PPPs on shaky foundations since property prices fell
BACKGROUND:In the mid-1990s, public-private partnerships (PPPs) emerged as a cure-all for the problem of rebuilding Dublin’s long-neglected social housing flat complexes. And for a time they worked.
From the 1950s the council had built upwards, leaving blocks of flats surrounded by large open spaces. Intended as recreation areas, these spaces almost invariably became wastelands or were paved over for parking.
Through the PPP system, the council could realise value from this land. A developer would build social housing for the council and in exchange would be allowed to use a portion of the land for private units.
Fatima Mansions is an example of where things worked. The Rialto complex, blighted by poverty and drug problems, got government sanction for regeneration in 2001. Work began in 2003 and the first residents moved in in 2005.
In all, 150 social housing units for former tenants of Fatima Mansions were built, 70 affordable dwellings and a very substantial number of private sector units, at 400.
The scheme worked because the private housing went on sale when the property market was buoyant, enabling the developer to cover the cost of building social housing and realise an investment return.
PPPs stopped working when property prices fell and a profit could no longer be realised from the sale of private apartments. In some cases, including the McNamara five, attempts were made to renegotiate the deal by increasing the density of private apartments on the site or reducing the number of social units.
However, the scale of the changes required by the developer were such that they were unacceptable to the council or would be unlikely to gain the approval of An Bord Pleanála.
The McNamara schemes were the first high-profile PPPs to fall but others followed quickly.
In December 2008, the deal with Bennett Developments for the regeneration of Croke Villas, an estate of 79 flats on Sackville Avenue beside Croke Park, collapsed.
Almost next door to Fatima Mansions, Dolphin House, another 1950s complex with appalling living conditions, saw its hopes of regeneration dissolve in 2009.
On the other side of Dolphin’s Barn, three bidders remained in the running until mid-2009 to rebuild St Teresa’s Gardens, but by the autumn, the council announced the plans were to be abandoned.
Attempts are being made to progress the schemes. The GAA has offered to rebuild Croke Villas in return for council-owned land. The project is contingent on both sides reaching agreement on the value of the land – a valuation has been given to the
GAA by the council but an agreement has yet to be reached.
Dolphin House is to undergo extensive refurbishment instead of the planned demolition and rebuilding.
The council recently decided to begin the demolition of St Teresa’s Gardens but has yet to secure funding from the Department of the Environment for the regeneration.