Dún Laoghaire Rathdown County Council is being asked to pay more than €500,000 each for social housing apartments in an as yet unbuilt complex in Dalkey.
Winterbrook Homes Ltd last month applied to the council for permission for a complex of 56 apartments at Charleville House on Harbour Road beside St Patrick's Church close to Dalkey village.
Under the planning laws, Winterbrook is required to provide five apartments for sale to the council for social housing, at a discounted price, if it secures planning permission. The company has put the cost of these apartments at €2.582 million, or €516,400 each, including the discount.
Changes made in 2015 to Part V of the Planning and Development Act mean councils can no longer take cash from the developer instead of social housing. However, because of the low rate of construction since the new rules came into force, few social homes have yet been delivered by developers, with just 37 provided to local authorities last year.
In Dún Laoghaire Rathdown, just three “Part V” homes were delivered in 2015 and none in 2016. However, with the recovery in residential construction, and growing house prices in what is one of the most expensive areas to live in the State, the council is expected to be asked to pay increasingly large sums for social housing in private estates.
Sinn Féin housing spokesman Eoin Ó Broin said there was a vast gap between the price sought by Winterbrook and the cost of building social housing.
Council coffers
“The average cost nationally for councils to build social housing is €191,000 and there isn’t a big variation in that. Even when a local authority is purchasing houses it’s around €200,000 or less, so how in God’s name could half a million for an apartment be seen as value for money social housing?”
Mr Ó Broin said he was not seeking a return of the system whereby local authorities took payments in lieu of housing with the money going into the general council coffers.
“Dún Laoghaire Rathdown had the worst reputation for taking payments in lieu of housing, and I would not advocate a return to that. But there may be a case, where there is a compelling value for money argument, of accepting a payment that would be ringfenced for the provision of social housing in the area in question.”
The main discount afforded to local authorities relates to the site value. The developer can only charge the “existing use value” at the time of securing planning permission and not its value when developed.
The Property Price Register shows the Dalkey site was sold earlier this year for €3.25 million. In its submission to the council, Winterbrook has valued the site at €5.5 million or €98,214 for each apartment.
Another discount is expected in terms of builder’s profit, but is less clearly defined. The Department of Housing said a “reasonable profit” should be agreed based on the costs that would have been incurred by the council had it retained an independent builder to undertake the work.
‘Rigorous evaluation’
A spokeswoman for the council said Winterbrook’s costs had not yet been subject to any tendering process or “rigorous evaluation” by the council’s quantity surveyor or valuer. “Full evaluation of costs and land values will only be undertaken when, and if, planning permission is granted.”
If the developer has land or homes elsewhere in the local authority area the council can agree to buy that instead, it could also seek a long-term lease for the apartments.
“Following a grant of planning permission and evaluation of proven costs, should the council be unable to secure substantial savings on the indicative average unit cost of €516,400, alternative options for Part V compliance will then be explored,” she said.
Anne-Marie Drohan, sales and marketing manager for Winterbrook, said while the apartments were costly, the development was a “high-end apartment scheme” primarily aimed at “downsizers” and that build costs were high.
It was too early to say what the market price of apartments would be, she said.
The company did not have other lands or units in the area to offer the council as alternative Part V compliance, she said.
