We will commence with questions to the Minister for Housing, Planning and Local Government. The first question is in the name of Deputy Darragh O'Brien who has 30 seconds to introduce his question.
Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
1. Deputy Darragh O'Brien asked the Minister for Housing, Planning and Local Government the status of the development of a special purpose vehicle by the Irish Council for Social Housing for the investment of funds in social housing. [39181/18]
This question will probably not come as a surprise to the Minister of State because I have asked it before on priority questions. I am again seeking an update on the development of the special purpose vehicle by the Irish Council for Social Housing for the investment of funds in social housing. Could the Minister of State provide an update? This relates specifically to the credit union sector. I remind the Minister of State that it is a commitment in the confidence and supply agreement. There is €750 million ready to be invested and I am seeking an update as to the progress of the initiative.
My answer might not be a surprise either because I have also answered the question on more than one occasion. I am happy to engage with the Deputy on this because it is an important topic.
The Minister of State might give a good answer this time.
The Deputy will find that I answered it the last time but he might not have liked the answer. I will always give the best answer and the most up to date position. I am happy to discuss this.
I am going to be strict on time today so I advise Deputies to concentrate on the question and forget about the asides. I am going to give two minutes and that is all.
I was just setting the scene.
I have been criticised for not getting through enough questions so let us take the business seriously.
Following engagement with the credit union sector on proposals for credit unions to provide funding for the provision of social housing, the Central Bank undertook a review of the relevant investment framework in 2017 and our Department fully engaged in all parts of that.
On foot of this review, revised regulations commenced on 1 March 2018. The revised regulations included the addition of investments in tier 3 approved housing bodies, AHBs, as a permitted investment class for credit unions. Deputy Darragh O'Brien is correct in saying the credit unions have been very clear that they have a lot of money they want to invest in housing schemes, so that facility was put in place. As such, since 1 March 2018, credit unions are permitted to provide funding through a regulated investment vehicle to tier 3 AHBs for the provision of social housing.
While it is a matter for the credit unions themselves to develop specific special purpose vehicles, SPVs, to facilitate this, my Department did inform the credit unions' representative bodies that it was funding a project being undertaken by the Irish Council for Social Housing, ICSH, to examine the establishment of SPVs to facilitate investment in the sector. The Department put the bodies in contact with the ICSH with a view to those bodies examining further how they could invest in the sector.
Work has been ongoing between the ICSH, a number of larger tier 3 AHBs and their financial advisers on the development of a vehicle or mechanism for delivering private financing for AHBs in respect of social housing. This project involved a number of phases, including engagement with a range of financial institutions, having regard also to the recent reclassification decision by EUROSTAT of the larger tier 3 AHBs earlier this year.
I understand that significant progress has been made with the project, with one AHB having already established a special purpose vehicle. Further work is ongoing to enable the establishment of other SPVs and it is expected that there will be further developments in this regard over the coming months.
With all due respect, it sounds like the Minister of State is beginning to wash his hands of this. Fundamentally, the SPV we are speaking about specifically relates to the credit union sector. PricewaterhouseCoopers, PwC, was taken on board by the social housing project to deliver this. It is that specific one that I am asking about and where it is at. I thought the Central Bank had approved this type of investment from 1 February - I stand corrected that it was from 1 March - but it was actually setting up the vehicle to allow them to do so and to invest in social housing.
Do I take it from the Minister of State's answer, because he mentioned the EUROSTAT decision, that the Government is moving away from this, or it is effectively saying this is not something that it now wants to see progress? The Irish League of Credit Unions is concerned. It stands ready to assist in resolving the supply issue, or being part of the resolution of the supply issue for our housing crisis, specifically on social housing. This is a real opportunity. I sense a major drift in this project. Could the Minister of State give me a timeframe for when the work will be completed? It was commissioned by his Department, after all. When will that SPV be established? When will funds be able to be put into the SPV for people to seek investment from it?
I have already been as clear as I possibly can on this. This is something into which we have put much work. We have worked with the Department of Finance and the Central Bank to make sure it could happen. The issuing and setting up of SPVs is not something the Department can do.
I know that.
