I thank the Cathaoirleach’s office for choosing this Commencement matter. I welcome the Minister of State, Deputy Burke, to the House and thank him for visiting County Galway last Thursday to engage proactively with the director of housing services, Mr. Liam Hanrahan, and the housing team to discuss a number of projects in the county and to visit a number of those in Moycullen, Roundstone and Clifden.
I have always been of the view that all types of houses are needed in all communities in Galway city and County Galway, including private houses to buy, affordable, social and private-rental housing and approved housing bodies. We find a situation, however, where there has been considerable work done on delivery of social housing. As the Minister of State heard last Thursday, there has been close to a 50% reduction in the waiting list in County Galway since 2016. This has been because of initiatives such as Rebuilding Ireland, some projects of which the Minister of State saw at first hand on Thursday.
However, there are challenges with regard to affordable housing and the ability of individuals and couples to purchase homes. They are over the threshold to qualify for the social housing list and, unfortunately, cannot receive a mortgage at a level to be able to purchase a home. That is the squeezed middle, if you like. Developments are happening in many areas within Galway city and County Galway, especially on the outskirts of the city in places such as Moycullen, Barna, Claregalway and Oranmore, but there is dire need for assistance with affordable housing.
We have also seen developments that have planning permission and are ready to go in areas which have not progressed, because, one would have to presume, developers do not have the equity to commence those projects. That is where the advance purchase arrangements are very important. They give that certainty to developers that they will be paid in advance for the delivery of these homes and will have the upfront equity to be able to put in place the infrastructure and development costs for homes.
It is a very important issue, as we know, because the costs to develop any home are increasing because of a variety of situations such as construction inflation. Labour, fuel and materials costs are all increasing and putting challenges on a set budget that any developer or local authority has. The delivery of affordable housing in Galway city and County Galway is very important.
Will the Minister of State elaborate on the engagement between both local authorities and his Department on the delivery of affordable homes? We know there has to be this engagement. The Department has to be able to continue to keep the pressure on local authorities in terms of delivery of units and they also have to engage with the Department of Housing, Local Government and Heritage to ensure there is funding, assistance and guidance for the delivery of affordable housing, whether it is on land the council owns directly or that it has identified through advertising expressions of interest from interested parties for projects. Perhaps the Minister of State might elaborate on engagement with both local authorities regarding affordable housing in both Galway city and county..
I thank Senator Kyne for his Commencement matter, which is key and very important in terms of raising the priority of affordable housing within the Department and in the context of Galway city and County Galway. The Housing for All strategy sets out a very strong target of 54,000 affordable home interventions between now and 2030. As the Senator quite rightly pointed out, Galway has to take its share of this projection.
Delivery of affordable housing, in accordance with the scheme set out in the Affordable Housing Act 2021 and the funding being made available, will be underpinned by the local authorities’ housing delivery action plans, including those of Galway City Council and Galway County Council, which were submitted to the Minister, Deputy O’Brien in December 2021. Preparation of the plans allowed each local authority to assess the level of demand with affordability constraint in its area, based on the housing need and demand assessment, and plan provision accordingly.
The plans are currently being revised and updated by local authorities in light of ongoing engagement and clarifications, and I expect that they will be ready for publication by local authorities before the end of the summer. They will also provide a comprehensive overview of projected delivery of affordable housing in Galway, how many units are needed and where they are needed. I had the opportunity to raise this matter with Galway County Council last week when we visited its offices in Prospect Hill with Senator Kyne. I understand there is a significant pipeline of works currently under way. I point to the urgency for affordable housing to be a key component in that context because, as the Senator said, a healthy society must be reflected by a diversity of housing, with affordable housing being a key element along with private housing.
Funding is made available to assist local authorities and approved housing bodies to deliver affordable housing for purchase and rent through the affordable housing fund, AHF, previously known as the serviced sites fund, and the cost rental equity loan. The serviced sites fund is supporting affordable housing development at Merlin Woods in Galway city which, according to Galway City Council, will deliver approximately 85 affordable homes to purchase by 2024. My departmental officials recently met with Galway County Council’s director of housing and council colleagues to discuss the progress of plans for a number of affordable purchase schemes in Galway county. I understand that Galway County Council intends to make applications to my Department for AHF funding to support these schemes in the coming months. The schemes are currently at various planning stages and, all going well, it is hoped affordable homes could be available for purchase from 2023.
The first home scheme will be delivered via a strategic partnership between the State and participating mortgage lenders. I can confirm that all parties are working with a view to deploying the scheme by the end of the second quarter of this year. It will improve access to newly-built homes, below the median price point, by using a shared equity model to bridge the gap between mortgage finance and the cost of new homes. This measure, targeted at first-time or fresh-start buyers, will allow purchasers to exit the rental market, help to build developer confidence in realisable consumer demand and contribute to the recovery of our construction sector.
Furthermore, the Land Development Agency is progressing two major projects in Galway city as part of its initial tranche of State lands. These include site locations on Dyke Road and Sandy Road, Galway. Overall projected delivery from these sites is for over 1,500 homes, with the first 170 to be achieved by 2026 on Dyke Road. To date, a preliminary design has been completed for the site and engagement with Galway City Council is ongoing. With regard to the development located at Sandy Road, a design team has been commissioned to prepare a framework for the Sandy Road regeneration. Stakeholder engagement is under way and a public consultation will be undertaken.
Other measures to allow buyers to access newly-constructed housing affordably, such as the help-to-buy scheme and the local authority home loan, formerly the Rebuilding Ireland home loan, are also available to eligible purchasers nationally to make home ownership more affordable.
I thank the Minister of State for his response. Certainly, the delivery of the housing delivery action plans by the summer is very important. The Minister of State spoke about the engagement he, his officials and, I am sure, the Minister, Deputy Darragh O’Brien, have had with officials in Galway city and county councils. I know from my engagement with them that there are plans, whether it be regarding the council-owned lands in Claregalway, where there is a mixture of affordable and social, or in respect of private developments in Moycullen, Barna, Oranmore and other areas that they are looking at. It is important that these plans are progressed.
The Minister of State mentioned the Land Development Agency and its plans for Sandy Road and Dyke Road, but it will still be a long time before the first of these houses will be delivered for purchase. That is worrying because these are two strategic sites in the heart of the city but the Minister of State is talking about 2026 before the first delivery of some of those homes. We need the Land Development Agency to step up to the mark and to deliver more quickly than it is doing both in Galway city and across the country. This is supposed to be a game changer with regard to State-owned lands and we need quicker progress and delivery on this.
I understand the urgency on the ground for affordable housing and also private housing. People must have a clear pathway to get the chance to own the keys to their new home for the first time. From 2023, Galway County Council will have a number of options for affordable housing. The 85 units in Merlin Woods in Galway City Council will be important to underwrite that capacity.
We will prioritise it as much as we can.
With regard to the engagement, other funds like Croí Cónaithe will make it easier to bring derelict properties back into use. That will be tailor-made for County Galway, so that the areas the Senator referenced, such as Clifden, Moycullen, Letterfrack and Roundstone, will get an opportunity as well under that scheme, which is very important.
I understand the urgency of affordable housing and we will be prioritising this. The plans are now being looked at within the Minister, Deputy Darragh O’Brien’s division within the Department in order to have them operationalised this year. Hopefully, people will be able to see a clear pathway to how to get to keys to their home for the first time.