Minister O’Brien announces €3.1 billion Housing Budget

  • Single biggest spend on housing by any Government
  • Largest build programme in the history of the State
  • €1.4 billion investment in water services

Minister for Housing, Local Government and Heritage, Darragh O’Brien TD has today (14th October 2020) detailed the €3.1 billion housing budget for his Department in 2021. This represents an increase in available funding of over €730 million when compared to Budget 2020.

Key areas of spending include social housing delivery, affordability measures, homelessness provisions and rental measures.

A significant sum of €1.4 billion has also been announced for investment in water services.

Commenting Minister O’Brien said, “Housing for All’ means just that. As a Government we believe that everybody should have access to good-quality homes to purchase or rent at an affordable price. This Budget means that delivery on that commitment will start today’.

‘Budget 2021 has provided the resources needed by my Department, Local Authorities and Approved Housing Bodies (AHBs) to get started on what will be the biggest social housing build programme in the history of the State. Next year we will build 9,500 social homes as part of an overall delivery of 12,750 social homes. These 9,500 homes represent a 22% increase on 2020 targets of 7,736. This is an ambitious target but it is one I intend to deliver on’.

‘This budget also provides for a suite of affordability measures totaling €468 million. This will be spread out across our Serviced Sites Fund, Local Infrastructure Housing Activation Fund, the Rebuilding Ireland Home Loan and the Land Development Agency (LDA). Importantly, €110 million of this will be provided to deliver a new national Affordable Purchase Shared Equity Scheme for first time buyers and a new funding model to accelerate the delivery of cost rental homes through the AHB sector.’

‘Just over 100 days into this Government, we have shown our commitment to affordable housing and cost rental by allocating funding towards these two schemes. This is the first time that a new national funding model to accelerate the delivery of cost rental homes through the Approved Housing Bodies sector has been announced.’

‘In terms of other rental sector supports, we are providing funding for rental inspections, the implementation of regulations on the short term letting sector and specific funding to support the Residential Tenancies Board (RTB) carry out their increased duties under the Residential Tenancies Amendment Act. This funding will make a difference in protecting and supporting renters.’

‘I do not accept the criticisms of others who simultaneously say that we have provided nothing for renters while dismissing the 76,500 tenancies assisted by the Housing Assistance Payment (HAP) and Rental Accommodation Schemes (RAS). While building our long term stock, we must continue to provide immediate options to support households in having their housing needs met under these schemes – this is absolutely necessary if we are serious about reducing homeless presentations’.

‘A critical focus of my Department will continue to be on homelessness prevention and the delivery of services for those experiencing homelessness. An increased allocation of €218 million has been provided, representing a 31% increase on the allocation of €166 million in Budget 2020. This will support more than 6,000 exits from homelessness and help support the vital housing first model.’

‘It is imperative that as the COVID-19 pandemic continues, local authorities and their NGO partners are supported in their efforts to reduce homelessness and to care for those who are vulnerable – my Department will not be found wanting in this regard’.

‘Specific funding of €21 million has been allocated to support the housing needs of members of the travelling community and €60 million has also been allocated to fund adaptation grants which will support older people and people with a disability to remain at home.’

‘Recognising the fact that capital investment in public water services is vital to support housing delivery, economic recovery and for delivering environmental compliance, €1.3 billion has been allocated to Irish Water in 2021. This funding will support major works. We have also set aside over €55 million for rural water schemes.’

‘These are just some of the key areas of Budget 2021 provisions in my Department. We have set ourselves ambitious but realisable targets that will benefit all of our citizens,” the Minister concluded.

Further breakdown of measures below

Social Housing Delivery:

  • 12,750 new homes will be added to the stock of social housing through build (9,500), targeted acquisition (800) and long term leasing (2,450).
  • Single largest social housing build – 9,500 homes.
  • 28,500 households will have their housing needs met.

