Affordable housing subsidy must double for Dublin – housing chief says

Grant of €50,000 may be fine for Leitrim, but not enough for Dublin, says Brendan Kenny

The State’s last affordable housing scheme was discontinued in 2011. Photograph: Chris Ratcliffe/ Bloomberg

The State’s last affordable housing scheme was discontinued in 2011. Photograph: Chris Ratcliffe/ Bloomberg

 

Affordable and cost rental housing will not be viable in Dublin unless the State subsidy for its construction is doubled, Dublin City Council’s head of housing has said.

Brendan Kenny said a €50,000 grant towards the cost of providing discounted homes might be “fine for Leitrim” but would be entirely insufficient for Dublin. “We really should be looking at €100,000,” he said.

Legislation for an affordable housing scheme, which will provide State-subsidised homes for sale to low- and middle-income workers, is finally expected to come before the Dáil this year.

The Affordable Housing Bill would also put cost rental, where rents are based on the cost of financing, building and managing the apartments rather than market rates, on a statutory footing.

A major component of the discounted costs of both the rental and purchase schemes comes from the “serviced sites fund” which subsidises up to €50,000 of the cost of each home through funding the site infrastructure.

However, Mr Kenny said the council was urging the Department of Housing to substantially increase this fund for the capital.

“We have been making it clear a national structure doesn’t suit Dublin. Having a site subsidy of €50,000 for the whole country, that might be fine say for Leitrim, and I’ve nothing against Leitrim, but having the same thing for Dublin city just doesn’t work,” he said.

“In the Dublin city area with its costs, really we should be looking at €100,000 – that would make a huge difference to the affordable housing scheme and to cost rental.”

Without the increase, the purchase price or the rents could not be reduced to an “affordable” level in Dublin city, Mr Kenny said.

“We cannot build a unit in Dublin for €300,000, no way. The average cost is more than €400,000. The schemes we are building at the moment, the big ones in the city, the average costs are €430,000 per unit,” he said.

“That doesn’t mean we don’t build. What it mean is if you are going to do affordable housing or cost rental, the Government needs to come up with a much bigger site subsidy than anywhere else in the country.”

Direct build costs

Figures provided by Minister for Housing Darragh O’Brien in response to a parliamentary question from Sinn Féin’s Eoin Ó Broin in recent months appeared to indicate the “direct build” cost of social housing in Dublin city was an average of €181,500.

However, it subsequently emerged this related to the construction of just 45 homes, half of which were not new build homes, but were the housing the council had refurbished at Priory Hall, which cost the council just under €141,000 to redevelop.

Mr O’Brien in December issued new figures indicating the average cost of homes approved for construction on city council lands in the past two years was just under €384,000.

Mr Kenny said this did not include VAT on construction. “This would bring the all-in [cost] up to €435,396 per unit.”

The State’s last affordable housing scheme was discontinued in 2011. A new scheme was announced five years ago in Budget 2016 but was never enacted. The last government re-announced the measure in 2018. Legislation was drafted and 18 months ago local authorities approved the “scheme of priority”, which determined how prospective buyers would be chosen. However, the legislation was never enacted.

In October, speaking at a post-budget briefing, Mr O’Brien said the legislation would come before the Dáil within weeks.

In the days before Christmas Mr O’Brien said the affordable purchase scheme, “will be finalised in the coming months”.