Saturday 28 June 2008

Funding shortfall halts social housing scheme

FUNDING FOR voluntary social housing in Dublin has been suspended because the city council has used up its annual allocation under the main scheme operated by the Department of the Environment.

A department spokesman said the council had reached its allocated borrowing level for the year and, as a result, no further social housing projects would be sanctioned under the scheme.

Dublin City Council’s allocation under the Capital Loan and Subsidy Scheme is €29 million out of a total of €160 million nationally. It had planned to spend over €87 million.

The funding crisis has arisen because of a glut in completions of Part V housing units; these are units built by developers to meet their obligations to provide 20 per cent social and affordable housing, and which are then sold to local authorities.

After a slow start, the number of Part V completions has soared and, with it, the bill payable by county councils. This has drawn funds away from traditional projects undertaken by housing associations and charitable groups.

The department spokesman said the Part V housing scheme gets priority because the houses are built.

Another factor prompting councils to divert money to Part V housing is believed to be the fear of litigation if developers are not paid.

Irish Times

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