Council Has Been Breaking Ground on Fewer Social Homes, Likely Meaning It Will Have to Start Buying More

Dublin City Council has been breaking ground on fewer social homes, suggesting that it is going to have to buy more from private developers in the years ahead if it’s to meet the targets the government has set.

Dublin City Council is tasked with delivering 1,974 new homes in 2024, according to a recent council report. They can do that by building them, having housing charities build them, or buying from private developers.

The number of homes the council and housing charities started work on this past year, though, is down from past years, suggest figures. Which appears to be putting the council on a different path to that envisioned by Fianna Fáil Housing Minister Darragh O’Brien.

“Our clear focus is to increase the stock of social housing through new build projects delivered by local authorities and Approved Housing Bodies (AHB) and, with this, to reduce the numbers of social homes delivered through acquisition programmes,” said O’Brien, a Fianna Fáil TD, in the Dáil on 8 November.

Sinn Féin TD and housing spokesperson Eoin Ó Broin said “It is really significant that there has been a drop in commencements of social housing.” Councils should be building a lot more housing directly on their own land, he says.

However, he also says that if the price is right the state – via housing charities – should snap up homes in the private sector too. “I would have the AHBs [approved housing bodies] buying all of that stuff but have some of it affordable [purchase].”

That way you could increase the social housing supply and also help increase homeownership in the city, he says.

The Numbers

In 2022, up to September, Dublin City Council and housing charities started construction on 123 new social homes in the city.

In 2021, the Covid-19 pandemic may have distorted the picture. But in 2020, they began building 297 homes in the first three quarters, indicating a decline of 60 percent.

Meanwhile, the council and housing charities started 178 homes during the same period in 2019, according to figures in a Department of Housing report.

Overall, there’s a mismatch between the number of social homes being built in the four Dublin councils – Dublin City, South Dublin, Dún Laoghaire-Rathdown, and Fingal – and targets, leaving a big gap to be filled by buying homes in the private market.

Between January and September 2022, the four Dublin councils and housing charities working in their areas started to build 249 new social homes. Together their target is to deliver 3,979 new-build social homes in 2024.

Still, a spokesperson for the Department of Housing says that the national housing strategy is on track. “Housing for All is working,” he says. “Supply, which is key to improving our housing market, is increasing.”

Responses from the four Dublin councils indicate that they will buy homes in the private sector to plug the gap between their construction programmes and targets.

Getting Started

In the full 12 months of 2019, Dublin City Council, together with housing charities, started to build 343 new social homes. In 2020, they broke ground on another 355 homes.

But in 2021, commencements dropped to 97, likely due to Covid-19-related disruptions – although social housing construction was permitted throughout that year.

In 2022, the construction sector was back up and running. But new work started on just 123 social homes in the first three quarters of the year.

One possible contributor to the slowdown in commencements is construction-cost inflation, says Ó Broin, the Sinn Féin TD.

Because of construction inflation, some contractors have looked to renegotiate prices, he says. Councils and approved housing bodies have to tender for builders and then get final sign off from the Department of Housing, he says.

But if the builder says that the price has gone up in the meantime, the council or the approved housing body (AHB) has to start the funding application process again, he says.

“They have to go back to the beginning of a cost-approval process that takes months and months,” he says.

How Much Are They Building?

Between 2017 and 2019, Dublin City Council more than doubled the number of homes it was in the process of building.

In July 2017 the council had 459 homes under construction and by June 2019 it was building 1,079 homes.

Since then, though, the rate of increase has slowed. As of October 2022, the council was building 1,284 homes.

Meanwhile there are around 30,000 households on Dublin City Council waiting lists including the transfer list.

More than half the homes under construction in the Dublin region are in the Dublin City Council area.

As of September 2022, the four Dublin local authorities, together with housing charities, were building 2,283 social homes, according to the Social Housing Construction Projects Status Report Q3 2022.

It is not possible to tell exactly when those homes will be completed but they will likely be finished across 2023 and 2024, with some going on into 2025.

The Department of Housing has tasked the local authorities with producing 7,774 new homes by the end of 2024, according to their individual housing delivery action plans.

From the start of January 2022 to the end of September 2022 South Dublin County Council started building 115 new social homes, while its target for new-build social housing in 2024 is 718.

A spokesperson for South Dublin County Council said that the council will deliver the homes using a range of methods. “Delivery of new-build social housing units will be via the Council, Approved Housing Bodies, Part V and turnkey acquisitions,” he says.

Turnkey acquisitions are new-build homes that the councils buy from private developers. Some of these are homes already under construction and bought off the plans, while others are forward-funded by AHBs and councils.

Fingal County Council started 11 new homes in the first three quarters of last year, while its target for 2024 is 705, according to its housing delivery action plan.

“Fingal is very proactive in the delivery of social housing and we continue to provide housing solutions through a number of mechanisms,” says a spokesperson for Fingal County Council. The council exceeded its social housing delivery target for last year, he says.

Dún Laoghaire-Rathdown County Council didn’t commence any new sites in the first three quarters of the year to contribute towards its target to deliver 582 new social homes in 2024.

But a spokesperson pointed out that the council commenced more than 208 new social homes in the last quarter of 2022. The council will use all available mechanisms to meet the targets, she says.

The spokesperson for the Department of Housing says the department is streamlining the process for approving social housing schemes including de-risking potential delays before councils and housing charities submit their proposals.

“In January, the Minister published a review of the pre-construction processes for social housing with a set of practical actions that will streamline the approvals and other pre-contract processes, while ensuring cost value-for-money,” says the spokesperson. “These proposals are being implemented.”

Does It Matter?

Councils should be building more homes directly, says Cian O’Callaghan, the Social Democrats TD and housing spokesperson.

If the state buys all the extra homes in private developments that are already under construction, they would be very expensive, he says.

One of the reasons that construction costs in the build-to-rent sector are high is because the finance is expensive, he says. “There would be no justification for buying at the full speculative cost.”

But there may be an opportunity to buy land with planning permission, which could be a good deal, he says. “The build-to-rent sector appears to be collapsing.”

That means that there are lots of sites with planning permission but no finance in place to build them out. “The government is certainly talking about buying up a lot of that,” he says.

If councils buy sites with existing planning permission and then develop them themselves with loans from the Housing Finance Agency that could present good value, he says.

Ó Broin, the Sinn Féin TD,  says “There is a heavy over reliance on turnkeys.” He thinks councils should be developing more homes on public land, and still buying homes from the private sector too.

Private sector commencements are also falling at the moment, though, he says. So if there could be an opportunity for the state to get good value buying up sites with planning that wouldn’t otherwise proceed.

“There is a strong argument to say that, subject to value for money, the state should just step in,” he says. “To develop them as public housing as a counter cyclical move.”

Those homes could be used for a mix of social and affordable housing and could thereby create more affordable housing supply in place of expensive private rental supply, he says.