Donnchadh Ó Laoghaire
Question:95. Deputy Donnchadh Ó Laoghaire asked the Minister for Housing, Local Government and Heritage his plans to put in place cost rental and cost purchase housing or affordable housing models. [22209/22]
View answerThursday, 5 May 2022
Questions (95)
Written answers
The Affordable Housing Act 2021 established a basis for four new affordable housing measures. These measures deliver on the Programme for Government commitment to put affordability at the heart of the housing system and prioritise the increased supply of affordable homes through (1) delivering affordable purchase homes on Local Authority lands, (2) the introduction of a new form of tenure in Cost Rental, (3) a First Home shared equity scheme and (4) expanding Part V planning requirements to increase the 10% contribution requirement to 20% and to apply it to Cost Rental as well as social and affordable housing.
This Act, supported by the unprecedented levels of funding committed to in the Housing for All strategy, averaging over €4 billion annually, will underpin the delivery of affordable housing targets. Specifically, 54,000 affordable homes will be delivered between now and 2030 by Local Authorities, Approved Housing Bodies (AHBs), the Land Development Agency (LDA) and through a strategic partnership between the State and retail banks.
I signed two sets of Regulations which underpin the Local Authority Affordable Purchase Scheme, made under the provisions of the Affordable Housing Act 2021, which came into effect on 13 April 2022.
The Affordable Housing Regulations 2022 made with the consent of the Minister for Public Expenditure and Reform, deal with the assessment of income/means as part of eligibility for an Affordable Dwelling Purchase Arrangement. The text of these Regulations is available online at:
www.irishstatutebook.ie/eli/2022/si/183/made/en/print
The Affordable Housing (No. 2) Regulations 2022 prescribe, among other things, the notification of affordable dwelling schemes to the public, the use by Local Authorities of schemes of priority, the calculation of home purchase prices and the equity shares to be taken by the Local Authority, and the minimum payment for a homeowner redeeming the Local Authority's equity interest. The text of these Regulations is available online at:
www.irishstatutebook.ie/eli/2022/si/184/made/en/print
In relation to Cost Rental, to date I have made three sets of regulations that expand on the policy framework for this new sector as set out in Part 3 of the Affordable Housing Act. On 19 August 2021 I made the Affordable Housing Act 2021 (Cost Rental Designation) Regulations 2021, which came into effect that day. These Regulations govern the process by which the owners of dwellings may obtain the designation of their properties as Cost Rental dwellings. The text of these Regulations is available online at:
http://www.irishstatutebook.ie/eli/2021/si/425/made/en/print
On 23 December 2021, I made two further sets of regulations concerning Cost Rental, the Affordable Housing Act 2021 (Cost Rental Letting and Eligibility) Regulations 2021 and the Affordable Housing Act 2021 (Cost Rental Rent Setting) Regulations 2021, which both came into effect on 1 January 2022. The text of these Regulations is available online at:
www.irishstatutebook.ie/eli/2021/si/755/made/en/print
www.irishstatutebook.ie/eli/2021/si/756/made/en/print
The Cost Rental Letting and Eligibility Regulations prescribe how landlords of cost rental dwellings should advertise vacancies in such properties and how interested parties can express an interest in leasing these homes. The Regulations also set out the main eligibility condition for leasing a cost rental dwelling, which is that a household’s annual income, less income tax, PRSI, USC and superannuation contributions, must not be greater than €53,000. In cases where the number of applicants exceed the number of available homes, an independently-verifiable lottery will be utilised to select applicants. Landlords should ensure that each property is suitably sized to meet a household’s needs based on the number of occupants and that the tenants selected in the lottery meet the income eligibility criteria.
The Cost Rental Rent Setting Regulations prescribe additional detail and relevant formulae in order to set out how rent reviews under Cost Rental work in practice. Rents can be reviewed annually in line with the Harmonised Index of Consumer Prices (HICP), with formulae set out for how reviews should be undertaken in three specific circumstances: the first rent in any tenancy, the first review of this rent and all subsequent reviews of this rent. All rents calculated are maximum rents, meaning landlords are free to charge the tenant less than this should they so wish.
Under the Government's Housing for All strategy, 10,000 Cost Rental homes will be delivered from 2021 to 2026 by AHBs, Local Authorities and the LDA. AHBs will be supported by Cost Rental Equity Loan (CREL) funding and Local Authorities will be able to avail of funding for Cost Rental delivery through the Affordable Housing Fund. The LDA will also deliver Cost Rental on its own portfolio of sites or through acquisitions under Project Tosaigh.
The first 65 CREL-funded Cost Rental homes were tenanted by the Clúid AHB in 2021 at least 40% below comparable open-market prices and range of other Cost Rental developments have been made available and tenanted in the period since then.
The First Home scheme will employ an equity stake model to support the purchase of c. 8,000 new homes on the private market in the years 2022 to 2025. The scheme will be jointly established and governed with participating mortgage lenders (primarily pillar retail banks). The overall anticipated spending for the scheme is €400m, funded on a 50:50 basis by the State and participating mortgage lenders. The current schedule anticipates a launch of the First Home scheme website at the start of June, with a full scheme deployment and acceptance of applications from the end of June.
Project Tosaigh was also announced through the Housing for All strategy. Under this initiative, additional funding of €1bn was committed to the LDA, who will enter into forward purchase arrangements to kick-start stalled private developments and increase the supply of affordable housing. The LDA initiated a call on 12 November 2021 targeting a scale in excess of 150 affordable units per development and is currently in the process of finalising agreements with prospective proposers for the initial tranche of affordable homes delivered through this initiative.