The prospect of a local authority paying a private developer almost €800,000 for social housing on a site formerly in Nama is a striking example of how far removed from reality housing policy has become. The houses are part of a project being developed by shopping center investor Hammerson in Dundrum, Co Dublin.
They are being offered at cost to Dún Laoghaire-Rathdown District Council under what is known as the Part V Rules, which have been in force in one way or another since the year 2000.
The rules require private developers to withhold a share of most housing developments for social housing – the current rule is 10 percent.
‘Cost’ may mean a bargain price but in any case it depends on how high quality the development is and has nothing whatsoever to do with the cheapest price at which quality homes can be delivered.
The upshot, in a relatively posh area like Dundrum, is that Hammerson offers posh homes that cater to wealthy buyers because that’s what it builds. They are rented out to eligible tenants at prices that are necessarily separate from delivery charges.
Local authorities don’t have to buy, but the reality is that Part V was the cornerstone of social housing provision even before the crash. A crappy foundation, it turns out.
The original motivation for the idea was a fairly widespread dislike for the large-scale provision of social housing.
That seems crazy today, but council estates had gained a terrible reputation in many circles during the long and miserable recession of the 1980s and 1990s. Crime, drug addiction and deprivation were seen as the result of an over-concentration of social housing tenants rather than a result of under-servicing in the communities.
The alternative has been a strong emphasis on mixed ownership in privately initiated developments. That was a thing during the boom when lots of housing was being built, but has since proved a disaster as too few homes were added too inefficiently to meet social housing needs.
That’s bad for tenants, who lose out if houses aren’t built. It’s bad for taxpayers who buy expensive units in private systems instead of funding efficient public housing on public land.
It’s also bad for first-time buyers, who actually have to pay more to make up for the margins developers lose on the 10-piece units shipped to municipalities at cost.
It’s time to ditch Part V and move forward with building social housing based on social housing needs, not based on market niches that developers happen to be targeting programs in.
https://www.independent.ie/news/the-part-v-rules-are-a-joke-and-the-prospect-of-a-council-paying-800000-for-public-housing-proves-it-41543736.html The “Part V” rules are a joke, and the prospect of a municipality paying €800,000 for social housing proves it