Wednesday, 18 September 2019

Ceisteanna (32, 34, 36)

Darragh O'Brien

Ceist:

32. Deputy Darragh O'Brien asked the Minister for Housing, Planning and Local Government the status of the affordable homes scheme; the amount spent to date; the amount anticipated to be drawn down by the end of 2019; the number of sites identified; the timeframe for delivery; and if he will make a statement on the matter. [37684/19]

Amharc ar fhreagra

Darragh O'Brien

Ceist:

34. Deputy Darragh O'Brien asked the Minister for Housing, Planning and Local Government the status of the cost-rental scheme pilot project; the timeframe for its completion; the income criteria; the selection process to be used; and if he will make a statement on the matter. [37685/19]

Amharc ar fhreagra

Joan Collins

Ceist:

36. Deputy Joan Collins asked the Minister for Housing, Planning and Local Government the status of cost-rental plans on a site (details supplied). [37951/19]

Amharc ar fhreagra

Oral answers (31 contributions) (Ceist ar Housing)

Go raibh maith agat a Chathaoirligh, agus cuirim fáilte romhat ar ais freisin. I ask the Minister to give an update on the affordable housing purchase scheme, the amount spent to date, the amount anticipated to be spent by the end of this year, the number of sites identified, the timeframe for delivery, and any further relevant information he might have around the exact criteria involved. As the Minister knows, all four Dublin local authorities have adopted the bones of the criteria, which are skeletal. Where are we with the next step, in order to actually open this scheme?

I thank the Cathaoirleach and the Deputy and welcome everyone back to what is a very important Dáil term.

I propose to take Questions Nos. 32, 34 and 36 together.

Part 5 of the Housing (Miscellaneous Provisions) Act 2009 was commenced in June 2018 to provide a new statutory basis for affordable dwelling purchase arrangements. Initial regulations in regard to schemes of priorities were made subsequently and further regulations will be put in place over the coming months regarding eligibility and other matters.

In order to support the delivery of discounted homes to buy or rent, this Government has committed €310 million under the serviced sites fund from 2019 to 2021 to provide infrastructure to support the delivery of some 6,200 homes. To date, funding of €127 million in support of 35 projects in 13 local authority areas has been allocated for infrastructure works on sites that will support the delivery of almost 3,200 homes.

The overall cost and the timing of delivery for these projects are contingent upon the completion of design, planning and procurement in the first instance and local authorities are working to achieve delivery as quickly as possible. The price of homes that will be offered for purchase under the scheme will vary by development but Dublin City Council, for example, has indicated that it expects to have two-bedroom homes available in Ballymun in the €148,000 to €168,000 price range.

The first cost rental project at Enniskerry Road in Stepaside has gone on site and will deliver over 150 homes, 50 of which will be cost rental. My Department has been in contact with the local authority concerned in regard to the commencement of drawdown of funding. The remaining projects are currently at the stage of design and planning and, accordingly, local authorities are not yet drawing down allocated funds. I anticipate that the bulk of expenditure will arise as projects reach the construction phase.

The Enniskerry Road project, which I formally launched last week, is one of two pathfinder pilot projects for cost rental. The homes involved are due to be completed in 2021 and tenants will pay €1,200 per month to live in the two-bedroom apartments. This rent is based on the cost of delivering and maintaining the homes and is a significant reduction when compared with market rents in the area.

Regarding the St. Michael's Estate site at Emmett Road, Dublin City Council is continuing to make progress on the preliminary work on this project. It is estimated that this site can accommodate approximately 470 homes in a high-quality mixed tenure development, including approximately 330 cost rental homes, and the development framework plan for the site has recently been completed.

Dublin City Council is engaging with my Department according to the best practice guidelines set out in the capital works management framework and is procuring an architect led integrated design team which will be responsible for designing the scheme and taking it as far as the planning stage. I am determined that work will continue to progress at pace on this project over the coming months and that lessons learned from the modelling at this location are applied to the ongoing development work for a national cost rental model.

