The Government has committed to accelerating a “huge” programme of social housing, with the new homes to be built alongside private houses, even if this provokes protests.
Minister for Housing Simon Coveney said the Government was determined to avoid the "mistakes of decades ago" that saw "huge swathes of urban areas" given over to purely social housing. Instead, he said, the Government would enforce a mixture of public and private housing.
He acknowledged this would be “not popular in some areas”, but it was the right thing to do.
"We cannot have a situation where some communities block social housing in their area because they don't want it," he told the Dáil Housing and Homelessness Committee on Thursday.
Expanding on the Government's housing strategy to The Irish Times, he said a majority of private houses built with the assistance of the State must be priced below €300,000 or be offered for rent at discounts to the normal market rate.
Accessing finance
In certain circumstances, he said, the Government would help private developers to build homes by reducing their costs. This could be done by bringing down the cost of accessing finance for builders or reducing the costs of infrastructure associated with construction, such as access routes into estates.
Mr Coveney, however, said that in circumstances where the State facilitated cheaper home-building, it would be the Government’s aim that most of those homes and apartments would be affordable.
He said this would mean homes priced in the €250,000 to €300,000 range, which could be still cheaper outside Dublin.
The Minister also highlighted the possibility of public-private partnerships or, for example, councils or State agencies giving over a portion of land for development. In such scenarios, where the homes were put on the rental market, the Government was examining a so-called “cost-rent” model, where the rent was at a discount. Mr Coveney said this could be at 70 per cent of the market rate.
On the so-called Part V requirement that a minimum of 10 per cent of new homes should be social and affordable housing, Mr Coveney said that housing agencies or other agencies could offer upfront payments to developers.
The Government was also examining a temporary cut on the VAT paid on new homes and apartments from 13.5 per cent to 9 per cent.
Fianna Fáil’s Barry Cowen said the Government should examine funding developments of social housing through special purpose vehicles.
Critical of rules
Mr Cowen was critical of the EU's fiscal rules, which he said "prevent the Government from spending the extraordinary amount of money that is needed".
Mr Coveney told the Dáil housing committee tens of thousands of new social housing units planned for the coming years must be integrated with private accommodation to establish a mix of housing types in towns and cities.
The committee will produce a report on the housing crisis and proposed solutions in the coming weeks, which will inform the housing strategy that Mr Coveney has said he will complete over the summer.
It is likely to be published at the end of August, and will serve as the Government’s action plan for addressing the housing shortage.
Mr Coveney said that while the deadline for the housing action plan was mid-August, it was likely to be delayed until the end of August due to summer holidays.
