Dáil Éireann Debate, Thursday - 13 October 2022
231. Deputy Steven Matthews asked the Minister for Housing, Local Government and Heritage the position regarding changes to the cost rental equity loan scheme; if the total level of funding available from his Department that has been increased to account for these changes; and if he will make a statement on the matter. [50818/22]
View answerThe Government's Housing for All strategy commits to delivering a total of 18,000 Cost Rental homes over the period to 2030. Significant funding has been secured and is being made available to support delivery of Cost Rental by Approved Housing Bodies (AHBs), Local Authorities and by the Land Development Agency (LDA).
Delivery will increase incrementally, to an average of 2,000 Cost Rental homes per year. 10,000 Cost Rental homes will be delivered from 2021 to 2026. 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 (AHF). The LDA will also deliver Cost Rental on its own portfolio of sites, or through acquisitions under Project Tosaigh.
International events have contributed to an increase in the cost of loan co-financing and the trajectory of interest rates which impacts AHB delivery of Cost Rental homes as well as all housing providers. Combined with the ongoing impact of construction cost inflation, the viability of schemes has become more challenging, negatively affecting the required level of cost rent paid by tenants.
With this in mind, Government has decided that it is appropriate to increase the funding ceilings available per dwelling delivered for both the CREL and AHF schemes. My Department is working on operationalising these increases. The changes for both schemes will be subject to defined criteria which allows the demonstration of need and the operational parameters for implementation are currently being finalised and will be completed over the coming weeks.
Budget 2023 saw the funding allocation for CREL increase from €70m in 2022 to €75m for next year, while funding for Local Authorities through the AHF rose from €60m in 2022 to €90m for 2023. The changes to these two schemes, combined with the increased funding available, will help to address some of the challenges faced by AHBs and Local Authorities in the continued implementation of Cost Rental schemes. The funding available will help to continue to target rents achievable for Exchequer-supported Cost Rental homes at a minimum discount of 25% below open market rates.
