James Browne (Wexford, Fianna Fail) | Oireachtas source

I thank Deputies Smith and Costello for raising this important matter around St. Michael's estate and on how the rent will be set. I am aware the Minister of State, Deputy English, responded to a similar query from Deputy Joan Collins on Tuesday, 16 November on this important cost rental development at Emmet Road. As indicated by the Minister of State, I can confirm that any rent levels for the cost rental homes to be delivered in the Emmet Road development will not be directly related to, or set based on, tenant income or the market rent for the area.

A central principle of cost rental is that the rent for the homes is a function of the costs incurred in financing, building, managing and maintaining them. There is now a clearly established legislative basis to operationalise this principle and for establishing the rent in a cost rental development. This can be found in Part 3 of the Affordable Housing Act 2021. These provisions were approved by the Oireachtas in July of this year by 101 votes to eight.

I would like to be clear that although cost rental will be public housing, it is not social housing. It does not use a differential rent structure. It is targeted at those individuals and families on moderate incomes and above the eligibility threshold for social housing who can afford to pay the cost rents. To illustrate this in practice, in terms of tenant eligibility, an upper limit of €53,000 annual household income, after income taxes, has been applied to the first cost rental projects. There is no lower threshold, though tenants would obviously be required to be in a position to pay the cost rent from their income. To reiterate, the rents for cost rental properties are not set by market rents but are in line with the criteria outlined in the Affordable Housing Act. Any references to market rent for cost rental homes simply serve as relative comparisons. They demonstrate how much more affordable these properties are for the eventual tenants when compared with what is available on the private rental market. Consideration of market rents can also help target State funding supports for proposed cost rental schemes at areas where they will offer the most assistance to tenants who would otherwise be facing comparably high rents.

The Government's cost rental scheme is already delivering long-term homes to families at affordable and stable rents. Using upfront capital subvention from the new cost rental equity loan, CREL, scheme, approved housing bodies, AHBs, are charging cost-covering rents at Taylor Hill in Balbriggan of €935 per month for two-bedroom homes, and up to €1,150 per month for four-bedroom homes. A further 50 homes at Enniskerry Road in Dún Laoghaire-Rathdown will be tenanted next month for €1,200 a month for modern two-bedroom apartments, with more to follow, including at Barnhall in Leixlip, County Kildare. These rents are affordable for the target cohort above the social housing income limits.

It is anticipated that similar capital subventions will be utilised at Emmet Road to make the resulting cost rents as affordable as possible, including the provision of public land at no or low cost, upfront capital grants from the Exchequer and State assistance with loan financing through the Housing Finance Agency and the European Investment Bank.

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