Affordable housing model could earn State money over time, conference hears

Housing body says homes for €250,000 ‘workable’ to ease declining ownership rates

The provision of affordable housing could over time make the State money and increase local income by several million euro per year, an online conference on the future of renting and housing in Ireland has heard.

The national housing charity, Threshold, and the Economic and Social Research Institute (ESRI) co-hosted the conference, which heard from experts in the area.

Hugh Brennan, chief executive at Ó Cualann Cohousing Alliance, said the delivery of affordable housing at a price of €250,000 for people on a joint income of €60,000 per annum is “workable” to alleviate declining homeownership and can be scaled up going forward.

Mr Brennan explained Ó Cualann has support from Dublin City Council in the provision of land and that development levies are waived.


“We have a set margin of 5 per cent plus our overheads and we pay the exact same rates to our builders and design team as any private developer would. So it is workable because we are doing it,” he said.

Asked if Ó Cualann’s model can be scaled up, Mr Brennan said it can, but that it would not be possible without Government subsidies.

However, those subsidies go “straight back to the State”, he said.

“The VAT element of our houses at €250,000 and the tax from PAYE and PRSI is more than the value of the land and waiving of development levies. So it is cost neutral, and over time actually makes the State money.”

One of the “huge benefits” of affordable housing was the disposable income people will have to spend in their own communities.

Research by the Ó Cualann Cohousing Alliance showed that for every 1,000 affordable houses built, local income will be increased by about €6.5 million per year.

Decline in homeownership

One issue contributing to the decline in homeownership since the 1990s was the increase in migration into the country, Michelle Norris, professor of social policy at UCD, told the event.

Ireland was a very monoethnic society in the 1980s, when homeownership rates were higher, and that has since dramatically changed.

“People who are migrants are less likely to be homeowners. That may reflect in part discrimination, but it may also reflect preference, people don’t wish to buy a house in a country they don’t intend to stay in long term,” she said.

“That said, for many people buying a house is an aspiration they feel they’ve been deprived of.”

Government support and initiatives such as the Rebuilding Ireland home loan could help as historically, when homeownership was high, many people had benefited from subsidies which now are not available to people.

Asked whether homeownership is “a dying breed” and if focus should be applied to improving rentals, Joe Frey, knowledge exchange broker for the UK Collaborative Centre for Housing Evidence said the private rental sector was “here to stay” but it will “tend to stabilise”.

Pat Farrell, chief executive of Irish Institutional Property, added that the “fundamental issue is a chronic lack of supply and the need to drive up supply”.

Mr Farrell said there was a role for institutional investors in the Irish market and in increasing affordability. The reality was that Ireland “lacks the resources” to fully fund housing without outside investors.

Ms Norris echoed this sentiment, adding that a “diverse source of finance is valuable” and private finance is “attractive if properly regulated”.

However, the provision of social housing dwellings leased back to the State for the use of social housing was “extremely problematic”, she said.

“The state is effectively bidding against itself and having to compete in the market against funds bidding to buy units and get subsidies from the State in the form of lease agreements to let them out. It doesn’t make any sense.”