Advert for Homeless Hostel Estimates Profits of €250,000 a Year

On Nelson Street in Phibsborough, a privately run homeless hostel is for sale.

Ardfert House, as it’s known, has 28 rooms for residents and a price tag of €3.2m.

Dublin City Council has a ten-year lease on the premises and pays €480,000 each year to the private operator, the advert says.

More than half of that is profit, it seems – although that’s based wholly on the seller’s advert. “Estimated profit €250,000 per year,” the advert says. on property website Daft.ie.

The listing has given councillors a rare insight into the council’s spending on a private hostel for single people, and an opportunity to compare that against charity-run hostels.

“This illustrates the enormous profits that are being made in the private homeless sector,” says Green Party Councillor Janet Horner.

Horner says she thinks the council should buy the hostel instead of shelling out €4.8m to a private operator over ten years.

She’s worried, too, she says, about whether many of those who are homeless and living in private hostels are not being supported with move-on plans. In other words, routes into permanent healthy homes.

The entire ethos of the approach is wrong, she says. “A profit-based, institutionalised approach to our vulnerable populations is a deeply dangerous approach to take.”

Getting Stuck

Many homeless hostels accommodate people in shared rooms and don’t have kitchens where they can cook for themselves.

By contrast, Ardfert House has a large shared kitchen and individual en-suite rooms with TVs, according to the advert.

The Minister for Housing Darragh O’Brien indicated recently that the national quality standards don’t apply in private hostels.

That leaves a big question as to what standards, if any, are in place in those hostels.

“It is really concerning that we have reason to believe that the private providers don’t provide the same level of care as NGOs,” says Horner.

She has requested a report showing how many people have moved on to permanent housing from charity-run hostels compared with private hostels, she says.

For those who become stuck in homelessness, the psychological costs are huge, she says.

Charity-run hostels are expected to implement a detailed national quality standards framework and that includes supporting homeless people to find a permanent home.

Caoimhe O’Connell, communications officer with Dublin Simon Community, said last June that the charity offers “a supportive, person-centred approach, providing unique support plans to help individuals address and overcome their own personal barriers to exiting homelessness”.

Each client has a key worker who works closely with them to help them with their housing situation, and links them into other supports like counselling, treatment, employability and health and wellbeing services, she said.

Following the Money

Horner has asked Dublin City Council to consider buying the property. It would be cheaper and the council could sell it later or convert it to housing if homelessness falls, she says.

A spokesperson for the DRHE says that it has a property team tasked with sourcing new emergency accommodation throughout Dublin.

“This can be difficult in light of the strong opposition that almost inevitably arises from local residents and businesses to the implementation of such facilities,” they said.

They are in regular contact with the Department of Housing to secure funding to buy new properties, says the spokesperson.

A spokesperson for the Department of Housing said via email that it is up to Dublin City Council to decide how to run homeless services.

In 2019, the Dublin Region Homeless Executive (DRHE) spent almost €144m on emergency accommodation and around a further €7m on long-term supported accommodation, shows a report from the Department of Housing.

Most was spent on private providers. They got around €85m. That includes €22m on private hostels, €11.5m on private family hostels, and €51.7m on hotels.

Around €59m went on charity-run emergency accommodation for single people and families. That is the homeless charities including Focus Ireland, Simon Community and the Peter McVerry Trust.

An additional €7m went on long-term supported accommodation, all of which was charity-run.

Each charity-run hostel is listed individually in the report, along with the final spend for that facility. Some privately run family hostels appear in a similar format.

But some other private hostels are all bundled in together in one line, listed as “Private Emergency Accommodation”.

This includes both hostels for adults and some that include families too, says a spokesperson for the DRHE.

From 2018 to 2019, spending on “private emergency accommodation” increased by 64 percent from around €13.36m in 2018 to almost €22m in 2019.

What is the Deal?

In 2019, independent Councillor Anthony Flynn tried to find out how much the council pays to private hostel owners and what the private operators provide in return.

The DRHE refused his FOI requests. In response to questions, the DRHE indicated that some spending had not been as it appeared in the report.

For example, money paid to a private operator that ran Lynam’s Hotel in O’Connell Street was listed as Focus Ireland Onsite Supports.

Lynam’s had only opened in December 2017, but the DRHE said it had spent €1,320,000 on it that year.

The report doesn’t differentiate between current and capital spending and part of the council’s response suggested it may have paid for work on Lynam’s, a building owned by a private company.

“The accommodation was retrofitted to adhere to current building standards,” it said.

While charity hostels employ trained social-care workers who offer support to homeless people, it is not always the case that they are more expensive.

The council pays the private operator at Nelson Street €480,000 a year for shelter for 28 homeless people. That works out at €17,142 per person.

Meanwhile, beds provided by a homeless charity, Depaul Ireland range from €9,800 per person at Peter’s Place, to €13,629 per person for Back Lane, to €38,461 per person on Little Britain Street on average, according to figures on its website.

“Running costs for individual homeless services can differ depending on any number of variables including the type of service being provided, the number of service users, running costs and the nature of the building,” says a spokesperson for Depaul Ireland.

The DRHE spokesperson says that both private providers and homeless charities “represent value for money in terms of the service they provide”.