A new State subsidy that could see developers secure up to €144,000 in funding for each apartment they build outside the Dublin area has been described as “the most crazy housing scheme that I have heard from any Government in recent years” by Sinn Féin’s housing spokesman.
Dublin Mid-West TD Eoin Ó Broin has said the Croí Cónaithe cities scheme is “a chronic waste of taxpayer’s money at best”.
The €450 million scheme will subvent the construction of up to 5,000 apartments in Dublin, Cork, Limerick, Galway and Waterford which have planning permission but remain unbuilt because costs outstrip market values.
To get the funding, developers must demonstrate there is a viability gap between what the apartment costs to build and the sales price they can achieve.
A national maximum of €120,000 per apartment has been set, but developers building in the regional cities will be able to argue for an increase of up to 20 per cent, bringing the State subvention to €144,000, because of the lower market values achieved in apartment sales outside Dublin.
To qualify, developers must agree to sell the apartments to owner-occupiers only, construction should start by the end of March next year, and the homes must be completed by the end of 2025. Each complex must have a minimum 40 apartment in blocks of at least four storeys.
"He's [housing minister Darragh O'Brien] going to give large private developers subsidies of up to €120,000 in Dublin, €144,000 outside of Dublin with no reduction in price for the purchaser and no affordability dividend," Mr Ó Broin told the Dáil on Tuesday.
“A chronic waste of taxpayer’s money at best, locking in unaffordable, excessive prices for apartments and at best driving them even further upwards.”
Mr Ó Broin was speaking as he brought forward a motion calling on the Government to dramatically increase direct capital investment in the delivery of “genuinely affordable homes for people to buy”.
The Sinn Féin TD pointed to the latest CSO figures which showed that house prices have risen by 15 per cent across the State and 27 per cent in border areas.
Mr Ó Broin said the median house price across the State was €282,000 but in Mr O’Brien’s constituency of Dublin Fingal, it was almost half a million euro.
"That is what you get when Fianna Fáil are in Government," he said.
In response, Mr O’Brien said there was “absolutely” a difficulty with affordability as well as a “fundamental difficulty” with supply.
“We can’t ignore the last two years or indeed the last 10 years of under-supply,” Mr O’Brien said.
He said the Government’s €4 billion Housing for All plan promised to deliver more social homes than ever before; 90,000 properties by 2030.
The minister said 300,000 new homes were needed between now and 2030 to address under supply in housing.
In relation to the Croí Cónaithe cities fund, Mr O’Brien said there were thousands of planning permissions that had not been activated, particularly in cities, where “compact urban growth” was needed.