We are clear on that. The Department has assisted with the funding, through the ICSH, to help develop that. It is in three phases, the first two of which are complete. Phase 3, on which the Deputy is asking for an update, is due in October, in the next couple of weeks. That is to allow a special purpose vehicle to be set up. The Deputy is right to say the Irish League of Credit Unions is involved in that. I want to be clear that the Department has engaged with the two credit union bodies.
I understand the Credit Union Development Association, CUDA, has made it clear to the approved housing bodies, AHBs, that it is ready to invest and open for business. It has done work on this, so CUDA is an option.
The Deputy mentioned another piece of ongoing work - a special purpose vehicle, SPV, option - being done by the Irish Council for Social Housing. I understand it is due in October. We helped to fund that arrangement, but we cannot make the council do it. I want to be clear, in that it is not for us to set up the SPVs.
The mention of October was definitive. Previous answers were more vague.
That is my understanding.
That is fine and I will take the Minister of State at his word, but the indications we have received are that credit unions will not be able to invest in the SPV once established thanks to how it will be structured. The Minister of State is not personally setting it up, but has he received the same indications and does he believe that, once the work is finished in October, the credit unions will be able to invest in the SPV? I hope that my indications are wrong. I appreciate that the Government wants to seek different streams of investment for social housing. This is a good idea and should work, but we are slightly frustrated with the delays. It is complex work, but if the establishment date is now October, then it should be October. The last thing I want is for the work to be completed in October only for us to find out that there is another hurdle to get over because the SPV has been structured in such a way that credit unions cannot invest in it.
I would be surprised if credit unions could not invest in an SPV that was set up to facilitate their investment.
So would I.
That is what it is meant to do, so something will have gone seriously wrong if they cannot invest.
I know, and I do not want to be discussing it with the Minister of State again in October.
Someone is feeding the Deputy information. That is grand, but whoever that is is obviously involved in the process, and that process is meant to find a mechanism for whoever that is to invest money. If that process does not succeed, then an SPV will not be announced in October, as allowing investment is what it is trying to do.
There are two bodies involved - the ILCU and CUDA. We have engaged with both. My understanding is that CUDA has an SPV option, is ready to invest and is open for business to engage with AHBs. That work has happened. The second piece of work is another model to achieve the same thing, and I am led to believe that it will be completed in October. The Deputy seems to know something about it as well. Something will have gone wrong if credit unions cannot invest in it, as it will have been set up in conjunction with them for their investment. We want this to happen. I can be no clearer than that. We have gone out of our way to try to make this happen.
I thank the Minister of State.
Social and Affordable Housing Provision
Eoin Ó BroinCeist:
2. Deputy Eoin Ó Broin asked the Minister for Housing, Planning and Local Government if he will work with South Dublin County Council to ensure that the residential development at Kilcarbery-Grange includes cost rental and affordable purchase homes in addition to social housing; and if a similar funding model to that approved for St. Michael's Estate in Dublin city will be explored to ensure that the development of the Kilcarbery-Grange meets the need for social and affordable housing. [39282/18]
The Minister is aware that the Kilcarbery-Grange proposal from South Dublin County Council is a significant development and one that could do much to ease housing need, not just in Clondalkin and Lucan in my constituency, but across the county. The difficulty that many elected members on South Dublin County Council have is that, while there is be a proposed 30% social housing component in the development, which is welcome, 70% is proposed to be sold at open market prices. In that part of the city, those prices would be between €320,000 and €500,000. Will the Minister work with South Dublin County Council to try to ensure a level of affordability in the development?
I thank the Deputy for his question. The early development of major local authority residential sites in Dublin is a top priority for the Government. To that end, we are working with all Dublin local authorities, including South Dublin County Council, to see these sites brought forward as quickly as possible with the optimal tenure mix and the greatest value for money for the taxpayer.
In the first instance, it is a matter for the local authority and its elected members to agree the optimal approach to development and financing. Kilcarbery near Grange Castle is an excellent site close to amenities and transport links, and my Department has supported enabling infrastructure for the site through almost €4.5 million in local infrastructure housing activation fund, LIHAF, funding. Plans for the development of the site have been advanced over the past two years, with a comprehensive procurement process now almost completed that will result in almost 1,000 new homes on the site. These will include 30% social housing homes, with the balance to be provided for sale at affordable prices.
