Real affordable housing must become part of the solution
I am calling on the Minister for Housing to consider a new housing scheme for those who are unable to access social housing, affordable housing or private housing. There is a steady increase in the number of social houses being built or purchased by the Local Authorities. In Fermoy alone there are three schemes, the smallest of which has been built (6 units), while the Duntaheen site (46 units) and Crann Ard site (52 units) are progressing. This is welcome news for those who are currently on the social housing waiting list.
Cork County Council have also identified five sites across the county that could be used for affordable housing schemes. Affordable housing schemes are generally targeted at those with a maximum gross income of €50,000 for single applicants and €75,000 for a couple. While Minister Murphy has targeted the delivery of 10,000 affordable units in the medium to long term, the cost of building may still make these units too expensive for many.
It is costing approximately €240,000 to build a 3-bedroom semi-detached A rated house. Even if there was a 20% reduction in the asking price as an affordable house, the cost would be €192,000. An applicant would need a deposit of €19,200. The average rent in both the Fermoy and Mallow Electoral Areas is over €840 per month, or over €10,000 per year. When other costs are also being incurred such as transport and childcare, it is simply impossible for many in this situation to be able to save the deposit.
Under the old affordable housing scheme, a 3% deposit was required, and repayments could not be more than 35% of the household’s net income. A reintroduction of this type of scheme would be welcome for those who are earning too much to be considered for social housing, but not enough to be able to save a substantial deposit or be able to purchase in the private market. Such a scheme would also need a degree of certainty in a person’s ability to repay. Interest rates are very low at the moment, and while this may continue for the foreseeable future, we need to ensure that we do not repeat the mistakes of the past and leave people overexposed if rate increase of incomes fall.