Minister welcomes increase of €725m in Housing, Planning and Local Government funding (+22%) under Budget 2019

Key Points:

• €2.4Bn for 2019
• €470m or 25% increase in housing budget for 2019
• €60m additional funding in 2018
• 5,000 adults will be supported out of homelessness and family hubs will be expanded
• 10,000 new Council homes will be delivered in 2019 as a result of additional funding (2,100 new homes up on 2018)
• Social housing needs of 27,400 households to be met in 2019
• Serviced Site fund for more affordable housing to be tripled to €310m
• Extra money for RTB to enforce rent caps and new laws to protect renters
Other areas
• €1.2bn investment in water services, up €84m on 2018
• €185m contribution to the Local Government Fund, up €60m on 2018

Eoghan Murphy, T.D., Minister for Housing, Planning and Local Government today welcomed the 22% increase in funding – some €725m – secured for his Department for next year under Budget 2019

The Government is allocating exchequer funding of almost €2.3 billion to housing programmes.  In addition, local authorities will fund a range of housing services to the value of almost €93 million from surplus Local Property Tax (LPT) receipts, bringing the total housing budget in 2019 to almost €2.4 billion.

In addition, a further €60m for 2018 delivery has been agreed meaning that Budget 2019 will therefore result in an additional €530m investment in housing.

This investment will see the housing needs of almost 27,400 households being met in 2019. Of the 27,400 housing supports, 10,000 will be Council Houses delivered through build, acquisition and long term leasing programmes. This is 2,100 more homes than will be delivered in 2018. The remaining supports will be delivered through HAP and RAS schemes.

Addressing Homelessness

A critical focus of 2019 activity is on prevention and delivery of services for homelessness, and an allocation of €146 million (+€30m on 2018) will address the increased demand for emergency homeless services and also assist in supporting homeless households with long-term and sustainable housing solutions.

In 2019, it is envisaged that in excess of 5,000 adults will exit from homelessness into sustainable tenancies through the provision of council homes and the Housing Assistance Payment. Housing First will continue to be rolled out, targeted at rough sleepers, and funding will also be provided to support the further roll out of the Family Hub programme.

Affordable Housing

Budget 2019 provides for a trebling of the Fund to €310 million over the period to 2021, meaning that the minimum number of serviced site fund homes that will be facilitated over the lifetime of the Fund will be over 6,000.

In addition, the infrastructure investment per home under the Fund is being increased to €50,000, with the discount per market price of a house capped at 40%, to be realised through an equity share with the purchaser. The scheme applies to new homes, and for single people earning up to €50,000 and couples earning up to €75,000.

An initial call for Local Authority sites under the Fund has recently been completed and a new call will issue shortly.

The Rebuilding Ireland Affordable Home Loan was launched just 8 months ago on 1 February 2018. There has been great interest in the scheme to date. At the end of September the Housing Agency had assessed and recommended 1,134 loans for approval, totalling some 236 million euro. An assessment is currently underway that will consider some inconsistencies in decision making that have been identified, the need to potentially broaden the application of the scheme, as well as the possibility of extending the affordable loan to vacant homes requiring refurbishment.

Rental Sector

Budget 2019 will see a 67% increase in exchequer funding to strengthen the powers of the Residential Tenancies Board and greater local authority inspections in the sector.

Some 70-80% of landlords only own one or two properties.  We have to introduce measures that will incentivise landlords to remain as landlords.

Budget 2019 introduces the full removal of the restriction on the amount of interest that may be deducted by landlords in respect of loans used to purchase, improve or repair their residential property. The rate was due to be 100 per cent by 2021 but will now be effective from 1 January 2019.

We have introduced rent caps but these need to be strengthened quickly.

Legislation later this month will:

  • provide that any breach of Rent Caps can be sanctioned;
  • strengthen the powers of the Residential Tenancies Board (an additional €4.5 million will be provided in 2019 to support stronger RTB capacity and local authority inspections in the rented sector – this is a 67% increase in exchequer funding for this purpose);
  • further tighten the operation of any exemptions;
  • enhance rental data from RTB registrations to provide more transparency in rents being paid;
  • double the notice period for renters where a notice to quit is served after six months;
  • seek to extend rent caps to student accommodation.