Any significant change in approach to the development of this site would require a new appraisal and approval process, incurring significant project delays and risk. In addition, it would necessitate a new procurement process that could incur further delays of 18 months or more, and delay the delivery of much-needed social and affordable housing.
Under the existing proposal, I understand that the council would receive a substantial financial contribution for the land that it owns that it intends to reinvest in other housing projects, which can in turn deliver more homes, with scope for some of these to be provided under the affordable purchase or cost rental schemes.
Taking account of all of these factors, I would encourage South Dublin County Council to conclude urgently the original process for the development of the site, for which it is to be commended. My Department stands ready to work with the council in identifying, prioritising and progressing other major sites in the area for affordable homes to buy and rent, which will complement the delivery of social housing and competitively priced homes for purchase at Kilcarbery.
I thank the Minister for his reply, but there is a difficulty. The majority of elected members have expressed a concern that the 70% of houses to be sold on the open market will not be at affordable prices. In fact, there is no contractual obligation in the draft agreement between the council and the preferred developer to provide any price for those. Given the sale prices being attained in the immediate area, standard family homes begin at €320,000 or €340,000 and increase to €500,000. As such, it is incorrect of the Minister to say that the 70% will be sold at affordable prices. That cannot and will not be guaranteed.
When the Tánaiste was Minister and O'Devaney Gardens and Oscar Traynor Road were being discussed, his intervention at the request of the majority of the elected members secured affordability on those sites. When issues with St. Michael's Estate emerged, the Minister of State, Deputy English, worked closely with Opposition Members and councillors to ensure affordability was delivered on that site. I do not accept that the Minister and the Department sitting down with the council and Deputies from the area to ensure a level of affordability on this site would cause a significant delay in the project. Given that it is the last major piece of development land owned by the council in that part of the county, I urge the Minister to work with us on ensuring affordability alongside the much-needed social housing.
I thank the Deputy for his supplementary contribution. Of the homes, 30% will be social housing. In addition, a site adjacent to the site will provide for the completion of more than 100 social housing homes. Of the 70% that will be sold at competitive prices, a cost reduction equivalent to the amount we have invested through LIHAF will be applied.
Similar prices in the area indicate that starter homes can be provided and are being sold for less than €300,000. Given the data that I have seen, I am not sure where the Deputy is getting the figure of €500,000 from.
This is not similar to the other projects that the Deputy referenced. We are 18 months down a detailed procurement process. Were we to delay it any further by trying to make a material change to the proposal before the councillors, it would contravene EU directives and Irish regulations and invalidate the procurement process. It could set us back a further 18 months. From the point of view of the Government and people who badly need new homes to be delivered, this is a significant development of almost 1,000 new homes, and I urge the councillors on the local authority not to delay it further and to proceed with giving approval for it at the council's October meeting. The council can then move forward with this and the adjacent sites and get all the funding that has been promised to it in respect of the land it owns, which it can then reinvest into other social and affordable housing schemes in its area. This is not to mention the large crèche and even larger community centre that will be provided on the site.
We have seen indicative prices from the lead agency. They show that none of the 70% would be affordable to single-income households and only the smallest of the one-bedroom and two-bedroom units may be affordable to couples without children under the Government's affordable lending criteria.
I have written to the Minister on behalf of five Deputies from five political parties representing the constituency asking him to meet us to see whether a resolution can be found. The 70% will not be affordable. The Adamstown development is also receiving LIHAF funding, and its homes range from €320,000 to €450,000. Shackleton Park, the nearest residential housing development, is being built beside Kilcarbery. Homes there range from €320,000 to €500,000. There is no new development anywhere close to this area where decently sized family homes are being sold for less than €300,000. Small apartments may be priced at €280,000 or €290,000. In the agreement that has been proposed for elected members to approve, no price has been agreed. Therefore, if this housing development proceeds as proposed, these houses will be beyond the reach of many within one, two or three years thanks to house price inflation. That is not a sensible use of public land. We are asking the Minister to work constructively with us, the elected members and council officials to ensure that not only do we get the much-needed social housing, but also homes that working families can afford.
