Mr. Jim Baneham:

The questions posed by Deputy Ó Broin have a number of elements, all of which I intend to cover as best as I can.

The initial question was how had we arrived at a figure of €1,200 in rent. At the beginning 155 dwellings were designed to be built on the site. The site is rocky and located on the side of Ticknock Hill or Three Rock Hill in the Dublin hills. Therefore, it has some issues in how it would be developed. The genesis of the scheme is as follows. Part 8 planning permission was granted in 2007 and included car parking and underground car parking spaces. If one were to start with a clean sheet of paper, one might not necessarily include such parking spaces, but they were included and there are certain costs associated with same.

On the overall scheme, the cost of the tender, including VAT, is €45 million, which is significant. There was a process engaged in with Dún Laoghaire-Rathdown County Council in which certain costs were stripped out, while others were pared back. I understand the county council will bear some of the costs. Because of its nature, the scheme presents certain challenges. Unfortunately, there is an issue with eradicating Japanese knotweed, while I have referred to other bits and pieces. The cost of the scheme must be funded over a long period.

The Deputy asked if the loans had to be paid down over a short period of time. The loan period with the Housing Finance Agency, HFA, is 40 years, which is unique in this context and is a significant element in keeping costs down. The cost per unit is quite high in that scheme, even allowing for the fact that we have been able to access serviced sites funding, which was another part of the Deputy's question. Serviced sites funding is being allocated to the scheme. Dún Laoghaire-Rathdown County Council was successful in getting an allocation of €4 million of Exchequer funding towards that. Taking that into account and just looking at the 50 units which are cost rental units, because only they are eligible for the affordable element, the cost per home or apartment is still around €260,000. The units are apartments which, by their nature, are expensive, there are issues with the site and they have to be managed over a long period of time.

I do not want to stand on anyone's toes in terms of the cost modelling but the long-term maintenance of those apartments, that is, keeping them in good condition over the long term, has been included in the modelling. At periodic points over the 40-year model, allowance has been made for significant works to be undertaken to upgrade properties. That is included in the rent. Ignoring something like that could lead to problems down the line but that issue was not ignored. In terms of the operational costs of the approved housing bodies, AHBs, involved, they looked at their costs and reduced them a little. They took about 25% off their normal operational costs. Again, it is an area that is somewhat unknown for them because they have not managed cost rental housing per sein the past. There were a number of different aspects involved in bringing costs down. The three main elements involved in bringing the quite sizeable capital costs down were the serviced sites fund, which was €4 million over the 50 units; the 40-year cost of finance delivered by the HFA; and economies that were delivered by the AHBs in terms of paring back various costs. While it would be nice to have a lower rental cost per unit, quite a lot of work went into getting it down to €1,200.

Moving on to other issues raised, the question of using a capital advance leasing facility-like loan for cost rental has been discussed. There has been interaction with the Department on that as a possibility. Indeed, the Housing Agency's first paper on that possibility dates back to 2015. There have been various iterations of cost or affordable rental models over the last number of years. At the moment, the main tool that can be used to reduce costs is the serviced sites fund and that is what is being proposed at the moment. The next question related to clarity on the equity charge in the affordable purchase scheme. I will try to explain it simply. If the equity at the outset is 25% and that equates to €70,000 in terms of the price reduction today, it stays at 25% so as costs go up, it is indexed to market prices rather than inflation per se. If the price of that house in ten years' time has gone up by €100,000, the equity stake has gone up by €25,000. Basically, that is the way it works.

The Deputy also asked a question on densities. I am not a planner so I am not the most competent person to talk about densities. That said, I did a few quick calculations relating to Enniskerry Road. The density there is about 55 per hectare.