In the Dail this week, I raised the need for more affordable homes for those who wish to purchase in Co. Kildare. Minister for Housing Eoghan Murphy outlined details of the new affordable purchase scheme which is designed to assist those who wish to purchase homes but who struggle to meet the current purchase price. It will build in a discount and the state will take an equity share in the home to allow the purchase to go ahead.
Although this is a new scheme, I am keen to see how the scheme would roll out in Kildare. Minister Murphy advised that he is awaiting details of lands available from Kildare County Council for the scheme.
To ask the Minister for Housing; Planning and Local Government the way in which the new affordable purchase scheme will work; the timeframe for completion of affordable homes; if they will be available nationwide; and if he will make a statement on the matter.
– Martin Heydon T.D.
For ORAL answer on Wednesday, 31 January, 2018.
The new Affordable Purchase Scheme will be governed by the relevant provisions of the Housing (Miscellaneous Provisions) Act 2009, which will be commenced shortly. It will be targeted at households with annual gross income below €50,000 for a single applicant or €75,000 for joint applicants. The maximum discount permissible under the Act is 40% and the sale prices will vary, depending on costs, the discount given and other relevant factors.
Once the relevant legislative provisions are commenced, I will develop detailed regulations covering the operation of the Scheme, including the full eligibility criteria. The elected members of each local authority will then determine the order of priority for the sale of affordable homes to eligible households.
The new Scheme will see local authorities taking a fully repayable equity share, to the value of the discount given, in all homes that are sold. Importantly, this will provide for a sustainable funding stream for affordable homes into the future. The funds arising from repayment of the equity shares will be recycled into the provision of more affordable housing through the establishment of an Affordable Dwellings Fund, which will be managed by the Housing Finance Agency.
I anticipate that there is significant potential for the delivery of affordable homes on local authority lands. Following on from the Housing Summit on 22 January, I have asked local authority Chief Executives to submit, by mid-February, an outline of their respective affordable housing programmes, with a particular emphasis on Dublin, Galway, and Cork, where there is the greatest affordability gap. The overall scale of delivery, and timescales, will be informed by these responses.
In addition, I am providing funding of €25 million over 2018 and 2019 for a targeted programme, where the local authority will make low-cost serviced sites available to approved housing bodies or co-operative housing associations in specific areas. This approach has worked well in certain areas and I would like to see it delivered on a greater scale in other areas, within the parameters of the overall scheme that will be set down in Regulations. My Department is currently drawing up the criteria for access to this scheme, taking account of broader policy on affordable housing, and will be seeking submissions from local authorities in the coming weeks.
The Government is also determined to make cost rental a major part of the Irish housing system. Under this approach, rents are set at levels to recover construction costs and to facilitate the management and administration of developments. Accepting that this innovative concept will take time to test and deliver, a pilot cost rental project is currently being progressed in Dun Laoghaire-Rathdown County Council, in conjunction with the Housing Agency and Approved Housing Bodies, on publicly-owned land. The pilot project is providing significant lessons to the State in terms of the delivery of cost rental and in parallel, discussions are ongoing with the European Investment Bank regarding experiences in delivering cost rental and other affordable models in other jurisdictions that could also work in Ireland.
The delivery of affordable housing will rely on the State developing the full potential of its residential land bank. The Residential Land Management and Development Group, which is now being established, will play a key role in driving delivery as speedily as possible.