Government rental scheme ‘not affordable’
Mr Baneham said he ‘hopes’ the cost would lower over time.
A scheme in Dublin that is designed to allow low and middle income earners to rent a home is not affordable, it has been claimed.
The Cost Rental Housing project was set up to enable individuals who are above the threshold for social housing, but are not able to afford a mortgage access accommodation.
The amount of rent charged is linked to the cost of construction and maintaining the properties built on council land, which differs from private renting where rents are set by the market.
The scheme however has been criticised after it emerged that tenants will pay 1,200 euro per month to live in a two-bedroom in a development on the Enniskerry Road once it’s completed in late 2021.
OK so what are we learning from todays (very dry but important) Housing Committee meeting on affordable housing?— Eoin Ó Broin (@EOBroin) June 18, 2019
- 1st cost rental project in @dlrcc isn’t affordable
- 2nd cost rental protect in @DubCityCouncil will only be affordable with longer loan & greater capital support
Jim Baneham, head of housing delivery at the Housing Agency – who appeared before the housing committee on Tuesday, said this is above a third of an individual’s disposable income.
Mr Baneham said he “hopes” the cost would lower over time.
Brendan Kenny, deputy chief executive from Dublin City Council, said rental costs would not be reduced to between 700 and 900 euros unless there was “significant intervention” by government.
Mr Kenny also told the committee that the cost of rent would not go below 1,200 euro unless the government provided more capital funding.
Mr Baneham told the committee that in the cost rental scheme, rents are not driven by market demand and are more stable over time.
“This is expected to result in rents that are affordable for lower to moderate income households,” he said.
“It is also different from social housing where the rent paid by these households is linked to income levels.
“It is widely recognised that there is a need to address housing affordability issues faced by low to middle income households, particularly in Dublin and other main urban areas.
“As a general rule, housing costs should be below one-third of a household’s income and long-term below one-quarter of income.
“The objective would be to reduce the rental cost closer to, or below, 1,000 euro per month in future developments.”
People Before Profit TD Richard Boyd Barrett claimed that the people and families who need low-cost housing will not be able to afford the rental costs.
“I find all this stuff mind bending. The people who need affordable rental homes who cannot get on the housing list because their income is too high are not people who can afford 1,200 euro in rent, so this will not work for them,” he said.
“The cost rental we get will not be affordable for people who need affordable housing.
“With every site you say you have to consider the cost of that site, possibly markets conditions like rent and then what is affordable for people. I think that is the wrong way to go about it.
“It means every single site becomes extremely complicated.”
Mr Baneham said that the Housing Agency has provided three additional sites for development to the Land Development Agency and is setting specific requirements for the provision of long-term cost rental housing on these sites.
The first two of these will be in Skerries, Dublin and in Naas and both will develop around 200 homes which will be a mix of social housing and cost rental housing.
Fine Gael TD Maria Bailey said the length of time to deliver affordable housing is “frustrating”.
Independent Senator Victor Boyhan said the cost of land is a barrier to affordability.