· I want to thank Hugh and the guys at O’Cualann for organising today’s event and indeed for all the great work they are doing on affordable housing.
· O’Cualann are a great example of an organisation that got on with it and delivered affordable housing.
· O’Cualann is a group of people with a “can do” attitude and we need more of that.
A little context:
· At the outset, it’s important to set the overall policy context.
· The Irish Housing system was devastated during the economic downturn.
· Housing output falling by 90%,
· The construction sector shed 100,000 jobs between 2007 and 2017.
· There is no quick fix to a shock like that.
· It takes a series of targeted actions across the complex and inter-related parts of the housing system.
· Rebuilding Ireland is the Governments comprehensive delivery plan.
· It is an iterative Plan that has been augmented and updated since its publication in mid-2016.
· At this point, we have put in place a very significant series of targeted responses that are designed to:
- Stabilise and provide the emergency response to homelessness;
- Develop a major social housing programme;
- Rebuild the house building industry and ensure that there is a steady supply of affordable homes;
- Reform and modernise the rental sector; and;
- Maximise the potential from vacant homes.
· We are doing everything possible to provide ongoing support for our most vulnerable citizens, while managing long-term programmes to create a sustainable pathway to a stable and consistent housing system.
Funding:
· The Governments’ commitment is clear.
· Next year we will invest more in Housing than any other previous Government has in a single year - €2.4 billion euro.
· That will deliver a lot of new homes for families in homelessness and housing insecurity today.
· Over four years to 2019, €6.6 billion will have been provided.
· We will oversee the building of tens of thousands of new homes.
· Over 20,000 homes that will be delivered this year, and
· 25,000 next year.
· I’d like to see more, but it’s a solid start given the recent past.
· From the outset we have targeted our efforts towards the most vulnerable and providing better help to homeless people and families remains the top priority.
· The best way to help a family that needs a home is to provide one.
· For that reason, accelerating supply of social housing remains a priority.
Social Housing
· We will deliver another 10,000 council houses next year. That is real progress.
· The social housing construction pipeline is now in place and growing, as evidenced in the Quarter 2 Construction Status Report.
· Since the end of 2016, the number of schemes and homes in the programme has doubled.
· Activity on-site has also increased significantly, with 1,074 homes going on-site in Q2 this.
· You cannot underestimate the challenge of reviving the social housing build programme.
· Local authorities had ceased to build and during the down-turn local authorities shed one third of their staff. That sort of capacity and experience takes time to replace.
Affordable Housing:
· Now that real progress is being made on social housing we have also been clear that we need to address issues of housing affordability and access.
· In particular, helping low- to middle-income households facing the worst affordability pressures in Dublin and elsewhere.
· Back in 2011 all affordable housing schemes were stood down, given the prevailing economic position in the country at the time.
· As you know, given the collapse in house prices there was an overhang of unsold affordable homes at that time and we also had 3,000 ghost estates.
· This time around it’s important that we target affordable housing interventions in areas that require them based on a consistent approach to economic assessment.
· All local authorities are now working on the economic assessments of the requirement for affordable housing in their areas. They will also assess the viability of delivering such housing from their sites.
· In order to deliver affordable housing, in the areas of the country most affected by a lack of affordable housing supply, a multi-stranded, targeted approach is being pursued.
· The measures are targeted at households earning a maximum of €50,000 for a single applicant or €70,000 for a couple.
· The ambition is for at least 10,000 affordable homes.
Serviced Site Fund:
· To get sites serviced the Government has trebled the funding to €310 million to support this programme of work, under the Serviced Sites Fund (SSF), as part of Budget 2019.
· The funding is available for key facilitating infrastructure, on local authority sites, to support the provision of affordable homes to purchase or rent.
· A first call for proposals, under the Fund, issued to local authorities in Dublin; the Greater Dublin Area; Cork and Galway on 29 June 2018.
· The closing date for applications was 31 August and 15 proposals were received from 9 local authorities.
· These are currently being assessed and I expect this process to be finalised and an announcement of the first successful bids to be made in the next week or two.
· Further calls for proposals will be made as soon as practicable thereafter.
· Once the funding is awarded and the infrastructure is provided we expect delivery of affordable homes from 2019 onwards.
· Separately, once all local authorities have carried out the economic assessment of the requirement for affordable housing in their area, further local authorities may be considered for funding.
