Mr. Andrew Hind:

I wish to make some practical observations on the affordability issue and the 10% figure because from a local authority perspective they are very much intertwined. Under the current legislation, the requirement for affordable housing and the overall percentage of housing development to fall under Part V is established through the preparation of the housing strategy. The methodology for preparing the housing strategy was issued by the Department to local authorities as long ago as 2000. In our most recent exercise in connection with the review of our development plan, we used the model set out in the existing guidance from the Minister. We were very concerned that the model, having been issued in 2000, might no longer be fit for purpose but actually, in our exercise it worked very well. In fact, this time around it worked better than in previous development plan cycles mainly because there is more and better data available on house prices through mechanisms like the residential property price register and so forth. The picture we were able to build of the local housing market was a better and more accurate picture than before. As a result of all of that, in Cork, the city and county councils reached the conclusion that the right level of provision of social housing was 14%. That was how the model worked out and that was the percentage we reached. Our colleagues in County Leitrim reached 12.5% having gone through a very similar exercise at a similar time. While not everybody fully agreed with that process, there was a large degree of local consensus among the stakeholders that the figure was right. Having gone through that process, our concern with the proposals in this Bill is that if the national requirement is to maximise the delivery of social and affordable housing then setting a 10% cap nationally might not deliver the full potential of all the markets around the country. Our view is that the existing mechanism works and indeed, it works better than it did in previous years because of better data. Therefore local authorities should be allowed to reach their own conclusions.

On the question of affordability, when we ran the model issued to local authorities by the Department over the past two years we found that market prices had fallen so much that the cost of building an affordable unit was greater than the market price achievable. As a result, we included no requirement for affordable housing in our housing strategy. However, our concern would be that as the market improves and prices rise, that may open up a gap between house prices and income levels, thus introducing a future requirement for affordable housing. Again, we would be concerned that taking affordable housing off the Statute Book altogether might foreclose the options available to local authorities in future circumstances.