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A €226 MILLION building activation scheme is about making housing more affordable, not building more affordable housing, the Department of Housing says.
The fund, announced last year, was designed to bring the cost of housing down in areas where infrastructure was needed.
Approvals for 34 projects across 15 local authorities under the Local Infrastructure Housing Activation Fund (LIHAF) will see investment of €226 million to facilitate 23,000 new homes by 2021, according to this week’s Rebuilding Ireland update.
The plan had originally been pitched as a way to lower the cost of building and the cost of housing and had originally been seen as a way to ensure affordable housing was built.
However, two circulars published by The Dublin Inquirer, show something of a softening of that stance.
The Department of Housing in September amended its criteria for applications to the fund to allow applications where 40% of the homes would not by priced under €300,000, as had been intended.
The Department said it had received feedback that this would not be possible in many areas. In April, Housing Minister Coveney said he had “received assurances” from developers on the subject of affordability.
But in a statement to TheJournal.ie, they say that the fund was designed to improve affordability.
The general requirement of improved ‘affordability’ was the focus of LIHAF.
However, Sinn Féin’s Eoin O’Broin says that isn’t good enough.
“LIHAF in principle is not a bad idea, but it has to guarantee affordability of housing. That’s not built into it.”
Council funding
The LIHAF fund allows local authorities to apply for funding aimed at delivering vital infrastructure to areas which would allow homes to be built there.
As part of the Government’s Housing Action Plan, €150 million was to be released by the Exchequer to finance these type of projects (with local authorities providing €50 million themselves).
While at least 10% will be used for social housing, figures on affordable housing are not clear.
A €15.9 million chunk of the funding has been granted to the Cherrywood development in south Dublin. Infrastructure projects are centred around the construction of the Druid’s Glen Road and bridge which will improve access to the area.
The Housing Department states that LIHAF funding will contribute to the provision of 2,000 units by 2021.
There are plans for an additional 6,000 also to be built in the area as part of SDZ masterplan.
Coveney told the Dáil that he wanted to see a dividend from that spending, but what “affordable” means is still unclear.
“We are putting in €15 million in and we want a dividend from that, in the context of affordability as well as getting houses built quickly.”
The Department of Housing says that the function of displaying affordability will lie with local authorities.
“We have asked Local Authorities to demonstrate additional affordability and the Local Authority and relevant developers are aware that the requirements will be that:-
“The local authority shall ensure that housing is delivered by relevant developers in a specified timeframe and to scale and with high levels of affordability either:-
(i) With a minimum 40% of homes delivered to be available at prices at least 10% below the average market cost of housing including under €300,000 in Dublin and comparative affordability outside of Dublin, as evidenced by an agreed “form of undertaking” by the relevant housing provider(s); or
(ii) With a demonstrated affordability dimension to housing provision on the site on the basis of a measurable cost reduction exercise that compares between a “before” and “after” LIHAF funding scenario as evidenced by an agreed “form of undertaking” by the relevant housing provider(s).
“The provision of the required 10% under Part V will be a factor in evidencing affordability but it must also extend to the rest of any relevant private housing on the site. This can be met by a reduction in the price of private housing in accordance with either (i) or (ii) depending on the relevant market.”
In the Cherrywood case, Coveney says he has sought assurances from Dun Laoghaire-Rathdown (DLR) Council about the site and affordability of the homes which are built by developer Hines. A spokesperson for Hines declined to comment on LIHAF, but a DLR spokesperson said the funding was “positive”.
“This grant funding will “unlock” and accelerate the delivery of much needed homes in the Dún Laoghaire-Rathdown area. The drawdown of funding is subject to signing a Grant Agreement between DLR and (the Department of Housing). A condition of the agreement is that housing is delivered by relevant developers in a specified timeframe and to scale and with a level of affordability. It is acknowledged that developers’ commitments to deliver affordability are a prerequisite. Discussions are on-going with the relevant parties and the DHPC&LG which will include the preparation of the supporting legal agreements.”
O’Broin says even this doesn’t make sense.
“Even 10% below the market isn’t affordable because the average asking price isn’t affordable for a lot of people.
“Central government should be stipulating the level of affordability needed to get funding.
“The Minister is now saying the negotiation is between the developer and local authority, but this is departmental funding.
The Minister says that if supply increases, price will go down – that is not true. From 2000-2009, we had unprecedented supply, but we also had massive prices. If you’re a developer, you’re aiming your houses at people who can get credit – wealthier people with large cash lump sums.
