Catherine Connolly (Galway West, Independent)
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112. To ask the Minister for Housing, Planning, and Local Government the engagement he or his Department had with Galway city and county councils in 2021 to address the funding and legacy debt issues highlighted in the minutes of a meeting (details supplied) in order to minimise their risk in the financing of affordable housing schemes and to maximise the delivery of affordable homes; and if he will make a statement on the matter. [46393/21]

Darragh O'Brien (Dublin Fingal, Fianna Fail)
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In March of this year my Department’s Secretary General and other senior officials met with each of the Galway local authority Chief Executives. On 31 May and 2 June and, most recently again, on 13 and 14 September, I met with the Chief Executives of all local authorities including both Galway City and County Councils, where a range of issues relating to the Housing for All plan were discussed, including land, funding and resources.

Housing for All contains strong commitments on strengthening the capacity of local authorities to initiate, design, plan, develop and manage housing projects. Supports are being provided to all local authorities through the Housing Delivery Co-Ordination Office (HDCO), which has been established within the Local Government Management Agency.

In addition, my Department is also supporting local authorities in the area of land acquisition through an early payment arrangement for suitable sites. I hope that both Galway local authorities will be utilising this opportunity to add to their land holdings and take advantage of early payment arrangements. My Department is also working with the Galway local authorities and others to develop housing proposals where possible to utilise sites that carry debt for the authorities.

Galway City Council has availed of the Land Aggregation Scheme (LAGS) which assists in the gradual unwinding of Housing Finance Agency (HFA) loans taken out by housing authorities to purchase land for the social and affordable housing investment programme. Under the Scheme, local authorities could for a nominal fee, transfer residential development land on which there were outstanding HFA loans to the Housing Agency. The Galway City Council site at Ballymoneen Road, Ballyburke was redeemed under LAGS in full at a cost of €7m.

In terms of the delivery of affordable housing schemes, Housing for All delivers on the Programme for Government commitment to put affordability at the heart of the housing system. It is the largest State-led building programme in our history, backed up by an unprecedented financial commitment in excess of €4bn per annum and will see 36,000 affordable purchase homes and 18,000 cost rental homes built, alongside 90,000 social homes.

Specifically regarding middle-income families wishing to buy homes, the Housing for All strategy contains a multi-pronged approach to improving affordability.

The Local Authority Affordable Homes scheme and the First Home scheme are primarily focused on supporting first-time buyers purchasing newly built homes. Both of these schemes will be targeted at households constrained by the maximum mortgage and deposit available to them. The gap between the market value and what the household can afford (including with the assistance of the ‘Help to Buy’ incentive) will be bridged via the provision of equity support. The equity support can subsequently be redeemed at any time at the home-owners discretion, or remain outstanding until the home is sold or passed on.

In terms of delivery of affordable housing interventions by local authorities, my Department together with the Housing Agency has met with the Galway local authorities regarding structures for the procurement and delivery of affordable housing. Local authorities intending to advance an affordable purchase scheme can apply to my Department for Exchequer funding of up to €100,000 per unit under the Affordable Housing Fund. It is anticipated that in most cases nationally, affordable homes will be delivered via partnership arrangements between local authorities and contractors whereby the majority of development funding is provided by the contracted body. Direct sales agreements will provide for the sale of homes directly from the contracted party to the eligible purchaser referred by the local authority. In this way the financial risk for the local authority is minimised.

In addition to these distinct shared equity schemes, Housing for All also provides for the 'Local Authority Home Loan', which will be in place later in 2021. The Local Authority Home Loan is a successor to the Rebuilding Ireland Home Loan Scheme, and will include an increase in the income ceiling for single applicants, thus increasing the number of people eligible. From 10 September 2021, I have already implemented a reduction of the mortgage interest rate by 0.25% for new borrowers under the existing Rebuilding Ireland Home Loan (RIHL). This lower rate will also apply to loans issued under the forthcoming Local Authority Home Loan. The Help to Buy scheme is also currently available to help purchasers in accessing homes.

Further to the above, Housing for All also provides the following supports -

- increased funding provided to the Land Development Agency,

- the Croí Cónaithe initiative intended to service sites and refurbish existing vacant properties in regional towns and villages,

- a higher stamp duty rate for institutional investors that purchase family homes,

- increased regulation of short-term letting properties,

- additional measures to reduce vacancy rates, and

- expanded supports for retrofitting existing homes.

Collectively, these measures will improve affordability for all families or individuals wishing to purchase a home.

Mark Ward (Dublin Mid West, Sinn Fein)
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113. To ask the Minister for Housing, Planning, and Local Government if he will provide a cost analysis on public funding used by local authorities to rent private homes for social housing over a 25 year lease; and if he will make a statement on the matter. [46391/21]

Darragh O'Brien (Dublin Fingal, Fianna Fail)
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An analysis of expenditure on housing supports was carried out by the Irish Government Economic & Evaluation Service (IGEES) within the Department of Finance and Public Expenditure and Reform in 2017. This analysis concluded that cost levels within each of the schemes funded under the Social Housing Current Expenditure Programme, which includes long term leasing, were generally below average rent price levels in the market, and as such, each of the schemes were meeting their individual operating objectives, and reducing the price impact on the market.

Building on the 2017 review, IGEES carried out a further analysis, published in July 2018, focusing on the comparative analysis of delivery streams particularly related to cost effectiveness. This report found that in certain areas, where house prices are higher - e.g. Dublin and Meath - the net present cost (NPC) of delivering units via current funding programmes such as leasing is higher than construction or acquisition. In areas where house prices are lower – e.g. Mayo and Tipperary - the NPC of leasing and other current funding programmes is either at or below that for construction and acquisition.

Whilst the 2018 report found that relative cost efficiency is an important consideration in terms of the mix of delivery, it also found that it is not the only consideration and must be viewed in the context of policy objectives and wider issues. In this context, as well as relative costs, a number of other considerations must be taken into account in terms of the overall mix of delivery including the speed of delivery, the quality and appropriateness of accommodation, sectoral capacity and flexibility.

Looking at the most recent cost information available, the average cost for a leased unit, based on leased units claimed for the first half of 2021, is €11,904 per housing unit.

Finally, a full spending review of the Social Housing Current Expenditure Programme (SHCEP), which includes long term leasing, is currently being undertaken by the Department of Public Expenditure and Reform.