Dublin housing scheme may have State funding withheld

More than €15 million in State funding needed for the development of thousands of new homes in south Dublin will be withheld if deals are not reached on the price and number of affordable homes.

Local authorities were last March allocated €226 million to provide infrastructure, such as roads and water mains, necessary to facilitate the development of housing on privately owned lands.

Under the terms of the Local Infrastructure Housing Activation Fund (LIHAF), a commitment has to come from housing providers whose land would benefit from the infrastructure, to produce housing “quickly, at scale and at affordable prices”.

Local authorities had until the end of July to submit the details of their affordable housing deals with developers, before the Department of Housing would agree to release the allocated funds.

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Dún Laoghaire Rathdown County Council has been allocated more than €15 million to provide infrastructure needed for the development of 8,000 houses and apartments in the new suburb of Cherrywood. However, it has not met the deadline to agree affordability terms with developers.

A spokesman for Minister for Housing yesterday said funding “can and will be withdrawn if appropriate agreements are not reached between local authorities and developers”.

Houses and apartments in Dún Laoghaire are among the most expensive in the county. The average price paid by a first-time buyer in Dún Laoghaire in 2015 was €467,000, in comparison to €325,000 in the neighbouring South Dublin County Council area.

The previous government had in 2015 said affordable homes were those costing "€300,000 or below". However, Minister for Housing Eoghan Murphy recently said affordability was "relative" depending on location.

Lack of agreement

Independent Senator Victor Boyhan, a former Dún Laoghaire councillor and currently a member of the Oireachtas Committee on Housing, said he was "deeply concerned" to learn that due to the "multiplicity" of land owners in Cherrywood no agreement on affordability had been achieved.

“I would urge Minister Murphy to ensure that no State funding is advanced under the LIHAF to developers that bring nothing to the table in terms of an enforceable agreement in law to achieve a ramping up of affordable and additional social housing in the county.” Senator Boyhan said he would be seeking to have a full report on all LIAHF agreements at the next Joint Oireachtas Committee Housing.

Some 11 developers own land in Cherrywood, the largest of which is Hines and owns 60 per cent of all sites.

The Department of Housing said the Minister had approved funding “in principle” but “will not sign grant agreements with local authorities for funding of the LIHAF infrastructure unless he is satisfied that an appropriate agreement has been reached between the local authority and any relevant developers reflecting the contribution of LIHAF on a given site”.

However, it said some additional time was being allowed to allow local authorities to conclude negotiations.

A spokeswoman for Dún Laoghaire Rathdown County Council said negotiations were ongoing with respective developers and agreements would be submitted for approval to the department when the discussions were completed.

A spokesman for Hines said the matter was “still under active consideration” and it remained in discussions with the council.