Building of 106 Wicklow social homes halted indefinitely over ‘value for money'
Wicklow People
Today at 02:00
The delivery of 106 social homes in west Wicklow faces an uncertain future following the Housing Minister James Browne's decision to pull the plug on the Public-Private Partnership (PPP) project that was set to deliver the homes.
A total of 486 homes were due to be constructed through PPP Bundle 3, at sites in Blessington, Dublin, Kildare and Sligo. However, after evaluation of the costs associated, the Department of Housing, Local Government and Heritage has decided not to proceed with contract award on a value for money basis.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Extra.ie
7 hours ago
- Extra.ie
'I have lots of friends who left Ireland because the rents are too high here'
The new changes to Rent Pressure Zones announced this week have 'loopholes that can be abused' by unscrupulous landlords, one renter has said. Eilís Walsh, 29, works in marketing for a social enterprise, and is paying €520 per month for an apartment in Limerick as a long-term tenant. 'I've been here a few years and I'm lucky, relatively speaking. There could be someone in an identical apartment a few doors down who has just moved in and paying much more,' she said. Eilís Walsh, 29, works in marketing for a social enterprise, and is paying €520 per month for an apartment in Limerick as a long-term tenant. 'Once a tenant does leave and the property can be brought to market rents, I think that in itself is unregulated because the standard of the property versus the rent that's being charged is insane. 'There's a lot of intimidation from landlords because there is a housing crisis, so you are more likely to try and stay renting where you are, even if the conditions are bad. 'My apartment is very poorly insulated and extremely cold for most of the year but I can't leave because everywhere else will cost much more.' 'If most landlords can make a few extra bob, they'll go for it. The property won't have to be kept up to a good standard if they can't evict a tenant but have an incentive to get the tenant to voluntarily leave,' Ms Walsh said. The new rules also distinguish between small landlords, with three properties or fewer, and large landlords who own more than three. Small landlords will still be able to evict tenants on a no-fault basis but cannot reset the rent unless the tenant leaves voluntarily. This has led to concerns that landlords may act nefariously in a bid to get tenants to leave of their own accord. 'If most landlords can make a few extra bob, they'll go for it. The property won't have to be kept up to a good standard if they can't evict a tenant but have an incentive to get the tenant to voluntarily leave,' Ms Walsh said. A stock image of a rental property. Pic: Getty Images The Department of Housing admitted this week that the changes will lead to increased rents for 'several years' until the RPZ changes stimulate investment in construction and the subsequent increase in new apartments leads to increased housing supply. 'Why are we punishing or scapegoating new renters by making them pay more? People have to move for all sorts of reasons. There's a lot of room for that system to be abused in terms of the new apartments,' Ms Walsh said. A report by the Housing Agency found that the RPZ changes may take as many as 'three to four years' before they contribute to more homes being built, while rents will increase in the short-term. Ms Walsh noted: 'That's assuming that they are built at the speed that the Government expects. 'They haven't met their targets for housing in the past. 'So many decisions in this area are being made for profit as opposed to a duty of care for people living in Ireland. I have so many friends who moved abroad because the rent is just not worth it,' Ms Walsh said. 'I can't see the housing crisis getting better in the next five years unless there's a change of government. 'We all know that there's a lot of TDs who are landlords as well.'
The Journal
7 hours ago
- The Journal
Extension of Rent Pressure Zones across country expected to happen within weeks
THE GOVERNMENT'S PLAN to extend Rent Pressure Zones across the entire country will be fast-tracked, with the law change now expected to be in place within weeks. The major shift in rental regulation was announced by Housing Minister James Browne earlier this week as part of plans to attract more private investment into the rental market, aiming to boost supply while also enhancing protections for renters. Initially, some of the changes were announced with a commencement date of 1 March 2026 and no date for others, however, it is now understood that the plan to bring the entire country under a Rent Pressure Zone (RPZ) will be done as a matter of urgency. Advertisement This is to prevent landlords from increasing rents in areas that are currently not protected in the interim period. Under the current system, over 80% of the country is already in an RPZ and subject to a 2% cap on rent increases or an increase in line with the rate of inflation, whichever is lower. Housing Minister James Browne received approval during Tuesday's Cabinet meeting for the heads of bill to be drafted. This was done to enable the Department of Housing to fast-track legislation which will be published and brought to the Houses of the Oireachtas in the coming weeks. ' Major reforms' for the rental sector finally revealed – here's what you need to know Readers like you are keeping these stories free for everyone... A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation. Learn More Support The Journal
Irish Times
7 hours ago
- Irish Times
A key plank of Ireland's social housing delivery now hangs in the balance
There are debates about where the State should and should not get involved in the housing market – but no argument that one area where it needs to step in is the provision of social housing for those who do not have the resources to rent or buy in the private market. Like many areas of the housing market, there are shortages here, as shown via long local authority housing lists and homelessness figures. So when a key Government scheme to provide more social housing is in danger of falling apart, it is noteworthy and the circumstances need to be examined. It is also clear that the decision of the Government to pull out of a public-private partnership (PPP) agreement to provide almost 500 social houses puts the whole process of using these kinds of deals to build social houses for local authorities in doubt. With future deals in the pipeline due to deliver another 1,000 social homes, this poses questions for the Government and Minister for Housing James Browne . [ Why is the housing crisis Ireland's most enduring failure? Opens in new window ] Late last week, as first reported in The Journal, Government officials deciding to pull the plug on a pubic private partnership programme where a private investment consortium was to deliver almost 500 social homes in Dublin, Kildare, Sligo and Wicklow. READ MORE The reason, according to the Department of Housing, was on cost grounds, with the decision made 'on a value for money basis.' Minister for Housing James Browne has said the department and the relevant local authorities remain fully committed to delivering the social housing in PPP Bundle three. Photograph