Dáil Éireann Debate, Thursday - 6 May 2021
80. Deputy Mick Barry asked the Minister for Housing, Local Government and Heritage the measures he will take to ensure housing is affordable given the large amount of private capital investing in housing here; and if he will make a statement on the matter. [23531/21]
View answerThis Government is absolutely committed to ensuring that affordable, quality housing solutions are available to everyone in Irish society and this is reflected in the Programme for Government.
Institutional Investors are regulated by the Department of Finance. The issue of sale and of purchase of land or housing are matters for the Minister for Justice. I have serious concerns of instances, recently reported, where investors are inappropriately purchasing entire completed houses estates, preventing their sale to families and first time buyers. I am working with my Government colleagues to bring forward comprehensive proposals to address this issue as a matter of urgency.
I would note that institutional investors occupy a relatively small share of the housing market which based on the last census in 2016 was more than 2 million houses and apartments. Industry estimates suggest that the total number of residential units under institutional ownership in Ireland was approximately 15,550 at the end of 2020, less than 1% of the total housing stock.
Historically, the private rented sector in Ireland has been largely made up of small-scale landlords, who will continue to provide the bulk of private rented accommodation. Data provided by the Residential Tenancies Board in November 2020 reports that the majority (over 70%) of landlords registered a single rental tenancy.
The presence of such institutional investors in the market helps to increase the supply of housing, particularly of urban apartments, through forward-funding of development. This is essential to reaching the National Planning Framework targets and to support more sustainable living generally. However the possibility of a trend of investment emerging where already or nearly completed traditional family home estates are purchased in bulk is deeply concerning and not in line with Government policy.
Over €3.3 billion has been made available in 2021 for housing - the largest budget in the history of the State. This year alone we are providing Capital funding of €468 million specifically to cover affordability measures including:
- €110 million for a new Affordable Purchase Shared Equity scheme and a new Equity Loan Facility to deliver Cost Rental homes;
- €50 million in Services Sites Funding to deliver affordable purchase homes on Local Authority lands;
- €38 million in Local Infrastructure Housing Activation Funding which will support the delivery of homes on private lands including many discounted prices;
- €210m for lending under the Rebuilding Ireland Home loan for those who cannot secure the necessary commercial loan.
- €205m to be spent by the Land Development Agency in its progression of housing including affordable homes.
- In addition, the Help To Buy scheme is also available via the Department of Finance.
The Government has recently approved the Affordable Housing Bill 2021 which will give a statutory basis for the introduction of the Affordable Purchase and Cost Rental schemes. I intend to publish the Bill very shortly bring it to the Oireachtas to allow its commencement this year. The Bill will also reform of Part V of the Planning and Development Act by increasing the existing 10% obligation for social housing in residential developments to a 20% obligation for social and affordable housing.
The new National Affordable Purchases Shared Equity scheme is currently being designed for private developments. My intention is that this measure will be available nationally. It will help bridge the gap, by means of an equity stake purchased by the State, between the maximum mortgage available to eligible households and the price of the new home they wish to buy. The objective of the scheme will be to increase housing supply by activating viable planning permissions and to enable First Time Buyers to buy a new home at a price they can afford sooner than would otherwise be the case.
In relation to Cost Rental, a range of work is ongoing to deliver this new form of housing. My Department is utilising the expertise of Local Authorities, the Land Development Agency (LDA), and the Approved Housing Bodies (AHBs) to deliver projects in a variety of ways, in order to prove the concept of this new sector. This is in conjunction with the policy development for the sector that is set out in the forthcoming Affordable Housing Bill.
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. It is important that the State targets its affordability measures towards the parts of the country that are experiencing the most extreme affordability challenges.
One of the main sources of State funding for Cost Rental homes is the new Cost Rental Equity Loan (CREL) scheme, which was allocated €35m in funding in Budget 2021. It gives Approved Housing Bodies (AHBs) access to Government loans on favourable terms to cover up to 30% of the cost of new Cost Rental homes. Following the detailed assessment of submitted proposals, approval was granted for the funding this year of 390 new Cost Rental homes, located in Dublin, Kildare, and Cork. Cost-covering rents for these homes will be at least 25% below comparable open market prices. Further details of these homes, including precise locations, will be published when the successful AHBs have completed necessary commercial arrangements. I intend seeking an expansion to this scheme through the review of the National Development Plan and the Budgetary process, in order to give AHBs certainty of funding on a multi-annual basis and allow them to plan developments into the longer term.
In the meantime both the Help to Buy scheme and the Rebuilding Ireland Home Loan remain available to eligible purchasers to make the cost of housing more affordable.
