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 “an act of daylight robbery” of public funds by the Social Democrats.
The party’s housing spokesman Cian O’Callaghan said the recently announced €450 million Croí Cónaithe cities fund was a “hare-brained idea” and a “bonanza for developers”.
The Dublin Bay North TD was speaking as the Social Democrats put forward a motion in the Dáil on Wednesday calling on the Government to scrap the project.
The scheme will subvent the construction of up to 5,000 apartments in Dublin, Cork, Limerick, Galway and Waterford that 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.
Mr O’Callaghan said the one thing guaranteed under the scheme was profits for developers and that it was “an outrageous use of public funds”.
“This is yet another bailout for developers, not only does the State bailout developers when property prices collapse, we now live in a country where the State bails out developers when property prices in apartments have reached all time highs,” he said.
“Is there any other country in the world where the Government does this…That is a win-win for developers, it is yet again the Government gifting public funds and resources to private interests with complete disregard for the public interest.
“It really is an act of daylight robbery – taking from the people and giving to developers, how can the Government possibly justify this? This is granting a developer’s wish list.”
Minister for Housing Darragh O'Brien said there were an estimated 70,000 uncommenced planning permissions in Dublin, Cork, Limerick, Galway and Waterford, with 40,000 of those in the capital.
Mr O’Brien said the Croí Cónaithe cities scheme was a short to medium term measure, “time bound and aimed at increasing the supply of apartments”.
The Dublin Fingal TD said the benefits of the plans would go to the purchaser, “who is enabled to buy an apartment in a core urban location which would not otherwise have been built at a price below the development cost”.
The minister also said nearly 5,700 new homes were delivered in the first quarter of 2022, the most in any first quarter since the CSO began collating this figure in 2011.
Mr O’Brien said there were over 22,000 homes completed in the last four quarters, with nearly 35,000 commenced in the 12 months to March 2022. He said the Government was putting forward a counter-motion.
Sinn Féin’s housing spokesman Eoin Ó Broin said the Croí Cónaithe cities fund was the “craziest housing scheme that any minister for housing has brought before us” during his six years as a TD.
The Dublin Mid-West TD said as it was coming up to two years since Mr O'Brien had become housing minister "it's quite clear you're an even worse housing minister in terms of results than Eoghan Murphy, than Simon Coveney or indeed Alan Kelly before you".