If we do not build more homes and approve the massive projects that we have before local authorities, such as the one for almost 1,000 homes, then talking about affordability and prices is a complete waste of time. We need new homes to be built. The Deputy's comparisons on price do not stand up from the data I have seen from the local authority area.
I am a very reasonable Deputy. I have met colleagues across the House a number of times to try to come to agreements or solutions when we can on other issues that have been before us. However, I have no role in this and neither does Deputy Ó Broin. This is a matter for the executive and the councillors on which to come to an agreement. If the Deputy has some influence with the Sinn Féin councillors on the local authority, I urge him to urge them to support this proposal and not to block or delay the delivery of a significant number of houses in his own area, as well as a new community centre, new crèche facilities, more social housing on the adjacent site and a huge amount of money that can then be invested in other affordable and social housing schemes in that local authority area. We need to make progress here. We need to build houses. If the Sinn Féin council members and other councillors do not support this proposal next month, my great fear is that another 18 months will be lost and we will lose almost 1,000 homes that are ready to go on-site early next year.
3. Deputy Darragh O'Brien asked the Minister for Housing, Planning and Local Government the status of his plans to regulate short-term lettings here; and if he will make a statement on the matter. [39182/18]
I was just reminded by my colleague, Deputy Casey, that he initially raised this matter at the very first meeting of the Joint Committee on Housing, Planning and Local Government with the Minister's predecessor, Deputy Coveney. It relates to any plans to regulate short-term lettings in the State. In particular, the Department has a task force and I wish to ask when its report will be published.
This is an issue. People too often just mention Airbnb but it is actually short-term letting. We all agree that we need to regulate this sector. In fairness, from my meetings with Airbnb and others, I understand they would welcome regulation. What is the status of those plans, when will the task force report be published and when will legislation be published so that we can actually act on this issue?
Under action 18 of the strategy for the rental sector, my Department established a working group involving representatives of all major public stakeholders with a policy interest in short-term lettings to develop guidance in respect of planning applications and changes of use relating to short-term lettings and to examine the need for new regulatory arrangements. The proposals under consideration by the working group, which has met on six occasions to date, have been aimed at facilitating short-term letting of accommodation within permanent residences, known as home sharing, while protecting the existing stock of residential property in areas of high demand, safeguarding neighbourhood amenity and consumer protection, and generating revenue to address any negative externalities of short-term letting. The working group completed guidance for local authorities on planning applications relating to short-term lettings and my Department issued a circular on the matter last October. The group has since been focused on developing proposals for an appropriate comprehensive regulatory approach for short-term tourism-related lettings.
Having considered the group's report, as well as the recommendations in the Oireachtas joint committee's report on short-term lettings, I am engaging with other relevant Ministers on the appropriate next steps in taking the proposed regulatory regime forward. Among the options under consideration is the development of a new licensing regime for short-term letting platforms and homeowners who rent out rooms or entire properties to tourists to facilitate a more managed approach to short-term tourist lettings and protect the existing stock of residential property, in particular long-term rental accommodation, in areas of high demand. Recognising that the introduction of such a regulatory regime will take time, I am also considering what other measures might, in the interim, support the recommendations and objectives set down in both the working group's report and that of the Oireachtas committee.
It appears that we are no closer. A Bill we published on 30 November 2017, initiated by Deputy Casey, could be used to move on in planning terms. Setting up a regulatory body would of course take time.
No one is looking to shut down home sharing or anything like that. That gets mixed up in this debate. Really it is about those who are using properties on a 365-day-a-year basis for what are supposed to be short-term lettings. Not only does that have an impact on the rental sector and on stock, but it also has an impact on neighbours, where there are visitors coming in every two or three days. There are many issues, as the Minister knows. I do not think we can wait too much longer. The Minister has engaged with the sector as have I and others. It is impacting particularly in urban centres such as Dublin, Cork and Galway. It is impacting on stock. On what date does the Minister think he will be able to bring forward regulations to make changes in the sector that will improve the supply in areas of high demand?
