Restoring developer housing contribution will increase home availability

Apartment blocks staying private as social housing tenants accommodated elsewhere

The prospect of restoring developers’ “Part V” housing contribution to 20 per cent will result in more homes being available for those on lower incomes. However, their new homes may not be where people expect.

In 2000, under Part V of a new planning act, developers had to sell 20 per cent of homes built to local authorities for social and affordable housing. This was cut to 10 per cent in 2015.

Due to spiralling construction costs, however, local authorities have often been unable to afford to buy the social housing on offer in the schemes that have been built since then.

As a result, private apartment blocks, particularly in Dublin, are remaining private and the social housing tenants are being accommodated elsewhere. This housing mix is unlikely to change under the Minister's plans.

"If affordable housing comes back into Part V, the issue will be price. If the price is too high to take the social housing on site, it will be too high for affordable housing as well," Dublin city council's head of housing, Brendan Kenny, said.

Developers in the south of the city have sought €700,000, from the council for two-bed social housing apartments, with some in the docklands asking more than €900,000. While a subsidy of €50,000 is available to local authorities for each affordable home, it could in no way offset the prices currently being sought, Mr Kenny said.

Expensive prices

“The statistics coming back to us on the average prices of Part V are very expensive. They are prices we won’t pay, because we can’t pay. If a developer is offering units at €700,000 and the only subsidy is €50,000, and people are expecting to pay €200,000-€350,000 for an affordable home, it won’t work.”

The likelihood he said, is that most affordable homes will be in off-site locations, where the developer provides the homes in another complex within its ownership, offers land to the local authority to build the homes, or buys an apartment block for use for social and affordable housing.

This last option has been successful in the recent past, Mr Kenny said. In 2017, Chartered Land bought the Shelbourne Plaza block of apartments close to Grand Canal Dock, and sold them on to the council for €24.5 million, instead of providing social housing in its Lansdowne Place development on the site of the old Berkeley Court hotel in Ballsbridge. It meant the council got the apartments for about €400,000 a piece instead of more than €800,000 and secured more than 50 social homes in the docklands.

Considerable distances

“That was a good option for Part V. Often when these offers are made, it’s in another part of the city, but this was close by, still in the southeast area. At the time we were in the process of detenanting St Andrew’s Court [a senior citizens complex near Pearse Street] and the residents there were older and reluctant to move too far so we were very pleased to be able to offer them homes there.”

However, many of the off-site offers made by developers are considerable distances away from their proposed schemes, often in areas where there is already a high concentration of social housing. However, Mr Kenny said, this is where the addition of affordable housing might come into its own.

“It may not be such a bad thing; the concern about accepting Part V in an area where there is already a high concentration of social housing is lessened because with the addition of affordable housing, you do get the tenure mix, and it is likely the homes will be far more affordable for the people buying them.”

While council’s first preference was always to take Part V on-site, it had to be realistic Mr Kenny said

“At the end of the day, I don’t see prices moderating any time soon, so it’s very likely a lot of Part V will be off-site.”