Tuesday, 16 November 2021
Department of Housing, Planning, and Local Government
286. To ask the Minister for Housing, Planning, and Local Government the total departmental finances allocated to Emmet Road, St. Michael's Estate development; the proposed loan from the EIB and other ways that the Government can subside this project in order to ensure that the rents are realistic and truly affordable while not compromising on the quality of design; and if he will make a statement on the matter. [55727/21]
290. To ask the Minister for Housing, Planning, and Local Government the progress on the regeneration of the St. Michael’s site, Emmet Road, Inchicore, Dublin 8 including the finances allocated, the proposed loan from the EIB and other ways that the Government can subsidise this project in order to ensure that the rents are realistic and truly affordable while not compromising on the quality of design. [55930/21]
I propose to take Questions Nos. 286 and 290 together.
Along with O’Devaney Gardens and Oscar Traynor Road, Emmet Road (4.9 hectare brownfield site, formerly St Michael’s Estate) is one of three significant sites, which is currently being brought forward for development by Dublin City Council (DCC). I have confirmed support for the proposed development, as being a project of strategic importance in its own right, as a Cost Rental ‘pathfinder’ project.
Although the design of the Emmet Road development has not been finalised, current plans propose 484 units in total, of which circa 375 units will be designated for Cost Rental homes and the remainder for social housing.
In terms of financial support, in addition to value the Council may be able to leverage via its own land, my Department gave funding approval to a Serviced Sites Fund (SSF) application totalling €18,750,000 from DCC for the Emmet Road project in Q1 2021. Subject to the standard processes, my Department will also fully fund the cost of the social homes in the development.
In line with the publication of the Government’s Housing for All plan, a number of significant improvements to the SSF scheme, now named the Affordable Housing Funding (AHF) scheme, have been agreed and communicated to local authorities. These changes include expanding the scope of costs covered to sub vent the all-in development cost of delivering the housing; accepting applications as they are developed on a rolling basis as opposed to time constrained funding calls; and, allowing funding support to now exceed the current maximum of €50,000 per affordable dwelling on a stepped scale to €100,000, based on location and density.
Discussions have been undertaken with the European Investment Bank (EIB) about potential loan funding from the EIB for the development and the EIB has confirmed support in principle for the project. The presence of an EIB representative in an advisory capacity will allow the Board for this project to draw on the EIB’s extensive experience of funding affordable housing. The input of the EIB is also relevant in ensuring that there is a full understanding of the banks’ strategic lending needs and priorities, which in turn, will help to inform a wider national model for Cost Rental.
The principle of Cost Rental is that the rent for the homes made available will be a function of the costs incurred in financing, building, managing and maintaining the homes. As such, it is essential for costs to be managed carefully, in order to deliver rents that are as low as possible. In determining viability, there is a clear need ensure that the design and specifications of Cost Rental homes is balanced appropriately with cost.
A net household income limit of €53,000 has applied to the first Cost Rental projects, so that a household could not spend any less than 25% of net income on a ‘reference rent’ of €1,100 per month, which is reflective of the rents for Enniskerry Road and the first Cost Rental homes funded by the Government’s Cost Rental Equity Loan (CREL) scheme. Cost Rental projects can benefit from State supports, such as grants for infrastructure works, the provision of public land at no or low cost and State assistance with financing. All three of these methods are being used by the Department to support initial Cost Rental projects.
As the design and other key metrics for the Emmet Road development have not yet been finalised by DCC, it would not be prudent at this juncture to comment on exact finances to be allocated to it nor on the ultimate Cost Rents that may emerge. However, as previously stated, my Department fully supports this development as a 'pathfinder' project and DCC will be able to avail of State supports to achieve its realisation.