LOCAL AUTHORITIES are to be allowed to sell affordable houses on the open market to get rid of a backlog of 3,700 unsold houses which are costing councils millions of euro in bridging loans and fees.
Minister for the Environment John Gormley is to send a circular in the next two days to city and county councils permitting them to sell affordable houses at market value to private buyers. This would allow private buyers who do not qualify for affordable housing to acquire an affordable house and not have to pay a “claw-back” to their local authority.
Housing legislation requires developers to provide 20 per cent of any new housing estate or complex for social and affordable housing. A discounted price for the affordable units is agreed with the local authority. Buyers of affordable houses must pay a “claw-back” to their local authority of the percentage of discount they received if they sell their house within 20 years.
General practice is that a local authority gives the developer names of people who are eligible to buy an affordable house. If two affordable house buyers reject the house or apartment, the council is obliged to buy it from the developer at the agreed discount.
Two months ago Dublin City Council announced that it has had to buy 300 homes from developers because they were rejected by buyers and that these houses were costing it upwards of €300,000 a month in bridging loans and fees.
The council said it planned to give a further discount of up to 35 per cent to those who were on its affordable housing list in order to clear the back log.
Senior officials from the Department of the Environment yesterday told an Oireachtas Environment Committee that nationally there were 3,700 unsold units.
