Tuesday 20 May 2008

Council to seek State aid as social housing plan collapses

DUBLIN CITY Council is to ask the Government to help fund its social housing budget following the collapse of plans to build thousands of housing units in partnership with one of the State's biggest builders. PAUL CULLEN and BARRY O'HALLORAN report

Opposition parties also called on the Government to "fill the gap" after the council confirmed that developer Bernard McNamara had pulled out of five public-private partnership (PPP) schemes, worth a total of €900 million.

In a statement, the council blamed the current economic situation and "substantial changes" in the housing market for making the projects unviable.

It says it will now explore the options available for regenerating the project areas, but admitted it will take longer than planned to provide the social and affordable housing.

In a letter to the council confirming his withdrawal from the projects, Mr McNamara attributed his decision to the "adversely changed circumstances" of the housing market, new guidelines forcing developers to build larger apartments and new energy regulations. A number of PPP schemes involving rival developers have not proceeded either, he pointed out.

Mr McNamara is involved in a wide range of construction projects. Recently, he sold his stake in Superquinn and has put a number of valuable city centre properties on the market, including the Ormond Hotel in the centre of Dublin and two buildings on Grafton Street.

Recent estimates of his personal wealth say he is worth close to €230 million. Assistant city manager Ciarán McNamara said he would be asking the Department of the Environment for financial support for social housing programmes at a meeting later this week. Another funding option being explored is the sale of part of the sites owned by the council.

"While this is a setback we could do without, the council is confident we will be still able to provide high-quality social and affordable housing, possibly over a longer time span."

The largest affected project is the €265 million redevelopment of St Michael's Estate, Inchicore, which has been in planning since 2001.

The other abandoned schemes are the €180 million regeneration of O'Devaney Gardens in Dublin 7, a €200 million project on the convent grounds on Seán MacDermott Street, the regeneration of the Dominick Street flats and a €100 million project on Infirmary Road, near the Phoenix Park.

Much of the existing run-down stock of council housing at the five locations has already been demolished and tenants are waiting to be rehoused.

The demolition of a further four blocks at O'Devaney Gardens is to go ahead next month.

The announcement was greeted with dismay by the affected communities, who have been waiting for years for regeneration schemes to begin.

"I'm so angry. We've been on this road for 10 years now, and this is the third plan that has been pulled out from under our feet," said one resident of St Michael's Estate, Caroline McNulty.

Under PPP schemes, the council gives a site to the developer in return for a specified number of social housing units. The developer then makes a profit by building private apartments on the rest of the site. However, the collapse in property prices has made such schemes much less attractive to developers.

Council officials say they will meet the regeneration boards of St Michael's, Dominick Street and O'Devaney Gardens shortly to put an alternative plan in place to deliver social housing.

Sinn Féin TD Aengus Ó Snodaigh called on the Government to "step into the builder's shoes" to ensure the social housing units were built.

Gerry Breen, Fine Gael group leader on the council, said the department would have to put money in to redress deprivation in the areas. He accused the council of putting "all its eggs in one basket" by granting so many contracts to Mr McNamara.

Irish Times


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