Affordability Measures include:

  • €110 million will be provided to deliver new Affordability Measures, including a national Affordable Purchase Shared Equity Scheme for first time buyers and a new funding model to accelerate the delivery of approximately 400 Cost Rental homes through the AHB sector
  • €50 million will be allocated to the Serviced Sites Fund (SSF) to provide infrastructure to support the delivery of homes to purchase or rent at discounted prices
  • The Local Infrastructure Housing Activation Fund (LIHAF) will be supported by an allocation of €38 million in 2021, which will go towards funding major public infrastructure projects and the ongoing delivery of up to 20,000 new homes across public and private sites over the lifetime of the scheme
  • In addition, the Land Development Agency (LDA) forecasts capital spending of €205 million in 2021, of which €60 million will be provided by the Department[1], before legislation sees capitalisation of €1.25 billion in Ireland Strategic Investment Fund (ISIF) funding.  This will support construction which is due to start on LDA sites. The LDA has 9 sites with delivery potential for in the region of 4,000 new homes and while precise tenure mix will be determined following master-planning, the majority of these homes will be made available for cost rental or affordable purchase.

Rental Sector:

  • New Cost Rental Equity Loan Facility (CRELF) will allow AHBs to borrow up to 30% of the cost of Cost Rental homes from the State meaning the delivery of homes at significantly below market rents.
  • Short-term Lettings – funding of €2.5 million is being provided in 2021 to support local authorities in the implementation of the short term letting sector regulations.
  • Funding of €10 million for the Rental Inspections Programme will assist local authorities to achieve their targets under the Strategy for the Rental Sector in relation to the inspection of private rented accommodation to ensure compliance with the relevant standards regulations.
  • The Residential Tenancies Board will be supported through a provision of €11 million in 2021 (+€2m on 2020).  The funding reflects the increased role and functions of the Agency, including its expanded regulatory mandate and will also support the delivery of measures required to support the sector during Covid-19.

Other important housing delivery and supports

Other important housing delivery and supports that will be funded through the increased resources being made available under Budget 2021 include:

  • Total funding of €40 million[2] is being made available for the remediation of 265 additional dwellings under the Pyrite Remediation Scheme and also for remediation works to dwellings in Donegal and Mayo affected by defective concrete blocks.
  • Funding of €220 million (+€77m on 2020) will continue to support the growing delivery of new social housing homes by the AHB sector, via the Capital Advance Leasing Facility (CALF).  The increase in funding will allow for the provision of 3,800 additional social homes through new build and acquisition in 2021.
  • Funding of €11 million for the Repair and Leasing Scheme will allow local authorities and approved housing bodies to provide financial assistance to property owners to remediate up to 170 vacant private homes so they can then be leased for social housing.
  • €23 million will support the continuation of the Mortgage to Rent Scheme and will allow for 330 additional households to be supported to remain in their own homes.
  • Total funding of €65 million is being made available in 2021 which will support the retrofitting of up to 2,400 social housing homes to a Building Energy Rating of B2.  This includes €15 million in Carbon Tax funds which will be carried over from 2020 to complete works on the programme of deep retrofitting of social homes in the midlands;
  • The National Regeneration programme, which targets some of the country’s most disadvantaged communities, will be supported through funding of €73 million in 2021.
  • Funding of €10.8 million will support the operational costs of the Housing Agency during 2021 and support the Agency in its role in the delivery of housing services and supports.

Water Services

The total investment under the Department’s water programmes of €1,409 million is up €120 million or just under 10% from the 2020 initial allocation. This investment will

  • Deliver significant improvements in our public water and wastewater services,
  • Support improved water supplies in rural Ireland, and
  • Support a range of programmes delivering improved water quality in our rivers, lakes and marine area.

Over €1.3 billion is being provided to Irish Water in 2021. The capital provision of €692 million is an increase of €100m over the initial 2020 allocation. The current provision of €613 million is €17m above 2020 levels; primarily driven by growth in operational costs from new investments and new plants.

Other Areas of Activity

Budget 2021 also means significant progress across the other areas of the Department.  In total, next year will see nearly €1.7 billion available for the Water Services, Local Government and Planning Programmes, as well as Met Éireann.

Brexit

As part of preparations for Brexit, and to ensure that manufacturers, distributors and importers of construction products on the Irish market are fully compliant with EU regulations post Brexit, a funding provision of €0.5 million is being made available in 2021 to support increased monitoring and compliance by local authorities.