Affordable Dwelling Issues

Table of Contents

Affordable Housing Scheme

Affordable houses are available

to first-time buyers,
to persons who have divorced or
undergone personal insolvency.

The scheme assists eligible applicants in purchasing a house at a reduced rate. The Housing Authority may acquire build, cause to be built or otherwise provide dwellings for that purpose.

The Housing Authority may enter into arrangements with approved bodies. It may enter public-private partnership arrangements. The Authority is to have regard to its housing services plan, the need to counteract undue segregation between persons of different social backgrounds and to ensure a mixture of size and type of dwellings to reasonably match the requirements of eligible households.

The Minister with the consent of the Minister for Public Expenditure may pay monies to a Housing Authority or a statutory body providing services to Housing Authority. Housing authorities may provide financial assistance to eligible households to assist them in purchasing a dwelling on the open market. It is to be within the category of dwellings eligible for financial assistance by the Minister. Financial assistance is the difference between the market value and the price, subject to ceilings as may be prescribed.

Provision

Arrangements for the provision of affordable dwellings may be by way of

a dwelling provided by the council
dwelling provided under Part V Agreement
an open market dwelling

The sale of there dwellings and the provision of financial assistance are not reserved functions. This is in contrast to other disposal of property by the Council.

Housing authorities are to prepare a scheme of priorities for facilitating affordable house purchase.

Authority’s Stake

The Authority obtains an equity stake in the dwelling house in return for its contribution. The equity stake is equivalent to the contribution. In the case of a house provided by the Authority either directly or pursuant to a Part V arrangement, this contribution is equivalent to the difference between the market value and the price paid.

The Authority contribution and equity is to be between 5% and 40%. It may not exceed 40%, as provided for by 2023 Regulations. The Housing Authority’s equity is the proportionate percentage represented by its contribution to the market value or purchase price.

The equitable share may be redeemed following sale. It may also be triggered if it is not redeemed by a long stop date. This may be 25 years under the legislation which has been extended to 40 years.

Realisation

The following events trigger the power of realisation of the equity by the Housing Authority

failure to redeem by the long stop date
homeowner dies or is adjudicated bankrupt
mortgagee receiver etc enters possession
becomes subject to CPO
demolished destroyed or damaged such as to materially affect its market value
is abandoned by the homeowner
homeowner commits a material breach of covenant in the affordable dwelling purchase agreement and fails to remedy within the period specified in the notice by the Housing Authority
homeowner wilfully misled the Authority as regards any material factor by which eligibility was assessed.

Purchase Agreement

The agreement is to be by deed, entered at the time of the purchase agreement. It is to record the relevant affordable dwelling contribution as a percentage of the equity. It is to make provision for redemption payments on sale and realisation et cetera. It is to provide for the valuation mechanism. It is to set the date after which the affordable dwelling equity may be realised by the Housing Authority if not previously redeemed . It is to make provision for realisation on the occurrence of a realisation event

There are to be provisions

governing /prohibiting sale mortgage or other alienation of the dwelling house or any interest on it without the prior written consent of the Housing Authority not to be unreasonably withheld
power to impose conditions on any such consent
requiring that if the Housing Authority gives its written consent the affordable dwelling is to be occupied as the normal place of residence of the homeowner or a member of the homeowner’s household
make provision for registration of the arrangement in the Registry of Deeds or Land Registry

Regulations provide the conditions to be contained in the agreement including obligations as to keep in good repair

compliance with statutory requirements
compliance with planning and building regulations
power to verify compliance
right to inspect to verify compliance

Qualification

The amount of a loan available to made to an eligible applicant is subject to the limits in the Regulations.

An applicant may be eligible for affordable housing if

gross annual income multiplied by 3.5 (increased to 4) does not exceed 85.5% of the market value of the dwelling concerned
the applicant is unable to obtain a mortgage of 85.5% of the market value of the property
persons making the application has not previously purchased or built a dwelling in the State for his occupation (with exceptions);
none of the persons making the application are beneficially entitled to an estate or interest in any dwelling in the State or elsewhere subject to exceptions
each of the persons making an application has a right to reside in the State.

The Minister may make regulations in relation to the manner in which income is to be assessed and as to the procedures applicable to income assessment.

Scheme

Housing Authorities are to make a scheme of priority to determine the priority accorded to eligible applicants for affordable housing. The scheme may be renewed from time to time by the Housing Authority as it considers necessary to amend it.

It may introduce a new scheme. The making and review of the scheme, are reserved functions for the elected members of the Council.

The Housing Authority prepares a draft of the scheme or amendments. The are to be provided to the Minister. The Minister may direct alterations as he deems necessary.

The Scheme is to determine priority to be accorded to eligible households in relation to sale of affordable dwellings when demand exceeds supply and provision of financial assistance for the purchase of dwellings in the open market where demand persistently outstrips the resources of the local authority.

Terms Specified by Regulation

Regulations may provide for

priority to be determined having regard to size and composition of household
applicants who do not own or are not beneficially entitled to an interest in a dwelling reside where it is no longer suitable to their needs
length of residence in the administrative area
date and time at which the applicant entered the list

dwellings with four bedrooms – priority is to be given to households of three persons or more
dwellings with three bedrooms – priority to be given to households of not less than two person

If having allocated the above, there is a greater number of applicants than available dwellings, priority is to be given in order of time on the list.

The scheme of priority under the 2009 legislation ceases to have effect.

Price

The minimum price to be paid by an eligible applicant for a dwelling under an affordable dwelling purchase arrangement shall be determined by the following formula: (A/9) x 10 where A is the – (a) gross income of the applicant multiplied by 4, or (b) where applicable the maximum amount which the applicant can borrow as a mortgage from a bank or financial institution. Where the minimum price for which a housing authority may sell an affordable dwelling is greater than the minimum price calculated above, the eligible applicant shall pay the sum that is the greater.

Where the applicant has monies in addition to that required for a deposit, the Authority may require greater sum than calculated above.

Agreement with Developer

The Authority may enter a direct sales agreement with the developer for the sale of dwellings to eligible households. It is required to have certain terms and conditions including

the dwelling specified shall be sold directly to eligible households
nominated by the Authority in accordance with scheme of priority
specifying the terms including price at which dwellings will be sold to nominated applicants
requiring the direct sale is not to be completed until the eligible applicant has entered into an affordable dwelling agreement with the Housing Authority
specifying terms and conditions to be included in relation to arrangements for completion of sale notification of sales and the other matters relating to the dwelling specified

Where the total amount due to developer under the direct sales agreement is less than the amount due to such person under a contract, the difference is paid by the Housing Authority. Where it is greater than the amount due under the contract, the amount of such difference is paid by the developer to the Housing Authority. If the amount due under a sales agreement is less than would be due under Part V agreement, the Authority pays the difference.