Written answers

Tuesday, 4 November 2014

Department of Environment, Community and Local Government

Local Authority Housing Mortgages

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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1001. To ask the Minister for Environment, Community and Local Government if he has issued any directions to local authorities regarding outstanding land acquisition loans, some of which are now due for repayment. [41213/14]

Photo of Alan KellyAlan Kelly (Tipperary North, Labour)
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The Land Aggregation Scheme was introduced in 2010 as part of revised arrangements for the funding of land for social housing purposes. The primary purpose of the Scheme was to assist in the unwinding of loans taken out by housing authorities to purchase land for the social and affordable housing investment programme. Applications to the value of some €164 million in loans have been accepted into the Scheme.

The figure of €164m includes €111m in respect of loans which were fully redeemed by local authorities with funding recouped from my Department, under the original terms of the Scheme. The remaining loans of €53m accepted into the Land Aggregation Scheme are in the form of annuity loans, for which local authorities are making repayments to the Housing Finance Agency. Such annuity repayments are recoupable from my Department subject to the local authority complying with terms of the Scheme.

In 2013 as a consequence of continuing pressure on Exchequer resources, and following a review of the Scheme carried out in consultation with the Department of Public Expenditure and Reform, it became evident that further expenditure on the Land Aggregation Scheme, in terms of accepting new applications into the Scheme, was no longer a sustainable option. The review concluded with the issuance of Circular 35/2013 on 11 December 2013, notifying local authorities of the discontinuance of the Scheme in respect of new applications.

Following the discontinuance of the Scheme, local authorities have been advised to consult with the Housing Finance Agency directly on the management of loans relating to lands not accepted into the Land Aggregation Scheme. I understand the Housing Finance Agency has made arrangements directly with some local authorities to extend interest-only arrangements to land acquisition loans, on maturity, for a further five years, after which they will revert to normal-course annuities.

The focus of the Land Aggregation Scheme has now shifted to the management and utilisation of the lands included in the Scheme. The Housing Agency has been tasked with developing a more extensive Land Management Strategy under which land transferred to the Agency will be considered.

The Social HousingStrategy will have a focus on utilising state lands and will further enhance our approach to social housingprovision in Ireland. Accordingly, both lands that have been transferred to the Housing Agency and local authority held lands suitable for housing development will be among the first sites considered in the social housing building programme. The Strategy, which I expect to publish the coming weeks, will contain clear measurable actions to be taken to increase the supply of social housingon a national basis.

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