Housing charities marvel at the idea thousands of rental properties will suddenly appear

Analysis: The reintroduction of an affordable purchase scheme was announced three years ago as part of Budget 2016

Homeless  in Dublin. The increase in homeless funding this year to €146m   is by now depressingly expected. Photograph:  Tom Honan

Homeless in Dublin. The increase in homeless funding this year to €146m is by now depressingly expected. Photograph: Tom Honan

 

The timing of the recent big-money housing announcement of the €1.25 billion Land Development Agency may have been calculated to take the edge off appetites for too much of a budget-day housing spending spree.

However, the fortuitous find down the back of the sofa of a decent few quid extra in corporate tax returns in the final days before Paschal Donohoe finished his budget preparations got the juices going again.

Housing, by its nature, devours budgets, and the headline funding for Minister Eoghan Murphy’s department at €2.4 billion is substantial. The difficulty is, however, even that pot does not go very far.

Donohoe said he was allocating €1.25 billion to the “construction acquisition and leasing” of 10,000 new social homes next year. However, just 6,000 will be new builds, either by local authorities, housing charities or by the private sector.

Far more social housing applicants, almost 17,000, are expected to be housed in the private rental sector using the Housing Assistance Payment at a cost of €121 million. However, this expectation may be hard to meet, with housing charities marvelling at the notion of all these rental properties suddenly appearing on the market.

The increase in homeless funding this year to €146 million is by now depressingly expected. No one in the sector is going to turn down €60 million more for emergency accommodation, but the idea of welcoming it was “heartbreaking”, said Mike Allen of Focus Ireland.

But the social housing and homeless funds are the work-a-day budget pieces. The razzle-dazzle of the housing budget was the €310 million affordable housing “serviced sites” fund.

Three years

The idea of this fund, which will be spread over three years with €89 million to be spent in 2019, is that central government will provide funding to local authority lands to bring them up to scratch so affordable housing can be built on them.

That funding, which is expected to work out at about €50,000 per home for 6,000 homes, will be used to give a discount of up to 40 per cent to qualifying home-buyers – singles earning less than €50,000 or couples earning up to €75,000.

Murphy said the first of these houses would be ready in 14 or15 months, which, given that a site would have to have infrastructure installed, and the homes would have to be built, a process currently taking about three years – is an astonishing target.

But that speaks to the relative “newness” of this announcement. The reintroduction of an affordable purchase scheme, which had been discontinued in 2011, was announced three years ago as part of Budget 2016. Murphy re-announced it at the start of this year, but only signed it into law last June.

Local authorities, particularly Dublin City Council, said they have suitable sites ready for it, but are still waiting for direction on how to run the scheme.

Unspent

Sinn Féin’s housing spokesman Eoin Ó Broin also questions the newness of the funding announced. He points to €75 million for services sites allocated in Budget 2018 which remains unspent, which when deducted from the 2019 €89 million allocation results in just €14 million additional funding for next year.

A couple of housing kites didn’t fly in the budget in the end. The plan to reduce the four-stage approval process for lower-cost social housing projects didn’t get a mention, although it is understood the measure has been agreed between the Government and Fianna Fáil.

Shane Ross’s “granny grant” (the one to fund splitting houses of pensioners into two separate units rather than the one to fund childcare) didn’t make it in, although Murphy said he was providing funding to a pilot project in Clondalkin which was reconfiguring older people’s homes, and this would provide a “powerful demonstration” of what could be achieved in the future.

Housing spending is ultimately unsatisfying for the Government as it fails to provide the immediate sugar hit of tax cuts. Donohoe’s proud boast that “more new homes will be provided this year than in any year in the past decade” means nothing really – housing numbers hit the skids a decade ago, and are still limping up only very gingerly.

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