submitted to my Department for approval. As with long-term leasing, all enhanced leasing proposals submitted to my Department must be accommpanied by an independent valuation of the market rent for the properties, carried out by, or commissioned and paid for by, the relevant local authority.
