Dublin City Council needs to borrow €132.5 million to fund its first cost-rental apartments at the former St Michael’s estate in Inchicore, which are expected to cost up to €450,500 each to build.
Councillors will next month be asked to approve the unprecedented borrowing programme so construction can start on the long-delayed development of 578 cost-rental and social housing apartments at the site of the 1960s flat complex, demolished 12 years ago.
If councillors approve the loan plan, the council will immediately seek final bids to build the new estate, which would put the scheme on track for completion in 2028, a decade after the regeneration 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. For 441 cost-rental apartments, the council will secure a Government grant of €66,150,000, leaving a gap of €132.5 million.
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, but councillors must approve the move 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.
[ Hundreds of public housing units ‘lost due to regeneration delays’Opens in new window ]
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.
Separately, council housing officials have raised concerns about the viability of “affordable” housing for sale in certain parts of the city, particularly Ballymun.
Councillors will next month be asked to approve plans for the development of social housing on sites in Ballymun previously earmarked for affordable housing schemes. However, the council still plans to develop at least some sites in the area for affordable purchase housing.
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 “so there has been difficulty in getting the figures to stack up”, Dervla Cotter, senior executive architect, told councillors on Monday.
Dave Dinnigan, the council’s director of housing delivery, said the council may have to switch to cost-rental for Ballymun “if affordable purchase doesn’t stack up in terms of the numbers, or the complexity of the build”.
Meanwhile, a programme of work is under way to remedy defects identified in the first phase of State-subsidised homes under construction at Oscar Traynor Woods, in Coolock, councillors were told.
More than 850 affordable purchase, cost-rental and social homes are being built by Glenveagh. Earlier this month the council confirmed work had been identified on site that was not compliant with building regulations.
A report that detailed remediation required for issues such as water ingress, roofing problems and damaged radon barriers was submitted by building control officers to Glenveagh on Friday.
A spokesman for Glenveagh said it shared the council’s “commitment to high standards” and “will continue to engage constructively with the council to deliver all of these homes”.
Senior council architect Martin Donlon said Glenveagh was “co-operating very well with building control”.
The council drew considerable criticism last summer when the first 16 affordable purchase homes on sale at Oscar Traynor Woods were advertised at prices of up to €475,000.
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