There has to be a public dividend for the taxpayer funding that is going to go into this. If we get 20,000 houses for over €400,000, where’s the dividend?
“You have to ask what the logic in spending that money was.”
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There’s more important legislation needed at this time. Hogan is right to put it on the back burner. The last thing we need is more regulations that will inhibit growth.
And as long as the USA and China are out of any deal, it’s pointless in Ireland cutting back. Our contribution is a drop in the ocean. Why should we restrict ourselves while the rest of the world will plough ahead regardless?
Cutting emissions will come about naturally as we seek to change our sources of fuel to renewables.
Why should we restrict ourselves while the rest of the world will plough ahead regardless?
that was a bad business decision and they’ve rightly suffered from it. What it shows is that there’s always a competitive market in these areas to allow the best ideas to become the most popular ones. Fuel efficiency is more popular now than ever. Car companies are investing billions in innovating to find the next breakthrough technology. We don’t need government intervention to push this. It’s happening anyway!
What did the Greens do for us ? Let me think …. That’s right carbon no stealth tax..
Not this rubbish again. What ever happened to those po-faced, do-gooder gob*****s known as the greens. If you’re still worried about the great con that is global warming you really need to go shove yourselves where the sun don’t shine.
The evidence is mounting for climate change. Read the big science journals and you’ll see. People burying their heads in the sand is what caused the economic crisis. Its a mistake we can’t afford to repeat.
Lou, go educate yourself and find out how much the environment is worth to us in terms of health, economy, food production and funnily enough employment. Climate deniers have been thoroughly discredited even as recently as a report mentioned in The Journal last week.
I am not a po-faced, do-gooder gobexpletive but I am green and I am extremely concerned about the change in climate. Should I call you a corrupt, ignorant, climate denier and mainstream party follower then?
Lou, about 99% of the scientific community (the guys who know what they’re talking about) indicate antropogenic driven climate change is happening. now.
I think there is better things to be worrying about now rather than the green party tryin to get attention again,the worlds super powers should cut there emissions first before we a population of 4 million go down that route,the green party got there way with carbon taxes which are ridiculous given the harsh winters were getting,people can’t afford home heating oil cos of these gombeens that were in power
Are you happy that we continue to spend billions each year importing fossil fuels when we have some of the most plentiful renewable energy in Europe? Do you deny energy efficiency cuts business overheads and home heating bills? It’s possible to enhance the economy and tackle climate change at the same time. I don’t think Phil Hogan is the man to bring this about.
Are you for real? Heating oil has not gone up in price because of carbon taxes, noticed any wars in the middle east lately? Heard anything about the cost of extracting oil increasing as we have to go deeper to get at it? I know who the gombeens are and it certainly isn’t the Green Party.
A country of four million with not enough heavy industry to fit in a kettle should not consider climate change of pressing importance. A good covering of old-fashioned dirty industries would absorb a lot of the unemployed and generate business for SMEs.
we have one of the worst per capita GHG emissions in the EU, look at our ag sector and transport sector. Because of the importance of agri in this country and its sensitivity to the climate we should indeed look to the importance of climate change and embrace it in legislation.
How long was Gormley a Minister before finally getting round to printing a Bill on climate change?
Seems a fairly daft comparison, given that.
Gormley was tackling climate change from the moment he became minister, but new legislation takes frustratingly long to implement.
Ommm look up carbon tax budget 2010,there you will see kerosene oil 6.5 percent and gas 7 percent,petrol and diesel bout 5 cent per litre,so do your homework before you shoot your mouth off at me!!!!fool
James, the problem isn’t the carbon tax though it is the cost of the product in the first place. I pay it too when I heat my home same as everyone else but I have no problem with paying it. I’d prefer not to rely on fossil fuel though.
There are many things wrong with the system in Ireland that are far more damaging to our pockets than a small Carbon tax. Like it or not we have to start becoming more responsible for environmental impact.
Ommmmmmmm ……as I said. Go shove yourself where the sun don’t shine. Recycle your nonsense somewhere else coz were all stocked up on crazy around here.
yes indeed you appear to fill a large part of that quota
Ommm first it was hole in the ozone layer,then global warming now climate change,humans impact a very little percentage of this,sorry to burst your bubble but we are a planet that revolves around the sun like the rest of the planets,of course the world is goin to heat up and cool down I cycles,this industry in worth billions to the worlds governments preaching bout carbon footprint,all the supposedly called scientists are funded by the governments to preach this crap cos it’s worth billions to them!!
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