An €18.5 million social housing scheme is to be constructed on a vacant site in Dublin city centre under the first “direct build” social housing scheme in generations.
Voluntary housing association Circle has begun work on 47 apartments on a former Dublin City Council site on Railway Street, behind the old Sean McDermott Street Magdalene laundry building, which was first earmarked for regeneration more than seven years ago.
Unlike the standard model which has been in use for the delivery of social housing for several decades, the scheme will not involve a developer with Circle instead hiring a builder to construct the apartments under a direct-build contract.
“Normally we would buy off the peg from developers,” Circle chief executive John Hannigan said. “What normally happens is we agree a forward purchase contract or a turnkey contract which says that the developer would go off and build X number of homes and we pay for them at the end of the period. You’re reliant upon the developer to do all the work in terms of the planning and building, and sell it at a price to us at the end,” he said.
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“This one we’re building directly ourselves. We’ve procured the builders, we’ve procured the architects, and we are being funded directly to build this. So we are in control of the whole process from start to finish.”
The project is being funded by the Department of Housing and through a loan facility from AIB, Mr Hannigan said.
“It’s the first time AIB have lent to an approved housing body for construction as well as long-term investment. They’re funding the construction, and at the end of that we transfer it into a long term loan with AIB. It’s the first time they’ve done this in the AHB sector for social housing and hopefully not the last time because we are hoping to do much more with them and on a much bigger scale.”
In addition to having more control over the specifications and finishes of the apartments, the direct build contract is designed to achieve cost savings, Mr Hannigan said.
“We can save money in two ways on this particular build. We’ve been able to buy the site at a good price from Dublin city so we’re not paying huge developer profits on the land price which keeps the cost down. And because we’re the developer effectively, there are no developer profits involved, so we come in cheaper than we would have done otherwise.”
Circle paid the council approximately €1.2 million for the site, which Mr Hannigan said would be valued at approximately €7 million on the open market. The apartments, 10 one-beds, 27 two-beds and 10 three-beds, are costing an average of €375,000. While this is less than if Circle was buying from a developer, it is significantly more than Circle had projected when it began talks with the council in 2015.
“If we had done this seven years ago or even five years, we would have got that around €250,000 each. We’ve seen very significant cost inflation over that period of time.”
The delays were challenging Mr Hannigan said.
“Quite a bit of time was spent trying to work through local consultation, trying to get the design right, trying to understand what was required in the locality. Then we ran into difficulties in respect of funding. It took a period of time to actually get it to cross the line from a State perspective and from a private finance perspective.”
The planning process was also lengthy he said. “We had a lot of objections, primarily from homeowners in the surrounding area, but some who weren’t in the surrounding area but who wanted to object to the height.” The blocks range from four to seven storeys.
“Then it took a long period of time to get the site transferred to us, because of title issues and issues of ownership of particular elements. That took longer than expected as well so all of these things added up to a long delay.”
The site was previously part of the old Liberty House flat complex, but had been vacant for many years and become a source of difficulties locally, the council’s area housing manager Paul White said.
“It would have attracted antisocial behaviour and there were always a lot of fires at Halloween, so it is really great to see it being developed now,” he said “It has been a long time in the works, but it is a really positive development for the area. There’s a fantastic community here and it will be a real asset for them.”
The development is expected to be ready for tenants, who will be nominated from the council’s housing waiting list, within 12 to 18 months.
