The use of public land for a new affordable housing programme, possibly involving 10,000 units per year, is to be examined as part of the talks on a new partnership agreement.
The Government and the social partners are to examine a proposal under which land currently owned by local authorities or State agencies would be made available to build social and affordable housing. The renovation of Government-owned buildings for such housing will also be considered.
The proposal, developed by the ICTU and IBEC, is that the funding of the initiative would be routed through the new National Development Finance Agency (NDFA). The NDFA is being established as part of the National Treasury Management Agency to advise on the funding of State projects and, where appropriate, raise finance itself. It would get its money back through the mortgage payments of the purchasers.
The construction of the houses would be overseen by the National Housing Agency, working in partnership with the relevant local authorities. Priority access to thc accommodation would be given to those on the housing list.
A statement from the Department of Finance last night said the Government was "prepared to explore the various issues concerning the supply of affordable housing and the role of the NDFA in this regard".
However, responding to speculation, it said it did not intend to use National Pension Reserve Fund resources to finance any such initiative.
Trade-union sources last night said, however, they still believed the housing programme could provide a profitable outlet for a part of the National Pension Reserve Fund, especially in an environment where falling equity prices had led to an initial loss on the fund's investment. The decision on the allocation of the investment is taken by a group of independent trustees.
The idea behind the proposed housing scheme is that, by cutting out the developer's profit, houses could be supplied at a much lower price.
Builders would be contracted to build houses for cost plus a normal profit margin. The sale price would reflect this cost and the cost of raising the finance, plus a small margin which would fund the development of local authority or voluntary housing units. Purchasers of the house would only be allowed to sell it back to the local authority.
An examination of State-owned land currently under way by the Minister of State at the Office of Public Works, Mr Tom Parlon, is expected to clarify the amount of land held by official bodies.