'No LDA role' to deliver housing for private sale
The Land Development Agency is unlikely to deliver any homes for the open private market, the Oireachtas Housing Committee has been told.
Appearing before TDs and senators, the chairperson designate of the LDA, Cormac O'Rourke, said that the agency would likely focus on the delivery of cost rental and affordable purchase homes.
"We do not see a role for ourselves in delivering housing for private sale", he told Social Democrats housing spokesperson Cian O'Callaghan.
The committee heard that the LDA is seeking to deliver 5,000 homes over the next four years through 'Project Tosaigh'.
This target includes two active sites at Shanganagh, Shankill, Co Dublin and St Kevin's in Cork.
However, Sinn Féin's housing spokesperson expressed doubt that such a target could be achieved considering no construction has started yet.
Eoin Ó Broin told the LDA he was worried that the agency would end up competing with Local Authorities and Approved Housing Bodies (AHB) in trying to acquire "turnkey" homes from the private market.
The Chief Executive of the LDA John Coleman later assured members that the agency would withdraw from any process to purchase turnkey homes if it heard that Local Authorities and Approved Housing Bodies were also involved.
Another concern expressed by deputies was the affordability of cost rental and affordable purchase homes.
Richard Boyd Barrett of People Before Profit told the committee that he feared social housing was being replaced by a model that was not affordable, adding that expectations that 75% of LDA homes would be cost rental confirmed his "worst suspicions".
"We can't control the rents", he told members, explaining that the cost of construction will decide the rate at which the rent can be set.
"The market will dictate it, that is worrying", he added.
Cormac O'Rourke told the committee that the LDA had not set "target rents" for its cost rental homes at Shanganagh in Dublin as tendering was still under way, however he told the committee that the agency would be acquiring land at a significant discount, compared to private developers.
"The problem is that we'll deliver cost rental but we won't deliver affordable cost rental", Eoin Ó Broin told the committee.
Deputy Ó Broin suggested that the agency try to restructure the financing of developments, so that the LDA could pay money back over a 50- or 60-year period.
He said that the savings achieved through this could then be passed onto tenants.
Cormac O'Rourke said he was struggling to think of a case where 50- or 60-year financing was granted. However, he committed to see if he could engage with the necessary parties on this matter, such as the European Investment Bank.
Eoin Ó Broin suggested that the State could provide "soft loans" which might only "kick in" after 40 years and could then be extended. He said that this model was being used in other jurisdictions.
Mr O'Rourke told members that he heard the points being made by the committee. "There is no point in delivering a product that nobody is going to take up, that's not in anyone's interest", he said.
Meanwhile, the chair of the Housing Committee called on the LDA to provide regular updates on its work and output.
Sinn Féin's Thomas Gould also called on the agency to consider appointing a disability advocate, to ensure that homes being built were not limited to certain cohorts.