When, earlier this month at City Hall, councillors got first sight of the designs and costs for officials’ favoured proposal for how to develop land at O’Devaney Gardens in the centre of the city, they had questions.
Many still have, they say.
The lack of deeper clarity around the logic of costings, the expensive price tag for the “affordable” homes, and why affordable purchase was chosen instead of affordable rental, means some councillors are struggling to work out how they’ll vote, they say.
They’re scheduled to vote on whether to press ahead with the deal to develop the land with Bartra Property Residential Holdings at their upcoming monthly meeting, on Monday 7 October.
Without answers, they’ll struggle to justify any decision, said Fianna Fáil Councillor Mary Fitzpatrick. “I don’t think councillors should be voting for a pig in a poke.”
The Proposal
There would be 768 homes developed on the land by Bartra, according to a report from Richard Shakespeare, Dublin City Council’s head of planning and property development.
Amenities would include 6,800 sqm of a central public park, four commercial units, two amenity units, one for community use, and a creche – all dependent on planning permission.
On top of the 768 homes on the large site, another 56 social homes have been built separately, next door – bringing the total number of homes to 824.
The report says these 56 homes, already under construction, are included in the 30 percent social housing to be provided on the site. In other words, Bartra are making 25 percent of the 768 homes for social housing.
Shakespeare’s report says the council will pay the tenderer the cost for delivery of 30 percent of social housing. Dublin City Council hasn’t responded yet to queries as to why that is – if its only getting 25 percent of the homes from the tenderer, and the other 5 percent is already being built by the council.
The report also sets out some details of the contract: there would be a development agreement with Bartra, a €7 million “consideration” payment from Bartra to the council, and work would have to start four weeks after planning permission is granted.
The developer wouldn’t technically own the land, meaning it couldn’t be flipped, a clause in the development agreement also says.
Fine Gael Councillor Ray McAdam says the deal is in line with what the biggest political parties on the council voted for in January 2017, when they backed plans to press ahead with tenders for O’Devaney Gardens.
“I think the principles and the objectives of the deal are worth supporting and we’re getting 824 homes on site,” says McAdam – including figures for the social homes being built next door on Infirmary Road.
Affordable Rental vs Purchase
When councillors voted through the plans in January 2017, the report on O’Devaney Gardens gave a breakdown of homes.
The tenure mix would be 30 percent social, 50 percent private, and 20 percent “affordable rental”, the report agreed by councillors said.
It continued: “The City Council will consider including Affordable Rental Housing in its Procurement Documents. It is anticipated that an Affordable Rental model will be announced by government in the coming months.”
A spokesperson for Dublin City Council said that references to “affordable rental” in the report that councillors voted through should be taken in the context of the “indicative nature” of the report.
It used terms such as “proposals, consideration, indicative, broadly in line” to describe the preference for an affordable-rental model, the spokesperson said.
But when it came to an advanced stage of the procurement process, there wasn’t – and there still isn’t – an affordable rental scheme to point to in documentation, they said.
By February 2017, the Department of Finance had killed an affordable-rental scheme being developed by the Department of Housing, which had been based on cash subsidies to private landlords.
How the homes for O’Devaney Gardens became affordable purchase, rather than affordable rental, is something Labour Party Councillor Marie Sherlock wants to know more about, she says.
“I think there’s real issues with regard to how the executive decided upon the affordable purchase to start with. They say there was no example of affordable rental in Ireland at the time when the cost-benefit analysis was commissioned,” says Sherlock.
But international models could have been taken into account, she says.
Green Party Councillor Neasa Hourigan said that the lack of a national affordable-rental scheme has left a gap.
“It leaves us very vulnerable and basically what we’re talking about is kind of like a discount scheme,” she says.
Other Options
Hourigan says there is no current definition of what defines “affordable” when it comes to affordable rental or affordable purchase. And it’s not what her party is looking for on the site anyway.
“Ultimately what we would have liked to see there is a certain provision of cost rental,” says Hourigan, where the cost of rent is set at cost of constructing and maintaining a house over a prolonged period of time.
Earlier this month, work started on Ireland’s first cost-rental homes in Sandyford on land provided by the Housing Agency.
Sherlock of Labour also has concerns about the breakdown of 50 percent private, 30 percent social and 20 percent affordable-purchase at O’Devaney Gardens, she says – as well as the costs of the affordable-purchase homes.
“I think there are a number of us pushing for precise information at the moment as to how those decisions were arrived at and then by understanding that, we can understand how we can change those decisions,” says Sherlock. Her party wants more social and affordable housing on the site, she says.
Other councillors from the Green Party, Fianna Fáil and Social Democrats, as well as some independents have been seeking similar information, they say.
Hourigan of the Green Party says she has been trying to find out whether details of the proposal could be changed to accommodate more affordable housing – whether that be affordable rental or affordable purchase – on the site.
In 2016, councillors approved a motion put forward by then Workers’ Party Councillor Éilis Ryan that the redeveloped site consist of 100-percent public, mixed-income housing. But after pushback from council managers and a meeting with then Housing Minister Simon Coveney, the council changed course and voted in the current 50-30-20 scheme instead.
Then, in May of this year, there was an election, bringing a slew of new councillors – including Sherlock and Hourigan – not involved in that original debate to City Hall. Several of them are getting their heads around how the council got to where it is.
Legal Advice
“The level of information we’ve been given as councillors is not up to scratch,” says Hourigan.
