Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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47. To ask the Minister for Housing, Planning, and Local Government the way in which he envisages the affordability requirement of LIHAF funding being delivered across the country and in Dublin in particular; and if he will make a statement on the matter. [45299/17]

Eoghan Murphy (Dublin Bay South, Fine Gael)
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The primary objective of the Local Infrastructure Housing Activation Fund (LIHAF) is to stimulate and accelerate the early supply of housing in urban areas with large demand, by opening up these lands with key enabling public infrastructure that would otherwise not be provided in the short term. The resulting increase in supply on both private and public lands is key to tackling price and affordability as the lack of supply is one of the main factors currently inflating house prices.

As required under the LIHAF scheme's criteria and conditions, local authorities were asked, inter alia, to obtain commitments from housing providers on associated sites in relation to housing delivery timelines and cost reductions.  Local authorities were asked to ensure that an agreed cost reduction was included in the agreements on the approved sites to ensure that there is a proportionate dividend for the State’s investment in infrastructure. 

Local authorities have used a range of mechanisms to meet the affordability commitment, tailored to the individual circumstances of each proposal. In some instances, the local authority itself owns the lands and consequently has a high degree of control in terms of ensuring delivery of a portion of units at affordable prices and on those sites, local authorities will be providing extra social housing over and above the 10% required under Part V of the Planning and Development Act 2000.

Where land is owned privately, providers of housing have entered into an undertaking with local authorities where, in recognition of the early delivery of the necessary public infrastructure, those providers have undertaken that housing will be delivered in accordance within an aligned timeframe of construction and with agreed cost reductions to be taken off the market price.  This can be an agreed cost reduction across all units or a larger cost reduction across a specified number of units.

I have asked the Dublin local authorities to seek to provide as much affordability as possible on related sites. However, under the criteria originally set out in LIHAF, the expectation is that cost reductions will be delivered to make housing more affordable than would otherwise be the case, as opposed to requiring that housing be priced under a certain ceiling. The cost of building in Dublin is high relative to other parts of the country, driven primarily by high land costs and the viability of private developments would have been affected by any unrealistic ceilings or price capping, whereas the approach being taken is designed to promote supply, while achieving a cost reduction that is proportionate to the investment in public infrastructure and provides a benefit in terms of both the overall market effect of increased supply.  In certain cases, the cost reductions will be aggregated and spread over a smaller number of units to deliver a greater cost reduction and, in those cases, those units will be targeted at key societal groups that may be impacted or priced out of the market.

To date, I have signed grant agreements for 22 of the 34 proposals which received preliminary approval and I will shortly publish further details regarding the approved LIHAF projects on my Department’s website.