John Cummins (Fine Gael) | Oireachtas source

I thank the Minister of State. These are very important amendments. The decision was made by the Cabinet prior to Christmas to increase the capital allocation to the Land Development Agency to enable it to be able to enhance its capacity to be able to deliver houses throughout the country, be they affordable purchase, cost rental or private houses in regional cities outside Dublin and Cork.

I have a point to make on this, which is more of a comment for the Minister of State to take away. When the CEO of the LDA came before the committee a few weeks ago we teased out the cost-rental model and how the LDA arrived at the figure of 25% below market rent, as is provided for in the legislation and regulation. It is making provision through direct capital subvention and there is very little borrowing. If we look at the approved housing bodies there is the CREL scheme and the other private sector borrowing they can get on the open market. Over time these units will become even more affordable because of the 25% discount. As the LDA is not borrowing for these units, it probably has the capacity to be able to deliver them at a further discount on market rent. I am not saying they could be discounted to nothing, absolutely not.The argument relating to the Vienna model is that Vienna delivered and built its units after the Second World War and, in time, the city owned those units after 30 or 40 years when they were paid for. The reality is that as the model the LDA has chosen, through not highly gearing in terms of borrowing, means these units are paid for up front, its ability to deliver rents that are more competitive is probably there. That is more of a comment. I am not sure whether the Minister wishes to address the issue. I understand how rents are arrived at in the context of AHBs. It is a calculation based on the repayments over 30 or 40 years. That is not the case with the LDA, as confirmed by its CEO at the committee meeting a few weeks ago.