Fine Gael row distracts from St Michael’s Estate saga

Bizarre scenes in Inchicore, where a senior Fine Gael Minister was set upon by one of his junior colleagues, only to have parties of the left leap to his defence, were certainly a distraction from the scheduled event – the announcement of the State’s first “cost-rental” scheme.

It's unlikely the Government will welcome the diversion caused by the public ding-dong between Minister for Housing Eoghan Murphy and Minister of State for Health Catherine Byrne, but perhaps it should, as the row draws attention away from some of the more awkward questions about this development.

This cost-rental or affordable rental scheme, where rents are set below market rates and low income workers are protected from the vagaries of the rental market, was first announced almost three years ago, in Budget 2016, and was to be funded from the sale of Bord Gáis.

The redevelopment of St Michael's Estate must be the most frequently announced housing project in the State

Why were these cost-rental homes not built before now? Murphy side-stepped this question to talk about how the Government had chosen to seek European Investment Bank funding for the development.

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What of the site itself? The Department of Housing issued a press release which refers to the redevelopment of a Dublin City Council-owed site at Emmet Road, Inchicore.

Nowhere does it refer to what the site would be more commonly known, namely the former St Michael’s Estate.

Could this be because the redevelopment of St Michael’s Estate must be the most frequently announced housing project in the State?

While it might seem unfair to rehash the disaster that was the boom-time relationship between the State and developer Bernard McNamara, for context, St Michael's Estate, a late 1960s complex of about 350 council flats, was one of five sites to be redeveloped under a public-private partnership (PPP) between the council and McNamara, with social and private housing.

Collapsed

The deal collapsed in 2008 when property prices dropped and a gap emerged between how much the social houses would cost to build and how much McNamara could make selling the private houses.

Later that year the council announced it would go ahead with the social housing housing element of three of the estates, including St Michael’s. Six years later, it completed 75 social homes on the land.

The council also deserves credit for running with the cost-rental proposal announced in October 2015, saying two months later that it would use this model to redevelop its vacant sites, in what it called the “land initiative”. St Michael’s was included as one of these sites.

However, this time last year the council said Government’s delays in setting up any affordable housing scheme had meant it could not seek developers for the sites.

Regardless, the council did press ahead and agreed a scheme for St Micheal’s involving 422 apartments and duplexes, 30 per cent of which would be social housing, 20 per cent affordable rental, and 50 per cent private homes. Last April it advertised this “development opportunity” and subsequently began the procurement process.

With this new plan, that process ends. The cost-rental proposals will now have to go back to the city councillors to assess. They are likely to be well disposed, but equally likely to want to put their own stamp on the scheme – which will take time.

A funding proposal for the cost-rental element, likely to be in the region of €90 million, will then be put to the European Investment Bank and if it likes the scheme, the procurement process of getting a developer will start again. Then comes planning applications and inevitable appeals.

Which leaves plenty of time for someone to come up with a whole new plan for St Michael’s Estate.