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Housing Provision

Dáil Éireann Debate, Tuesday - 27 March 2018

Tuesday, 27 March 2018

Ceisteanna (648)

Barry Cowen

Ceist:

648. Deputy Barry Cowen asked the Minister for Housing, Planning and Local Government the number of units covered by the enhanced leasing scheme, by county; the anticipated costs per annum in 2018; and if he will make a statement on the matter. [14137/18]

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Freagraí scríofa

A range of housing options are necessary to ensure a supply of accommodation to meet different types of social housing need. Harnessing the off-balance sheet potential of private investment in social housing is an important objective of the Government and the social housing targets set out in Rebuilding Ireland over the period to 2021 reflect the ambition in that regard.

Of the 50,000 social housing homes to be delivered under Rebuilding Ireland, 10,000 are targeted to be leased by local authorities and Approved Housing Bodies (AHBs) under leasing arrangements from a range of different sources, including 3,500 homes targeted using the Repair and Lease Scheme (RLS), and 6,500 homes using a  combination of the existing social housing leasing arrangements, and the new Enhanced Lease Scheme. All homes delivered under leasing arrangements, including a new Enhanced Leasing Scheme, will be funded under the Department’s Social Housing Current Expenditure Programme (SHCEP). 

The new Scheme is targeted at new build or new to the market properties to be delivered at scale and will complement the existing long-term leasing arrangements, which will continue to be available. There are, however, a number of key differences between the existing long term lease and the enhanced lease, the purpose of which is to facilitate larger levels of private investment in social housing while ensuring that the capital investment is off balance sheet in respect of Government expenditure.

Under the existing long term lease agreement, the owner retains responsibility for the structural maintenance on the property. However, the day to day management and maintenance of the property, e.g. leaking pipes, broken heating etc., is carried out by the local authority or AHB. Under the enhanced lease arrangement, the owner is responsible for both structural maintenance and day to day repairs. This is one of the fundamental differences between the enhanced lease and the existing arrangement and is one of the features of the lease that determined the CSO and EUROSTAT classification of the enhanced lease as an “operating” rather than a “finance” lease, and therefore off-balance sheet.

The owner will be paid up to 95% of the market rate - as opposed to 80% (85% for apartments) under the existing lease agreements. This reflects the reduced responsibility of the local authority in relation to maintenance of the property under this type of contract as compared to standard long term leasing. The local authority will retain the differential rent paid by the tenant.

The market rent must be evidenced by a valuation prepared by a qualified valuer and each valuation must refer to 3 comparable properties in the locality as evidence of the market rent for the property. Rent reviews will be carried out every 3 years, linked to the Harmonised Index of Consumer Prices (HICP). The term of the enhanced lease is 25 years, rather than the 10-20 year term under the existing agreements.

Local authorities will determine the suitability of the proposed properties, having regard to the standard of the properties, the requirement for social housing in the area and the criteria set out in each authority’s Development Plans, including, in particular, sustainable communities considerations.

The scheme will be governed by my Department and operated by local authorities. It will be funded through my Department's SHCEP. The Housing Agency will manage and administer the scheme on behalf of my Department and will act as a national co-ordinator.

A call for proposals is currently open and the Housing Agency is accepting submissions from interested parties until 12 April 2018. All proposals are subject to a range of criteria as set out in the “Calls for Proposals for Enhanced Long Term Social Housing Leasing Scheme” and the proposals will be assessed and marked in accordance with the terms set out therein. The Call for Proposals is available on the Housing Agency website at the following link: https://www.housingagency.ie/News/Current-News/Enhanced-Long-Term-Social-Housing-Leasing-Scheme.aspx.

Further information with respect to the numbers and locations of the units proposed for leasing under the Scheme will only be available once the individual proposals have been assessed, marked and accepted in accordance with the terms and methodology set out in the Calls for Proposals document.

Questions Nos. 649 and 650 answered with Question No. 632.
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