LAST UPDATE | 18 Jul 2023
INCOME CEILINGS FOR the cost-rental scheme are set to increase for Dublin to €66,000 and €59,000 for the rest of the country under proposals signed off by Cabinet today.
Under the current rules, tenants are only eligible for cost rental if they have a net income of €53,000 per year. The new income ceilings are also net household income.
It is understood the department carried out analysis, looking at various factors such as inflation, wages, and rents before reaching the income threshold levels.
The changes signed off by ministers at an incorporeal meeting will come into effect on 1 August.
Cost-rental means that the price of rent is equal to the cost of the build alone.
Tenants are charged an amount that covers the cost of delivering, managing, and maintaining a home only.
This means prices are not driven by market movements, making it more affordable, and there is no risk of the developer making a profit.
The Government plans to provide an average of 2,000 cost-rental homes per year to 2030.
In addition, Housing Minister Darragh O’Brien launched a new scheme called the Secure Tenancy Affordable Rental investment scheme (STAR), which aims to invest up to €750 million in the delivery of over 4,000 cost rental homes out to 2027.
The scheme will allow for equity investment to stimulate the creation of cost rental accommodation.
Both private providers and Approved Housing Bodies (AHBs) will be able to apply to provide cost rental homes under the scheme and the State will make an equity investment, but in return the homes must be designated as cost rental homes for 50 years.
The STAR investment scheme will be managed by the Housing Agency on behalf of the Department of Housing.
Expressions of interest from providers will open on 1 August 2023, and is open to all providers including consortiums, approved housing bodies, as well as private firms.
O’Brien said supply of safe and affordable cost rental homes at a scale will increase under the scheme, stating that it is “crucial to make the rental market work for everybody”.
Cabinet also signed off on changes to Cost Rental Equity Loan (CREL) on foot of a recommendation from the Working Group on the Cost Rental Equity Loan.
The CREL is available to Approved Housing Bodies who provide cost rental homes. The improved loan will see availability of increased levels of loan finance, together with new State equity investment which will improve the ability of AHBs to bring forward cost rental homes, it is understood.
To embed this post, copy the code below on your site
have your say