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The Minister for Housing, Local Government and Heritage, Darragh O’Brien, has welcomed the European Commission’s approval of Ireland’s State aid application for the Croí Cónaithe (Cities) Scheme. The scheme is a fund to support the building of 5,000 apartments for sale to owner-occupiers.
Today, Ireland received notification from the Directorate General for Competition in the European Commission (DG Compet) that it has deemed the scheme compatible with the internal market. This decision enables The Housing Agency to conclude their first set of development agreements shortly and as a matter of priority.
The Croí Cónaithe (Cities) Scheme aims to bridge the current ‘Viability Gap’ in delivery - between the cost of building apartments and the market sale price (where the cost of building is greater). In May 2022, The Housing Agency invited Expressions of Interest from proposers with planning permission to build apartment developments in Dublin, Cork, Limerick, Galway and Waterford. Twenty-six proposals were submitted by 16 different proposing entities.
Currently the agency is concluding appraisals of projects with a potential for up to 2,100 apartments. A second call under the scheme is expected to be announced in the coming months.
Welcoming the Commission’s decision, Minister O’Brien said:
“The Croí Cónaithe (Cities) Scheme has had strong interest to date and I welcome today’s decision by the European Commission, which enables us to progress the first agreements for the delivery of apartments. I want to thank the Commission for their constructive engagement over the last year.
“Increasing supply is key to improving the housing market and this scheme will increase the supply of apartments for people to buy and live in within cities. It’s about giving people who wish to buy a home and live in cities greater choice and, in turn, ensuring our cities have vibrant and strong communities. My department and The Housing Agency will remain focused on progressing this scheme to increase supply.”
Bob Jordan, Chief Executive of The Housing Agency, which is managing the scheme on behalf of the department, said:
“I welcome the decision of the European Commission and look forward to working on this important scheme which will deliver a much needed supply of apartments for home purchasers in our cities.”
In May 2022, Expressions of Interest (EoI) were invited from proposers with planning permission to build apartment developments in Dublin, Cork, Limerick, Galway and Waterford. On receipt of applications in June 2022, the Housing Agency has been actively involved in the various appraisal stages. Stage 1 dealt with the eligibility of the proposals, stage 2 ranks the suitability of each proposals and finally stage 3 takes into consideration a detailed due diligence process potentially leading to contract.
It is expected that the Housing Agency will conclude their first set of development agreements shortly and as a matter of priority. Both the Department of Housing, Local Government and Heritage and the Housing Agency intend to work closely with the relevant Local Authorities in ensuring that supply is activated and more compact forms of apartment living come on stream.
The Croí Cónaithe (Cities) scheme is devised to provide that the benefit of it accrues to the private individual purchaser/end user and not to the undertaking selling the apartment/developer.