Wednesday, 27 June 2018
Local Infrastructure Housing Activation Fund
I am grateful to the Leas-Chathaoirleach for the selection of this Commencement matter. I warmly welcome the Minister of State, Deputy Damien English, to the House. He is always very welcome and it is always good to see him. I thank him for taking up my invitation to make a statement on the possible further expansion of the local infrastructure housing activation fund, or LIHAF, scheme. It would be hard to have learned much about the scheme as it has not kicked in to any great extent yet. However, LIHAF was rightly identified by the then Minister, Deputy Simon Coveney, the Minister of State, Deputy English, and their officials as a way to address, as part of Rebuilding Ireland, the shortage of critical infrastructure necessary and bring on large sites that could deliver significant housing capacity.
We all know we have a housing crisis in and we do not need to rehearse that discussion. All of the experts suggest we need to build approximately 30,000 houses, which is an ambitious but necessary target to achieve through mixed delivery of housing. It is a real need. LIHAF was introduced to develop infrastructure and the Government announced its support for the scheme. When the package was initially rolled out under Rebuilding Ireland, the Government's press release referred to funding of €226 million for strategic infrastructure through LIHAF, the delivery of 23,000 houses by 2021 and 34 high impact delivery projects across 15 local authorities.
The major concern being expressed now, in particular in the feedback from the 15 local authorities, is about affordability. That will always present a problem. In the area in which I live in south County Dublin, Cherrywood received the largest tranche of funding under the LIHAF scheme. Most of the units that will be provided there will be build-to-let. As such, the real concern is about how we can ensure a decent return and value for the expenditure of Government money on critical infrastructure. How can we assure people and give them the confidence that this contribution will feed into affordable housing? Every day, I meet couples who are working professionals but who cannot secure funding or affordability in housing.
There is a possibility under tranche 2 of the scheme, which the Minister of State has previously indicated that he was considering. I would like the Minister of State to consider with his colleagues in the coming weeks the opportunity which may arise to ensure that the next block of LIHAF funding is directed to local authority or State lands. National inventories and audits are being carried out of State-owned lands held by the HSE, the OPW and other agencies. There are vast banks of public land owned by local authorities, which they tell me they cannot bring into use.We should direct the next tranche of LIHAF funding to State lands to bring about conditional affordable housing.
It is good to have the opportunity to come in here to discuss this. I thank Senator Boyhan for the invitation to discuss the possibility of further funding under the Local Infrastructure Housing Activation Fund and the option of channelling the LIHAF funding from round 2 directly to local authorities which have identified key sites within their own landbank capable of delivering significant housing projects. That is exactly what we want to do. We want to make local authorities able to develop their own land bank. We have worked closely with them over the past year or two to bring forward their sites, get them organised and bring forward their plans to deliver social, private and affordable housing on their landbank and to utilise that landbank as quickly as they possibly can. With what we want to achieve, we are on the same page here.
As Senator Boyhan will be aware, the aim of the Local Infrastructure Housing Activation Fund is to increase housing supply through enabling infrastructure such as roads, bridges and parks. It is doing that through public funding of almost €200 million across 30 public infrastructure projects in 14 local authorities, with an associated housing delivery of approximately 20,000 units over the coming years from these strategic sites.
The key part, when LIHAF was launched, was to activate these sites. There were no plans to activate these sites and the key aim of LIHAF was to use public funds to step in with key infrastructure requirements to deliver the housing over three or four years following on from 2016. Two years ago, there was little activity and there was no sign of these sites coming on line. The aim was to activate; it was an activation measure.
Additional funding of €50 million over the period to 2021 was signalled in budget 2018 for a second call for proposals under the Local Infrastructure Housing Activation Fund. However, as part of the roll-out of targeted serviced sites funding as well as infrastructure supports under the national planning framework, there are now a number of funding streams operating in that space.
For example, significantly increased funding over the course of the ten-year national development plan will be available for enabling infrastructure and regeneration projects through the new €2 billion urban regeneration and development fund and the €1 billion rural regeneration and development fund, announced in February under Project Ireland 2040.
Local authorities will also shortly be able to apply to the new serviced sites fund which will provide Exchequer funding to support delivery of both off-site and on-site infrastructure which can unlock local authority-owned lands in order to deliver affordable homes.
