Richard Barrett’s Bartra signals readiness to build 400 social homes

The Richard Barrett-backed Bartra Capital Property could offer to build up to 400 social dwellings under a new Government scheme, its chief executive said.

Damien English, Minister of State for Housing and Urban Development, said on Wednesday that local authorities would be allowed to lease properties for social housing from pension funds and other institutional investors for 25 years.

The scheme will allow investors to pay for the construction of social dwellings that can be leased to councils, which can, in turn, rent them to tenants.

Bartra chief executive Mike Flannery said his company could offer to build an initial 350 to 400 social homes under the scheme and hoped to construct 2,000 over the longer term. He suggested that a call for proposals under the scheme to the State's Housing Agency could prompt developers to offer several thousand new homes to local authorities for social housing.

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“I would say that they will get a selection of offers from credible developers with credible institutional equity behind them,” he predicted.

Councils will rent the properties from the investors at rates tied to European inflation rather than the more volatile local market, giving the local authorities predictable costs and the institutions stable, long-term returns.

Institutional capital

Late last year, Mr Barrett argued that introducing such a scheme here would allow the State to tap a "huge bank of institutional capital" that already invests in social housing in Europe, the United States and Australia.

Mr Flannery said pension funds would invest in such ventures in the Republic for steady returns, once the projects were big enough.

The Government hopes that the scheme will result in developers building 10,000 social houses. It will only apply where backers intend to provide at least 20 homes in a single local authority area.

Mr Flannery emphasised that councils could determine where and how fast the homes were built.

“It allows developers to go to local authorities and offer them structured, organised delivery of units in a pattern that suits the local authorities,” he said.

Bartra aims primarily to build social housing to lease to councils over the long term. The company is one of a number of groups that have been lobbying the Government to allow councils lease properties over the long term for social housing.

Traditionally, local authorities built and owned the houses and apartments and let them to tenants.

The Department of Housing said the Enhanced Long-term Social Housing Leasing Scheme, as it is called, would be structured so that it is not part of the national debt. The department, the Housing Agency and the National Development Finance Agency worked together on putting the plan together.

Mr English remarked that it was one of a number of measures designed to tackle the social housing shortage. The deadline for proposals is April.