The European Investment Bank (EIB) has agreed to loan the Housing Finance Agency (HFA) €400 million to unlock the building of hundreds of new social and affordable homes.
The EU bank says the financing marks a “significant step forward in expanding access to high quality, energy-efficient housing” in Ireland.
The Housing Finance Agency will repackage the EIB cash as 40-year fixed rate financing to local authorities.
The EIB says its a model which will allow councils to offer rents at least 25 percent lower than commercial rates.
“This new €400 million loan facility will enable the HFA to enhance their role in supporting the delivery of long-term, safe and secure homes for all”, said James Browne TD, Minister for Housing, Local Government and Heritage.
“Providing long-term fixed-rate finance for up to 40 years to Local Authorities and Approved Housing Bodies will help with securing a strong pipeline for social and affordable homes.”
The European Investment Bank’s Vice President, Ioannis Tsakiris, was in Dublin last week to see EIB-financed homes under construction.
“Behind every front door is a story of security, dignity and opportunity”, he said.
“Ireland continues to set a great example in affordable, sustainable housing in Europe, and the EIB is determined to build on this momentum.
Ireland continues to be a leading partner for EIB-backed housing investments in Europe, with flagship projects setting new standards in affordability, energy efficiency, and community impact.”
The announcement comes as a new report commissioned by the President of the European Council reveals the extent of rising house prices across Europe.
According to the study, prices in Germany are up by half compared to ten years ago. In Ireland, prices have risen by more than 90 percent in Ireland. Homes have more than doubled in price in Estonia compared to ten years ago.
“It is important that European leaders listen to the daily concerns of European citizens”, said António Costa, President of the European Council.
“Housing affordability and accessibility are among the most urgent concerns for Europeans, from Lisbon to Copenhagen, from Dublin to Athens. This is an issue that needs to be tackled at all levels: local, regional, national. We also need to reflect on how best the EU can complement these efforts and have a concrete impact in fighting this crisis”, he said.
Last week, the Lord Mayor of Dublin, Ray McAdam, put his name to a joint letter from his counterparts from across Europe urging EU action on housing.
The European Commission has promised to present an affordable housing strategy by the end of this year.