Private sector developers delivered 80% of social housing units last year

Almost 80 per cent of new-build social homes delivered last year were acquired from private-sector developers, with just 20 per cent supplied directly by local authorities or approved housing bodies.

Figures obtained from the Department of Housing underscore the State’s reliance on the private sector for its housing needs.

They show a total of 5,142 new social homes were delivered in 2021, significantly fewer than the Government’s original 9,500 target. The below-target performance was blamed on the disruption caused by Covid-19, which resulted in the closure of most building sites during the first four months of 2021.

A detailed breakdown of the total shows 3,481 units were acquired by way of so-called turnkey purchases, where the local authority or housing body enters a forward-purchasing arrangement with a private developer, or through the Part V rule, which stipulates developers must set aside a certain portion of their developments for social housing.

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A further 615 units came from public-private partnership schemes on State lands with private-sector developers.

Just 1,046 (20.3 per cent) were delivered directly by local authorities under the Social Housing Capital Investment Programme or by approved housing bodies through the Capital Advance Leasing Facility or through the State’s Capital Assistance Scheme, which funds the provision of rented accommodation for those with special needs.

Over-reliance

The figures show there is “still an enormous over-reliance on private developers and the acquisition of new builds from private developers through turnkey purchases and Part Vs”, Sinn Féin housing spokesman Eoin Ó Broin said.

“The argument here is not that turnkeys are a bad thing. What is a concern, however, is the over-reliance on turnkeys and the underperformance of direct delivery,” he said.

If the Government is going to make its 9,500 social housing target this year, “we’re going to have to see a significant increase in the direct delivery of social homes in addition to turnkeys,” he said.

Mr Ó Broin also noted there would be greater demand for turnkeys this year because the Government’s new cost-rental scheme.

He also claimed the lower-than-expected social housing output for last year could not be blamed entirely on Covid and that much of the underperformance related to "bureaucracy and micromanagement" on the part of the Department of Housing and the Department of Public Expenditure and Reform, which slows the pace of direct delivery projects.

The cost of social housing has been the subject of much controversy. Under the Part V arrangement, UK property group Hammerson is proposing to sell Dún Laoghaire-Rathdown County Council 88 units as part of its redevelopment of the old Dundrum shopping centre for €42.6 million or an average of €484,090. Three-bedroom units will cost the local authority €788,741.