Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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37. To ask the Minister for Housing, Planning, and Local Government the financing arrangements envisioned in the delivery of social, affordable and market priced housing on the first eight sites to be developed by the Land Development Agency. [39019/18]

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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52. To ask the Minister for Housing, Planning, and Local Government the proposed projects that the Land Development Agency will enter into with private developers; the way in which an affordable home under such partnerships will be defined; and the estimated time it will take to build social and affordable homes in projects under the charge of the agency. [39090/18]

Eoghan Murphy (Dublin Bay South, Fine Gael)
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I propose to take Questions Nos. 37 and 52 together.

Along with my colleague the Minister for Finance and Public Expenditure and Reform, I signed the Establishment Order for the new Land Development Agency (LDA) on 13 September 2018. This Order was made under the Local Government Services (Corporate Bodies) Act 1971.

The Agency will act as a national centre of expertise, working with and supporting local authorities, public bodies and other interests, to harness public lands as catalysts to stimulate regeneration and wider investment and to achieve compact, sustainable growth, with a particular emphasis on complex regeneration projects and the provision of affordable housing.

The LDA has a number of financing options available to it, including direct funding by the LDA from its own capital, the deployment of third-party capital or a combination of both.

Significant preparatory work is required in relation to the initial portfolio of eight sites and as part of this process, funding structures will be devised on a case by case basis, taking account of the scale of each project, value for money for the State, risk and pace of delivery.

To enable more delivery of social and affordable homes on public lands, the Government has, in parallel with the establishment of the LDA, approved a new affordability requirement in relation to publicly owned lands, whereby a minimum of 30% of any housing developed must be reserved for affordable purposes in addition to the 10% statutory social housing requirement under Part V of the Planning and Development Act, whether such development is being progressed by the LDA or any other market operator. Furthermore, public bodies, such as local authorities and the Housing Agency, engaging with the LDA in relation to their lands will also be in a position to condition their release for development reflecting their own policy requirements.

Therefore, complying with the Government's new public lands affordability requirement above, the LDA will be capable of progressing a significant level of both Affordable Purchase Scheme based and cost rental-based projects on lands forming part of its portfolio of sites, working within the broader policy framework for the delivery of affordable housing set by the Government.

In line with the general internationally accepted principle that households should not be spending more than a third of their income on housing costs (e.g. rent or mortgage), and using similar maximum gross income thresholds to the new affordable scheme (i.e. €50,000 for single-income and €75,000 for two-income households), my Department is working with the LDA to ensure that it can deliver housing for both purchase and rental purposes within such parameters.

In relation to affordable homes for purchase, the Rebuilding Ireland Home loan sets a maximum value of homes that can be bought/built at €320,000 in the Greater Dublin Area, Cork and Galway cities, and €250,000 elsewhere in the country.

A maximum dual-income threshold under the new Affordable Purchase Scheme is set at €75,000 (which would enable a first-time buyer to afford repayments of around 35% of net income on a 90% LTV mortgage, using the Rebuilding Ireland Home Loan, of around €285,000), enabling an overall maximum house purchase price of €320,000.

Analysis of projects supported under the Local Infrastructure Housing Activation Fund indicates that, on just under three-quarters of all 30 sites funded, there will be homes available to purchase for less than €320,000 (at today’s prices).

In relation to affordable rental delivery, my Department believes that, in line with the public lands affordability requirement mentioned above, the availability of such public lands at low or no cost to underpin cost rental projects, including those progressed by the LDA, would be capable of delivering rents at around 20% below comparable market rates in the area, but this will vary, depending on the development potential of a given site, costs of providing site infrastructure, etc.

In addition, the LDA will have to demonstrate and report on how it is meeting the policy requirements under Part V and the new public lands affordability requirement, using the range of relevant affordable schemes and mechanisms.

The LDA is in the process of commencing feasibility, planning and other preparatory works on its sites immediately, with construction envisaged to be commencing on the first homes in 2019 for delivery in 2020, with progress ramping up in line with an overall business plan which is also being advanced as a matter of urgency.