Tuesday 20 August 2019

State delays funding for new homes over social housing fears

(Stock picture)
(Stock picture)
Paul Melia

Paul Melia

The Government is refusing to approve State funding for one-in-six housing schemes because it's not clear how many of the homes built will be 'affordable'.

Only 28 of 34 so-called Lihaf projects announced last March have been approved and signed off by Housing Minister Eoghan Murphy, despite an October deadline to finalise projects.

The €226m Local Infrastructure Housing Activation Fund is earmarked to build roads, bridges and other services needed to open sites for development. In return for the cash, developers had to provide social and affordable housing.

At the time, the Government said the funding would help deliver "new and attractive communities to live in at affordable prices and rents".

But progress on finalising deals has been slow, as house prices continue to rise due to lack of new supply.

New figures from the CSO show prices have risen 12.8pc in the year to September, compared with 8pc in the year to September 2016. In Dublin, house prices rose by 12.4pc and apartments by 11.4pc in the year to date. The fastest pace of growth was in the west, where house prices rose by 16.5pc.

While below peak levels, prices have risen by 87pc in Dublin and by 61.4pc in the rest of the country since early 2013.

The highest 'average' price in the State is Glenageary in south Dublin, at €632,763. Outside Dublin, it's Greystones in Co Wicklow at €380,000, falling to a low of €52,538 in Clones, Co Monaghan.

Read More: More homeless than ever relying on shelter

Labour's housing spokeswoman Jan O'Sullivan said the figures showed the need for a national affordable housing scheme.

"The State needs to pick up the slack from where private developers have failed," she said. "Wages have not risen by the same level of 12.8pc and so many people are being priced out of the market."

The Lihaf scheme is designed to ramp up delivery of units, with 34 projects located across 15 local authority areas approved for funding, capable of delivering 23,000 homes by 2021.

It is understood agreements have not been reached for schemes in areas of high demand across Dublin. In some cases, projects are not ready to proceed, while affordability concerns are an issue in others.

The Department of Housing said it expected most projects would go ahead, but some could be delayed until a second round of Lihaf funding is announced next year.

It could not confirm how many of the 17,500 units approved to date were social or affordable. In some cases, all homes in an estate will see a price reduction, while in others a certain number will benefit.

Lihaf funding has been subject to controversy, with concerns raised about why the State would fund infrastructure works in private developments.

Few homes will be sold for less than €280,000 in the capital, with most 'affordable' units likely to be above this threshold, barring many families from buying in these estates.

Irish Independent

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