Can we afford affordable housing?
Issued : Monday 24 May, 2004
Areas : Skibbereen
Given the extent of the housing crisis, with 29%-48% of new households not being able to afford to buy or rent, much is made of the so-called Affordable Housing Programme. But the truth of the matter is that, with prices around the € 150,000 - € 180,000 mark, affordable housing is only affordable to less tha 1% of the housing list.
The Cork County Housing Strategy (November 2001, pg. 24) estimated that 29% - 48% of households in Cork County were not able afford to buy or rent on the open market. In numbers, they estimated that 7,500 households would need some for of social or affordable housing. They also that demand would increase to 13,500 households by 2006.
At the same time, the projected Council housing building targets were only 4,500 new homes over the same period. It was hoped that casual Council house vacancies would provide another 1,750 homes, still leaving the County short of 7,000 additional homes that would be available for persons on the housing list.
At the same time, the Housing Strategy proposed the building of 1,675 affordable homes, being a combination of private sites, shared ownership homes and affordable homes for sale. The Strategy stated that around 850 of these were likely to go to people on the housing list.
The suggestion that this programme will signficantly help persons on the housing list flies in the face of reality. Take West Cork, for example, the Housing Needs Assessment for 2003 shows that of 654 households included in the assessment, 49% had annual incomes of less than € 10K, 50% had incomes of between € 10K and
€ 30K, and only 1% had incomes over € 30K.
Your paper quotes the purchase price of an affordable home at around € 150,000 for Rochestown (€ 200,000 for Cork City). To even qualify for a mortgage on the cheaper scheme an income of over € 30,000 would be required. Applicants with incomes of over € 32,000 are not eligible (although combined incomesare allowed).
If a household within the highest earning 1% of the housing list secured a mortgage,the repayments (over 20 years) would constitute around 42% of the households’ gross income, considerably higher than the 30% of net available income guideline recommended under the 2000 Planning Act.
As defined, affordable housing has little to offer households on the housing list. It will benefit a very small percentage of higher earners on the list, who are not likely to be the households in greatest need. It provides homes, jobs and development, so fulfills a role.But it cannot be seen as an alternative or substitute for providing genuinely affordable housing for rent, built to sound, sustainable standards, owned and properly managed by local authorities and by approved housing associations.
