Bernard Durkan (Kildare North, Fine Gael)
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Question 123: To ask the Minister for the Environment, Heritage and Local Government the extent to which he proposes to provide affordable housing for persons on such waiting lists in local authorities with particular reference to ensure that each house is both affordable and negative equity proofed for the next six years; and if he will make a statement on the matter. [18422/09]

Bernard Durkan (Kildare North, Fine Gael)
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Question 124: To ask the Minister for the Environment, Heritage and Local Government the action he proposes to take to ensure that houses perviously acquired by the local authorities under the relevant section of the Planning Acts in respect of affordable housing are not being sold to purchasers at a price above that deemed to be affordable under current market conditions; and if he will make a statement on the matter. [18423/09]

Bernard Durkan (Kildare North, Fine Gael)
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Question 125: To ask the Minister for the Environment, Heritage and Local Government the action he proposes to take to ensure that affordable houses are made available to persons who have registered an interest in such housing at a price that will not incur negative equity in the next five years; and if he will make a statement on the matter. [18424/09]

Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
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I propose to take Questions Nos. 123 to 125, inclusive, together.

The provision of affordable housing is primarily a matter for individual housing authorities through the operation of the various affordable housing schemes. I have no function in relation to the price at which particular units are sold. The sale price of an affordable home is determined largely by its cost. For example, the price of units transferred to local authorities under Part V reflects the costs negotiated, in accordance with the relevant legislation, between authorities and developers. These costs are based on the sum of the site costs, calculated at existing use value, actual construction costs as agreed between the local authority and the developer, plus reasonable profit on those costs. The scope for local authorities to re-negotiate prices in light of current market conditions would depend on the nature of the contract entered into with the developer in the context of the Part V agreement.

Where authorities consider it appropriate, in the context of reduced open market prices and the continuing need to ensure value for money outcomes, they have the option further to reduce the sale price of any affordable house by further subsidisation utilising Part V monies, clawback or other internal capital receipts on hands. Local authorities are best positioned to make judgments in this regard based on local circumstances. In approving an affordable house purchase, local authorities must also consider the ability of applicants to make the necessary mortgage payments and satisfy themselves that the borrower's income is sufficient to meet the financial commitments involved under the scheme.

Affordable housing is privately owned housing and, as such, is subject to the fluctuations of the market. The current market value is used to calculate the level of clawback due in the event of resale of an affordable house and, where the gap between the sale price and market value has narrowed, the clawback reduces accordingly. Where the clawback amount payable would reduce the proceeds of re-sale below the initial price actually paid, the legislation provides for the amount of clawback payable to be reduced to the extent necessary to avoid that result.