Thursday 30 March 2017

Social housing: Lease scheme will put end to councils building homes

Paul Melia

Paul Melia

MASSIVE cuts in funding for social housing will result in people on local authority waiting lists never owning their own home.

The capital housing budget will be slashed by €360m as the Government moves to leasing instead of building new council housing.

But local authority tenants living in their homes for at least 15 years will be allowed purchase their property for almost half the market price -- if they buy in the next year.

The Department of the Environment will also unveil a 'build-to-lease' scheme early next year, where developers will be guaranteed a rental income for up to 20 years if they finance and build homes on behalf of a local authority.

"If we were to build 20,000 houses it would cost €3bn. I can lease 3,500 homes for €25m a year, so it's very good value for money," Housing Minister Michael Finneran said.

"We're looking at a build-to- lease system where a developer could give a 10- to 20-year lease on homes they build on sites they own or a site provided by a local authority.

"It gives more flexibility to the local authority. I don't see it as a bailout for developers. We need houses for people.



Value

"If I were to give €20m to a local authority, they'll have to get someone in to build them. I want value for money and we're very advanced in that process."

The cut in funding to build new homes -- down from €880m last year to €520m in 2011 -- is part of a general move where local authorities will no longer build housing. Instead they will enter into long-term leases to provide homes for people on council waiting lists.

But €172m has been given to continue the regeneration projects at Ballymun in Dublin and in Limerick. In Limerick, up to 500 units will be built in 2011.

A new scheme will allow up to 45,000 council tenants who have lived in their homes for 15 years to buy their property for a discount of 45pc off the market price, if they decide to buy in the next year.

Until now, the maximum discount available was 30pc off the market price. This was based on a 3pc discount per year of the tenancy, up to a maximum of 10 years. But the new tenant purchase plan aims to allow people living in their homes for at least 15 years to get a discount of up to 45pc.

Funding for homeless services have also been cut, from €56m last year to €53.4m in 2011.

Mr Finneran said that 680 homeless people would be in new homes by the end of the year, and that more would be housed in 2011.

Irish Independent

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