World of Politics with Harry McGee

Last month, Minister for Housing James Browne announced that he was suspending a project to build almost 500 social homes. The homes were to be built under a public private partnership agreement (PPP) in six locations – three in Dublin; one in Sligo; one in Wicklow; and one in Kildare.

Under the deal, the construction would be financed privately and then rented out to tenants for 25 years at which time they would be transferred to the council.

But what made Browne baulk was the cost of each unit. At a meeting of Dublin City Council, Fianna Fáil councillor Rachael Batten revealed that the proposed homes would cost almost €1.2 million each.

It was argued by Dublin City Council’s housing manager that that price could not be compared to the price of a house being built and sold in the here and now. The private company would have to maintain the property and do tenancy management for 25 years and then hand it back to the council in perfect condition.

Sure – if it were sold on the open market, it would work out at less but not that much less. The reality was that the only figure that would register with the public was €1 million plus per social home, and half of them were not even in Dublin.

Did Browne have any other choice?

It wasn’t exactly a new concept. This was Bundle 3, one part of an ambitious plan to build 3,000 homes using the PPP model. There were seven bundles in all.

The project was launched as far back as 2015 when Alan Kelly was Minister for Housing and Brendan Howlin was Minister for Public Expenditure.

It wanted to use the successful model that had been used to build roads and schools to build social houses. Bundle 1 and Bundle 2 went without a hitch and delivered 1,000 homes altogether, including a development of 74 homes in Ballyburke off the Western Distributor Road in Galway City.

But things have changed over the past five years, and construction costs have spiralled. When individual social homes are creeping towards the million euro mark, that’s when you begin to worry. That’s clearly unsustainable.

So it’s back to the drawing boards for the Minister. He’s going to have to figure out a less expensive way of delivering those homes over the next five or six years.

Pictured: Rough start…Minister for Housing James Browne.