Dáil Éireann Debate, Tuesday - 10 May 2022
337. Deputy Bernard J. Durkan asked the Minister for Housing, Local Government and Heritage the degree to which the various forms of assistance available for first-time house buyers are upgrading satisfactorily without contributing to house price inflation; and if he will make a statement on the matter. [22617/22]
Amharc ar fhreagra339. Deputy Bernard J. Durkan asked the Minister for Housing, Local Government and Heritage the way that house buyers seeking to purchase an affordable house are in a position to do so given house price inflation and the possibility that assistance available is being eroded by price inflation; and if he will make a statement on the matter. [22619/22]
Amharc ar fhreagra340. Deputy Bernard J. Durkan asked the Minister for Housing, Local Government and Heritage the extent to which affordable housing can be made available in such a way as to ensure that those in need are not being subjected to market price inflation; and if he will make a statement on the matter. [22620/22]
Amharc ar fhreagra341. Deputy Bernard J. Durkan asked the Minister for Housing, Local Government and Heritage if an all-out effort can be made to provide affordable housing and housing for those on the local authority waiting lists in the short-term given the high-level of income currently devoted to payments of rent or mortgage repayment due to house price inflation; and if he will make a statement on the matter. [22621/22]
Amharc ar fhreagraI propose to take Questions Nos. 337, 339 and 340 and 341 together.
The Housing for All strategy is the Government’s plan to increase the supply of housing to an average of 33,000 per year over the next decade.
Our targets include the delivery of 90,000 new social homes and 54,000 new affordable homes in the period 2022-2030. Housing for All is supported by an investment package of over €4bn per annum, through an overall combination of €12bn in direct Exchequer funding, €3.5bn in funding through the Land Development Agency and €5bn funding through the Housing Finance Agency and through a strategic partnership between the State and retail banks.
Specifically in relation to affordable homes, using various funding streams available to help reduce the ultimate purchase or rental cost, Housing for All targets the delivery of 36,000 Affordable Purchase homes and 18,000 Cost Rental homes up to 2030. These homes will be delivered by Local Authorities, Approved Housing Bodies, the Land Development Agency as well as through a strategic partnership between the State and participating retail banks (the First Home shared equity scheme).
The first 65 Cost Rental homes were tenanted by the Clúid AHB in 2021 at least 40% below comparable open-market prices. Funding from the Affordable Housing Fund (AHF) supported the delivery of 50 Cost Rental homes that were tenanted last month in Woodside, Enniskerry Road, Stepaside. Tenants have been selected by AHBs for a further 4 Cost Rental schemes due for delivery in the coming months, with further developments due later in the year.
Affordable purchase homes supported by the AHF, will be made available in Boherboy, Cork City this May, with indicated prices of €218,000 for a 2-bedroom and €243,000 for a 3-bedroom dwelling. Applications recently closed for 16 Affordable Purchase homes in Kilcarbery Grange, a South Dublin County Council supported affordable purchase development. Indicated costs for these homes are between €245,600 and €285,300. This will be followed by Dun Emer in Lusk, a Fingal County Council supported affordable purchase development with indicated costs of €166,000 for a 2-bed apartment and between €206,000 and €258,000 for 3-bed dwellings. These homes are being made available at rates which are c. 20% below market norms.
The First Home scheme will employ an equity stake model to support the purchase of c. 8,000 new homes on the private market in the years 2022 to 2025. The scheme will be jointly established and governed with participating mortgage lenders (primarily pillar retail banks). The overall anticipated spending for the scheme is €400m, funded on a 50:50 basis by the State and participating mortgage lenders. The current schedule anticipates a launch of the First Home scheme website in early June, with a full scheme deployment shortly thereafter.
Project Tosaigh was also announced through the Housing for All strategy. Under this initiative, additional funding of €1bn was committed to the Land Development Agency, who will enter into forward purchase arrangements to kick-start stalled private developments and increase the supply of affordable housing. The LDA initiated a call on 12 November 2021 targeting a scale in excess of 150 affordable units per development and is currently in the process of finalising agreements with prospective proposers for the initial tranche of affordable homes delivered through this initiative.
The CSO Wholesale Price Index shows the annual increase for building and construction materials to be 16.9% to the end of March 2022. Construction costs have risen considerably over recent years through a combination of the increased cost of regulatory compliance and general increases in labour and materials costs.
Housing for All commits that the Government and relevant State agencies will advance methods to reduce residential construction costs, particularly the cost of apartment construction, by increasing the focus of existing and planned construction related initiatives on the residential construction sector, and by ensuring a coordinated, whole-of-government, approach to residential construction.
In this regard, the Government will enhance the intended role of the new Construction Technology Centre, which is under development by Enterprise Ireland, beyond the standard remit of Technology Centres in general for its first three years of operation in order to prioritise residential construction, in particular by incorporating:
- structures and funding to enable innovation in residential construction prior to the National Standards Authority of Ireland compliance processes, including demonstration, certification, standardisation and commercialisation as well as research and development;
- a proactive role in strengthening the residential construction value chain;
- promotion, development and support for innovation / modern methods of construction (MMCs) using digital and manufacturing technology;
- support for SMEs to develop scale and to adopt MMCs and Building Information Modelling techniques for residential construction; and
- support for digitisation in the manufacturing sector for residential construction e.g. digitally controlled manufacturing equipment.
This will be complemented by an increased focus for the Department of Public Expenditure and Reform-led Construction Sector Group (CSG) on the residential construction sector. This will include the introduction and full implementation of a pipeline of cost reducing innovations and productivity measures, in line with its established remit to improve productivity and efficiency, and to temper price inflation.
In addition the CSG supported by my Department are also in the process of preparing a study to carry out an analysis for each component of cost of construction (including cost of compliance) of house and apartment development, with a view to reducing cost (including cost of compliance) and increasing standardisation. It will also identify opportunities for cost reduction for consideration by relevant Government departments and industry.
In accordance with Government policy, social and affordable housing construction projects (as with all publicly funded construction projects), must be procured in accordance with the Capital Works Management Framework. The Office of Government (OGP) is responsible for implementing national policy on public procurement, particularly in relation to construction procurement.
The OGP continues to review the situation and introduced the following interim measures last year to address the impact that price increases in construction materials is having on public works tenders:
- Reduced fixed price period duration to 24 months (previously 30 months minimum).
- Permit mutual cost recovery within the fixed price period for material price changes in excess of 15% (previously 50%)
- Introduction of a new mechanism to address the period between tender submission and award through limited indexation of the tender price
The above measures relate to new public works contracts going forward.
