Housing: More cash for new homes as Government sets out 'priority'
A €750M fund for builders, an additional €75m to open up sites for residential development, and 3,800 new social homes in 2018 are among the main housing measures announced in Budget 2018.
The Department of Housing will spend more than €1.8bn next year through building, buying and leasing properties, with the budget for Housing Assistance Payments (HAP) doubling to €301m, up €149m.
Housing Minister Eoghan Murphy said the measures introduced would help address the homeless crisis, ramp up the social housing new-build programme and deliver affordable homes.
"We're going to see an almost doubling in new builds, and it will increase into the following year," he said, referring to delivery of 3,800 new social homes in 2018, up from 2,000 this year.
He said that affordable units would be delivered on sites in receipt of the €226m LIHAF (Local Infrastructure Housing Activation Fund), which funds infrastructure needed to open up sites for development, and said an additional €75m would be allocated for a second round of LIHAF funding. This is designed to deliver 5,000 affordable homes.
The budget for homelessness has increased to €116m.
"Addressing our housing shortage and homelessness crisis is the Government's number one priority," he said. "Budgeting is about choices, and I believe we have made the right choices when it comes to increasing our state building programme, supporting homeless people and ensuring that more homes can be built, more quickly and at more affordable prices."
Some 25,469 social housing units will be delivered next year, through a mix of new-build, acquisition, long-term leasing and HAP. The budget for Rebuilding Ireland, announced last year, will rise by €500m to more than €6bn, with 50,000 new homes to be delivered, an increase of 3,000 over the original target. Some 33,500 will be new-build.
Among the most significant measures is the creation of Home Building Finance Ireland, which will administer a €750m fund for builders unable to secure affordable finance.
The money will be drawn from the Ireland Strategic Investment Fund, and made available for commercial investment in housing finance. The fund will draw on the "extensive skill and expertise" within Nama, and will be available to builders who were not in the State bad-bank, Mr Murphy said. This was because those builders had alternative sources of finance available.
The €750m is intended to fund development of 6,000 homes across the State.
Sinn Féin's housing spokesman Eoin Ó Broin said the housing package was less than expected.
"There's nothing beyond the existing social housing targets. There was an expectation that delivery would increase. That hasn't happened," he said. "There is no affordable housing guaranteed in this Budget, and they're also spending less on LIHAF next year than expected.
"Legislation will also be needed for the building fund. How will any units be built next year using that fund? It's being presented as a solution to the affordability trap, but I can't see how they will be delivered at affordable prices."
But the Housing Agency, which advises the Government on policy, said the "significant increases" in funding were welcomed. HAP had proven effective in providing support, and the increase was "critically important" to prevent homelessness. The €750m building fund could also be used to target re-use of vacant properties.
Housing at a glance
- €1.83bn for housing in 2018.
- €500m increase in Budget for Rebuilding Ireland, with 50,000 new homes to be built by 2021, up 3,000. 3,800 units to be built next year.
- €75m for infrastructure fund to open up sites for housing.
- Housing Assistance Payment increases by €149m to €301m. Funding for homeless services to rise by €18m to €116m.
- €750m building fund for non-Nama builders, to be administered by a new agency called Home Building Finance Ireland.
- Mortgage interest relief to be phased out by 2020, affecting those who bought a home between 2004 and 2012. It will be 75pc next year, falling to 50pc and 25pc after.
- Vacant site tax rises from 3pc to 7pc, and commercial stamp duty increased from 2pc to 6pc. Residential land exempt.