Dáil Éireann Debate, Thursday - 6 May 2021
68. Deputy Bernard J. Durkan asked the Minister for Housing, Local Government and Heritage the extent to which additional measures are underway to address the current housing crisis with particular reference to the rapidly escalating house prices with some properties currently being sold for approximately 10% to 15% over the asking price; and if he will make a statement on the matter. [23508/21]
View answer74. Deputy Bernard J. Durkan asked the Minister for Housing, Local Government and Heritage the average price of a house now deemed to be in the affordable category; the number built, acquired or under construction at present throughout Ireland; and if he will make a statement on the matter. [23515/21]
View answerI propose to take Questions Nos. 68 and 74 together.
The purchase prices of homes are influenced by a significant range of market factors, including income, location, demand, supply, building size, and specification etc.
As affordability is, broadly speaking, a factor of household income, there is no single or universally applicable price-point which denotes affordability. The CSO would provide statistical data on the mean and median prices of homes by local authority area. Typically, spending on housing of between 30% and 40% of net household income are used by policy makers and commentators as ‘rule of thumb’ measures of affordability.
The Programme for Government, ‘Our Shared Future’, clearly lays out our commitment to putting affordability at the heart of the housing system through a number of measures, with €468 million in affordable housing measures in Budget 2021 alone.
Government has recently approved the Affordable Housing Bill 2021 and I intend to bring this before the Oireachtas in the very near future as part of the summer legislative programme. This Bill includes provisions to underpin three schemes delivering on the Government’s commitment to prioritise the increased supply of affordable homes through (1) affordable homes for purchase delivered by local authorities, (2) a new affordable purchase shared equity scheme for private homes, and (3) the introduction of a new form of tenure in Cost Rental.
The Serviced Sites Fund (SSF) is available to local authorities, in areas where an affordability challenge exists, to provide affordable housing to buy or rent on their land. SSF funding of almost €188 million has been approved in principle in support of 39 infrastructure projects in 14 local authority areas, which will assist in the delivery of some 4,200 affordable homes. While the majority of SSF projects are currently at the planning and design stage, my Department continues to engage and meet with local authorities in order to progress approved projects, and to have preliminary discussions on potential future projects.
The first two SSF projects that will deliver affordable housing are in Dún Laoghaire and Cork. Fifty homes will be provided later in the year at the Enniskerry Road in Dún Laoghaire, the first ‘Cost Rental’ pilot programme. The first project that will deliver affordable homes to purchase is at Boherboy Road in Cork City, where 116 new energy efficient 2- and 3-bedroom homes will be delivered in six phases; with the first phase to be delivered by Q2 2021. Homes will range in price from €198,000 to €223,000.
In addition to the Cost Rental project at Enniskerry Road, a further two projects are underway. Dublin City Council is progressing a site at Emmet Road, Inchicore (the former St Michael’s Estate) and the Land Development Agency is collaborating with Dún Laoghaire-Rathdown County Council on a site at Shanganagh, Shankill. Both of these projects have received approval in principle for SSF funding.
The provision of Cost Rental housing is also being implemented through the new Cost Rental Equity Loan (CREL) scheme, with a Budget 2021 allocation of €35 million. I have approved in principle the financing this year of 390 new homes across eight sites, located in Dublin, the Greater Dublin Area, and Cork. CREL support and careful cost management has generated initial rents which are at least 25% below comparable open market prices, delivering significantly improved affordability for renters.
The Affordable Purchase Shared Equity Scheme will enable first-time buyers to buy a new home at a price they can afford, much sooner than would otherwise have been the case. The equity stake will fill the gap between the mortgage people have, and the price of a new home. In so doing, it will build confidence in the construction sector to increase housing supply. The proposed price caps for the equity scheme are reflective of the median price of a new home bought by first-time buyers, and are targeted to address the affordability gap in different places.
In addition, the Land Development Agency is tasked with working with Government Departments, Local Authorities, state agencies, and other stakeholders to assemble strategic sites in urban areas and ensure the sustainable development of social and affordable homes for rent and purchase. On its establishment, the LDA had access to an initial portfolio of 8 sites that have near term delivery potential for approximately 3,400 new homes. Whilst the tenure mix for these homes has not been finalised, the LDA will have regard to Government policy, and all appropriate legislation, on the appropriate tenure mix for developments on public land, as well as the criteria for the operation of cost rental and affordable housing schemes.
These measures are designed to increase housing supply at a time when needed most. They will get families into new homes at a price they can afford.
Additional affordability measures, such as the Help to Buy Scheme and the Rebuilding Ireland Home Loan (RIHL), are already available to eligible applicants.
The Help to Buy Scheme has had 23,545 approvals by the end of February 2021, with the estimated total value of approved Help to Buy claims to date in the order of €389.2 million.
The RIHL is available for both new and second-hand homes. At the end of February 2021, the RIHL has had 3,817 approvals. Budget 2021 confirmed that €210 million has been sanctioned for RIHL lending in 2021.
