State may return to private sector for help with social housing

Analysis: Exactly how new public-private schemes would work still unclear

For about two decades, up to 2008, public-private partnerships (PPPs) between local authorities and developers were the standard way of providing large-scale social housing.

Under these schemes, a city or county council supplied the land and a developer built social and private housing, using the sale of the private properties to offset the cost of building the council housing.

They worked for local authorities because they had land, but not the money to build housing, and they worked for developers because in a rising market the price they could get for the private housing, once completed, was significantly greater than what it had cost to build social housing.

However, when property prices collapsed developers pulled out of the deals, leaving chaos in their wake. Dublin city was worst hit by the failure of the PPP method. The city council had several PPP developments waiting to start construction, five of which involved deals with a single developer, Bernard McNamara.

Three of those projects involved the regeneration of flat complexes, some of the city’s largest and most dilapidated, and when McNamara left the pitch in 2008 hundreds of tenants living in sub-standard accommodation had to be rehoused, adding to waiting lists and worsening the city’s burgeoning housing crisis.

Horror

It’s no surprise then, that when in July 2014 the city council’s head of housing

Dick Brady

suggested testing the market to see if there was private sector interest in building on council-owned land, the response from many councillors was one of horror.

However, in the intervening two years as the full extent of the city’s housing crisis has emerged, councillors have reluctantly come around to the view that it’s better to have someone build housing than to leave council land vacant.

Brady had been due to present a report on plans for sites at Oscar Traynor Road in Coolock, O’Devaney Gardens in Dublin 7 and St Michael’s Estate in Inchicore to councillors last May, but decided to hold off to see what was on offer in the Government’s imminent housing action plan, published this week.

The plan makes no specific commitments in relation to these lands but does reference the "initiative by Dublin City Council to seek expressions of interest from the market in respect of a number of sites it owns, for a mix of housing developments" under the heading "Mixed-tenure development on State lands" but detail on how these schemes would work is scant.

Asked why these PPPs would work now when, less than 10 years ago they so catastrophically failed, Coveney said the creation of a sustainable housing market was the solution.

“So many of the partnerships collapsed because the private element of those partnerships went bust and so we need to build a much more sustainable property market now where we don’t constantly drift from boom to bust with all of the social consequences that come from that. My job is to create a sustainable, growing housing market.”

He was not proposing “a give-away of publicly own land to private sector developer” he said.

“What I’m talking about is putting partnerships together that can put in place mixed-tenure developments . . . that is a much more effective way of delivering social housing quickly than simply building masses and masses of social housing estates with social housing only in them.”

Brady said he sees the housing plan as a confirmation of the council’s intentions for its vacant land, and will bring a report to councillors on the three sites in September. “There will be no mega-sites going to one developer” he said. “We’ve learned not to put all our eggs in one basket”.