Dáil Éireann Debate, Monday - 11 September 2023
973. Deputy Richard Boyd Barrett asked the Minister for Housing, Local Government and Heritage to provide an estimated unit cost to the Exchequer for providing cost rental homes (1-, 2-, 3- and 4-bedroom) and for providing affordable homes (1-, 2-, 3- and 4-bedroom); and if he will make a statement on the matter. [39415/23]
View answerThe Affordable Housing Fund (AHF) is in place to support local authorities to deliver affordable purchase and cost rental homes in line with the ambitious targets set out under the Government's Housing For All strategic plan and the provisions of the Affordable Housing Act 2021. The AHF does not provide funding support to affordable housing delivery by Approved Housing Bodies, the Land Development Agency, First Homes, or a range of other affordability measures which are addressed separately.
The cost of delivering new homes is dependent on a range of variables, such as the location, the scale of the development, and the size and type of the homes involved. Overall cost information relating to approved local authority affordable housing schemes is collated at development/project level rather than at individual housing unit level.
In general, AHF subsidy rates of €50,000, €75,000 and €100,000 per affordable home are applied dependent on the location of and the net density achieved in the development. A subsidy rate of up to €150,000 per affordable unit applies to cost rental developments in the five city areas.
This subsidy is applied by the Local Authority to the development costs which allows the homes to be made available for purchase or rent to eligible applicants at a reduced price or rent, a discount of at least 15% below the open market sale price or at least 25% less than the market rent.
In the case of an affordable purchase home, the remaining development costs are met by the purchaser's funds and mortgage loan. The local authority takes a percentage equity stake in the home equal to the discount of the purchase price from the full market value of the home which is redeemable by the purchaser at a future date. The amount of discount applied is determined by the local authority on a case by case basis having regard to the purchasing power of the approved affordable housing applicant.
In the case of cost rental homes the remaining development costs after subsidy are primarily paid for by borrowing which is repaid over time from the cost rental income stream.
In summary, the AHF outlay to assist in the delivery by local authorities of affordable homes for purchase or rent will fall in the range from €50,000 to €100,000 in the case of an affordable purchase home and up to €150,000 in the case of a cost rental home, with 95% of the AHF subsidy being met from Exchequer funds.