She’s asked many times for the legal opinion the council got on the possible legal challenges that the council might face if there is any prospective change to the procurement, she says.
Hourigan says this impacts on councillors’ understanding of things like how the affordable-purchase scheme was calculated, and management fees on houses into the future.
Labour Party Councillor Dermot Lacey says similar. “We don’t know how legally tight the agreement between the council and Bartra actually is.”
In Brendan Kenny, the council’s deputy chief executive’s, presentation to councillors earlier this month on the transfer of the land to Bartra, the council warned of potential legal challenges, should the council change the details of the O’Devaney development from those it gave during the procurement process.
There could be issues around legal costs, compensation claims, and delays, it said – and that it opened financing risks from construction inflation too.
Both Hourigan and independent Councillor Anthony Flynn are unsatisfied with the legal advice given by the council with regards to potential issues with procurement.
Hourigan says: “This thing of bringing pressure to bear on us, I’m not sure if that’s as compelling as it once was.”
That way of working is not delivering homes and it’s not alleviating the homelessness crisis and it’s not working, says Hourigan. “That isn’t a compelling argument anymore.”
McAdam of Fine Gael says council managers have been clear throughout and followed the directive of the city councillors as laid out in January 2017.
“Any deviation away from that risks, in my view, legal challenges from Bartra. But it also says that we, the councillors, can’t make our mind up and that we can’t utilise the powers that we have in terms of the development of public land,” McAdam says.
“No one will want to touch the council with a 50-foot barge pole because you cannot be guaranteed the commitment the council entered into will be honoured by the councillors,” says McAdam.
If the proposal is rejected there’s a risk that the Land Development Agency will seek to take over the land, he says.
How “Affordable”?
One of the chief stumbling blocks right now for some councillors wary of backing the proposals is the mooted prices of the affordable-purchase homes on the land.
Currently a two-bed house would be priced between €270,000 to €315,000, while a two-bed apartment is priced between €303,000 to €354,000, a report to councillors suggested. The report notes a 30 to 40 percent discount.
That’s not affordable, says Sinn Féin Councillor Daithí Doolan. Right now, his party can’t accept the proposal being put forward, he says.
But if the pricing for the “affordable” homes drops, they’d be happy to vote through the deal, says Doolan.
Minister for Housing Eoghan Murphy has said in the Dáil that, for social homes, the average construction cost for a two-bedroom, two-storey house is €174,206, while all-in-costs – which includes land, construction, professional fees and utility connections – come to €222,582.
The average construction cost for a two-bedroom apartment is €189,112, and all-in cost is €243,476, he also said.
So it’s not clear why the price tag for two-bed “affordable-purchase” houses are priced as they are. Dublin City Council owns the land, development fees have been waived, and nearly €10 million has been granted from the serviced site fund – a fund to facilitate the installation of key infrastructure on public land to support the provision of affordable homes.
“We’ll accept the deal if what’s deemed as affordable is actually affordable – and if we feel that the price tag put on the infrastructures, community gain, community centers, everything, if we feel that’s justifiable – then yes we will support it,” says Doolan.
Social Democrats Councillor Gary Gannon says that setting a precedent for affordable-purchase housing to be set at such a price could have ramifications for future developments in the city.
Fianna Fáil’s Mary Fitzpatrick says she’s asked for information on the valuation of the land, given it’s a key factor in how the homes are priced. She was told this information was “confidential”, she said.
In its January 2017 report on O’Devaney Gardens, the council estimated the land value at €14 million, but land values have continued to rise in the city since then.
Fitzpatrick says she’s also asked for the cost-benefit analysis of the deal and a breakdown of the costs feeding into the “affordable” sales price. But the council hasn’t been forthcoming, she says.
“There was certain issues when I asked these questions and that a lot of the information was confidential and privileged and would be unavailable because it would be commercially sensitive,” says Fitzpatrick.
Earlier this year, Dublin City Council and the Department of Housing refused to release details of the economic appraisal of different affordability options on the site under Freedom of Information Act too, citing the ongoing procurement process.
Says independent councillor Flynn: “We don’t have the details in full in terms of what the deal actually is with Bartra.”
Some councillors have been seeking information, under non-disclosure agreements. Flynn, too, has been seeking legal advice on whether he can get access to his information from the council.
On the Dublin Agreement
Running through the debate is the question of how the agreement with Bartra would chime with one of the central promises of the “Dublin Agreement”, the ruling coalition’s programme for its council term.
The agreement – which Fianna Fáil, the Green Party, the Labour Party and the Social Democrats have signed up to – says they’ll reject any sale of publicly owned land to private developers, unless there’s a “clear evidence-based justification” that the monetary benefit far outweighs the long-term social and economic benefit forgone in housing or other public uses.
Hourigan says she takes this to heart. “I know there’s the legacy issue and it’s more complex than just our own ideologies but I still take that issue very seriously,” she says.
If it can be shown that the deal is for the greater public good, then it wouldn’t contravene the Dublin Agreement, says Fianna Fáil’s Fitzpatrick.
“The hard truth is that if we don’t accept this private money to enable the building of 824 homes and community infrastructure, there is money coming from nowhere else. The government isn’t going to give us the money,” she says.
But with detailed information secret – seemingly because of the procurement process – demonstrating such might prove a challenge, says Fitzpatrick.
Gannon of the Social Democrats says he doesn’t see this as a legacy issue that they simply have to honour. “The decision is actually standing in front of us,” he says. “If we sell it off, the opportunity is gone forever.”