The Deputy is right; we cannot wait any longer. I am a fan of home sharing. It is a very interesting new development that we have in the shared economy. However, it cannot happen in an unfettered way. Certainly when we have a housing crisis it cannot happen in an unregulated way.
The Deputy has me in a difficult position because I am about to finalise proposals on this. Had this question come this day next week, I think we would be talking about the changes that would have already been made, if I can put it in those terms. If we want to look to the types of recommendations and the types of changes that should be made, the Oireachtas joint committee had some excellent proposals. I was actually closer myself to that committee's recommendations than to the report I received from the group that was established. If we look to Toronto in particular, what it has done is very interesting. Essentially, what we will be talking about is potentially a two-stage process whereby in the near and immediate term we go to make a change that will have a substantial outcome in terms of getting short-term lettings back into the long-term market, but then also moving to a point after that where we can have a proper understanding of what is happening in terms of licensing, regulation and everything else.
I will give people notice when I make the announcement ahead of when the actual changes will come into law. I will do that next week in order that people can have a little bit of time to get ready for the new arrangements. I agree that it is important that we move on this quickly.
I am very pleased to hear that changes are imminent. We are talking about next week, which is to be welcomed. No one wanted to rush the fences on this issue either. I, too, am a fan of home sharing and there is a role for it. People travel differently and we have issues as well whereby we need to ensure that people can visit and experience Ireland. First and foremost, however, we need to make sure that in the midst of a housing crisis we are not losing properties and stock to the hospitality sector and that we prevent excessive profiteering in this regard as well, which has been taking place. There have been interesting decisions made by a couple of bodies including Fingal County Council, Dublin City Council and An Bord Pleanála about the type of zoning that would be required for properties that are being used solely for short-term letting right through the year. Such activity should be seen as a commercial enterprise, not a residential one.
I look forward very much to the Minister's announcement next week. I hope it is as close to the joint committee's recommendations as possible. We all will want to work together to make sure this makes an impact very quickly. It is an important part of resolving parts of our supply issue in the residential market.
I think when we talk about the Oireachtas joint committee's recommendations, it will be very close to the committee's intentions but the manner in which we actually achieve it might be a bit different because it could be quicker the way I am proposing and that is what I have been trying to do.
We will have an open mind on it.
It is a question of how we can do this quickly and effectively. We can discuss that next week when the announcement is made. I am trying to finalise the announcement at the moment so this is not to give an absolute guarantee about next week. If something were to come up it might delay things because there is a bit of work still to be done, but we are very close. We are trying to understand the scale of this problem. The Deputy will have looked at the same data I have in terms of reports that have been published and the potential number of new homes that could come in to the rental market. If we look at the information from the Residential Tenancies Board today, it tells us how important it is. If we can quickly get 1,000 homes in the greater Dublin area, or potentially more, back into the rental market very soon, it would have a very important impact in terms of what people are experiencing at the moment. As the Deputy knows, they are experiencing an incredibly difficult situation where people are paying far too much in rent if they can even find a place to rent, which is also very difficult.
Public Procurement Contracts
4. Deputy Jan O'Sullivan asked the Minister for Housing, Planning and Local Government his views on comments by a public official on the cost of public procurement in the context of a housing project in Dublin which will cost nearly €500,000 per unit; if this will be examined as a matter of urgency in order that publicly-owned lands can be developed for social and affordable housing as speedily and cost-effectively as possible; and if he will make a statement on the matter. [39228/18]
I want to raise the issue of the comment by a public official on the cost of public procurement and the time public procurement takes in the context of a housing project in Dublin that will cost nearly €500,000 per unit.
St. Teresa’s Gardens, the housing project referred to by the Deputy, is a key regeneration project, the first phase of which will see the delivery of 54 new social housing homes. As the project is currently the subject of a tendering process, it would not be appropriate for me to comment at this time on the likely project costs. I understand this matter was discussed by the committee yesterday in respect of the same council official.