Nick Bradshaw/ The Irish Times Nobody is saying much about the exact circumstances of this, but we can safely assume that the Department of Public Expenditure and Reform was heavily involved. A key unanswered question is why it took the Government so long to decide to pull the plug on a deal where a preferred bidder had been chosen six months ago, at which time the cost details were all known. These public/private partnerships had become an important route for delivery of social homes. Close to 1,000 homes were delivered under the first two partnership programmes, or ' bundles' as they are called. The one which has now been cancelled was to be the so-called Bundle three. Four more bundles are in the pipeline involving around 3,000 further homes and the Department says these are now being reviewed. Given the cost issues with Bundle three, there must now be serious doubt about whether these will go ahead. So a key plank of Government social housing delivery now hangs in the balance. PPPs involve a range of players. The houses are financed and constructed by a consortium – involving financiers, builders and housing managers – who then provide maintenance and tenancy management services for a 25-year period. The homes remain in the ownership of the local authorities and are handed back to them after the end of the 25-year period. The preferred bidders for Bundle three – who had also built out the second bundle – was a consortium called Torc , led by international financiers Equitix and the Kajima Partnerships. The consortium also involves construction companies JJ Rhatigan and the Spanish firm, Obrascon Huarte Lain SA (OHLA). Tenancy management services are provided by Tuath Housing and facilities management by Derwent for a 25-year service period. Minister Browne has said that the department and the relevant local authorities remain fully committed to delivering the social housing in PPP Bundle three through 'an alternative procurement and delivery strategy.' Planning permission has been granted in all cases and while the department will not comment on what happens next, one possible course of action would be for the local authorities to seek tenders to get the houses built, operating on a more traditional basis which does not involve a PPP contract to manage and maintain the properties afterward. Another option would be to re-enter talks with the consortium to see if the deal could be saved, or even if it might move forward on a different basis. Sources close to the consortium say it is keen to look at all the options. Sinn Féin housing spokesman Eoin Ó Broin has called on the Government to provide funding to the local authorities to ensure that the houses are delivered as soon as possible. Ó'Broin has been critical of the PPP model in the past arguing that it does not deliver best value for the State. The build costs under previous two social housing PPPs have appeared broadly in line with the market, he said, but significant additional costs are built into the contract for financing, maintenance and management over the subsequent 25 years, raising questions about value for money. Dealing with problems which emerge can also be complicated for tenants, he says, given the complexity of the arrangements. The Dáil Public Accounts Committee also questioned the value-for-money achieved through expenditure of €639 million on the first two bundles of PPPs which delivered almost 1,000 social housing units in Dublin, Cork, Galway, Waterford, Clare, Kildare, and Roscommon. The total construction and life cycle costs were approximately €640,000 per unit, it pointed out. A breakdown of this figure was not provided to the committee beyond it being told that actual construction costs per unit were €222,000 and €277,000 respectively for the first two bundles. The PAC said it was 'concerned that it cannot evaluate whether the units delivered through this PPP programme represent good value-for-money, as commercial sensitivity means the total cost, minus construction costs, in the tenderers' models will remain confidential 'until a specified period of time has elapsed'.' Now, it appears, this value for money issue has come to a head. Sources say that the per unit cost – including construction but also all the other expenditure over the 25-year period – has risen sharply beyond the €640,000 per unit referenced in the PAC report, due – presumably – to rising build costs and general inflation. Some sources say that the increase could have been 20 -25 per cent or more per unit, though the figure could not be confirmed. The costs appear to have sounded alarm bells in the Department of Public Expenditure and Reform (Dper). What is odd is that this seemed to take so long to happen – the preferred consortium had been chosen last October, there had been extensive contacts since then, contracts were about to be signed and builders were close to going on site. Crucially, sources close to the consortium say that there had been no increase in the costs involved in the project since last October, when it had been chosen as the preferred bidder. So why did it take so long for the plug to be pulled? The agreement would have been assessed by Dper under what is called a public sector benchmark, to ensure value for money as compared to other possible forms of delivery. But this would presumably have been done before the preferred bidden decision. The Minister for Housing says that it is determined to get the projects moving in some form. But the questions now are what delivery mechanism will be used, what will it cost and, crucially, what the delay will now be in delivery. Public procurement rules will be an issue here in finding a way forward. Sources believe that with bundle three now in trouble, the subsequent four – which are at varying stages in the process and which were set on up exactly the same basis – are also now in doubt. The Department says that these will be reviewed 'to ensure the most appropriate procurement strategies for the delivery of these homes is selected and advanced.' This would appear to indicate uncertainty about the whole PPP approach. In turn this means problems for one area of social housing delivery on which the Government and the local authorities would have been relying to help to meet targets. It also sends out some decidedly mixed messages to international investors at a time when the Government is trying to attract more of them to build here under its rental reform programme. Had the plug been pulled late last year, when the costs were clear and before a preferred bidder was appointed, then there would have been more time to reassess the best way forward. Now, however, there is a messy situation with the bidding consortium and most other players – including the National Development Finance Agency (NDFA) who helps advise on these bundles – all apparently taken unawares. The consortium has also spent significant amounts of money, including hiring staff, with a reasonable expectation that the deal would go ahead. While sources close to the consortium say they wish to find a way forward, legal action – potentially- delaying matters further must surely be a possibility if some compromise is not found. This one still has a way to run and it is difficult to see how the delivery of the planned social housing will not now be subject to serious delay.
