Focus on building affordable homes – but no relief for struggling renters
RENTERS and buyers got nary a mention in the Budget’s big housing package. Some €2.3bn has been set aside for housing, but it is largely focused on new-build and ramping-up delivery of social and affordable homes.
Key measures include a €1.25bn package to deliver 10,000 new local authority units; an additional €121m for the Housing Assistance Payment to provide 16,760 new tenancies, and €60m to provide emergency homeless accommodation to be spent on family hubs and bed spaces before the end of the year.
There is also a €310m affordable housing scheme aimed at couples earning up to €75,000 a year, with 6,000 homes to be provided at discounts of up to 40pc from the market price. Projects will be announced in the coming weeks.
“This funding reflects our determination to do more to rise to the challenge of providing shelter and homes for our people,” Finance Minister Paschal Donohoe said.
“I acknowledge that where we find ourselves today is not where we want to be.
“There is much work to be done to reduce the level of homelessness, find permanent solutions for those in temporary and emergency accommodation, and to improve affordability for those on low and middle incomes. However, from a point where housebuilding was close to a virtual standstill a number of years ago, this Government has made, and is continuing to make, progress.”
But there has been criticism at the lack of an affordable rental scheme, with the Irish Council for Social Housing saying this could have helped many people struggling to meet their housing costs.
Any affordable purchase scheme should be confined to the cities where housing costs were most acute, it said, adding average house prices were only above €200,000 in 11 local authority areas.
Suggested tax relief for tenants paying more than 30pc of their income on rents was also ruled out, with smaller landlords instead benefiting from a tax break.
However, the Government failed to introduce any measure to curb the growth of large institutional investors. This is despite a report published yesterday saying Ireland was the most attractive destination for buy-to-let investors for the third year in a row due to rising rents, and after tenants in one development were hit with demands for 25pc rental hikes in recent days.
Housing Minister Eoghan Murphy said further reforms of the rental market would be announced in the coming weeks. Consideration is being given to extending rent pressure zones beyond their expected expiry date of 2019. In addition, student accommodation may also fall under the rent cap legislation.
Gone is the Independent Alliance proposal for a ‘granny flat grant’.
While Transport Minister Shane Ross insisted he had secured a commitment to provide grant-aid for older people hoping to convert their homes to provide rental accommodation, the Government has said it will support conversion of one house in a Dublin suburb to see if the concept works.
Mr Murphy confirmed the “pilot project” is just one home in Clondalkin, adding that any future funding for the granny flat grant is dependent on the success of this one property.
The minister said there would need to be a “proof of process” to see if the concept works, and then it will be expanded. This is being funded under a €57m housing adaptation grants package.
There was nothing new for first-time buyers, with no announcement on the lucrative Help-to-Buy scheme, which will remain in place until at least the end of next year.
The Rebuilding Ireland Home Loan remains in place, with 1,134 loans approved to a value of €236m.
Sinn Féin said the housing package over-stated the level of financial commitment being provided.
“The figures indicate that only a paltry additional €120m has been allocated for capital investment in housing for 2019 above existing commitments,” spokesman Eoin Ó Broin said.
In all, the housing Budget has lots of money for projects, but little by way of help for tenants or those seeking to downsize. The affordable homes are welcome, but far more than 6,000 units for middle-income earners are needed.