· I envisage a maximum amount of funding of €50,000 per affordable home and on this basis some 6,200 affordable homes could be facilitated.
Options
· In terms of the type of affordable housing that will be delivered on local authority sites:
o it may be affordable housing for purchase, under the recently commenced provisions of Part V of the Housing (Miscellaneous Provisions) Act 2009, or,
o Cost rental, which is being advanced on a number of pilot sites before being rolled out more generally.
Affordable Purchase:
· Under the 2009 Act, the maximum discount is 40% of the market value of the home and the local authority takes a charge, equivalent to the discount, against the property.
· The discount is repayable and will be centralised in a dedicated affordable housing fund. This will provide ongoing funding for affordable housing and help more families into the future.
· At full discount this equates to a home worth €350,000 being available today for €210,000 or an apartment worth €300,000 being available to buy for €180,000.
· The local authority will retain a charge equivalent to the discount and the household must recoup the charge at re-sale or during the charge period.
· The applicants will be selected openly and transparently by the local authority providing the homes.
Rebuilding Ireland Home Loan:
· To help people get the finance they need to buy a home, the Rebuilding Ireland Affordable Home Loan was launched on 1 February 2018.
· There has been great interest in the scheme to date. At the end of September, the Housing Agency had assessed and recommended 1,134 loans for approval, totalling some 236 million euro.
· An assessment is currently underway that will consider some inconsistencies in decision making that have been identified, the need to potentially broaden the application of the scheme, as well as the possibility of extending the affordable loan to vacant homes requiring refurbishment.
Cost Rental:
· One of the biggest problems we face is a lack of affordable rental options in Dublin and other major urban areas.
· We need to manage the rental stock better to make it attractive to landlords and tenants.
· The changes in terms of short-term lettings and the new RTA legislation will help.
· We also need a different form of rental product.
· Not for profit, cost rental.
· We are determined for it to become a major part of our rental landscape in the future.
· It is clear that there is a gap between social housing and the rental market that needs to be filled.
· It will make a sustainable impact on housing affordability, national competitiveness, and the attractiveness of our main urban centres as places to live and work.
· The Housing Agency, Dun Laoghaire Rathdown County Council and a number of Approved Housing Bodies (AHBs) have signed the agreements on our first cost rental pilot, at Enniskerry Road, and tenders have issued.
· In parallel, Dublin City Council, my Department and the National Development Finance Agency undertook detailed modelling and financial appraisal on a major site, at St. Michael’s Estate in Inchicore, which DCC will now develop as a major cost rental project.
· The European Investment Bank is also supporting the development and implementation of this key project and the broader thinking and policy around affordable rental.
Land Development Agency:
· Land is a critical input and if land prices spiral so do house prices and rents.
· Therefore, one of the most significant actions taken recently is the decision to establish the Land Development Agency.
· This will be a commercial state sponsored body, acting within a clear government policy framework, including that all public land disposals must deliver at least 40% of any housing potential on such lands in the form of social (10%) and affordable (30%) housing.
· The LDA will establish a national centre of expertise for state bodies and local authorities, using experienced staff with expertise in project management finance, planning, development and procurement.
· For the first time, Government will create a State body to deliver on the key principles of the Kenny Report of 1973 and NESC’s latest research, targeting land management and housing delivery that is intended to underpin the delivery of 150,000 new homes over a 20 - year period or around 25% of all housing needs envisaged by Project Ireland 2040.
Conclusion,
· Fixing housing remains a top national priority.
· Together with helping the most vulnerable immediately we also need to design and deliver Irelands housing system of the future.
· We need an extra 550,000 new homes by 2040 to cater for an additional 1 million people in Ireland.
· Those people have a variety of housing needs and aspirations that the housing system needs to address.
· One thing is common – it must be affordable based on income.
· The States’ role is to address market failures to deliver social and affordable housing.
· The State has land and access to funding and finance to help deliver these badly needed homes.
· There is a lot happening in this space and all Dublin local authorities have major sites coming forward for mixed tenure housing.
· For example, a 1,000 home site will begin construction in the summer in Clondalkin.
· We debate a lot among public service insiders regarding the housing situation.
· Today presents an opportunity to get a broader perspective on the housing situation and I’m looking forward to hearing from other contributors.
· We all want the same thing – the best housing system for Ireland and its growing population.
· I like the O’Cualann approach – what can I do? How can I contribute?
· Thank you.