Conor Sheehan (Limerick City, Labour)
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2. To ask the Minister for Housing, Planning, and Local Government the way in which he intends to ensure the LDA meets its targets with a sustainable source of funding in view of the recent report by the Department of Finance into sustainable funding options for the LDA; and if he will make a statement on the matter. [53944/25]

Conor Sheehan (Limerick City, Labour)
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How does the Minister intend to ensure the LDA meets its housing targets with a sustainable source of funding, especially in light of a recent report from the Department of Finance into sustainable future funding options for the LDA?

James Browne (Wexford, Fianna Fail)
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The Land Development Agency is a key part of the Government’s housing strategy in delivering affordable homes for rent and sale in communities right across Ireland. The Department of Finance’s report on the sustainable funding options for the Land Development Agency considered the financing needs of the LDA and the implications of this need on the business model and operational activities of the agency. This report and the pressing need for further expansion in housing supply of all tenure types have informed the Government’s decision in June to expand the role and remit of the LDA.

The annual report of the LDA for 2024, for example, which will be laid before the House this week, shows that the Government invested a further €325 million from the Ireland Strategic Investment Fund in 2024. The LDA invested €535 million in 2024 which, combined with existing assets, means the LDA holds €600 million in cost-rental assets now and €305 million in assets under construction at the end of 2024.

The Government has committed to empower the LDA to widen its operational model to allow it to increase its level of capital recycling thorough the disposal of more units through affordable purchase schemes and, where appropriate to local housing demand, private sales. The LDA will also seek to further develop its land assembly function to ensure a healthy pipeline of serviced sites with a potential for further capital recovery where appropriate.

This expansion to the role and remit of the LDA will leverage its existing expertise and skills to accelerate the delivery of housing in vibrant, sustainable communities all over Ireland and support the LDA reaching the mature stage of its lifecycle as a major developer and provider of affordable housing. The LDA entered into spending commitments of €824 million in 2024 which will deliver around 1,750 homes and has major projects for direct delivery at various stages of planning and development which will deliver over 10,000 homes by 2029. In addition to changes to the LDA’s operating model, officials from my Department are currently liaising with the Department of Finance on the treatment of the LDA’s cost-rental activity with respect to corporation tax. This has the potential to further support the sustainability of the LDA.

Conor Sheehan (Limerick City, Labour)
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We know the LDA has delivered 2,054 homes between 2018 and 2024. The biggest issue is that, of that figure, only 281 homes were delivered through direct delivery, with the majority delivered through Project Tosaigh. How does the Minister intend to ensure the LDA is adequately capitalised? What is his view of the current financing model of the LDA? I believe the LDA cost rental model is broken. Rents are way beyond the reach of those for whom cost rental was intended and the financing model is completely different from how cost rental operates in other countries. It is very clear the LDA will not meet its targets unless it continues to buy turnkey assets. Will the Minister clarify his view on the current financing model and whether he believes the LDA needs to refocus its mandate?

James Browne (Wexford, Fianna Fail)
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That is exactly what the Department of Finance did, working with the Department of housing. It looked at how the LDA is financed and how it can be financed into the future and examining the remit of the LDA. We have agreed to expand its role.

The LDA will be absolutely critical. It will very soon be the largest housing delivery body in this country. We are fully committed to expanding its role and using financing to ensure that happens. In its gearing up it was very reliant on what are often referred to as turnkeys but we have to be aware that very much refers to off-plan properties that otherwise would not have been built. It was not a case of going in and buying properties that had been built where keys were ready to be handed over. The LDA is now moving more towards direct delivery and that is really important. We want to get to a situation where all delivery, whether it is affordable housing bodies, the LDA or local authorities, is being done in a plan-led manner. In the circumstances of the last few years there has been an emphasis on that partnership model but we very much want to get to a situation where all this is clearly plan-led by all bodies. That will maximise the delivery of homes so that the private market is there and available for people in the private sector.

Conor Sheehan (Limerick City, Labour)
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Further to that, given that the LDA lacks active land-management powers and has no strong CPO powers, is this something the Minister plans to address? The LDA has to negotiate bilaterally with all these State bodies. There was also something very concerning in the report about the possibility of the LDA selling off its assets. I want to know the Minister’s view on that.

Given that direct delivery is expected to deliver 6,000 homes and amount to 43% of the LDA’s delivery channel, how does the Minister intend to scale that up in the next three to four years, given that at the moment it is so heavily reliant on turnkey?

James Browne (Wexford, Fianna Fail)
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I have been heavily engaged with the LDA. I meet it regularly. It is anxious to have that direct delivery model, which is what it has been moving towards as quickly as possible. The key is that we get properties delivered. As I say, I much prefer the direct delivery model and to get the private market delivering on the private sector side of things. That is where we are heading and where much of my wider decision-making of the last few months have been driving towards. We will provide the LDA with the funding it needs to deliver the properties we want it to deliver right across the country. I am very confident that we will get there in terms of our housing delivery model and we will do so over the coming years.

Under the national development plan, nearly one in every three euro over the next five years will be into housing or into water to facilitate housing delivery. That shows the commitment from the Government to deliver. The LDA is an absolutely crucial part of that, as are local authorities. A lot of our local authorities are really delivering on social housing. Some are not and we need everyone to step up to the mark.