Exceptional borrowing of €132.5 million has been approved by Dublin city councillors to fund the construction of cost-rental apartments at the former St Michael’s estate in Inchicore, Dublin.
The council is to immediately seek final bids to build the long-delayed scheme of 578 cost-rental and social housing apartments at the site of the 1960s flat complex, demolished 12 years ago.
The new estate is now on track for completion in 2028, a decade after the cost rental project was announced.
Just over three-quarters of the apartments in the estate, now named Emmet Road, will be used for cost-rental housing, for low- and middle-income workers, while the remaining 137 will go to people on the city’s social housing waiting list.
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While the Government will fully fund the social housing, it will invest only €150,000 per cost-rental home. In order to help cover the cost of the 441 cost-rental apartments, the council will secure a Government grant of €66,150,000, leaving a gap of €132.5 million to fund the apartments expected to cost up to €450,500 each to build.
The rents which the tenants will be charged are expected to be determined later this year, the council’s head of housing Mick Mulhern said.
In its other planned cost-rental schemes, the council is partnering with private developers and approved housing bodies, or the Land Development Agency, to finance the construction. However, uniquely in this case, the council is using a “direct build” model.
This requires it to seek a 40-year loan from State lender the Housing Finance Agency, which required the approval of councillors to allow work to progress.
The cost-rental plans for St Michael’s were announced in July 2018 by then minister for housing Eoghan Murphy. An application to An Bord Pleanála was finally made in October 2022, with permission granted in July 2023.
St Michael’s estate has been earmarked for regeneration since the late 1990s. It was one of five sites due to be redeveloped with social and private housing under a public-private partnership deal between the council and developer Bernard McNamara, which collapsed in 2008.
Councillors have also approved plans for the development of social housing on sites in Ballymun previously earmarked for affordable housing schemes.
The affordable purchase scheme works by offering eligible buyers a discount on the market value, with the State taking an equity stake in the home to reflect the discount given. Buyers on lower incomes pay less, but the State takes a higher stake in their homes than with people on higher incomes
Under legislation, the minimum sale price of an affordable home must be at least 15 per cent below the local market value. Market values in Ballymun are lower in other parts of the city, but construction costs are high, making it difficult for the council to achieve the required discount.
The council still plans to develop at least some sites in the area for affordable purchase housing.
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