Dáil Éireann Debate, Thursday - 6 July 2023
100. Deputy Richard Boyd Barrett asked the Minister for Housing, Local Government and Heritage what changes he intends to make to the cost-rental rules so that those eligible on income grounds are not ineligible on affordability grounds; and if he will make a statement on the matter. [33209/23]
View answerCost Rental is a new form of rental tenure designed to assist a cohort of renters who face significant affordability challenges meeting high rents in the private sector. The Government’s Housing for All plan targets the delivery of 18,000 Cost Rental homes by 2030, primarily through delivery by Approved Housing Bodies (AHBs), local authorities and the Land Development Agency (LDA).
Rents for Cost Rental homes are a direct function of the costs of constructing, financing, managing and maintaining the homes. The lower these costs, the more affordable the resulting rents are for the tenants. Cost Rental offers a more affordable form of rental tenure, with long-term security and protection from market pressures. However, the fundamental model is that rents cover costs, net of any initial capital subsidy provided by the State, to support the delivery of new homes into the sector. This means that tenants must be able to sustain a cost-covering rent, in order to secure the long-term future of these homes. Potential tenants are selected from the pool of applicants through the use of a lottery, but Cost Rental landlords must also assess these potential tenants with regard to their ability to sustain the necessary rent level. It may be that not every applicant will have the resources to meet a cost-covering rent for a particular home.
Government funding for Cost Rental has been allocated to AHBs through the Cost Rental Equity Loan scheme, and to Local Authorities through the Affordable Housing Fund. Ensuring that Cost Rental properties are good quality new-build homes, with value engineering and long-term maintenance in mind, can help put downward pressure on lifetime costs and make rents more affordable for tenants. The delivery of large-scale Cost Rental developments will also bring economies of scale in ongoing management and maintenance costs.
