Dublin cost-rental scheme dropped over rising costs
The State’s cost-rental programme has been dealt a blow following the decision of one of the largest non-profit housing bodies to scrap a Dublin cost-rental project because it had become financially “unviable”.Housing association Clúid is building 144 homes on a Dublin City Council site at Bannow Road in Cabra, close to Broombridge station. The majority are designated for social housing, with 40 to be used for a cost-rental scheme to provide homes for workers who earn too much to qualify for social housing but cannot afford private market rents. The council said it has been informed by Clúid it “can no longer deliver 40 cost-rental homes at Bannow Road” as “the cost-rental element of the scheme is unviable” due to rising costs. Instead Clúid intends to submit an application to the Department of Housing for funding to change the development to a 100 per cent social housing complex.Under the cost-rental system, operating since 2021, rents are based on the cost of building, managing and maintaining the properties. The terms of the State-subsidised scheme require rents to be at least 25 per below market values for the area. Applicants must have an after-tax income under €66,000 in Dublin and €59,000 outside the capital, but the monthly rent should not be more than 35 per cent of their net income. READ MORETrump administration deports elderly Irishman from US to Costa Rica under controversial dealGovernment and civil servants uneasy over President’s choice of first overseas tripGrace O’Malley-Kumar, killed in Nottingham attacks, ‘was too good to be true’, say parentsThe surprise findings from Census 1926: Only 1% returns in Irish and ‘so many nuns’ living to 100The system has operated successfully where the cost-rental developers, usually non-profit housing bodies, are able to provide the homes at low enough rents so that workers with earnings under the maximum threshold can afford the rent without paying more than a third of their net incomes monthly.However, in areas such as Dublin city and Dún Laoghaire where the development cost, or “building, managing and maintaining” the properties, is highest it has been a struggle for housing organisations to provide the homes within the scheme’s terms.Clúid, which delivered the State’s first cost-rental housing scheme in Balbriggan in Fingal, north Dublin, in 2021, said at the Bannow Road development it was the future maintenance costs that have pushed the cost-rental element beyond viability.“Rising costs in areas such as planned maintenance, cyclical costs and component replacement mean that it would not be possible to deliver these as cost-rental homes with rents 25 per cent below market rate,” it said in a statement.[ More than 1,300 applications received for 56 cost-rental homes in DublinOpens in new window ]It said it remained committed to providing cost-rental homes “across Ireland” but proposed developments would be assessed “on a case-by-case basis to ensure the funding available to us will be sufficient to cover buying and maintaining the property and providing an excellent resident experience”. It said it was “confident” the department would support the change from cost-rental to social housing at the Bannow Road site.The department did not respond to queries on Friday. Cost-rental is one of the key elements of the Government’s housing programme, particularly in Dublin, with a target more than 4,000 cost-rental homes in the capital up to 2030.A spokesman for the department said it was committed to cost rental and where viability issues arise “works with providers to reassess financial models and potentially vary the funding arrangements”.However, he said: “Not every cost-rental project can be made viable under all circumstances. In the case of the development at Bannow Road, it is understood that Clúid is proposing they become social housing, and the department will consider this application when received.”
