Is 650sq ft Enough Space for a Family of 4 To Live In for 20 Years?

Press Release, 14th February 2007

Apartments as small as 650 sq feet and containing little if any storage space or access to outdoor living space are being offered to single people,  couples and families alike under the Affordable and Social Housing Schemes. Catherine Murphy, TD has termed such accommodation as “substandard”, especially in the case of the Affordable Housing Scheme considering that participants are subject to a 20 year Clawback**  intended to deter them from entering into the scheme for speculative reasons.  She has called on Government to first reduce the 20 year Clawback to 10 years for those buying such small units, so that expanding families can upgrade to larger accommodation without being penalised.  New minimum standards recently announced by the Minister will take years to kick in so measures must be taken to deal with the substandard housing stock already built in the planning stages.

“The Affordable Housing Scheme is a good way for people, especially first time buyers, to buy their own home, but it’s hardly fair to expect people to buy into 650 sq feet and commit to it for 20 years.  There’s just no room for family expansion in such small apartments; there isn’t even room to store a bike or Christmas tree.”

Murphy however went on to highlight that Local Authorities are being put in an awkward position because of the persistence of many developers in building such small units.  “We’re seeing a disproportionate number of 2 bedroom apartments being acquired by some Local Authorities on a take it or leave it basis.  Although some Local Authorities are entitled to buy up to 20% of all new housing developments for use under these schemes, continuous property price rises over recent years, along with inflation, are making larger homes unaffordable.  The result is that Affordable Home Buyers don’t have a great deal of choice when it comes to the units being offered.” 

The Solution
“To be honest this problem needs a two pronged approach.  Firstly the Minister for the Environment should reduce the Clawback applied to apartment purchases under the Affordable Housing Scheme to 10 years instead of twenty, with the amount of the Clawback reducing from 5 years on.  This way, families could get started in apartments with the knowledge that after 10 years they can upgrade if they need to.  But second, and most importantly, we need to stop the practice whereby developers are allowed to build such impractical accommodations.  Apartments must have adequate living, storage, and outdoor space, it’s as simple as that, but many developers will only provide these things if they are made to.  Unfortunately it’s easy to predict that we’re trading one set of problems for yet another, its essential that there is intervention before it becomes a crisis.”

**Clawback – A Clawback is a way for Local Authorities to claim back the amount by which they discounted a property sold under the Affordable Housing Scheme if it’s sold on within 20 years and it’s applied as a deterrent to people using the scheme purely for speculative purposes. 

If a property, for example, is bought from a Local Authority for €200,000 but has a market value of €350,000 the Clawback is calculated as follows: 350,000-200,000 = 150,000 (discount amount), (150,000 / 350,000) x 100= 43% (percentage by which the property was discounted).  If the property is sold within 10 years of purchase the full 43% of the market value on sale is payable to the Local Authority, however, between years 10 and 20 of the scheme, the Clawback then reduces by 10% annually.  In this case it reduces by 4.3% each year.

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Posted by catherinemurphy on February 15, 2007. Filed under Latest News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.