Plans for a new affordable housing scheme to be revealed

The programme will allow lower-income households to buy homes at a discount.

Plans for a new affordable housing scheme, allowing lower-income households to buy homes at a discount, will be announced in the next two weeks, Minister for Housing Eoghan Murphy has confirmed.

The new scheme would be the first to give set discounts to qualifying owner-occupiers since the national affordable housing scheme, which saw Dublin buyers get new homes at 30-35 per cent below market rates, was scrapped in 2011.

The introduction of a new scheme was announced almost two years ago as part of budget 2016, but has yet to be established.

Under the last scheme a local authority would buy houses, at a discount, from developers, and sell them to first-time buyers whose incomes were below a certain threshold. Under the 2000 Planning Act developers had to provide 20 per cent of any new housing estate for social or affordable housing.

The discount deals were agreed with the developers when the estates received planning permission and then passed on to the purchasers when the homes were completed.

Homeowners who sold up within 20 years had to pay a percentage of the proceeds of the sale to the local authority, known as a “clawback” to repay the discount.

The discount in Dublin was in the region of 30-35 per cent. However, following the collapse of the property market in 2008, local authorities were left owning hundreds of properties they had bought from developers at the height of the market which, after the crash, would cost buyers more than similar homes on the market.

In 2009 Dublin City Council alone had a backlog of 300 unsold affordable houses that were costing it upwards of €300,000 a month in bridging loans and fees. Two years later the Government scrapped the scheme, with developers now only obliged to provide 10 per cent of homes for social housing.

Matter of urgency

Following the Government announcement in late 2015 that it intended to introduce a new affordable housing scheme, the city council decided to incorporate affordable housing into plans for its vacant lands.

The council plans more than 1,600 homes at O’Devaney Gardens, St Michael’s Estate and Oscar Traynor Road, 50 per cent of which would be private homes, 30 per cent social housing and 20 per cent affordable housing.

In a report earlier this year the council’s housing department said this “was done in the context of an expectation that some type of a national affordable housing scheme would be introduced by Government,” but “no such scheme has been introduced”.

The lack of a State affordable housing scheme would “result in delays to the procurement process,” it said.

With tenders issued last month for the €125 million regeneration of O’Devaney Gardens, it is understood the council had asked the Government to deal with the affordable housing issue as a matter of urgency.

The terms of the new scheme, including eligibility criteria, have not yet been finalised, but speaking at an event to mark the completion of social housing on Charlemont Street in Dublin yesterday, Mr Murphy said a scheme was “being worked on” and he would announce details “in a couple of weeks”.