More than 2,000 unsold affordable housing units remain on the books of local authorities more than a decade after the property crash and have cost the State over €86 million in debt-servicing costs, Minister for Housing Darragh O'Brien has confirmed.
The homes were delivered during the boom under the Part V planning rules, which obliged developers to set aside a proportion of their developments for social and affordable housing.
They were intended for homebuyers on lower incomes but when the property market crashed demand dried up. In many instances, the affordable prices were higher than open-market prices, which had plummeted.
The properties were eventually acquired by local authorities and – after a period of limbo – used to house social tenants, but the €371 million of debt associated with buying them remains on the councils’ books.
Figures provided by Mr O’Brien, in response to a parliamentary question from Sinn Féin’s Eoin Ó Broin, show that a total of 2,039 unsold affordable units have been identified across 19 local authorities and are being used to house social tenants.
Cork county had the largest number (575), followed Fingal (274), Dublin city (271) and Cork city (248).
The total debt-servicing costs paid on the borrowing between 2009 and 2020 was €86.6 million with Cork city paying the most (€20.5 million). Fingal and Dublin city paid €17.5 million to service the debt.
Mr O'Brien said he had established a working group comprising officials from various State housing bodies to examine the issue and his department was consulting with local authorities and the Housing Finance Agency to gather the relevant financial data. "Once completed, the next meeting of the working group will consider the options available for resolving this legacy issue," he said.
Part V of the Planning and Development Act currently requires 10 per cent of new housing developments to be earmarked to meet wider social needs with local authorities entitled to obtain it at existing-use value.
Mr O’Brien intends to increase that portion to 20 per cent, possibly comprising 10 per cent social housing and 10 per cent affordable housing or a mix dictated by the local authority.
Part V obligation
The 2,039 unsold affordable units remain one of several issues still outstanding from the crash.
“The State was never meant to acquire these units and now there’s an issue around who is going to pay for them,” Mr Ó Broin said.
“The Government is now returning to the 20 per cent Part V obligation, which will include affordable units – that’s a good thing – but we need to make sure that something is built into it that doesn’t repeat this mistake if there is another property downturn,” he said.
Separately, the first homes to be delivered under the Government's new cost-rental tenure model were launched yesterday by housing agency Clúid.
The 25 properties in Balbriggan, north Co Dublin, will be rented to qualifying tenants at sub-market rates of between €935 and €1,150 a month.
Under the scheme, rents for the homes are set at a minimum of 25 per cent below market values.