State lost potential €100m to build social housing, conference told

The State lost out on a potential €100 million to build social housing offered to developer Richard Barrett’s new business because the Government had not approved a system for leasing the homes to councils.

Mr Barrett told a conference on Wednesday that while the official waiting list for social housing in the Republic was 91,000, the actual number of people seeking homes was more than 700,000.

The former Treasury Holdings partner calculated that, including groups such as those on housing and rent support, the figure came to 174,856 families, or more than 700,000 people, in need of social homes.

He set up Bartra Capital two years ago to build and lease social homes to local authorities. The company came close to getting €100 million backing from an ethical investor for this purpose. However, the firm pulled out because the Government had not approved the leases that would have been used to let them to councils.

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"There is a huge bank of institutional capital which already invests in social housing in the US, Australia, Europe and even Britain," Mr Barrett said.

He explained that many of these investors were simply seeking a return that matched inflation. They would invest here if the Government would approve the long-term lease, which runs for 20 years and increases in line with the annual inflation rate.

Mr Barrett argued that even if people accepted the Government’s “deception” that the real need was 130,000 homes, the State could only provide 22 per cent of them. “Where is the other 78 per cent going to come from?” he asked.

“You’re talking about almost three quarters of a million people; it’s difficult to disguise the problem. This is going to land us in a huge fiscal hole.”

Mr Barrett also predicted that the crisis could drive large numbers of people to support extremist politics.

Approval

Bartra's chief executive Mike Flannery said afterwards that even if the Department of Housing agreed to councils leasing privately-built properties it would still require the Department of Finance's approval. He said that the Government had signalled that it could approve the system shortly.

Meanwhile, Minister for Housing Eoghan Murphy told a Sunday Business Post residential property summit that developers were seeking permission to build more than 11,000 new homes under the new fast-track planning system introduced in July.