1. Affordable Rental Pilot at Enniskerry Road
DLRCC SPC Briefing
Affordable Rental Pilot at Enniskerry Road
14th March 2018

2. Content of Presentation
Background to Enniskerry Road scheme
Rental market context
Cost rental model
Initial rent
Funding
Eligibility and operation of scheme
Control over Cost Rental dwellings
Current position

3. Background to Enniskerry Road Scheme
105 social and 50 affordable dwellings to be constructed under DLRCC Part 8 planning approval from 2007
Respond! & Tuath Housing selected as development agents following a Request for Proposals process in 2016
50 affordable dwellings to be delivered under a “Cost Rental” model

4. Rental Market Context
RTB Quarterly Rent Index Q The quarter-on-quarter growth rate in Dublin was 4.1% in Q3, compared with 3.1% in Q2. On a year-on-year basis, Dublin rents were up 9.9%
Average Dublin rents 14.3% higher than the previous peak in Q4 2007
Daft search on in Dublin 18 on 13th March 2018 – 37 x 2 bed properties available, 26 of which €2,000+ per month, €1,440 cheapest in Shankill

5. Cost Rental Model
Rental cost of 50 x 2 bed affordable rental dwellings will be linked to
Their initial construction cost
Their ongoing operational cost
Rent increases will be linked to Consumer Price Inflation (CPI), not rental market inflation. Rent reviews will be subject to Residential Tenancies Act(s) (RTA) rules.
Funding models assume rents increase at 50% of CPI i.e. if CPI is 2%, rents would increase by 1%

6. Cost Rental Model cont’d
Site being provided at zero cost by the Housing Agency
Construction costs include:
Contractors tender cost, design team fees (incl. legacy DLRCC costs), utility connections costs
Operational costs include:
Response maintenance, cyclical maintenance, sinking fund provision for long term building maintenance, tenancy management costs
Construction costs occur once at the outset of the project, operational costs occur over time

7. Initial Rent
Initial rent not yet finalised as tender costs for the project are not yet determined.
Current assumption is initial rent will be approx. 20% below market rent when the dwellings are expected to be completed in Initial rent may be lower than this however, depending on tender costs and overall scheme funding
As rents will inflate at 50% of CPI, rent will:
Become increasingly affordable over time
Increase at a moderate, predictable rate for tenants

8. Funding
Respond! and Tuath are expected to borrow funds from the Housing Finance Agency (HFA) to pay for the construction cost of the cost rental dwellings
Funding repayments will be fixed over 25 years at a competitive interest rate – providing cost certainty
Funding provided in conjunction with loan finance from the HFA for the Payment and Availability and CALF funded the social housing dwellings in the scheme

9. Eligibility and Operation of the Scheme
Eligibility and operation criteria for the pilot scheme not yet finalised with the Department
Eligibility will be subject to income caps
Income limits for Rebuilding Ireland Home Loan are
€50,000 gross income for a single person
€75,000 for a couple
Eligibility also likely to be linked to employment – tenants will need to be in continuous employment or provide accounts if sole trader

10. Eligibility and Operation cont’d
Cost rental units need to be appropriately occupied – single person households, if eligible to apply for 2 bed dwellings, will be required to share 2 bed dwelling
Household income changes after entry into the scheme:
Income exceeds threshold – tenancy protected by RTA but tenant needs to be incentivised to vacate property at end of Part IV tenancy period
Income drops to low for affordability - tenancy protected by RTA but tenant needs to assisted to move to more sustainable tenancy
Changes in household composition – as above, tenancy protected but tenant may need to be incentivised or assisted to move

11. Control over Cost Rental dwellings
Respond! and Tuath Housing will be obliged to operate the Cost Rental scheme under a long term lease arrangement (150 years). Scheme rules, once approved by the Department, will be written into the Lease
DLRCC will have oversite of the operation of the scheme as the land owner (Agency will transfer land to DLRCC)
Land transfer to DLRCC from the Housing Agency will also include covenants which will restrict the use of the site to social and Affordable (Cost Rental) dwellings – dwellings will have to be used as Cost Rental into the future

12. Current Position
Main legal agreements for the development of the site are either agreed or at advanced stage, pending finalisation
Anticipated that operation of Cost Rental scheme should be finalised with the Department in Q2 2018

13. Thank You Tel: 01 656 4100 E-mail: info@housingagency.ie