The cost of land for building

 

Sir, – The cost of building land is one of the biggest contributors to unaffordable housing. The controversy over the jam factory site is a fine case study illustrating so much that is wrong. It would appear that the problems – and the solutions – are clear to everyone except our politicians, local and national, who are in a position to do something useful but choose not to.

A vacant site was valued at €2.5 million in 2016. Planning permission was secured for residential development. The site is now on the market for €25 million. A Sinn Féin councillor who was adjacent to the rezoning process described it in colourful terms: “These two geezers breezed in here with nothing on their minds but to line their pockets” (“Jam factory site leaves sour taste for council”, News, October 19th). And the innocents on the council fell for it hook, line and sinker.

So a public act – the grant of planning permission – results in a private gain of the order of €22.5 million or more. But it gets better.

You report (“Owner denies ‘flipping’ old factory site”, News, October 20th) that the current owner of the site has agreed to lease 30 per cent of the development to Dublin City Council on a 25-year lease and will do more if the demand is there. A spokesman for the council says that any new owner would have to engage directly with the council in advancing such a lease.

The new owner will have paid in the order of €25 million for the site before a block is laid. Naturally that cost will have to be factored into the terms of any lease agreed with Dublin City Council. So, at the stroke of a pen the council increases the value of a privately owned site by in excess of €20 million. And it now wants to enter into a long-term lease which will see it pay rent for 25 years on a development cost which will include the premium created by the council’s grant of planning permission.

And don’t get me started on the thought that a public body which could borrow at close to a zero interest rate to develop public housing which it would own prefers to pay a market rent for 25 years to a private developer.

Beam me up! – Yours, etc,

PAT O’BRIEN,

Rathmines,

Dublin 6.