Damien English (Meath West, Fine Gael) | Oireachtas source

That is why we have a building programme. While we are building the houses, however, we have to make sure we have people in a house today as well. We will use the HAP programme and we have to rely on the private sector for that. It is not something we want to do forever but it is something we have to do because we have to have houses today while we build the new ones. We are doing that. The early years of Rebuilding Ireland were focussed on harnessing existing capacity and more immediate solutions, such as working with the private sector in some cases, while in parallel progressing local authority and approved housing body, AHB, capacity to build more and establish solid project pipelines. I referred to the pipelines earlier. There is now a pipeline of more than 1,000 projects with over 16,000 houses in the system. That is a major difference to where we were two years ago or even a year ago. The local authorities are now able to step up. They have been given the people and resources they need, as in taxpayers' money. The NGOs have got a spend of about €60 million that they use to provide services. The approved housing bodies are also back in the game.

Everyone is now in a better place to be able to provide services, short term and long term, than was the case two or three years ago. The money was not there in the past and we could not afford to have what we needed. People will give out about the local authorities and blame them but it was not their fault. They did not have the money or the resources. Now, they are in a strong position to do that. They have rebuilt their teams and are delivering the projects. All of us, including the local authorities, want to do it faster and we will keep finding ways to do that. The pressure is on all of us to drive this with more urgency. The local authorities are now able to do it. They will be able to build and do it at a faster pace in the years ahead.

Those pipelines are now in place and, if people want to track it, that is evidenced in the quarter 2 construction status report. That tracks activity on a quarterly basis to see what is happening. I keep making this point; we do not make this up. It is all there, it can all be tracked and it is all factual. It is not stuff we make up for speeches. We report on it on a monthly and a quarterly basis. It can tracked and watched. There is no point trying to kid anyone. We are the Department in charge of making this happen. We are not trying to cover this up or make it look better in any shape or form. We are very honest in everything we do. What goes on in Rebuilding Ireland - our Action Plan for Housing and Homelessness is a complete and open book. Any member of the Joint Committee on Housing, Planning and Local Government will vouch for that because we go before it regularly and everything is on the table. Nothing is hidden away.

On affordable houses, the Minister, Deputy Eoghan Murphy, has been very clear that we need to address the issue of housing affordability. We must recognise the pressures that exist for low to middle-income households, particularly in Dublin and certain other of our main urban centres. An affordable housing programme is not needed in every county or town. It is needed in key areas. We are trying to make homes more affordable. In some cases it will be a subsidised affordable housing scheme and in others it will involve working with the private sector to make sure it is in a position to deliver homes at a more affordable price. It is a combination of different ways as well. There are different solutions for different towns throughout the country. Back in 2011, all affordable housing schemes were stood down given the prevailing economic position in the country at the time. I will remind Members that there were 3,000 unfinished estates at that time. It is not 3,000 now; it is less than 100 such estates. We have worked hard through the local authorities and all of the different stakeholders to bring those houses back into use. It was right that the affordable housing programme at that time was stood down given the situation we were in. It was not required and it was not needed because, given the collapse in house prices, there was an overhang of unsold affordable homes at that time.

This time around it is important we only target affordable housing interventions in areas, as I mentioned earlier, that require them based on a consistent approach to economic assessment. It is not for every town and village. It is not needed in all cases but in some cases, it is. All local authorities are now working on the economic assessments of the requirement for affordable housing in their areas. They will also assess the viability of delivering such housing from their sites. A dedicated workshop on affordable housing will be hosted by our Department for all local authorities on 8 November. In order to deliver affordable housing in the areas of the country most affected by a lack of affordable housing supply, a three-pronged, targeted approach is being pursued. The Government has trebled the funding to €310 million to support this programme of work, under the serviced sites fund, SSF, as part of budget 2019.

The funding is available for key facilitating infrastructure on local authority sites to support the provision of affordable homes to purchase or rent. A first call for proposals, under the fund, issued to local authorities in Dublin, the greater Dublin area, Cork and Galway in June 2018. The closing date for applications was August 2018 and 15 proposals were received from nine local authorities. These are currently being assessed and I expect this process to be finalised and an announcement of the first successful bids to be made in the coming weeks. Further calls for proposals will be made thereafter.

Once the funding is awarded and the infrastructure is provided, we expect delivery of affordable homes from 2019 onwards. Separately, once all local authorities have carried out the economic assessment of the requirement for affordable housing in their area, further local authorities may be considered for funding. It is important that they do that assessment to justify the use of taxpayer's money to provide these homes. Most of these cases will involve the use of State-owned land to help subsidise, through an equity scheme, the cost of those houses. We envisage a maximum amount of funding of about €50,000 per affordable home and on this basis, approximately 6,200 affordable homes could be facilitated. The ambition is for at least 10,000 affordable homes to be delivered under this programme and thereafter it will become a demand-led process. People refer to some of the affordable housing schemes that have worked in the last year. The Ó Cualann model used out in north Dublin is a good one. The approximate subsidy, through land and infrastructure, is about €70,000 per house. We are targeting this scheme at €50,000 per house. That will include the cost of the site, infrastructure, etc. It will make a major difference to the price of that house. It is important we do that.

The type of affordable housing that will be delivered on local authority sites may be affordable housing for purchase, under the recently commenced provisions of Part V of the Housing (Miscellaneous Provisions) Act 2009, or a cost rental approach. The cost rental model is being advanced on a number of pilot sites before being rolled out more generally. Under the 2009 Act, the maximum discount is 40% of the market value of the home and the local authority takes a charge, equivalent to the discount, against the property. The scheme applies to new homes, and is targeted at single applicants earning up to €50,000 per annum or €75,000 for dual applicants. At full discount, this equates to a home worth €350,000 being available today for €210,000 or an apartment worth €300,000 being available to buy for €180,000.