On the issue of public procurement, I can assure the Deputy that public procurement does not drive up the cost of construction projects. It is set in place to try to drive the cost down, to monitor costs and make sure we get the best value for taxpayers' money. Social housing projects funded by my Department, like all publicly-funded construction projects, must comply with the Government’s capital works management framework, the objectives of which are to ensure greater cost certainty, better value for money and financial accountability. I consider the competitive tendering process required by public procurement as being a cornerstone in achieving value for money and transparency in the use of public funds.
It should be noted that the regeneration projects, such as that referred to by the Deputy, move through a number of phases including initial master planning stage, demolition works, enabling works, refurbishment and consultation and construction more generally. These projects seek to address the causes of disadvantage in these communities through a holistic programme of physical, social and economic regeneration. By their very nature, regeneration projects are complex and can incur unavoidable additional costs, including demolition, site remediation, temporary rehousing and amenities such as playgrounds, pitches and so on. The public procurement process helps ensure that value for money is achieved in rebuilding and regenerating a community and there is no reason that cannot be achieved in a speedy and efficient manner.
I do not buy into this concept that the rules are slowing down projects. We have made a lot of changes to the processes and I have engaged a lot with local authority officials in the housing sector as has the Minister, Deputy Eoghan Murphy. We are quite confident that our new system of delivery and the new timelines that are in place are not delaying projects. As quickly as local authorities can do the work, we can get it signed through in our Department as well.
As to the cost of this project, we were on site last week - we launched our report there - and this project is finally moving on. There will be a tender decision made in the next couple of days - in the next week or two - and it will hopefully move on from there. I cannot go into details on the price but certainly the price being talked about is way off what we have estimated it will be. The project involves a lot more than just building these houses.
The Minister of State is going to have to enlighten us all because he is in charge of this. Would it take, in the context of the housing emergency, eight weeks to get a proposal ready on the part of a county council? In terms of the Department, which has a lot more staff and expertise, would that take about six weeks? Could the Minister of State tell us if it is his view that his Department and the county council together can get this public procurement process done and dusted, and get builders etc. on site within approximately - let us double the time - 20 weeks?
As Minister of State, his job is to untangle the bureaucracy. We have county councils with flow charts. Accompanied by the flow charts, on the Minister of State's own departmental website, they look like a surrealistic painting. The reason I say "surreal" is because of the length of time it appears to be taking for public procurement, arising from the procedures of his Department, which is well resourced, and the county councils, to which the senior Minister has given a kicking recently, which the Minister of State has said was deserved. Can the Minister of State give us a timeline on how long the average public procurement process will last? Currently, the Minister of State is making people who are walking by all of the derelict sites feel utterly hopeless.
I want to be clear on this. One of the first things we decided to do in the Rebuilding Ireland plan was to change the policy in relation to the process of delivering housing projects, which under previous administrations, Governments, Ministers and parties was taking three, four or five years. We put a process in place, in conjunction with the local authority sector, that is in line with best practice and the commercial sector, so that when one looks out the window and sees a field or a site, one can go through all of the processes and be on that site now in 59 weeks.
Fifty nine weeks.
Can I finish, a Leas-Cheann Comhairle? The Minister and I wish-----
We agreed this morning that we would observe the time.
The Minister, Deputy Eoghan Murphy, and I would be very happy if all involved could make this happen in 30 weeks. In some cases, it is possible to do it in 30 to 35 weeks.
In the private sector, if one asks a developer or builder today, and they look out and pick a new site and ask them how quickly they can be on site, they will say roughly 14 months to go through all the planning etc. We believe we can do it in 59 weeks. We have proven that. We want it done even faster with the resources that are there. I can assure the Deputy that the delays in our Department are dealt with. We have put an end to that and we can turn applications around quite quickly. The public procurement process, which is set down by the Department of Public Expenditure and Reform on capital projects, and in which the Deputy's colleague was involved, gets good value for money and is in place. It is a nine point process. We have it down to four stages and can turn this around quite quickly.
The notion that it would cost €500,000 per unit is wrong and not true and that was explained yesterday at the committee. The average cost for a social housing unit is in or around €200,000.
