Dún Laoghaire-Rathdown County Council is to pay up to €2 million a year to lease a block of 81 apartments for social housing at Beechpark, Cabinteely, in south Dublin.
The newly-built development, just beyond the turning for Cabinteely village on the N11, comprises about 240 units in a mix of houses and apartments. A spokesman for the council said it would lease 81 apartments in total, made up of 15 one-bed and 66 two-bed apartments. The properties will be allocated to families and individuals who are on the council’s housing waiting list.
The council will lease the apartments from Irish property investor Ardstone, which acquired about 140 apartments at the development for €66 million, or about €471,000 each, earlier this year. It’s understood that the second block of apartments will also be rented, to a mix of social and private tenants. Investor Ardstone has plans to grow its social and affordable housing fund to about €1 billion by the end of this year.
A spokesman for the council said that a long-term lease of 25 years for 81 units at the development has been agreed under the enhanced leasing scheme.
Constructed by O’Flynn Group, Beechpark was launched in November 2019, with the homes sold to private owners. Prices for the homes started at €535,000 for three-bed terraced homes, rising to €770,000 for four-bed homes.
Now residents who bought homes in the development fear the new lease agreement on the apartment block will lead to an “oversaturation” of social housing.
Speaking to The Irish Times, two home owners in the development note that given that a further 14 houses may be allocated to the council under Part V obligations, this would bring the proportion of social housing at the development to 41 per cent, a figure which they say is “extremely significant”.
“It’s genuinely not about social housing, it’s the balance [of social housing versus private], the quantum [of social housing] and the way the local council has been able to act with the taxpayer. It’s the bigger picture as well; it makes you afraid to buy anywhere if this is what’s going to happen,” one resident said.
Most of the houses in the development have now been sold, but residents also fear the impact the scale of social housing in the development may have on the resale value of their properties.
“The unfortunate and real-world consequence is that the original purchase value of the houses in Beechpark will be adversely affected,” they claimed.
Another cause of frustration is the lack of communication from the council on the agreement, with residents only finding out earlier this week.
“We’re very distraught and disgusted with the way it’s been handled,” they said.
A group of residents in the development are now writing to the council requesting that either the lease agreement be rescinded or that arrangements are put in place “to formally and certifiably reduce the social accommodation allocation to a more appropriate level in keeping with the Part V guidelines”.
Introduced as part of the Rebuilding Ireland Action in 2018, enhanced lease agreements target newly built, or yet to be built, houses and apartments for leasing. Unlike a standard lease agreement, where rents are fixed at about 80-85 per cent of market rents but maintenance is taken care of by the council, under an enhanced agreement the owners of the properties provide day-to-day maintenance of the properties. For this, they will get a significant bump in their rent, as up to 95 per cent of market rent is payable under the scheme. This is typically index linked every three years.
Back in 2019, for example, Dún Laoghaire-Rathdown County Council agreed to lease 89 apartments at the Herbert Hill development in Dundrum, under an enhanced long-term lease, at an average monthly rent of €2,000 per apartment.
With typical rent of about €2,000 a month in the Dún Laoghaire area according to the RTB rent index, it likely means that the council will pay up to about €1,900 a month in rent for a two-bed apartment at Beechpark, based on 95 per cent of market rent, and less for a one-bed. For 81 apartments then, the annual cost to the council is likely to be about €1.8 million, or some €45 million over 25 years (although this probably will be higher, as rents are likely to be subject to an increase every three years).
The Government’s social housing strategy has also recently been criticised for allowing investment funds acquire entire housing estates, with a view to leasing them back as social housing to local councils. This prompted the introduction of new measures this summer to limit the acquisition of houses and duplexes.