Jim D'Arcy (Fine Gael) | Oireachtas source

I too wish to speak on the social housing strategy for 2020, and I ask that the Minister be invited to the House. The strategy outlines a €1.5 billion guaranteed, up-front Exchequer investment in social housing from 2015 to 2017. There will be a further €300 million for housing projects by public private partnerships. The sum of €400 million will be made available through a new housing finance entity. I welcome the strategy, but there are pinch points. Take, for instance, a voluntary housing agency looking for a developer to build ten houses. The cost of a three-bedroom semi-detached house would be on average €160,000. The housing agency pays four fifths of the market price. This would be €138,000. It will cost the builder €145,000 to build the house. The opportunity for buying and selling is limited. An average leasing price is €800 per month. This would be a high price in some areas but is low in Dublin. In some areas, people are paying €500 per month for a three-bedroom house. Working with the figure of €800, a housing agency will pay four fifths of that, €640. The developer will have a yield of 2% from this. Bank costs are 4.7%.

Realistically, it will be difficult under the current model. There are other pinch points such as the fact that local authorities have land that was bought for millions of euro.