There are “major flaws” in the Government’s Cost Rental scheme, according to People Before Profit TD Richard Boyd Barrett.
Introduced in 2022, the government’s Affordable Housing Act brought in the affordable purchase scheme and a new affordable rental scheme called “Cost Rental” that was targeted at those just over the income limits for social housing.
The scheme is targeted at those earning above the income for social housing and below €53,000 annual net.
However, the criteria for eligibility also includes an assessment of your ability to afford the rent on the home you apply for, Deputy Boyd Barrett says.
Applicants are only deemed eligible if they will be paying less than 35 percent of their net income.
In April of this year; the Land Development Agency offered homes in Delgany under the Cost Rental Scheme.
“The cost of the rent in the Delgany Scheme means that if you include the income limit and the affordability clause, many of those that are eligible on income are not eligible because of the the rents are too high for their income.” he says.
In Delgany the rents are €1,220 for a one bed apartment, €1,445 for a two bed apartment, and €1,530 for a two bed apartment.
Deputy Boyd Barrett said: “It is clear that the department did not do the maths on the cost rental criteria, essentially the exact people that are supposed to be catered to by these “affordable” apartments become ineligible because these apartments are not in reality affordable.
“For example, if you are a single person with one child and you earn €45,000 net, you are above the limit for social housing so the “cost rental homes” are supposed to be for you.
“But you would not be eligible to apply for the 2 bed at €1445 per month because you are only allowed pay 35 percent of your net income which would mean that you could only apply for an apartment below €1312 per month.
“Similarly if you are a family that need a three bed home and earn €50,000 net, once again you are eligible on income grounds but you would only be eligible for the three bed at €1530 per month because 35 percent of your net income allows for a monthly rent of no more than €1458.
“This is just outrageous,” he says.
“The very scheme to allow for affordable rental is unaffordable for many of those who are within the income limit for the scheme.
“Today I called on the government to look at this as a matter of urgency as it has major implications for not only the whole cost rental model but also for the newly announced Cost Rental Tenant in Situ scheme.”