In terms of that work to progress the cost rental agenda more generally, I have convened a working group led by my Department, also involving the Land Development Agency, the Housing Agency and other bodies, to develop the cost rental policy framework to provide for a sustainable financing structure and to allow us to commence the delivery of homes at scale. In order to assist with this work, in May 2019 my Department signed an agreement with the European Investment Bank to officially engage it to undertake a research project into cost rental on our behalf. Detailed operational and eligibility criteria for cost rental will be informed by this evidence building and policy work. This work will be concluded well in advance of the completion of construction work on the first homes at Enniskerry Road.

These new schemes are set in the context of significant moderation in the growth in house prices and complement other key Government affordability initiatives. Included among these are the Rebuilding Ireland home loan, under which more than 1,000 loans had been drawn down the end of June this year, and the help to buy scheme, under which some 14,000 applications have been approved. In addition, the Land Development Agency's initial portfolio of sites will have the potential to deliver to deliver 3,000 affordable homes and the local infrastructure housing activation fund, LIHAF, will support more than 2,300 affordable homes on mainly publicly owned lands, while 5,600 further homes will benefit from a LIHAF related cost reduction, some of which have already come on stream.

In overall terms, programmes are in place under which some 18,000 affordable homes or homes with a LIHAF related reduction will be delivered, with 15,000 households already supported under the Rebuilding Ireland home loan or the help to buy scheme.

Before we start-----

The questions have been grouped. I will allow Deputies Joan Collins and Darragh O'Brien to speak.

That is a point of order I want to raise. I do not want to be obstructionist on the first day back but I wrote to the Office of the Ceann Comhairle before the recess about the grouping of Priority Questions. They should not be grouped. Deputy Collins's question has been grouped with mine. I do not have any issue with that but I get two Priority Questions, other Deputies get one and they are grouped together. That is not the Minister's fault but it allows for an omnibus answer like the one we got, which covered everything from affordable purchase, affordable rent and cost rental to help to buy and Rebuilding Ireland home loans.

I will conclude. I wrote to the Office of the Ceann Comhairle in July this year to complain about the grouping of Priority Questions. They should not be grouped because every six weeks I get two questions and other Deputies get one. Three of the five Priority Questions for today have been grouped. That is not acceptable. I did not object to this at the start of the debate when the Acting Chairman announced the grouping of the questions and I know the House agreed to that. I am very serious in that regard. I would like the Acting Chairman to convey my concerns to the Ceann Comhairle. I will again write to his office to complain about this practice because it restricts our ability to ask the Government questions.

On a point of information-----

As one very famous radio presenter said, "I hear what you are saying." I will take your concerns back to the Ceann Comhairle. The grouping of questions is a matter for the Minister. We will have 80 minutes for this debate.

On a point of information, the grouping of questions is not a matter for me. I support what Deputy O'Brien has said.

My understanding is that it is a matter for the Minister. He can decide. There are 80 minutes.

That is not what I was informed of. From my point of view, issues like the Rebuilding Ireland home loan are separate from the serviced sites fund. It is in my interest to be able to speak to those issues separately because of the amount of information we have in this area. The questions have been grouped today, but it is something we could look at before we take questions in the future.

I can see there are concerns. As I said, I will raise this matter to the Ceann Comhairle. Deputy O'Brien has written to his office.

Yes, and I have not received a response.

I will have a word with him today. We are losing valuable time. Maybe we could move on.

I am aware of that. I know officials have to abide by their rules. I respectfully say that it is irrelevant whether it is the same amount of time or the time is extended. The Minister has made a fair point. My point is that our questions are being grouped, as are his answers, and he is trying to fit many things into one answer. In some instances, they are not particularly relevant. We want to be able to tease out individual questions and ask follow-up questions. When I ask a follow-up question, I could throw six or seven issues at the Minister and not receive an answer to any of them. It is not acceptable.

That is the issue. The Minister had eight minutes to outline a number of answers to three questions. It is now up to me to decide what I have to pick by way of a supplementary question.

I refer to home ownership and affordable purchase. Home ownership levels in Ireland are now below the EU average, at 67%. In 1991, the home ownership rate was 82%. In 1991, private renters comprised 9% of the market and the figure is now 21%. The average age at which a person buys one's own home has risen from 26 years to 35 years. This is a major issue. Where are the criteria for the national scheme? I wrote to the Minister in March to raise issues I had with the salary levels, in particular those for couples. The matter should be devolved to local authorities and should not involve simply a discount on market price. That is a mistake. We should consider a shared ownership type arrangement. That relates to affordable purchase.

