The state will double its spending on renting council housing within two years, although the housing secretary has promised to end the practice after Dermot Desmond criticized it as a “criminal waste of money”.
Figures obtained through a parliamentary inquiry by Social Democrat housing spokesman Cian O’Callaghan show that state spending on renting social housing was €36.6 million in the first half of 2022, while it was 2020 as a whole amounted to 37 million euros in 2021 it was 55.37 million euros.
He said while the government has promised to end long-term leasing, the state is signing “more and more of these sweetheart deals with developers,” which he described as “extraordinarily bad value for money.”
“Long-term leasing entails the state paying for a property over a period of 20 to 25 years. At the end of the lease, the state has no assets and the tenant faces eviction.”
The practice of leasing social housing from private investors was sharply criticized by billionaire businessman Dermot Desmond in a 2021 letter to Housing Minister Darragh O’Brien. Mr Desmond described it as a “criminal waste of money” and said investment funds “laugh at Ireland and make a lot of money doing it”.
Mr Desmond said no other country had such a strategy, which he said had made Ireland “the prey of greedy developers and international investors”.
“Allowing the private market to dictate the price of public housing is a shocking mismanagement of public funds – you might as well hand out blank cheques,” he wrote.
Mr O’Brien said at the time he did not need Mr Desmond to raise the issue as he had opposed renting social housing since his opposition days. He promised to phase out the practice by 2025.
The Dublin investigator reported last week that Dublin City Council (DCC) said the huge spate of rental housing that has been built or received planning permission in recent years has fueled the rise in the use of social housing leases.
The publication reported DCC bought just one social home from developers of big projects in 2022 while it rented 48.
In the City of Dublin, the percentage of permitted housing units being built for rent, which are mainly one and two bed apartments, has increased from 15 per cent in 2018 to 82.8 per cent in 2020.
DCC Chief Executive Owen Keegan has expressed concern that “the emergence of very large projects consisting solely of rental housing with a shortage of housing mix is viewed as inappropriate and will not contribute to the creation of long-term viable and stable communities”.
Housing Department figures show that seven local authorities, Leitrim, Offaly, Wicklow, Galway City, Mayo, Kildare and Dún Laoghaire-Rathdown, spent more on renting social housing in the first six months of 2022 than in all of 2021 Spending from Offaly have increased from €21,900 last year to €319,000 for the first six months of 2022.
A spokesman for the Minister said: “Housing for All is the Government’s plan to increase the supply of housing to an average of 33,000 homes per year over the next decade.
“By the end of 2030, more than 300,000 new apartments will be built, including an estimated 90,000 social housing, 36,000 affordable apartments and 18,000 rental apartments. This includes the delivery of 47,600 newly built social housing units over the period 2022-2026.
“As the supply of new social housing increases, the dependency on long-term leases will decrease. It is envisaged that 3,500 public housing units will be leased long-term over the life of the Housing for All plan, decreasing from 1,300 public housing units in 2022 to 200 public housing units in 2025. As part of the Housing for All plan, long-term leases will be phased out by 2025.
“Long-term lease spend on social housing is cumulative spend on both the existing stock of social housing and new stock signed under long-term leases. As such, long-term lease spend is expected to increase in 2022 versus 2021.”
When asked if it knew which companies are making the most of social housing rentals, the department said the details of the entities the homes are rented from are a matter for local authorities.
https://www.independent.ie/irish-news/social-housing-lease-spend-to-double-despite-pledge-to-stop-41879727.html Doubling social housing rental spending despite pledges to stop