Dáil Éireann Debate, Tuesday - 26 July 2022
698. Deputy John McGuinness asked the Minister for Housing, Local Government and Heritage his estimated targets for cost rental homes for each of the years 2022 to 2025; and if he is confident that these targets will be met. [40729/22]
View answerThe Government has acknowledged that many families are currently facing housing affordability issues in Ireland. To address this problem and as part of its Housing for All strategy, the Government has committed to the delivery of 10,000 Cost Rental homes by 2026 and a total of 18,000 Cost Rental homes by 2030, or an average of 2,000 homes per year, which will make a real difference for families experiencing affordability issues in Ireland.
Cost Rental is defined as housing in which tenants only pay rents to cover the costs of financing, managing, maintaining and delivering the property, rather than rents being subject to market driven movement.
Under Housing for All, it is planned to deliver State-supported Cost Rental primarily in three strands via Approved Housing Bodies (AHBs), Local Authorities, and the Land Development Agency (LDA). The Government has put in place a Cost Rental Equity Loan (CREL) scheme to assist AHBs with Cost Rental delivery and Local Authorities (LAs) can avail of support from the Affordable Housing Fund (AHF) to deliver Cost Rental units.
The main delivery of Cost Rental to date has been through AHBs using the CREL. The first 65 CREL-funded Cost Rental homes were tenanted in Ireland by the Clúid AHB in 2021, with 25 at Taylor Hill, Balbriggan and a further 40 at Barnhall Meadows, Leixlip, Co. Kildare. Both developments delivered cost-covering rents at least 40% below comparable open market prices.
Approval in principle has been confirmed for approximately 900 Cost Rental homes to be delivered by AHBs under the CREL scheme in the period to 2023. The Government has committed €70 million in CREL funding for this year and a further €75 million in CREL funding for 2023. CREL funds 30% of the cost of acquiring Cost Rental homes, with the remaining 70% also committed by the State through loans from the Housing Finance Agency. This commitment is given on a multi-annual basis in line with the Housing for All targets.
Local Authorities will play an important role in delivering Cost Rental within their areas. The central Exchequer funding through the AHF will help facilitate a Local Authority-led financing structure for Cost Rental. €60 million has been allocated to the Affordable Housing Fund (AHF) in 2022. For example, Dublin City Council has submitted an application for funding under the AHF for their site at Emmet Road, which is an important project for the development of the Cost Rental sector in Ireland. Current projections will see 582 homes delivered on this city centre site, 376 of which will be Cost Rental homes.
Furthermore, the LDA has committed to the delivery of large numbers of Cost Rental homes, both directly and in conjunction with Local Authorities. Under the LDA Act, equity funding of up to €1.25 billion will be made available to the LDA for the purposes of its activities through transfers from the Ireland Strategic Investment Fund (“ISIF”). The LDA will also have the ability to borrow up to €1.25 billion to fund these activities. Housing for All recognises that additional resourcing of approximately €3 billion, likely to be in the form of borrowing, will be required to meet the increased level of activities envisaged under the plan.
Details of the work that the LDA is progressing on public lands that will deliver Affordable Purchase and Cost Rental can be found here: lda.ie/projects-schemes/.
In addition to the public lands that the LDA is working on, Project Tosaigh is a market engagement initiative to unlock land with full planning permission that is not being developed by private sector owners due to financing and other constraints, and use it to accelerate the supply of affordable housing. The target under Project Tosaigh is the delivery of 5,000 new homes by 2026 for Cost Rental or sale to eligible households under affordable purchase arrangements.
The first strand of Project Tosaigh involved an expressions of interest (EOI) process, launched in November 2021, to engage builders and landowners in forward purchase agreements, with the intention of securing stock in certain developments in the shorter term. Details of all homes that will be made available under Project Tosaigh will be confirmed when commercial agreements are finalised. Full details of the initiative can be found here: lda.ie/home-building-partnership/.
As the Cost Rental model continues to be rolled out, it will provide long-term rental accommodation, with secure tenures, for thousands of renters. Cost Rental will also add certainty to the rental market and provide more options for people. It is also expected that the development of the Cost Rental sector will have an impact on the wider rental market, reducing rents over the longer term, as people within the target cohort will have more options available to them.