I want to talk about affordable rent but my issue is that when I ask supplementary questions it is as if I am asking only about affordable purchase. I want to ask about affordable rent, help to buy and the Rebuilding Ireland home loan.

I support the point made by Deputy O'Brien. The grouping of questions is not helpful. My specific question concerned the cost rental model in St. Michael's Estate. On 20 February this year, Deputy John Curran put down a question about the off balance sheet costs of cost rental accommodation. The Minister replied that the urban design development framework plan for St. Michael's would be completed later in quarter 1 of 2019. Where is the framework plan? There was a forum meeting on Monday and I have not been able to get much information on St. Michael's Estate. This is an important pilot scheme.

I note the Minister's point that rents of €1,200 per month will be charged under a cost rental model in Enniskerry. I would have to consider that as the figure seems quite high. I would expect rents in St. Michael's Estate to be lower than that.

The Minister went all over the houses on some other points. I want to discuss what is happening in O'Devaney Gardens where land was handed over to a developer and we will only get about 176 public housing units out of a total of 798 or 800 houses. What is happening is a scandal and I would like the Minister to comment. Perhaps he will withdraw the land initiative proposal put forward by the Government.

If Deputies are going to ask questions, they should stick to the subject of the questions they tabled if they want to get specific answers. Deputy Collins asked about St. Michael's Estate in her question but has now delved into another area that, in fairness to the Deputy who asked the question about O'Devaney Gardens, will be addressed later in the session.

The average age of home ownership, which was raised by Deputy Darragh O'Brien, has been changing for a number of reasons. The average age has moved from 26 to 35 or 36. Home ownership has been declining since 1991. I think it fell as quickly during the boom years as it is falling now so, again, that is linked to different things. The NDFA has modelled cost reductions for affordable homes schemes that are not just related to a discount on the market price but to the net income of a person. With regard to a clerical officer or a teacher on the mid point of the salary scale, we are looking at those types of salary scales because we must make sure the homes being provided are affordable for people living and working in areas and cities where price pressures are highest. This is why we have the ambition for at least 20,000 affordable homes under the different schemes and that is why we set up the Land Development Agency and locked in a minimum of 30% for the provision of affordable homes on the land being brought forward by the agency.

I have not had a chance to respond to Deputy-----

I am sorry but I laid it out at the start. The Minister will have a further opportunity to come back in.

We did not have the opportunity to ask the questions we wanted to ask this morning.

I am going to but it is wholly inadequate. I wrote to the Minister on 7 March 2019 with regard to the criteria for the scheme. Part 5 of the Housing (Miscellaneous Provisions) Act states that the Minister may, from time to time, consider it appropriate to issue housing authorities guidelines but this has not been done. The Minister should not strangle the local authorities with upper income limits, particularly for couples. Given that €2,024 is the average monthly rent in Dublin city and county, a couple consisting of a nurse or a garda earning €75,000 between them will be excluded from the draft scheme, which is not what we want. That is not the scheme that Fianna Fáil developed. The previous Act would allow for discretion at local authority level. This must happen. We need clarity about when the scheme will open for applications. The only way that can be done is after we know what the real criteria for the scheme are.

I ask the Minister to look back at the letter I sent him on 7 March, a copy of which I will give to him. There are elements in that letter that may be helpful to him and his officials so that we are not trying to fit square pegs into round holes. In some areas of the country, the criteria may work while they may not work in others. Can I come back in?

No. Does Deputy Joan Collins have a final comment to make?

It is impossible. Does the Minister know when that plan will be brought forward? It has been over a year since he came to St. Michael's Estate to launch the cost rental model there and I would like to see what is happening and for the Minister to report back. It has gone too far.

