Written answers

Tuesday, 20 February 2024

Department of Housing, Planning, and Local Government

Housing Policy

Photo of Richard BrutonRichard Bruton (Dublin Bay North, Fine Gael)
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345. To ask the Minister for Housing, Planning, and Local Government if he is aware that the rule that a cost rental should not exceed 35% of net income is rendering some persons in Dublin ineligible for both cost rental and ineligible for social housing; and whether this necessitates some changes in the terms of access for support in order that no one is excluded. [7582/24]

Photo of Darragh O'BrienDarragh O'Brien (Dublin Fingal, Fianna Fail)
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Cost Rental is a form of rental tenure designed to assist a cohort of renters who face significant affordability challenges meeting high rents in the private sector and who are not eligible for social housing support. The core principle of Cost Rental is that the rents cover the development, management, and maintenance costs of the homes, so that the long-term future of the homes is financially secure, but that rents are not subject to the pressures of the open market. Unlike market-driven rents, Cost Rental prices only increase in line with consumer inflation, providing stability while meeting ongoing expenses. Additionally, Cost Rental homes offer long-term, secure tenancies regulated by the Affordable Housing Act 2021.

The primary eligibility condition for accessing Cost Rental housing is a maximum net annual household income (less income tax, PRSI, USC, and superannuation contributions). This was originally set, for the whole country, in December 2021 at €53,000, these limits were adjusted to €66,000 in Dublin and €59,000 elsewhere in August 2023, acknowledging changing economic circumstances.

All Cost Rental properties must be leased to a tenant whose household falls within the above prescribed eligibility conditions, but because rents must cover costs on an ongoing basis, a landlord must be confident that a prospective tenant can be expected to pay the rent every month over the long term. Therefore, under the current legislation, a Cost Rental landlord has final discretion on whether to enter into a tenancy agreement with any particular applicant. There is no rule that the rents in a cost rental tenancy should not exceed 35% of a tenant's net income and my Department has not set any criteria in this regard. However, I am aware that this is a common affordability metric and may be used by landlords when assessing prospective tenants.

Regarding social housing, income thresholds were increased by €5,000 for all local authorities from January 1, 2023, based on a 2022 review conducted by my Department. The new thresholds are €40,000, €35,000, and €30,000 for bands 1, 2, and 3 respectively. Notwithstanding these changes, my Department is awaiting detailed research examining the existing income limits in the context of current market and population conditions and the suitability or otherwise of the current framework having regard to the significantly changed landscape since it was introduced. This has been commissioned by the Housing Agency and I understand this work is near completion. When it is available, my Department will undertake a detailed examination of the report, including consultation with stakeholders. This will facilitate the preparation of options for my consideration later this year as set out in the Housing for All Action Plan update.

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