Written answers

Thursday, 1 March 2012

Department of Environment, Community and Local Government

Social and Affordable Housing

5:00 pm

Photo of Dara MurphyDara Murphy (Cork North Central, Fine Gael)
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Question 152: To ask the Minister for the Environment, Community and Local Government the discretion he has to allow local authorities to change guidelines for the affordable housing scheme allowing the council to temporarily rent out their homes with reference to the clawback that applies for a period of 20 years from the date of purchase, subject to the reduction provided between years ten and 20 for normal residency by the purchaser; and with further reference to the applicant complying with obligations required by a private landlord; and if he will make a statement on the matter. [11961/12]

Photo of Jan O'SullivanJan O'Sullivan (Limerick City, Labour)
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The allocation of an affordable home is made on the basis that an individual is in need of housing, is a first time buyer, cannot afford to purchase privately on the open market but can service a mortgage obtained by loan through an approved financial institution or a local authority where private finance has been refused. While the terms and conditions of the various affordable housing schemes and the regulations governing local authority loans do not prohibit an affordable home owner from renting a spare room in his/her home, a local authority may attach conditions to the contract with the purchaser pertaining to subletting of the unit and its use by the purchaser as his/her normal place of residence. In order to prevent short-term profit taking on the resale of the house to the detriment of the objectives of the schemes, houses sold to first time buyers under the various affordable housing schemes, at a significant discount from market value, contain a clawback provision. However, where a person is selling an affordable home and the clawback amount payable would reduce the proceeds of resale below the initial price actually paid, the legislation provides for the amount of the clawback payable to be reduced to the extent necessary to avoid that result. A breach of contract conditions would be a matter for a local authority to pursue as it considers appropriate given the particular circumstances involved. The administration of the various affordable housing schemes is a matter entirely for local authorities.

As announced in the Government's Housing Policy Statement, published on 16 June 2011, all affordable housing schemes, including shared ownership, have been stood down in the context of a full review of Part V of the Planning and Development Act 2000. A request for tenders in respect of the review was published at the beginning of February 2012.

Photo of John LyonsJohn Lyons (Dublin North West, Labour)
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Question 153: To ask the Minister for the Environment, Community and Local Government the legal situation and current practice in relation to the management of CAS schemes by approved housing bodies once the mortgage period on the properties has expired and the property is no longer subject to the requirements of the mortgage deed with the local authority; if he intends to put in place a guidance framework for such schemes; and if he will make a statement on the matter. [11964/12]

Photo of Jan O'SullivanJan O'Sullivan (Limerick City, Labour)
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Section 6 of the Housing (Miscellaneous Provision) Act, 1992 enables housing authorities to provide capital funding to approved housing bodies (AHBs) in respect of the provision of housing. A body seeking to obtain, and to retain, approved status under Section 6 of the Act must have as primary objectives, the provision of accommodation for low-income families or persons with special needs such as the elderly, the homeless or persons with a physical or intellectual disability. It must also have in its memorandum of association or registered rules, as the case may be, provisions prohibiting the distribution of any surplus, profit, bonus or dividend to members and requiring that the assets of the body be applied solely towards its objectives.

Approved housing bodies (AHB) are the owners of the accommodation schemes financed under my Department's capital funding schemes. These bodies have overall responsibility for the proper management and maintenance of their dwellings. It is also their responsibility to ensure that procedures and administrative arrangements are in place to achieve compliance with the terms of the capital funding schemes. It is a matter for the housing authority to have suitable liaison arrangements in place to oversee the administration of the schemes, and to ensure that the investment made in the dwellings provided under the schemes is preserved and the terms of the mortgage arrangements are complied with.

The Government's Housing Policy Statement, published in June 2011, identifies AHBs as key partners in the delivery of social housing. This recognises both the constrained funding levels available for local authority construction programmes and the capacity and track-record of the voluntary and cooperative housing sector.

AHBs are uniquely placed to help drive the achievement of the housing supply responses set out in the policy statement. However, the move from capital funded programmes of construction and acquisition by approved housing bodies to more revenue funded options presents challenges for them. As such, I intend to develop an enabling regulatory framework for the sector that will provide support and assurance both to the sector itself and to its external partners as it takes on the expanded role envisaged for it in the policy statement and to underline its status as a viable and attractive investment opportunity for financial institutions.

The development of such a regulatory framework, which is both robust and harmonised with the varying capacities of individual AHBs, will take some time. In the interim my Department is actively working with the sector on the development of a voluntary code which I expect most bodies will endorse. This code, which should be finalised and agreed in the coming months, will serve as a learning opportunity for the sector and for my Department as we develop a longer-term statutory framework that will best support the enhanced role of AHBs.

In the context of this regulatory work, my Department is keeping the situation in relation to the expiration of mortgage periods under review and will examine, in consultation with housing authorities and the voluntary housing sector, whether specific guidance in this area might be of assistance.

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