Dáil Éireann Debate, Thursday - 6 May 2021
82. Deputy Thomas Gould asked the Minister for Housing, Local Government and Heritage his views on whether affordability and not market value should be the criteria by which costing for cost-rental and affordable housing is judged. [23533/21]
View answerA range of work is underway to deliver Cost Rental housing in Ireland, which has been designed in line with similar sectors that successfully provide affordable rental accommodation elsewhere in Europe. This new form of rental tenure will see rents linked to the cost of provision of homes, rather than being subject to the pressures of the open market. Rents will increase only in line with consumer inflation, remaining stable in real terms while continuing to cover management and maintenance costs. The growth of Cost Rental will mean a substantial continuing stock of more affordable rental homes becoming a feature of housing in Ireland over the longer term.
Cost Rental homes will be operated and allocated in line with provisions in the Affordable Housing Bill 2021 which was recently approved by Government. The Bill, which will be published shortly, defines Cost Rental in Ireland for the first time and will allow the Minister to regulate tenancies in which the rents only cover clearly defined costs. The primary eligibility condition intended for Cost Rental is the setting by the Minister of a maximum household income for new tenants. This will ensure that Cost Rental benefits the target cohort of moderate-income households, who have incomes above the limits for social housing supports and who are facing affordability pressures in the private rental market without any State support.
The 14 December 2020 Call for Proposals for the new Cost Rental Equity Loan (CREL) invited applications from Approved Housing Bodies under certain conditions, one of which was that homes would have a cost-covering rent at least 25% below comparable open market prices in the local area. The CREL projects for which I announced approval in principle on 8 February 2021 meet this requirement. This is unrelated to the actual rents for the 390 new CREL-funded homes, which are calculated from the capital and current costs of delivering these dwellings. The 25% market discount benchmark was used primarily to screen applications at the assessment stage, in order to target limited State investment, in the form of the favourable terms of the CREL loans, at those projects which demonstrated significant impact.
