Eoin Ó Broin (Dublin Mid West, Sinn Fein) | Oireachtas source

By way of understanding, part of the challenge is that because many of these models have been evolving in real time around schemes and the challenges of schemes, the LDA, which is purportedly a commercial entity, has to pay the passive rate of corporation tax. There is a 25% tax charge which is essentially adding to the rent of the tenant. In an average LDA property that is an extra €2,500 per year. Its ISIF funding is coming in at approximately 2.8%. Again, that is allegedly commercially sensitive information but that is our understanding. The cost of finance for the AHBs, even from the HFA, is significantly higher and we know it has increased. CREL is obviously much more advantageous in terms of interest rates. With local authorities, it is a mixture. Some use the affordable housing fund but South Dublin County Council has used some of its own reserves and imputed a return of 2% a year on that. There are, therefore, three different delivery agents with three fundamentally different financing models, all of which means that people renting one of those properties from one of the three different cost-rental landlords, even if the properties were identical and had exactly the same build costs, could be paying different rents. Is the Department fully cognisant of the impacts of those different financing and rent-setting models?

The rent setting is also really important. This is something the Chair might be interested in. If I am in an AHB I have my HFA loan but I also have CREL. One AHB, in its rent setting, is charging the tenant for the pay-down of the HFA loan and when that loan is paid down, the AHB will start charging the tenant, as part of the rent setting, whatever is required to pay down the CREL. That is very sensible because the CREL does not have to be paid down until after the HFA loan has been repaid. Another AHB is charging its tenants the full cost of both the HFA loan and the CREL because its board thinks it is better financial governance to put that money away. I believe the Department should decide which of those models is the best model and apply it everywhere. Otherwise, this means that one AHB is paying the loans consecutively and charging the tenants the rents in that manner, while another is charging rent for both the loans at the same time. One tenant is, therefore, paying a higher rent than the other tenant.

Every time I look at these models, they become increasingly confusing and complex. That is why I am saying the officials’ heads must be pickled from looking at this in the Department. As we are trying to scale this up, would it not be better to have a single model insofar as possible? I appreciate that because the LDA is allegedly commercial, it has to pay corporation tax and that anomaly will persist. Is there not a better way, however, where we try to simplify this and provide a level of consistency so that the rents people are paying is consistent?