Activation of housing developments at scale is a priority under Pillar 3 of Rebuilding Ireland and LIHAF is a powerful tool in addressing the challenge of housing supply. That was its aim - addressing the supply issue as an activation measure, as the Senator clearly understands. However, the Government is also committed to the delivery of affordable homes by local authorities, and to the regeneration and development of our towns, cities and rural communities.
As the Minister indicated in the Dáil last week, given the crossover between the two regeneration funds and LIHAF, and in consultation with the Minister for Finance and Public Expenditure and Reform, he has concluded that it would be unnecessary duplication to have separate calls under separate funds for the same types of infrastructure projects. In addition, both he and I are eager to give further support to local authorities to bring forward and service publicly-owned sites to provide affordable housing under the recently commenced affordable purchase scheme, which is exactly what the Senator has been raising here. In what we are trying to do, we are on the same page.
Accordingly, the Government has agreed that the €50 million in funds that had been originally allocated for the second call under LIHAF will be amalgamated with the new serviced sites fund to increase the Exchequer funding available from €25 million to €75 million over the period 2018 to 2021. This will be matched with at least €25 million from local authorities towards land servicing costs, bringing the total fund available to €100 million. This funding will help to speed up the development of affordable housing from publicly-owned sites and I expect that the call for proposals under the fund will issue later this week.
I thank the Minister of State for that comprehensive report. I welcome the fact that the call for the funding will be issued later this week. From what the Minister of State stated, I am not quite sure it will be exclusively to fund State lands or public lands. Let us not get caught up on whose they are. They are public lands.
The real controversy is that we have vast tracts of State lands and we have thousands and thousands of people without homes. There is a focus on the private sector and I accept that there is a logic in some of that. I do not have any ideological hang-up with who - public, private or whatever - builds houses but the time has come where we need to put in place supports to get these landbanks into action for houses for our people. That is the key, particularly with local authorities.
The Minister of State did not touch on the land aggregation scheme today but he might be mindful of it. The Department would have rejected many submissions for the land aggregation scheme and local authorities are stuck paying vast interest on lands as well.
The key focus must be on telling people that we will use State lands - the people's assets, the taxpayers' assets - and funds to get people into houses. These are our people who want to purchase affordable accommodation to provide homes for themselves and their families.
I thank the Minister of State for the comprehensive response.
I thank Senator Boyhan for bring a focus to this issue. It is exactly what we were trying to achieve here. We are able to use the State-owned landbank to deliver housing across the three categories of social, affordable and private.
We have asked local authorities to bring forward all their plans on how to activate and develop those sites. They have been doing that and we have been working through those plans with them over the past couple of months. Our housing delivery team - I and the Minister, Deputy Eoghan Murphy, and an officer in the Department, Mr. Peter Gavican - has been visiting all the local authorities and going through all their options, sites and landbanks, trying to work out solutions on how to activate that land. This funding will be concentrated on publicly owned lands and on local authority-backed projects to deliver affordable housing and other projects of housing, such as activation measures. We are clear what the funding is for.
Even at the start, LIHAF was for activating land. Land was not being activated and houses were not being built.
The additional tranche of funding of LIHAF is working and is bringing forward projects. The new funding will bring forward more projects with a greater focus on State-owned land.
Already, we have 13,500 going through the process of a pipeline of social housing projections on 820 sites but there is enough land ideally placed in State ownership to deliver 30,000 houses. We will concentrate on that as well as working on additional lands for more housing projects as well. We want to activate our land.
I hear commentary that there are 120,000 sites belonging to the State. That is an exaggerated number. We do not own the lands that NAMA has. We are in control of the loan book, through NAMA, but the State does not own the land and is not in control of what happens that land. Naturally, through NAMA, we are in control of what happens its loans and work through that as well. I want to be clear on that. When I hear this figure of 120,000 sites, often the land includes parkland and every other kind of land. However, we are concentrating on land for housing that we own and we will bring that forward.
We are in this space and the fund will be open for calls next week. Prior to that, local authorities had been told, for the past year or year and a half, to work with the Department to bring forward proposals on these lands anyway. These proposals are at an advanced stage. We will match the funding as well.
In relation to the last comment the Senator made about the aggregation scheme and sites that were not brought into it, we have been clear to local authorities that the best way to get their money back on those sites is to activate them - to build houses on them and draw down their funding on the housing projects. That is what we are trying to do here. Concentration on activity is how best to deal with that as well.