If an “affordable” home on council land in Coolock costs €500,000, how much will rents be for 340 cost-rentals?

At the full Dublin City Council meeting on Monday, councillors rounded on the plans for housing on Oscar Traynor Road, lining up to say that the homes for sale were not going to be affordable.

Developer Glenveagh has planning permission to build around 850 social and “affordable” homes on the former council land in Coolock.

A three-bedroom house, the most expensive of the 197 affordable purchase homes, is to cost €500,000, shows a council report. Although the homeowner can get in for less because the council will take an equity stake in the home.

The prices are much higher than those published by council officials when they agreed to the scheme in November 2021. The most costly home would be €306,000, said to a council report from the time.

Council officials have given an explanation for some of the gap.

The prices they quoted to councillors in 2021 were excluding VAT, said council housing manager Frank d’Arcy at Monday’s meeting.  And, a €100,000 subsidy to bring down the price of the homes has also been scrapped in favour of the shared equity scheme, according to the report, which shows prices after an equity share is deducted.

Taking that into account, the prices of most of the homes will be within the ranges promised to councillors in 2021, said a council report issued earlier this week.

But councillors aren’t buying that.

And, higher price tags don’t just have implications for the homes that are to be sold to owners. Price increases also feed into higher rents for the 340 homes earmarked to be “cost-rentals”.

Independent Councillor John Lyons says he is worried that cost-rental won’t work at these higher prices. “Is it going to put the cost rental scheme in jeopardy?”

Sinn Féin TD and housing spokesperson Eoin Ó Broin said he expects the cost-rental homes will be significantly more expensive than outlined in 2021.

Back then, the prices were listed as €940 for a studio, €1,275 for a one-bedroom apartment and €1,500 for a two-bedroom apartment.

He points to the new Land Development Agency cost-rental scheme in Citywest. There, tenants are being charged €1,390 for a one-bedroom, €1,580 for a two-bedroom and €1,750 for a three-bedroom.

The LDA bought those apartments at slightly lower prices than the full prices now being quoted for the ones in Coolock, he says.

Which suggests the rents in the cost-rentals in Coolock could be higher than the ones at the LDA scheme in Citywest, if the buyer in Coolock pays these full prices.

Ó Broin says he understands that negotiations around the cost-rental homes at Oscar Traynor Road are going on at the moment, between the approved housing body Clúid, with a deal expected soon.

Dublin City Council didn’t respond before publication to queries sent Thursday about rents for the cost-rental homes, or why the “affordable” purchase price has increased so much since 2021.

At Oscar Traynor Road

In January 2017, councillors voted in favour of progressing proposals to work with a developer to build homes on council-owned land at Oscar Traynor Road in Coolock.

It was September 2020 before the councillors on the North Central Area Committee got sight of more detailed plans for 853 homes on the site.

The designs presented to local area councillors showed apartments and houses built around what would be known as the Lawrence Lands Park, complete with a lake, cycle tracks, an orchard, nature trails and community allotments.

The plans show a community hub, childcare facilities and a walking route to a proposed new gaelscoil.

In 2020, the two-bedroom affordable purchase homes were set to be priced at €250,000 to €300,000, and would benefit from a subsidy through the government’s serviced sites fund, said a council report.

That price also assumed that the buyer qualified for the Help to Buy scheme, a tax rebate scheme that helps first time buyers to come up with a deposit, to buy a newly built home.

In 2021, amid concerns about the deal, council officials said the prices would be lower, at €227,000 to €284,000 for a two-bedroom home, thanks to an increased subsidy.

Officials also dropped the plans to fully privatise half the homes, instead agreeing that 20 percent of the homes would be affordable purchase, 4o percent social housing and that an approved housing body would purchase the remaining 40 percent of homes from Glenveagh for a cost-rental scheme.

Then, last week, some of the scheme’s homes were advertised.

A purchaser can buy a two-bedroom house for prices starting from €355,000 and the council would pay around another €95,000, according to a recent council report.

That means the full price of the two-bedroom home appears to be around €450,000, an increase of €166,000 from the highest price range outlined in 2021.

Why the change?

One major difference is that the affordable housing subsidy was scrapped in favour of the shared equity scheme. “The goalposts have shifted because the scheme has changed too,” says Lyons.

Sinn Féin councillors are pushing for a meeting with the Minister for Housing, Fianna Fáil TD Darragh O’Brien. Lyons wants that too, he says. “That is where we need to go, he has to come out and explain this.”

Council officials said at the council meeting on Monday that the 2021 prices were excluding VAT. But the increase from €284,000 to €450,000 is 58 percent.

“It’s a red herring,” says Lyons. “It still doesn’t explain the uplift from the prices that were agreed.”

At Monday’s meeting, Labour Councillor Dermot Lacey welcomed the provision of 340 social homes on the site. But said of the affordable purchase homes, “no ordinary person could afford this sort of housing”.

Lower prices described in 2021, were “cynical in the extreme”, says People Before Profit Councillor Conor Reddy. “It could be read, if we are honest, as deliberately misleading.”

In 2021, council officials said that the prices were locked in until 2024 but now they won’t confirm whether those were renegotiated, says Lyons. He pushed for answers at the meeting.

“The managers were being a little bit fly in the report they gave to councillors yesterday,”  says Ó Broin, the Sinn Féin TD, by phone on Tuesday.

Usually if they were quoting prices excluding VAT, which is 13.5 percent, they would make that clear, he says. “That could be €50,000 on a home,” he says.  “You would have thought it would be made explicit.”

Lyons says he thinks there is no connection between the sales price and the cost of building.

Rather the price is calculated at a discount from the market price, he says. “That is exactly it, there is no other explanation.”

Ó Broin is equally convinced that the prices are nothing to do with the cost of construction. Instead, the developer assesses the market rate for a similar home and then provides a discount, he says.

If Dublin City Council starts selling lots of affordable homes at a certain price in an area that will dampen the price of the other new build homes around it, says Ó Broin. “The department doesn’t want the affordable purchase price to have a downward impact on house prices generally.”

“Government has accepted that the it is the policy intention of cost rental to depress the price of rents more generally in the private market,” says Ó Broin.  “It’s the very opposite with the affordable purchase.”

At Monday’s meeting, Michelle Robinson, acting director of Housing Operations with the council, said that there is a correlation between sales prices and cost of construction.

“We do have a contract price,” she said. “We have to repay the contract price to the developer, so there is a correlation.”

The council taking an equity stake is what makes the home affordable for someone who could otherwise not afford it, said Robinson. “I fully appreciate the challenge with the word affordable.”

She will circulate a report with comparable market values, she says. “These are A rated, new homes, it is hard to find direct comparisons in the area.”