Brendan Smith
Question:208. Deputy Brendan Smith asked the Minister for Housing, Local Government and Heritage when affordable housing schemes will become operational; and if he will make a statement on the matter. [15668/22]
View answerThursday, 24 March 2022
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As set out in the Housing for All strategy, this Government is committed to supporting 54,000 new affordable homes by 2030, of which 36,000 will be for purchase and 18,000 for rental. The Affordable Housing Act 2021, the provisions of which I commenced in August and September 2021, laid the foundation for three new affordable housing schemes: 'Cost Rental' housing, the 'Local Authority Affordable Purchase Scheme', and the national 'First Home' shared equity scheme which will support purchases in the private market.
Part 3 of the Affordable Housing Act provided for the establishment of a Cost Rental sector in Ireland. The introduction of Cost Rental tenancies helps to improve affordability and security in the rental market. Rent levels for Cost Rental tenancies are based on the cost of the 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 primary eligibility condition for Cost Rental is a maximum household income for new tenants, which was set by the Minister at €53,000 net of taxes and pension contributions. This will ensure that Cost Rental homes benefit the target cohort of moderate-income households, who have incomes above the limits for social housing supports but who are facing affordability pressures in the private rental market.
Under Housing for All, 10,000 Cost Rental homes will be delivered from 2021 to 2026 by Approved Housing Bodies (AHBs), supported by Cost Rental Equity Loan (CREL) funding, along with funding for Local Authorities through the Affordable Housing Fund. The Land Development Agency will also deliver Cost Rental, either on its own portfolio of sites or through acquisitions under Project Tosaigh. All Cost Rental projects will achieve cost-covering rents at least 25% below comparable open market rates.
The first 65 CREL-funded Cost Rental homes were tenanted by the Clúid AHB in 2021, with 25 at Taylor Hill in Balbriggan and a further 40 at Barnhall Meadows in Leixlip. Both developments delivered cost-covering rents at least 40% below comparable open-market prices. The tenanting process is currently underway by the Tuath AHB for a further 44 new Cost Rental homes at the Parklands development in Citywest, also supported by CREL funding, with projected rents of €1,264/month for 2-bed apartments and €1,297/month for 2-bed duplexes. Tenants will also soon be moving into a further 50 Cost Rental homes at Enniskerry Road, Stepaside, which are being delivered by the Tuath and Respond AHBs in collaboration with Dún Laoghaire-Rathdown County Council.
Part 2 of the Affordable Housing Act underpins the Local Authority Affordable Purchase Scheme, under which Local Authorities will make homes available to eligible buyers using an equity share model. Following engagement with legal counsel, as well as with the Local Government Management Agency (LGMA) and the County and City Management Association (CCMA), secondary legislation for the scheme is at an advanced stage and these Regulations will be issued in the coming weeks. The Regulations will include the format for notification of sale of such dwellings by a Local Authority, the application process, eligibility criteria, the form of the purchase arrangement, matters relating to redemption of the Local Authority's equity interest, and provision for a Local Authority to choose to implement a Scheme of Priority for ranking applications.
The first new homes under this scheme will be made available on an administrative basis at Boherboy in Cork this month. Cork City Council has indicated these will cost €218,000 for a 2-bedroom and €243,000 for a 3-bedroom dwelling. These will be followed by a scheme at Dun Emer in Dublin, where Fingal County Council has indicated a 2-bed apartment will cost €166,000, and a 3-bed dwelling will be between €206,000 and €258,000. In addition, South Dublin County Council has recently advertised 16 homes in Kilcarbery that will cost between €245,600 and €285,300.
Part 4 of the Affordable Housing Act provides the basis for the First Home Scheme, which will be available nationwide. This scheme will support eligible first-time buyers to buy a new-build home in private developments by means of an equity share model, similar to that used in the Local Authority Affordable Purchase Scheme.
First Home will operate for the period 2022 to 2026 and deploy overall funding of c. €400 million, jointly funded by the State and participating mortgage lenders. A new First Home Designated Activity Company, incorporated in December, will operate this scheme. Significant work is continuing on the detailed design and parameters of the scheme, and full details will be confirmed upon completion of this work. It is anticipated that initial activity on key areas of work, including public communications, will be undertaken over the next months in advance of First Home’s first receipt of applications and deployment of equity support, scheduled for Q2 this year.