Bríd Smith: Demands income-linked cost rental for St Michael's

I was reading back on interesting articles to do with the state's investment in property and housing and it is very clear that the state is one of the biggest players in the property market today but you would not think so because state agencies and local authorities are renting and leasing properties back off the state so if you look at the total investment by the state into the Ireland strategic investment fund which is basically to vulture funds and cuckoo funds it adds up to 1,063 million in the recent past now i say that to put in the backdrop of the attempts by the community of st michael's estate in inchicore to forward the development of what is 9.2 acres of prime land in the middle of inchicore for the sake of that community for 21 years the community around st michael's have been fighting to regenerate in a sustainable way that very very important community and yes thankfully thornton heights was built but there's a big chunk of land lying empty and we now have a designer talking to people on the regeneration board without knowing what costs the designer is working with and what we need to find out here today minister is where the regeneration of st michael's is at will a certain cost be made known to the designer so we can have good quality uh affordable housing uh affordable housing on that land but not just good quality affordable housing but affordable being set at not a share of the market 25 percent below the market value but a proportion of the income of people who are will live in in those dwellings and this is a really important point for the regeneration of st michael's that it be publicly owned and funded in a way that the the cost rental element will mean a proportion of your income is paid on rent rather than 25 percent less than the market value that's meaningless because that market value is never ending never ever onwards an upward scale and this would defeat the whole point of the struggle that that community has engaged in for the last 21 years as indicated by minister english i can confirm that any rent levels for the cost rental homes to be delivered in the emmett road development will not be directly related to are set based on tenant income or the market rent for the area a central principle of cost rental is that the rent for the homes is a function of the costs incurred in financing building managing and maintaining them there is now there is a now clearly established legislative basis to operationalize this principle and for establishing the rent in a cost rental development this can be found in part three of the affordable housing act of 2021 these provisions were approved by the iraqtis in july of this year by 101 votes to eight i would like to be clear that although cost rental will be public housing it is not social housing it does not use a differential rent structure it is targeted those individuals and families on moderate incomes above the eligibility threshold for social housing and who can afford to pay the cost rents to illustrate this in practice in terms of tenant eligibility an upper limit of 53 000 euros annual household income after income taxes has been applied to the first cost rental projects there is no lower threshold through though tenants would obviously be required to be in a position to pay the cost rent from their income to reiterate the rents for cost rental properties are not set by market rents in but in line with the criteria outlined in the affordable housing act any references to market rent for cost rental homes simply serve as relative comparisons they demonstrate how much more affordable these properties are for the eventual tenants when compared to what is available on the private rental market consideration of market rents can also help target state funding supports for proposed cost rental schemes at areas where they will offer the most assistance to tenants who would otherwise be facing comparably high rents the government's cost rental scheme is already delivering long-term homes to families at affordable and stable rents using upfront capital subvention from the new cost rental equity loan scheme approved housing bodies are currently charging costs covering rents at taylor hill in balbrigan of 935 euro per month for two bedroom homes up to 1 150 euro per month for four bedroom homes our further 50 homes at enniscary road dunnery rathdown will be tenanted next month for 1 200 a month for modern two bedroom apartments with more to follow including at barn hall in leekslip county gildare these rents are affordable for the target cohort above the social housing income limits it is anticipated that similar capital subventions will be utilized at emmet road to make the resulting cost rents as affordable as possible including the provision of public land at no or low cost upfront capital grants from the exchequer exchequer and state assistance with loan financing through the housing finance agency and the european investment bank thank you carol well when you include the provision of public land at no cost i would assume so it's public land and it shouldn't add to the cost of building homes on it but i just want to go to your figures because a combined income of 53 000 in a two two people working in the home would mean that they'd have to be on just above the minimum wage to meet the maximum threshold of 53 000 to qualify for affordable housing and i think this makes a joke of what's been attempted i remember in 2008 when bernard mcnamara the previous public partnership developer who was to develop saint michael's pulled out of the scheme and the people protested at city hall saying greed greed how much do you need mr mcnamara and i think here we have to be very careful when we look at what is affordable for ordinary people on low incomes we have to take into account their lives their ability to pay the sort of communities they want to live in not the profit margins of the developers and here is why i quoted those figures at the beginning because the state has a fundamental role in financing such developments so that people can live quality and rooted lives in their communities i thank deputies submission costellaw for raising the important matter around st michael's and the and how the rents would be set within the last year the minister for housing local government and heritage has developed an entirely new policy framework to enable development of cost rental housing in ireland culminating in its inclusion in the government's affordable housing act the minister has also rolled out funding for cost rental through the cost rental equity loan schemes for ahb's and the affordable housing fund for local authorities the government's housing for all plan included a number of significant improvements to the affordable housing fund for local authorities above and beyond the previous service sites fund under which dublin city council had been approved for 18.7 million funding these changes include allowing the funding support to now exceed the previous maximum 50 000 euros per affordable dwelling on a step scale up to 100 000 euros based on location and density which is something that could assist the reduction in rents at this important site even further when this capital subvention is combined with the utilization of local authority land and the long-term low interest finance available from the housing financial agency and the european investment bank the level of financial supports will have a real impact on the resulting rents that can be charged for these types of homes these will not be linked to the market or tenant income and will be financially sustainable cost rents as set out in the affordable housing act the department of housing fully supports the cost rental development and will continue to work with dublin city council to achieve the realization of this development