Dún Laoghaire Rathdown councillors have said they had no knowledge of the council's plan to lease an entire estate in Cabinteely, south Dublin, for social housing.
The council is understood to be in negotiations to lease Heron Wood, a planned estate of 34 apartments in Cabinteely village, from Poolbeg Properties in a deal that could cost the council almost €25 million in rent.
Councillors said they had serious concerns about the plans, but had no ability to intervene in the lease scheme.
"The impact the councillors can have is being whittled away all the time. The council management does not have to come to the councillors for approval for this, and we hadn't been informed negotiations were under way," said People Before Profit councillor Melisa Halpin.
According a report in the Business Post, the council is in negotiations in relation to a 25-year lease on the estate and, according to a prospectus issued by the developers, the average rent for the homes would be €2,500 per month.
“An average rent of €2,500 is extortionate,” Ms Halpin said. “Hap [Housing Assistance Payment] tenancies are capped at €900 a month for a single person, I’d assume the average rent the council would pay in this development for a one-bedroom apartment would be €1,500. It is deeply unfair.”
Under the terms of the Government’s long-term social housing leasing scheme, private or institutional investors must finance 100 per cent of the cost of construction, and the council cannot purchase the homes at the end of the lease term, in order to keep the scheme off the Government’s balance sheet.
“It’s a very bad deal,” Ms Halpin said. “Instead of making money for an investment fund, that €25 million could be used to provide families with permanent homes, which would also be an investment in the future of the county.”
‘Poor value’
Fine Gael councillor Barry Saul said the leasing arrangement was poor value for money and had a distorting effect on the market.
“I would have concerns about public or private funds being used to fully buy or lease entire estates,” he said. “While the objective of the council is to maximise the number of units they get, it prices first-time buyers out of the market. That is not the holistic approach we want to the development of areas.”
Although the Government would reimburse the council for the cost of leasing the homes, it did not represent a good long-term housing strategy, he said.
“In terms of the use of State funds it is a short-term fix, and you would have to have concerns about the value for money. As a model it doesn’t seem to make sense.”
Chairwoman of the council's housing policy committee, Labour councillor Martha Fanning, said the committee was not typically informed when the council decided to enter into long-term housing leases. "We tend to find out when it's in the newspapers."
A balance needed to be struck between providing homes and the effective use of funding, she said. “If one of the 6,000 people on the housing waiting list was offered one of these homes, they might be quite delighted, but in terms of the provision of housing, 34 units, which the council will only have temporarily, is a drop in the ocean,” she said.
“In terms of planning for the delivery of housing, this piecemeal approach isn’t working and hasn’t worked for a long time. In terms of cost, it’s an appalling way to do it. It’s a terrible approach that is hugely expensive. The long-term solution to housing isn’t to put excessive amounts of money into property developers’ hands.”
The council did not respond to queries on Sunday.
