Eoin Ó Broin (Dublin Mid West, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

148. To ask the Minister for Housing, Planning, and Local Government his plans to address the unaffordability of cost rents. [18168/26]

Eoin Ó Broin (Dublin Mid West, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

The price of cost-rental accommodation is far too high. There is a growing number of working people, singles and couples, who earn too much to access social housing but because of the application of the affordability rule, they are not able to access cost rental. Can the Minister confirm that he shares my concern with respect to this matter and set out what he is going to do to assist the Land Development Agency, LDA, and approved housing bodies to bring down the cost of cost rental so it is affordable for all those people seeking to access it?

James Browne (Wexford, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thank the Deputy for raising this question in relation to the unaffordability of cost rentals. As the Deputy is aware, the cost-rental scheme was introduced by this Government under the previous housing plan and is continued and expanded in the new plan. It is designed to address the affordability challenge in the rental sector and to provide secure, long-term homes for moderate-income households. This is why, under the new Delivering Homes, Building Communities plan, we have committed to growing the provision of affordable cost-rental properties.

Though cost rental was only introduced in 2021, over 4,500 new homes were delivered by quarter 3 of last year and a substantial pipeline is now in place.

There is huge demand for these homes as they become available. While we are not yet at the stage of supplying as many as are needed, we are getting there. The cost-rental homes already delivered and those in the pipeline are meeting a real demand, are incredibly popular and are providing a much needed, secure and affordable element in the rental sector. Let us be clear that cost-rental housing did not exist in this country five years ago. From a standing start in 2021 to now, because of the action of this Government and the unprecedented levels of funding provided in successive budgets, rental properties are being made available at heavy discounts to the private market rental rates. This State intervention is ensuring those on moderate incomes who would otherwise not be able to afford to rent are moving into decent homes with monthly rents they can afford.

We are providing substantial funding to local councils, the LDA and the approved housing bodies, AHBs. Since the launch of cost rental in 2021, approximately €2.25 billion in Exchequer funding has been approved for cost-rental projects. Beyond my Department, significant funding is also being provided by the State's Housing Finance Agency. The lowering of VAT on new apartments to 9% in budget 2026 will also assist in delivering new homes to the cost-rental sector, with lower costs meaning lower rents. The nature of my Department's funding in the form of non-repayable grants and investments and long-term loans at extremely low rates means rents can be set below full cost recovery levels and far below comparable rents in the private market.

Eoin Ó Broin (Dublin Mid West, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Earlier this week the Minister visited Oscar Traynor Road, where there are two- and three- bedroom cost-rental units. The two-bedroom units cost almost €1,600 per month and the three-bedroom units cost almost €1,800 per month. That means people need a net income of €54,000 to be able to access the two-bedroom units and €64,000 for the three-bedroom units. This tells us that a huge group of people who are not eligible for social housing, but whose incomes are below those levels, are locked out.

Approximately 26% of applicants to the LDA's cost-rental stock are excluded on affordability grounds. For three-bedroom schemes run by local authorities and AHBs, it can be as high as 50%. The Minister has not even acknowledged there is a problem. We are all strong supporters of cost rental. If the Government had listened to us or to such organisations as NESC and the ESRI in the past, we would have been doing this a decade or more ago. However, right now, there are thousands upon thousands of working people who cannot access social housing, do not earn enough for cost rental and have no housing options. Does the Minister accept there is a problem? What will he do to address it?

James Browne (Wexford, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The visit to Oscar Traynor Road was a huge day. It was great to see a huge turnout. As the Deputy will be aware, the scheme has a mix of social, affordable and cost-rental units. It is a significant mix. If I recall, there are approximately 850 homes being delivered there in total and they are being delivered ahead of schedule. It is one of many large schemes now being delivered by Dublin City Council. Cost-rental schemes are oversubscribed. I am trying to ensure - I am keeping a close eye on this all the time - that there is a scaling in affordability so that people can access the homes they need in line with what they can afford, whether that is through social housing, affordable purchase, cost rental or helping people to be able to buy homes with the help-to-buy scheme and the first home scheme under which people can purchase homes themselves. That is what we are looking to do on the affordable side and we are always monitoring the various schemes.

Eoin Ó Broin (Dublin Mid West, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

The Minister's response is genuinely remarkable. He does not even accept there is a problem despite the fact that the data from the AHBs and the LDA confirms it. What is worse, LDA tenants are effectively paying corporation tax as part of the rent. That amounts to 15% of the rent they pay. Although the LDA has been given an exemption from corporation tax for new developments, that will not be passed on as an affordability measure, as per the Government. Worse, the LDA has just hit almost 500 of its tenants with rent increases that are entirely unjustified and those increases will range between 2% and 5%. This is at a time when rents should be coming down.

I will give the Minister a third opportunity to respond. There is a growing number of people who earn too much to qualify for social housing and not enough to qualify for cost rental. Does he accept this is a policy problem his Department needs to examine? Does he accept, for example, that solutions such as passing on the corporation tax reduction and discouraging cost-rental landlords from increasing the rent would assist in tackling the genuine affordability problem for thousands of working people?

James Browne (Wexford, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I very much have answered the question. We are always assessing the various schemes that come under the Department of housing to ensure there is availability for people at various levels of income. These schemes are way oversubscribed. We need even more cost-rental properties. That indicates there are people who fall into that bracket. We need to ensure, as I said, there are social, affordable, cost-rental and other schemes, whatever they may be, and the private supports we provide to people to be able to buy homes. I keep all those things constantly under review to keep a balance and that is what I will continue to do. I will continue to keep it under assessment.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I call Deputy Hearne on Question No. 149.

Eoin Ó Broin (Dublin Mid West, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

With 21 seconds left, the Minister cannot accept there is an affordability problem.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Does Deputy Hearne wish to put his question-----

Eoin Ó Broin (Dublin Mid West, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

That is utterly shocking.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

-----or will I just move on to the next one?