Regarding affordable housing, it has been said that prices for a two-bedroom house in O'Devaney Gardens would be between €270,000 to €315,000 while prices for a three-bedroom house would be between €300,000 and €350,000. It has been said that prices for one-bedroom apartments would range from €237,000 to €276,000 while prices for three-bedroom apartments would range from €360,000 to €420,000. Does the Minister not realise that the mean average wage is €37,000 and that 64% of workers earn less than that? The median average income is €27,000. These workers will never have a chance to buy these so-called affordable homes that we are handing over to a private developer that will make a profit of €67 million from them. It is outrageous. This is not what we want in our country.

My understanding is that we do have quite a bit more time left because of the grouping so Deputies can come back in but I will be guided by the Acting Chairman. I think it is unfair of Deputy Joan Collins to have raised O'Devaney Gardens because it is a question for later on in this session but I will get straight to the point about it. Most of the affordable homes in O'Devaney Gardens will be priced at less than €310,000. I spoke to Dublin City Council yesterday and was informed that no homes will be sold for more than €400,000 under the schemes relating to the land there. There is more work for Dublin City Council to do on this but I repeat that most of the affordable homes will be priced at less than €310,000.

With regard to Deputy Darragh O'Brien's point about the modelling, in its modelling, the NDFA has looked at people like clerical officers earning €27,000 per year to see what kind of rent they could afford based on 35% maximum of their net income. When we talked about this during a previous engagement, I spoke about €50,000 for an individual and €75,000 for a couple but they are guides. The actual determination is 35% of net income so we are working on the regulations for that aspect with local authorities and they will be in place before the houses come on stream. It is important to note that the regulations for the scheme of priorities have already gone through most local authorities, 21 local authorities have approved and ten are still going through their scheme of priorities, namely, who comes through based on his or her connection to the area, working in the area and children in school. We discussed that during a previous session.

Regarding St. Michael's Estate, the NDFA has completed its financial modelling. A report from Jack Nolan on the wider scoping exercise is due next month. Dublin City Council is procuring its design team, the urban design framework plan for the site has been completed and we have had initial discussions with the European Investment Bank. Progress is being made. It is too slow. This site has huge potential, particularly for cost rental, and we are trying to expedite things and are looking at ways of doing that.

Because there is a minute and a half left, there will be 30 seconds for a question and 30 seconds for a reply.

What the Minister said about flexibility relating to criteria is welcome because this flexibility is needed. Selling State land is a flawed model. We should prioritise building affordable housing on State-owned land and doing that does not require selling off land. We will probably discuss the Land Development Agency's approach later because there are questions relating to it further down the agenda. How many sites have been identified through local authorities, how many local authorities have responded to the Minister and what is outstanding?

I thank the Minister for his reply. At least, it is moving along a bit. I also think it is too slow. We are talking about 330 homes in St. Michael's Estate, which would add to us having rents that could be affordable. I am looking forward to seeing that model.

The Minister said that Dublin City Council informed him that no home in the affordable housing scheme in O'Devaney Gardens would be sold for more than €400,000. Does he not realise that a person buying a home costing €270,000 would need a deposit of €27,000 and would need to earn almost €70,000 per year? That is not what the majority of workers are even touching on. So-called affordable housing will only be for the top 20% of earners, not for the ordinary retail worker or bus or train drivers.

I thank the Deputies for their questions. With regard to the serviced sites fund, the intention is to build on local authority land. That is what we are trying to do but there is wider scope for the serviced sites fund beyond that.

In the case of O'Devaney Gardens, we are using a portion of the land - about 22% - to get all those hundreds of homes built across the site as well as other very important infrastructure. I can go into that in detail when the question submitted is answered later on. The important thing about the Land Development Agency's approach to land is that it is State land in terms of the initial tranche of sites and it is the developer so it is not a question of selling off the land. It is a question of developing it in the best interests of the State.

Progress at St. Michael's Estate is too slow and I am looking for ways to expedite that. Most of the affordable homes in O'Devaney Gardens will be priced at less than €310,000. Regarding a house priced at €310,000, if a person is getting Government help in the form of the help to buy scheme to get the deposit together, that is for people on the mean average industrial wage about which Deputy Joan Collins spoke earlier. We are modelling affordability using positions like clerical officers, teachers or gardaí because we know that when it comes to affordability, while people in these occupations do not qualify for social housing, they are unable to buy a home and that is why they need this help and why it is so important.