A new funding model to provide 350 homes by the end of next year, which will be available to rent for a minimum of 25 per cent below open market value, has been announced by Minister for Housing Darragh O'Brien.
On Monday, Mr O’Brien issued a “call for proposals” for Ireland’s first cost-rental tenancies, called the Cost Rental Equity Loan (CREL) scheme, in which tenants pay rent that covers the cost of delivering, managing and maintaining the homes only.
The scheme will see long-term loans on “favourable terms” made available to approved housing bodies to cover up to 30 per cent of the development or acquisition cost of new cost-rental homes.
State assistance in securing financing will mean that Approved Housing Body (AHB) landlords can set lower cost-covering rents for cost rental tenants, the Department of Housing said.
It is expected the remaining development or acquisition costs for the homes will be met by long-term commercial loans from the Housing Finance Agency, which has confirmed it will make a corresponding €100 million available next year for the scheme.
Government funding of €35 million has been made available for the scheme under Budget 2021, forming part of a larger allocation of €468 million for all housing affordability measures.
The specific eligibility criteria for the scheme is currently being finalised, however, it is expected that the scheme is for individuals on a “moderate income”, who are above the income threshold for the affordable housing scheme.
A further 50 cost-rental homes are currently under construction in Enniskerry Road, south Dublin and will be ready for occupation in mid-2021.
Minister O’Brien added that he intends to place the new cost-rental sector on a statutory footing, indicating that a Bill on affordable housing will be brought to government shortly.
He said AHBs have “consistently demonstrated their capacity and expertise in developing and managing homes for the social housing sector”.
“This new scheme provides for an expanded role for the AHB sector, enabling it to support moderate-income households in need of quality, affordable homes.”