‘Affordable’ housing means different things in different places, Minister says

Private developers must deliver affordable homes on lands benefitting from public funds

Minister for Housing Eoghan Murphy has declined to say what he considers an "affordable" house price to be, saying it means different things in different locations.

The Minister on Wednesday warned private developers that they will “have to deliver affordable” homes on lands benefitting from public funds.

He rejected an assertion of one his senior officials on Tuesday that it was “possible” that not all publicly-funded “affordable” housing , would in fact be affordable.

David Walsh, assistant secretary at the Department of Housing, told an Oireachtas Committee it was difficult to know what price the "affordable" units at the biggest housing development in the State would be.

Up to 8,000 homes are being built at Cherrywood in south Co Dublin on a site benefitting from a €15.2 million subsidy from the Local Infrastructure Housing Activation Fund (LIHAF).

The fund, announced in August, aims to bring infrastructure to sites to enable their development. A condition of the funding was that the developer would deliver affordable housing, to rent and buy, as well as social housing on-site.

Mr Walsh agreed with Eoin Ó Broin TD (Sinn Féin) that it was “possible” none of the Cherrywood units would come in at less than €300,000.

Mortgages are generally limited to 3½ times a borrower’s income. The average industrial wage in the first quarter of this year was €37,600, giving a maximum mortgage for a single person on the average wage of €131,600.

Asked at a Housing Agency conference if LIHAF subsidised sites would always deliver affordable housing, he said: "They'll have to deliver affordable. Where significant public money is being brought to open up a site, affordability will have to be part of the negotiations."

Failure to deliver

Asked whether a developer who failed to deliver affordable housing on a LIHAF site would get the associated funding, he said: “Let’s look at the sites. Let’s look at what solutions we can bring to bear and let’s look and see exactly how we can make sure these sites are going to bring in the right mix of affordable housing to buy, to rent. ”

Some 34 sites across the State have been approved for €226.4 million of public funds under the fund.

“We are still at the beginning of the process, relatively, in terms of how we are going to use LIHAF to leverage new sites,” he added. “We know where the sites are going to be. Now we are going to figure out how we’re going to finance and build on those sites, how we are going to bring public money to bear.”

Mr Murphy said the Government had not yet decided “how we are going to decide what affordable is. It will be relative to incomes and will be relative of course to the locations, too. So it’s too early to know what affordable is going to mean in each site.”

He added: “Affordable needs to mean affordable.”