Wicklow Fianna Fáil Senator Pat Casey has welcomed the publication of the Affordable Housing Bill. “Since first been elected to the Oireachtas in 2016 I have been calling for affordable housing supports for all areas of Wicklow and this is a good start and reflects Fianna Fáils determination to see increased supply of homes for all people.”
“The Bill provides for the introduction of three new schemes delivering on the Programme for Government commitment to put affordability at the heart of the housing system and prioritise the increased supply of affordable homes. These schemes will see;
- local authorities deliver affordable homes for purchase on their lands for the first time in more than a decade,
- a new Affordable Purchase Shared Equity scheme where the State would provide equity support to households seeking to purchase homes in the private market but unable to secure the full mortgage to do so.
- The introduction of a new form of tenure in ‘Cost Rental’. This legislation will provide the basis for the first 400 Cost Rental homes in the State which will be delivered in 2021 with many more in the pipeline in the years thereafter.”
Senator Casey continued, “As part of our approach of using multiple policies across the short and long term to address the affordability crisis we are expanding direct state building of affordable homes to open up home ownership opportunities. This bill sets out a new legislative basis for direct state led construction of affordable homes in all areas of Wicklow for purchase.”
The final details of the Affordable Purchase Shared Equity scheme are being advanced based on engagement with stakeholders and it is intended that when finalised it will be open to all new build homes, subject to regional price caps and targeted at first time buyers.
Senator Casey said, “This is the first affordable housing scheme of its kind in Wicklow. It is a specific and targeted measure to mitigate the affordability challenges faced by young working people, many of whom are caught in a rental trap.
“The scheme will increase housing supply in all areas of Wicklow as it helps to improve viability by bridging the gap between the maximum mortgage that might be available to a household and the actual cost of a new home for ordinary income families. In Budget 2021 we have put aside an initial €75m for 2021 to start the scheme up and will boost this with additional private investment.
“When finalised, the scheme will accommodate appropriate control mechanisms and it will be in accordance with Central Bank rules. Development of the scheme is informed by international practice for example in the UK where its scheme has increased supply by 14%. There is no obligation to repay the loan after a certain point until the house is sold but it will make financial sense for the owner to pay down the equity stake. “
Senator Casey continued, “Comparable schemes have not led to any significant increase in house prices. According to the Independent National Audit Office, the scheme in the UK increased housing supply by 14% and inflation by 1%.
“Assuming that potential buyers in Wicklow are currently renting this support will save them up to €11,000 per year in rent and in the long term save the state rental support payments.
“In addition to the affordable purchase schemes, the Bill for the first time, defines ‘Cost Rental’ as a new form of tenure and places it on a statutory footing. This legislation provides the basis for the first cost rental homes in the State which will be delivered in 2021 with many more in the pipeline in the years thereafter.
“A ’Call for Proposals’ to AHBs for the delivery of approximately 400 Cost Rental Homes, to be made available at a minimum 25% below open market values, has already been issued. Resulting homes will be used for Ireland’s first Cost Rental tenancies, a new sector of the rental market in which tenants pay rent that covers the costs of delivering, managing, and maintaining the homes only,” concluded Senator Casey.