The acquisition of so-called turn-key properties bought directly from private developers for social housing tenants is key to solving the State’s housing crisis, the chief executive of one of the country’s largest housing co-ops has said.
Kieron Brennan of Co-operative Housing Ireland (CHI) said the Government had committed to delivering 50,000 new social housing units over the next five years in its programme for government, with CHI and other approved housing bodies (AHBs) expected to supply more than half of these.
“Turn-key properties will make up a majority of these and are central to addressing the housing crisis,” he said.
His comments come in the wake of controversy over the money some local councils are paying private developers for social housing units.
But Mr Brennan said there was no way the Government’s 50,000 target could be met without the acquisition of turn-key housing and that the public versus private argument was misplaced.
He was speaking as CHI launched a new development of 69 affordable family homes in Carrigaline, Co Cork.
Its Brookhill estate was developed in conjunction with Cork County Council, the Housing Finance Agency, the Department of Housing and property developer Homeland Group. Taoiseach Micheál Martin is due to attend the launch on Monday.
“As well as direct builds, turn-key homes are essential to addressing the housing crisis, they allow for the risks associated with building to be pushed back on to the developer, for a greater housing tenure mix, for social housing to be built on private land and for accelerated house building,” Mr Brennan said.
He said the value of the Brookhill development could be seen in monetary and social terms.
“When all the associated costs including land price, servicing costs (water, gas, electricity), levies, acquisition costs, stamp duty and VAT are included, there is real value for money and at a discount compared to private homes,” he said.
“ We are not competing with private home provision, as the model is very different. The private sector is about profit maximisation. The attraction for a developer working with an AHB is the security of having an agreed price and certainty of sales, “ he said.
Figures recently obtained from the Department of Housing suggest that in some areas turn-key acquisitions were nearly double the cost of the social housing units developed directly by the councils themselves.
However, the figures did not contain details about the size or spec of the units being compared and councils say the timeline for delivery of direct builds can be significantly longer than those acquired via the private sector because of red tape.
Typically councils procure about two-thirds of their social housing needs from the private sector as turn-key acquisitions.
Despite Covid-19 and the disruption to construction, CHI, which manages 3,000 social homes across Ireland, said it was on target to deliver more than 400 homes this year.
In Budget 2021, the Government set aside €3.3 billion for the delivery of housing programmes, which includes funding for 12,750 social homes next year, 9,500 from direct builds.
The build target includes the delivery of 5,250 new homes by local authorities, 2,950 by approved housing bodies and 1,300 new homes through Part V acquisitions, where developers set aside 10 per cent of their developments for social housing.