Sinn Féin Housing spokesperson Eoin Ó Broin TD has called on the Minister for Housing Darragh O’Brien to scrap his plans to privatise the provision of social housing.
The call was made in response to the new Minister’s proposal for 100 year private sector leases for social housing and a report published by commercial real estate firm CBRE promoting the investment potential from such leases.
Deputy Ó Broin said:
“Last week during an interview with Ivan Yates on Newstalk the new Housing Minister Darragh O’Brien said he was considering a scheme to lease private sector properties for 100 years for use as social housing.
“Yesterday a report published by real estate firm CBRE highlights how domestic and international investors are keen to acquire residential units and let them to local authorities on long-term leases.
“Long term leases for social housing are the height of economic illiteracy. The longer the lease the crazier they are.
“Compared with the cost of building new social housing, 100 year leases would be 3.5 times more expensive outside of Dublin and 5 times more expensive in Dublin.
“This is based on the Department of Housing’s current long term leasing scheme and the Department of Public Expenditure and reforms guidelines for calculating the cost if long term lease projects.
“At a time when the cost of Government borrowing is almost zero And market rents are at their peak why would anyone lease a private property for 100 years.
“Long term leasing makes no sense economically. It is a windfall gain for the developer while the taxpayer and the State loses out.
“Of course it shouldn’t surprise us that Fianna Fáil are considering such an option. When last in Government their housing policy was developer led. In 1997, when they took office, the annual cost of rent subsidies was €90m. By the end of 2011 when they left office it had increased to €620m. An increase of 588%.
“Any return to the bad old bays of Bertienomics must be resisted. The best way to meet social and affordable housing need is by building public housing on public land and prices that working people can genuinely afford.”
Note to editors: Tables with long term leasing costings based on Department of Public Expenditure and Reform rules for calculating the Net Present Value of long term leases and the Department of Housing, Planning and Local Government’s rules for standard long term leases.