Wednesday, 31 January 2018
Ceisteanna - Questions - Priority Questions
Repair and Leasing Scheme
58. To ask the Minister for Housing, Planning, and Local Government the number of units provided through the repair and leasing scheme; his proposed changes to the scheme; and if he will make a statement on the matter. [4831/18]
The repair and leasing scheme was wholly inadequate last year, which resulted in a very poor take up.
That was not lost on Members of the House, who were quick and constant in their efforts to point it out to the Minister. The Minister said towards the end of last year that he was revising the scheme and providing new criteria to ensure it has the desired effect. Can he elaborate on what changes he has made or is making to the scheme so it will be more successful in the near future?
The Deputy has raised this matter on a few occasions. I agree it is a scheme we had hoped would work better. However, it is a demand led scheme. It was a carrot to the sector to bring housing forward by providing access to finance to bring vacant properties to the market. While my Department is currently finalising detailed output data across each of the social housing delivery programmes in 2017, it is already clear that the repair and leasing scheme, RLS, has not yet delivered the level of new social housing homes envisaged.
At the end of 2017, a total of 820 applications had been received under the scheme. Local authorities were engaging with the property owners on 573 properties, 31 lease agreements have been signed and nine homes have been tenanted.
The Minister, Deputy Eoghan Murphy, has reviewed the operation of the scheme, as part of the review of Rebuilding Ireland, and has concluded that the scheme has significant potential but there are areas where it can be improved to make it more attractive and effective. We all probably agree on that. At the housing summit last week local authority chief executives were advised that, from 1 February, a number of key changes are being made to the scheme. These include a reduction in the minimum lease term required from ten to five years and increasing the proportion of market rent available to property owners where they take on more responsibilities under the tenancy, meaning that up to 92% of market rent will be available. Previously, it was only 80%. Now, if one takes on more responsibility it is up to 92%, which is much more attractive. There is also the provision of additional funding for property owners, over and above the current €40,000 limit, where the dwelling is a bedsit type dwelling being brought into compliance with the standards for rented houses regulations and being made available for social housing.
The Minister is making €32 million available for the scheme in 2018 and I expect local authorities and approved housing bodies to continue to implement the scheme locally and to achieve the target of 800 new properties this year. At the housing summit we asked for the support of local authorities to drive this forward and I have repeatedly asked all parties in the House to help us to drive it. It is an attractive scheme and I believe we have made it more attractive. It is a good scheme to bring forward housing stock at a good cost to the State. Hopefully, there will be greater take-up in the year ahead.
I am glad some changes have been made, although I do not know if they go far enough. Can further recommendations be made by other Members of the House to try to improve the scheme? The figure for last year was 800 too, and it proved illusory. There are only 31 leases and nine properties tenanted from the scheme. The Minister is aiming for 800 again this year. Is he satisfied that the two changes he mentioned - the reduction in the term and 92% of the market rent rather than 80% - are sufficient? Are they the key factors attributed to the failure last year?
I agree that the figures were ambitious, but rightly so. There is potential for the scheme and there was potential for it last year as well. The prediction of 800 this year is realistic when one considers that over 550 applications are in the system and are waiting to be processed, so we can reach the figure. The changes are sufficient. The biggest deterrent, as we found from feedback from interested applicants and from Members of the House, was the issue of ten years. People felt it was a long time to commit to the scheme. The five-year term should solve that. The other issue was the amount of rent available. Up to 92% of the market rate is more attractive. Also, some people still strongly believe that this is not a good enough return for them. I should stress that this scheme was introduced to help people who could not access finance in some other way to make their housing stock available. It is not about meeting everybody's desires but to encourage people who own these properties but do not have an income or cash to bring them forward. We believe the changes we are making should make the scheme more attractive and help us achieve the target of 800 units this year and into the thousands over the next three years. However, it will only work if we promote it. We will try to promote it again. It is a way to bring vacant properties back into use. We all agree with the concept and I ask for the Members' support in getting the message across. It is a good scheme, and it has been improved.
If the investigation into the failure of the scheme was thorough, the Minister might be able to clarify if the 700 applicants who were refused have been informed of the new process or new criteria. How many of them will meet the new criteria and how many can we expect to be successful as a result?
In case I gave the Deputy misinformation, it was not 750 refused. There were 850 applicants. Some 573 are still going through the process and over 40 have gone through it. A couple of hundred did not pass the test. In most cases, it was that after they engaged and made the applications there were parts of the scheme they did agree with or the application did not pass the social housing requirement test, that is, it was in an area where there was no demand for it. In some cases, the house would have needed much more than €40,000 spent on it, or it would not have been suitable. Those people were encouraged to sell the house, perhaps to the local authority. In some cases where it would not have been viable it would have made more sense to buy the property because, given the value of the property, it would not have been worth entering the scheme.
However, they have not been notified yet, as far as I am aware. This was only discussed and agreed at the housing summit and the Minister, Deputy Eoghan Murphy, made the announcement afterwards. It is something we could consider. It would make sense to re-engage with the people who expressed an interest so we will do that on foot of today's discussion.