Michael Murphy (Tipperary South, Fine Gael)
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433. To ask the Minister for Housing, Planning, and Local Government further to Parliamentary Question No.125 of 19 February 2025, the policy rationale for the 2023 Payment and Availability and Capital Advance Leasing Facility financial assessment circular; and the impact this has had for development financing for approved housing bodies since its introduction. [9070/25]

James Browne (Wexford, Fianna Fail)
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Pursuant to a commitment in 'Housing for All', a review of the Payment and Availability-Capital Advance Leasing Facility (P&A-CALF) Scheme was conducted and a report published in 2023.

The review occurred against the backdrop of certain local authorities, mainly in the West and North West, finding it very difficult to achieve viability under the then P&A-CALF funding model due to, inter alia, the relatively lower rents in those areas, as P&A funding was then linked to a percentage of market rent. These viability issues were also being experienced by other local authorities given the significant increase in construction inflation in the wake of the Russian invasion of Ukraine, the Covid 19 pandemic and supply chain issues.

Following the review and Ministerial approval thereon, my Department issued Housing Circular 12/2023 of 6 April 2023, which set our revisions to the P&A-CALF Scheme as a support to Approved Housing Bodies (AHBs) in the delivery of social housing units.

The changes to the P&A-CALF funding model introduced by the aforementioned Circular include:

• that the initial P&A Agreement amount would now be calculated on the basis of the overall eligible capital and operational costs rather than being linked to market rent;
• the introduction of a minimum CALF percentage of 25 per cent as a control to balance the funding cost between the capital and current budgets; and
• that the CALF loan remains as a repayable loan.

Since their introduction, the revisions to the P&A-CALF Scheme have had a positive effect on development financing for AHBs, in that, nationally, applications under the Scheme increased by 67 per cent in the year following the implementation of the review recommendations.