Mr. Brendan Kenny, the deputy chief executive of Dublin City Council, is well regarded by everybody who has an interest in housing over a very long period of time. He has suggested - I would seriously listen to him even if the Minister of State wanted to give him a kicking - that the cost for procurement is approximately €300,000 in the way the Minister of State's Department is running it.
Can the Minister of State sit down and untangle the bureaucratic steps? Could he produce the flow charts to us here in the Chamber?
It is there.
If we all get pen and paper, I am sure we could merge and blend some of these steps. There was a time when Fine Gael's slogan in an election was to burn all of the quangos. Now, Fine Gael resorts simply to bureaucratic gobbledygook. There are people who know all about building and all the Minister of State is talking about are steps, and then he falls back on it being the Department of of Public Expenditure and Reform's fault. The Minister mentioned another Department and made a reference, I presume, to the Department of Public Expenditure and Reform. The Minister, Deputy Pascal Donohoe, has been in that Department for a while and Deputy Michael Noonan was in it before that. Can the Minister of State give us an answer?
The Deputy is forcing me into making this point to her. Previous housing Ministers from her own party had processes and positions in place that were gobbledygook, were red tape and took three, four, five and six years - ridiculous times. One of the first things we did was to get in there and change the process to get on site. I am not saying it is perfect. I would like to get it even faster but we have set out a target now, a timeline, that is available and can be followed.
What about Dominick Street?
I would be very happy if the Deputy could tell me where we could shave off more weeks but it is an agreed process, which is in line with the private sector as well, which claims to do all of these things really quickly. Our sector can now do it just as quickly.
Mr. Brendan Kenny attended the committee yesterday, and he did not blame our Department for delays.
I did not say he did.
I want to clarify it. The process is changed and I am quite happy to give the process to Deputy Burton. She can go through it and come back to me with her pen if she has any changes and I will be happy to look at it. We want to get on site more quickly - trust me. All that the Minister, Deputy Eoghan Murphy, has ever asked of local authorities is to be more urgent in delivering projects where they can. That is what we are trying to do and the process has changed. Trust me, it was gobbledygook before that.
5. Deputy Darragh O'Brien asked the Minister for Housing, Planning and Local Government the number of units due to be provided under the serviced sites fund in 2018; and if he will make a statement on the matter. [39183/18]
Turning to the area of affordable housing, I would like to ask the Minister how many units are due to be provided under the serviced site fund this year. How many have been delivered to date and has the Minister revised those targets?
I thank the Deputy for the question. On 29 June, I invited applications under the serviced sites fund from 11 local authorities to support the provision of key enabling infrastructure on their land, to get their sites ready for the delivery of affordable housing. The call and funding is being targeted initially at 11 local authority areas where it has been identified that there is a more pressing need for affordable housing, and where there are significant publicly-owned sites that could be used for affordable housing. These are the local authorities in Dublin as well as Cork, Galway city, Meath, Kildare, Louth and Wicklow.
The call closed on 30 August and the 15 proposals submitted by nine local authorities are currently being assessed by my Department. I expect to be in a position to make the initial awards of funding next month.
The Exchequer provision under the fund totals €75 million over the four years to 2021. When local authority co-funding is included, an overall minimum investment of €100 million will be available under the fund to offset the costs of providing both on-site and off-site enabling infrastructure for sites in order for them to be brought into use for affordable housing.
A total of €15 million in Exchequer funding has been allocated for 2018, to which the local authority minimum contribution of €5 million will be added. This should enable the provision of infrastructure for approximately 500 affordable homes, based on a maximum level of €40,000 infrastructure investment per home.
Am I correct in saying that nine local authorities have responded already and that they are being assessed by the Department? What two that did not respond and why? Affordable housing is a serious issue in the areas of the 11 local authorities and it is interesting to see that two have not even responded with proposals.
The original target was that 500 affordable units would be delivered in 2018. There was €20 million allocated as the Minister said. Do I take it from his answer that there will be no affordable housing units delivered in 2018? If that is incorrect, please let me know, as I will be glad to hear if I am wrong. I take it that if the Minister is assessing them and that this will not be completed until next month. I
f funding is awarded we are looking at the earliest time for construction being potentially starting next year. Could the Minister enlighten me on that? I would be particularly interested as to the two local authorities that did not respond to the call.
