Michael Finneran (Roscommon-South Leitrim, Fianna Fail)

These amendments provide for the introduction of significant changes in the way affordable housing is made available for sale under various affordable housing schemes. They provide for a shift to the equity sharing arrangement and away from the current procedures which involve a time-limited clawback in return for a discounted house. The provisions, which were signalled in the budget of 2009 and are covered under amendments Nos. 115 to 133, inclusive, provide the legislative powers necessary for this equity sharing arrangement, together with enabling powers for an open market component to replace the current shared ownership scheme in due course.

Under the new arrangements the purchase transaction will be largely unchanged from the purchaser's perspective. However, instead of the units being sold at a discounted price, as they are currently, with the value of the discount being subject to a clawback that reduces over time, the housing authority will take a stake in the affordable unit sold. The purchaser will have the option of either buying out the outstanding stake in steps or, alternatively, at the end of a fixed period of 35 years. The various affordable housing schemes will continue to operate unchanged as the means of supplying affordable units but third purchasers will have the single affordable housing purchase mechanism available to them. The stake held by the housing authority will be equivalent to the percentage below the market value at which the property is sold to the affordable purchaser. Generally, affordable housing units are sold at 20% to 25% below the market value so I anticipate that the housing authority's share will be pitched at around this level.

The new arrangements mean that affordable housing products can be tailored more closely to an individual's ability to pay. Undoubtedly, the new arrangements are not as financially advantageous to households as the existing arrangements have proven over the years. However, our basic objective in the provision of affordable housing is to support home ownership for households unable to purchase in the market without some degree of assistance from the State. It is not about creating wealth. The various affordable housing schemes in place provide a welcome means of bridging the affordable gap for households ready to take the step into home ownership but who require a modest level of support. I believe the new arrangements will not only enhance supply but also offer better value for the State and provide a more equitable means of supporting the valid home ownership aspirations of the prospective purchasers.

A small number of consequential amendments have also been agreed, which provide for a number of minor changes to provisions relating to affordable housing under the Housing Acts 1992 and 2002 and Part V of the Planning and Development Act, as well as deletions of proposed changes to the provisions of the 1992 and 2002 Acts for which the Bill provides. These are now needed given the wider changes proposed under the substantive amendments. The changes follow certain recommendations made in the report, Increasing Affordable Housing Supply, which was prepared by consultants for the Affordable Homes Partnership and subsequently published for public consultation following Government approval. The report also identified measures that would assist in responding to the ambitious targets for affordable housing in Towards 2016. During the consultation process, the shift towards an equity sharing arrangement, as now proposed, was supported by all the social partners.