Eoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

This change is a significant benefit to the State. It is important to note it has been decided that in order to keep them off the balance sheet, these properties will not come into public ownership at the end of the 25-year period. Indeed, the State will not have the first option on them. This is important because it will allow us to leverage even greater potential to secure more housing through this stream without having a negative impact on our ability to spend money in other areas of housing or the public good. As we get towards the end of the 25-year lease agreement, we will have to manage tenancies actively to make sure no one is exposed in a way that means he or she has nowhere to live.

However, it is also important to note that over the 25 year period people's housing needs will have changed. The original needs of that tenancy will have changed in the 25 year period. The exact needs of the tenant in 25 years time are not set in stone on day one. Some work will be done of course in advance to ensure that the tenancy can be managed. Perhaps the arrangement will be rolled over. It is not for certain that the stock will necessarily be taken back into private ownership or sold off. Even if it were sold off, it is not certain who the buyer might be; it could be an approved housing body or someone else. That will depend and it will be managed closer to the end of the lease term.

Reference was made to cost comparisons for the different lease agreements. Considerable work was done between ourselves and the Departments of Finance and Public Expenditure and Reform to ensure that we were bringing in to existence a new stream of delivery that would ensure value for money for the State. It is important that this is done. Sometimes, it is difficult to make direct cost comparisons. Risk in this instance will be carried almost exclusively by the private side. This includes risk for the build, maintenance, day-to-day management and potential vacancy if the units are empty or not re-let at a given time. In those circumstances, the investors will not get their lease payments or the payments will cease. The fact is that they are tied into what will not be a free hand in terms of rent rises. That will be linked on a three year basis to the harmonised index of consumer prices. All these factors make it difficult to carry out a direct cost comparison with the traditional lease agreement that we have had with local authorities playing the management role at an 80% discount.

We have done considerable work with the Department of Public Expenditure and Reform and the Department of Finance to ensure that we are getting value for money for the taxpayer. This is an important new stream of housebuilding and homes for social housing.