Two Approved Housing Bodies Selected to Manage Cost-Rental Development at O’Devaney Gardens

At O’Devaney Gardens in Stoneybatter on a recent Wednesday, construction is well underway on 56 social homes being directly built by Dublin City Council.

It is 5:30 pm and the builders have left. From the outside, some of the homes appear to be almost finished.

A larger site next door to that development lies empty, a few men are gathered around the middle talking while another is walking through the site.

Last year Dublin City Council made a complex deal with the developer Bartra to build 768 homes on that vacant patch of land in Dublin 7, close to the Phoenix Park.

Of those, 192 will be social homes, 165 affordable purchase homes and 411 private homes, says a spokesperson for the Department of Housing.

But a last-minute deal in October 2019 means that Dublin City Council also agreed to appoint an approved housing body, (a housing NGO) to negotiate to buy some of the private homes for a cost-rental scheme.

Two approved housing bodies (AHBs) have now begun to negotiate with the developer Bartra to buy homes for that scheme.

According to a council report Bartra, the developer, expected to get an average of €450,000 for one-bedroom and two-bedroom apartments.

The Housing Finance Agency says it hasn’t funded AHBs to purchase one-bedroom and two-bedroom homes in that price range before.

Dublin City Council spent a maximum of €330,000 for two-bedroom homes last year, said a Dublin City Council spokesperson by email in January.

Some say that the homes in O’Devaney Gardens will be too expensive for a cost-rental housing scheme to provide affordable rents.

But others say the scheme could work if the loans can be taken out over a long period of time and if the government subsidises the cost-rental homes.

The Department of Housing has not committed to provide funding for this scheme.

“As agreed with DCC, the Department will directly fund the development cost of the 192 social housing units, along with 56 additional social housing units already under construction on an adjoining piece of land,” says a spokesperson for the Department of Housing.

The Department of Housing is also subsidising the affordable purchase homes, he said.

O’Devaney Gardens Update

Bartra is expected to file for planning permission for O’Devaney Gardens early next month, says a Dublin City Council spokesperson.

Circle Voluntary Housing Association and Tuath Housing Association have been selected from five AHBs, or AHB consortiums, who bid for the job of running the cost-rental scheme.

The AHBs have “begun interaction with Bartra in relation to the Cost Rental Proposal”, says the spokesperson for Dublin City Council.

The Dublin City Council spokesperson indicated that the council will not manage the complex when it is built.

“Dublin City Council has always maintained that the future management of this large, and other similar mixed tenure projects, would require a totally different type of approach when it comes to management and maintenance,” said the spokesperson.

The two AHBs could manage the running of the entire complex, including social housing and private housing, she said. “A strong option is the use of AHBs to do this or the creation of a special entity for this purpose.”

The department has not yet received a funding application from the council to acquire homes at the site, says a spokesperson.

“The Department will continue to support DCC’s redevelopment of O’Devaney Gardens according to the agreement approved by Councillors in November 2019,” he says.

Cost Rental vs Affordable

The government is committed to improving security and affordability for renters, says the spokesperson for the Department of Housing.

“A cost-rental model is being developed for the delivery of housing that creates affordability for tenants and a sustainable model for construction and management of homes,” he says.

There are plans for a cost-rental scheme in St Michael’s Estate in Inchicore. The council is building those homes directly but still there are concerns that the cost-rental homes may not be affordable, at rents of around €1,300 per month.

Some say that this issue would be even more pronounced at O’Devaney Gardens if a cost-rental scheme goes ahead there, as the developer has already said that they are expecting private homes on this site to sell for an average of €450,000 for one-bed and two-bed apartments.

“The key to affordable cost-rental housing is in the cost because the rent will be determined by it,” says Orla Hegarty, assistant professor of architecture in University College Dublin. “If the cost is set at full market prices then a large on-going public subsidy would be needed to make the rent affordable”

In the case of O’Devaney Gardens, the deal already means the council has agreed to transfer the land to the developer, so the AHBs are likely negotiating on the same basis as any first-time buyer or investor in the market, she says. “It leaves them with little or no negotiating power.”

“Outsourcing full control of state-owned land to a developer and then buying back homes at market rates is very poor value for money,” she says.

This cost-rental scheme has the potential to “end up like a deal, where you give your car away for free, only to pay taxi fares to the new owner”, she says.

“O’Devaney is in a stunning location,” says Labour Councillor Alison Gilliland who chairs the housing committee in Dublin City Council and is part of the ruling Dublin Agreement coalition that pushed for the cost-rental scheme to be developed at O’Devaney Gardens.

The council’s vision is for that type of location to be available to people on all incomes. “We want to see mixed-tenure and mixed-income across the city,” she says.

If the AHBs can get the loans over 40 years at low-interest rates, and if they can secure the same government subsidy as the affordable purchase homes, then the rents could be affordable, says Gilliland.

She thinks the prices come within the limits of what the AHBs are approved to spend on homes.

There might be other cheaper homes for sale in Dublin 7 that the AHBs could buy instead, but they mightn’t be as good, she says.

The O’Devaney scheme will be large, well-insulated, sustainable family homes, she says. “They are built to a very, very high spec. That was the criteria of the tender.”

When the council buys second-hand homes they often spend around €25,000 to retrofit them and bring them up to standard, she says.

Another advantage in O’Devaney is that the AHB will be managing a mix of units and as children grow up, that might allow older people to downsize but stay living in their own community.

Gilliland says she would prefer to see an affordable rental scheme that was set at 15 percent of income, rather than a cost-rental scheme, which is tied to building costs. “There would have to be a subsidy from the government,” she says.

[Correction: This article was updated at 11.39am. A previous version said that Alison Gilliland said that homes would be offered for market rate, this was inaccurate. We apologise for the error.]