I thank the Deputy for his question. As I said in my initial reply, I called into 11 local authorities, nine came back to me on foot of that call and two did not come back to me. That was a judgment they made. I will publish information on that shortly when I can, once we have fully assessed the different proposals that have come in. The 11 local authorities we targeted are those that we know from data are having a very serious affordability challenge. That is not to say there may not be other local authorities that also have an affordability challenge. A separate information circular will go out to those local authorities in terms of them having to provide an economic assessment that shows there is an affordability squeeze in their areas when we compare it with existing homes being built and what they are being sold at or second homes also. That work is being done across the 31 local authority areas but we have prioritised those 11 local authorities where the affordability challenge is greatest.
An amount of €20 million has been allocated for this year and there will be a drawdown from that fund this year. It probably will not be the full amount and any money that is not drawn down will be moved into other areas of capital expenditure to make sure there is as much delivery as possible, in excess of our targets if possible, this year. Sites were under preparation ahead of that call. The ambition is 4,000 growing to 10,000 and that is before we talk about other aspects of the Land Development Agency, which is the subject of a separate question coming up.
When we look at this now at this point in the year, it is not likely we will see affordable homes under the serviced sites fund being completed this year. Other conversations are ongoing between myself and the Minister for Public Expenditure and Reform regarding the budget and in that context to see if there are quicker affordability wins that can be made. The Deputy will be aware of those conversations because he has been included in them.
I understand that and it is highly unlikely any affordable housing will be delivered this year. That is why I on behalf of my party, Fianna Fáil, have put affordable housing at the centre of our budget discussion and as a policy priority.
I want to ask the Minister about the €50 million in the local infrastructure housing activation fund, LIHAF, that he has said he is allocating in this respect, increasing the potential funding to €100 million. I take it he is proposing there would be €100 million in the fund next year, which obviously has yet to be agreed in the context of the budget. I impress on him again the urgency of this matter. People who are working, have good jobs, pay taxes and pay high rents cannot attain their dream of owning a home and they are becoming increasingly frustrated and angry at this stage. Therefore, delivery needs to happen. The Minister had a target of building 500 houses this year but that will not be met; probably zero will be delivered. Houses must be delivered on an affordable basis next year. People need to see progress. That is what we in Fianna Fáil will be insisting upon. Will the Minister confirm again that €50 million funding in LIHAF will be added on top of the money in that fund for next year? Will he give a commitment he will name the two local authorities that did not respond to his call and that they will have to say why they did not?
I thank the Deputy for his supplementary question. He has put affordability at the centre of his budget request and I have put it at the centre of my work since I came into office. We all know in this House how important it is not only to deliver social housing homes and more homes but to make sure they are homes people can afford to buy. One thing we are doing to ensure that is putting in place an affordable purchase scheme and a cost rental scheme, which I have already commenced. That is not to say that homes that are built and sold that are not part of those schemes will not be affordable, they will be, and we have seen that in the prices up and down the country. However, the Deputy and I both recognise there are people on good incomes who cannot afford to buy homes at present and who want to, are ready to and are starting families and we have got to help them, and that is what we are trying to do. The Deputy will know that in the context of the budget negotiations that we have been trying to do that, so I will not go into those negotiations. The serviced sites fund is not the only mechanism for delivery, as the Deputy will be aware.
Because the affordability issue is very important to me, I moved the €50 million that was earmarked for a second LIHAF into the serviced sites fund earlier this year, as the Deputy will be aware, in order that we could have greater firepower behind that particular fund. In terms of a LIHAF 2, that has been subsumed into the new urban regeneration and development fund, the €2 billion war chest that we put behind Project Ireland 2040 to meet its goals beyond Rebuilding Ireland. I believe that fund will close tomorrow and we will be making announcements around that in October.
Thank you, Minister.
Will I have another opportunity to come back in?
I will quickly give the figures for the coming year, for which the Deputy asked. The figure is €20 million this year - this is Exchequer-local authority money - rising to €26.7 million next year and then continuing until we reach a total of €100 million. That is spread over the period between now and end of the timeframe for Rebuilding Ireland.