Wednesday 26 September 2018

Cheap housing boost planned for squeezed middle

Stock picture
Stock picture
Paul Melia

Paul Melia

The Government is to launch an affordable homes scheme for middle-income households early in the new year.

Housing Minister Eoghan Murphy said below-market price homes would be provided by building on State-owned lands, in developments in receipt of public money to pay for infrastructure works and on large land banks being developed as new communities.

"We're basically going to re-establish an affordable homes scheme, which was scrapped in 2009," the minister said. "At the moment, there are people eligible for social housing. If you're not, you get almost no support from the State. We want to look after that cohort of people who aren't eligible for social housing but who don't have the means to buy or rent a home at the moment."

Under the previous scheme, local authorities bought homes at a discount from developers which were sold to first-time buyers, subject to a maximum income threshold.

The deals were agreed during the planning process, and owners who sold within a set period of time were obliged to repay a percentage of the price to the council, known as the clawback.

In Dublin, homes were sold up to 30pc below market prices. While income limits have not been set, they are likely to range from around €45,000 to €75,000.

Mr Murphy said that three different methods would be used to provide affordable homes.

"We will take small (State owned) sites, close to social housing and private housing because we need the mix, and people will go into those homes," he said.

Some €25m has been set aside for 2018 and 2019 to deliver at least 650 cooperative homes, where the State provides the land meaning that units can be delivered at a cheaper cost. A two-bedroom home in Ballymun built by the Ó'Cualann housing cooperative cost €140,000, and a three-bed €170,000.

The second way is through LIHAF, or the Local Infrastructure Housing Activation Fund. This involves public money being used to provide infrastructure including roads, to open up sites for development.

The minister has approved 29 of 34 LIHAF projects where the State will invest €177m in infrastructure works in private developments. Five are delayed because agreement cannot be reached on affordability.

It is expected that 17,940 units will be provided on these sites by 2021. Mr Murphy has previously said that on 70pc of LIHAF sites, two-bedroom and three-bedroom homes will come in under €320,000. The vast majority of them will come in under €300,000.

"On some schemes it's a cost reduction per unit, but on around 30pc of schemes we will take a number of homes - 50, 100 or 150 - and they will be affordable homes, priced at a certain level. Affordable to buy, but also affordable to rent," he said.

The third will be when large land banks are being developed, where local authorities will be urged to seek affordable units. The details on how the system will work will be finalised next month. The minister added he would not be happy with progress on tackling the housing crisis until at least 25,000 homes were delivered every year.

Irish Independent

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