Cork County Council seeks €80m for 'cost rental homes'
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Cork County Council has announced that it is to seek an €80.5m loan from the Housing Finance Agency to build 528 ‘cost rental homes’ with construction to start late this year and be completed by of the end of 2026.
The cost rental scheme is an initiative by the Government to support the housing rental sector and the council will offer rents to tenants at far less than the going market rate in the private sector.
It is targeted at low- and middle-income earners who do not qualify for social housing because they earn too much, but do not have the means to purchase their own home.
According to a report delivered to councillors by Jeremy Canty, the local authority’s acting director of finance, the scheme is designed to provide rental properties "of secure tenure as rents are set a minimum of 25% below the local private market private average".
Mr Canty said the capital cost of building the units is met by a combination of Affordable Housing Fund (AHF) subsidies and local authority borrowing which will hopefully be achieved through the Housing Finance Agency loan, which the local authority can repay over a maximum 40-year term.
He said the loan repayments and ongoing maintenance and management costs of such developments will then be met through the rental payments made by the council tenants.
“Therefore, in essence, the cost rental (scheme) pays for itself over time and is therefore cost neutral,” Mr Canty added.
Cork County Council currently has 17 such schemes on the drawing board which it hopes will be built under the auspices of the new government scheme.
So far six of them have been approved for planning in Youghal. Bantry, Midleton, Carrigaline, Bandon and Carrigtwohill.
Mr Canty said it is anticipated that all the planned schemes will be delivered in phases between the end of this year and 2026.
The council will have to get approval to seek the Housing Franchise Agency loan from the Minister for Housing, Local Government and Heritage Darragh O'Brien, and it is confident this will happen.
Fianna Fáil councillor Seamus McGrath, who is chairman of the council’s Housing Special Purposes Committee, said while six locations have already been chosen for the scheme the remainder are yet to be finalised. He expects to be notified of them by senior council officials soon.
Mr McGrath said it’s likely the other schemes will be constructed in large population areas where demand for rental accommodation is at its greatest.
“I know demand is huge, for instance, in Carrigaline and Passage West (the areas he represents). I've had a lot of enquiries from people in those areas about this scheme. I’m hoping we’ll hit the ground running in Carrigaline early next year,” Mr McGrath said.
He said there is a large cohort of working people who cannot afford their own homes and are struggling to pay ever-increasing rents.
“Hopefully this new scheme will help them out. It offers security of tenure for the tenants. It may even act as a stepping stone for some. With reduced rents they may be able to save enough money to then qualify for affordable housing,” Mr McGrath said.
People seeking affordable housing get it at a discounted rate and can purchase the property from the council over a period of time. However, those in cost rental homes cannot buy them.