The local authority will retain a charge equivalent to the discount and the household must recoup the charge at resale or during the charge period. The State will have an equity stake in the house. That will roughly be over about 25 years. I want to be clear. I have given examples of some house prices but it will be different on every site and it will be site specific. Please do not throw back statistics that we are not going to pay €250,000 for a house in Leitrim. That is not what I am saying. I am just giving examples. Each decision will be made in combination with each local authority on a site-by-site basis. The funding repaid by the purchaser is paid into a new affordable dwellings fund which will then be used to fund more affordable housing and help more people. The applicants will be selected openly and transparently by the local authority providing the homes. This will be led by each local authority in its area. Another mechanism to try to help people get the finance they need to buy a home is the Rebuilding Ireland affordable home loan which was launched on 1 February 2018. There has been great interest in the scheme to date and by the end of September the Housing Agency had assessed and recommended more than 1,100 loans for approval, totalling some €236 million. An assessment is under way which will consider some inconsistencies in decision making that have been identified, as this is local decision making by each local authority. The need to potentially broaden the application scheme will be looked at, as well as the possibility of extending the affordable loan to vacant homes requiring refurbishment. It has been suggested by the local authorities and the housing bodies at some of the housing summits we have had, as well as by Members in both Houses, that perhaps we should be able to use this affordable loan to be able to bring back some of the vacant properties. It is something we are looking at, and there is much merit in the proposal.

There is also the help-to-buy scheme, which received much criticism when we first brought it in as people said it would not work. Our intention was to encourage the market to provide housing to first-time buyers. At that stage, a year and a half ago, the market was not supplying those starter homes to first-time buyers. It was hard to get them because they were not in supply, partly because the market, that is, the people building houses, did not believe a first-time buyer would necessarily get a mortgage to be able to buy the house in the first place. We had to intervene, therefore, through the help-to-buy scheme, which gave people some of their tax back to help them put together a deposit to buy a house. More than 8,000 people have successfully availed of that scheme, and 8,000 more are in the system. They have all bought new build homes supplied by the market of first-time buyers. If one looks at the price people pay for houses, more than 70% of first-time buyers over the past year bought houses for a figure under €320,000, even when the greater Dublin region is included. Some 50% of them bought houses for less than €250,000. There are a range of houses out there because we have increased the supply of houses across many sites, which was important. Where it is viable for the private sector to build houses changes on a near-weekly basis, which is also important to bear in mind because we are seeing an increase in the private sector too.

On cost-rental, which I mentioned earlier, we are determined for it to become a major part of our rental landscape in the future. It is common in other European countries but it has not been here. It is clear there is a gap between social housing and the rental market that needs to be filled, making a sustainable impact on housing affordability, national competitiveness and the attractiveness of our main urban centres as places to live and work. If we are to try to accommodate people in our larger cities in order to fill all the jobs here, we must bring forward more innovative housing solutions, such as cost-rental and other proposals.

The Housing Agency, Dún Laoghaire-Rathdown County Council and a number of approved housing bodies, AHBs, have signed the agreements on our first cost-rental project in Enniskerry Road and tenants have been issued. In parallel, Dublin City Council, DCC, my Department and the National Development Finance Agency undertook detailed modelling and financial appraisal on a major site at St. Michael's Estate, Inchicore, which DCC will develop as a major cost-rental project. The European Investment Bank also supports the development and implementation of this key project. We recently met with it and the other Departments, and it is interested in funding a programme of cost-rental throughout the parts of the country where it is needed. It is a concept that has worked well abroad. These two projects will prove the concept in an Irish context, after which we will be able to roll out more proposals because it is a logical approach to delivering houses for those who do not want to purchase the house but rather want confidence and security of renting at a reasonable price in order that they can predict and manage their finances.

On the Land Development Agency, LDA, one of the most significant actions taken recently was the decision to establish it. It will be a commercial, State-sponsored body acting within a clear Government policy framework in order that all public land disposals must deliver at least 40% of any housing potential on such lands in the form of social and affordable housing at 10% and 30%, respectively. The LDA will establish a national centre of expertise for State bodies and local authorities, using experienced staff with expertise in project management finance, planning, development and procurement. For the first time, the Government will create a State body to deliver on the key principles of the Kenny report of 1973 and the National Economic and Social Council's latest research, targeting land management and housing delivery that are intended to underpin the delivery of 150,000 new homes over a 20-year period, or approximately 25% of all housing needs envisaged by Project Ireland 2040.

What the LDA is doing here is making the State a major player in the management of land, guaranteeing the supply of land to be able to deliver housing at different price ranges over the years ahead. In the past, local authorities were involved in zoning, setting out and, in some cases, purchasing land, but in most cases the State does not have enough land in certain counties. It finds land expensive to buy because it buys zoned land and pays a high price for it. In other cases, the State owns lands but not through the Department of Housing, Planning and Local Government. Rather, it could be the HSE, the Department of Justice and Equality or some other Department. The LDA will manage that State land on behalf of all the Departments and make the right commercial decisions about housing under Government direction. It will assess what is right for each site to bring forward housing at the different levels, whether it be affordable, social or private. The State will be a player.

I have always argued that local authorities are not really in control of their county or town unless they own some land and they have a say in what is happening around them. Zoning land is one thing, but being an active player, owning and developing the land is different, whether it is for housing, shops, retail, streetscapes or whatever, and a major part of this will be urban regeneration. If a local authority in conjunction with the LDA owns part of the land, it has a much bigger say in making it happen, which is what we are trying to do here.