The first Rent Pressure Zones are due to expire at the end of next year, and so Minister Murphy is considering an extension of this measure given continuing conditions in the rental sector.

As this is reviewed we will also examine other provisions around the operation of the Rent Caps in line with recent recommendations from the Residential Tenancies Board.

Other important housing delivery and supports

We will continue fund other important housing supports and services in relation to homelessness, regeneration and programmes to upgrade existing housing (energy efficiency improvements, adaptation grants, housing for Travellers, pyrite, etc.).

Supports that will be funded through the increased resources under Budget 2019 include

  • Funding of €13 million (+€1m on 2018) will support a range of Traveller specific accommodation schemes, including the provision of additional group housing;
  • €32 million (+€2m on 2018) will fund the remediation of a further 460 houses affected by pyrite;
  • A further 9,000 council homes will be improved through the energy efficiency programme in 2019 through funding of €25 million;
  • €23 million (+€1m on 2018) will support the continuation of the Mortgage to Rent Scheme and will allow for over 400 additional households to be supported under the scheme;
  • Exchequer funding for housing adaptation grants will be increased to €57 million (+€4m on 2018). This will enable up to 11,800 home adaptations to be undertaken facilitating people with disabilities and older people to continue to live in their own homes;
  • The National Regeneration programme will be supported through funding of almost €72 million (+€11m on 2018) targeting some of the country’s most disadvantaged communities;
  • Funding of €10 million (+€2.8m on 2018) will support the operational costs of the Housing Agency during 2019 and support the Agency in its expanded role in the delivery of housing services and supports;
  • A provision of €11.5 million will be made available in 2019 (+€4.6m on 2018) to support  the expanded role and functions of the Residential Tenancies Board and to also expand the rental inspections programme by local authorities;
  • The Local Infrastructure Housing Activation Fund will be supported by an allocation of €41 million in 2019.  This funding will go towards 30 key public infrastructure projects such as roads and bridges which will unlock land for housing development which would otherwise remain stagnant.  Two projects are under construction in Dublin and Limerick with the remaining 28 projects to finish design and planning phases and reach construction stage in 2019.  These projects are designed to release the delivery of up to 20,000 homes across the country, with more than 25% expected to be social or affordable homes.
  • In relation to defective concrete blocks, an issue which has affected homeowners in Donegal and Mayo – the Government approved in principle this morning the development of a grant scheme of financial assistance to support affected homeowners to carry out the necessary remediation works to dwellings in those 2 counties that have been damaged. The putting in place of such a scheme will now be a key priority for the Department, with funding to be available from next year.

 Other Areas of Activity

Budget 2019 also means significant progress across the other areas of the Department.  In total, next year will see an increase for the Water Services, Local Government and Planning Programmes, as well as Met Éireann, that amounts to over €250 million.

 Water Services

In the Water area, capital and current funding to Irish Water will amount to nearly €1.2 billion in 2019, an increase of €84 million on this year.  There is an increase of €122 million for vital, accelerated capital investment in water and wastewater services as planned for under the National Development Plan 2018-27. On the current side, the requirement for Irish Water is some €38 million below the 2018 provision. This reflects the continuing achievement of efficiencies on operational expenditure, which is driven through the Irish Water Business Plan and the economic regulatory process undertaken by the Commission for Regulation of Utilities.

There will also be capital funding of €23 million in 2019 (+€3m) for the next cycle of the Multi-Annual Rural Water Programme which will run from 2019 to 2021.  In addition, €6 million is being provided for Developer Provided Infrastructure to establish a funding programme to progressively resolve housing estates with problematic developer-provided water services infrastructure.

Local Government

Turning to Local Government, 2019 will see a contribution from the Department’s Vote to the Local Government Fund of €185 million – an increase of €60 million on 2018. This will provide significant additional support to the local government sector in providing a range of essential services at local level, including assistance towards increased pay/pensions costs arising under national pay agreements and resources for certain local government initiatives across the country.

There will also be an increase of €2 million in capital investment in fire and emergency services, bringing the total to over €11 million in 2019.