Mr. Seamus McCarthy:

Go raibh maith agat, a Chathaoirligh. At the meeting of the committee on 26 October, I outlined the key aspects of the 2022 Appropriation Account for Vote 34 - Housing, Local Government and Heritage. I do not propose to repeat them here. Programme A, housing, accounted for expenditure of almost €3.4 billion in 2022, representing 60% of the overall spending on the Vote. The expenditure was spread across 34 separate subheads comprising funding programmes for social housing and more general housing market interventions. Funding under subhead A.23 for the Housing Agency increased very significantly in 2022 due to a late transfer of €125 million to the agency to establish a land acquisition fund. Effectively, this was funded from unspent allocations for the acquisition of local authority housing under subhead A.3.

The Housing Agency's financial statements indicate it had income of €50.3 million in 2022. This comprised mainly grant funding from the Vote for the ongoing pyrite remediation scheme and for the agency's normal operations, and incomes from the sale of housing units under the agency's revolving acquisitions fund. The land acquisition funding of €125 million received by the agency in December 2022 is recognised as a reserve and very significantly boosted the agency's cash position at the year end.

The report before the committee today examines the progress in developing the land aggregation scheme sites since 2019, when I last reported on this scheme. The scheme was established in 20101 to alleviate the financial burden on local authorities related to maturing Housing Finance Agency loans. The loans had been taken out by individual local authorities during the property boom years to buy land for future social housing development. Because that development did not proceed, the local authorities were not in a position to pay the loans when they matured. By the end of 2022, the scheme had cost the Vote almost €132 million and there were outstanding mortgages to the value of €35.6 million. While the payments were funded from the Vote, the sites were transferred into the ownership of the Housing Agency. A total of 73 sites were accepted into the scheme on the basis that they had reasonable development potential for social housing. A small number of the sites or parts of sites were disposed of. As of 31 August 2023, the agency retained ownership of 60 sites with an estimated market value of just over €56 million.

The examination found that almost half of the site area acquired under the scheme still had no development plans or proposals for delivery of social or affordable housing. The agency attributes this variously to infrastructural constraints, lack of demand for social housing in certain areas, individual site issues such as flooding risk, topographical unsuitability and zoning constraints. Although the Housing Agency assessed the scheme land bank as having the combined capacity to deliver an estimated 5,365 social housing units, just 676 social housing units had been delivered in the 13-year period since the scheme was established. This represents just under 13% of what was estimated could have been achieved.

Due to a lack of development it is anticipated that 28 of the sites will, in due course, be liable to residential zoned land tax, which it is estimated will cost the Housing Agency approximately €1.5 million per year.

Overall, when the land aggregation scheme succeeded in reducing the indebtedness of certain local authorities to the Housing Finance Agency. The apparent unsuitability of a significant part of the scheme's land area for any foreseeable social housing purpose casts doubt over the value for money achieved in the procurement of this land.