Concern has been expressed over the payment of almost £3 million by Dun Laoghaire-Rathdown County Council for a 2.3 acre site on Sandyford Road in south Co Dublin.

The site, which has a very narrow access through an existing housing estate, was sold by tender recently. It is understood that the council plans to build up to 40 houses for local authority tenants on the site.

In addition to the amount of money the council paid for the site, the Fine Gael TD for the area, Ms Olivia Mitchell, said the policy of concentrating local authority housing in small areas appeared to be opposed to the Planning Development Act. The Act envisages up to 20 per cent of private housing estates being given over to local authorities for the provision of social and affordable housing.

"One would have to question the whole policy of buying land in such a high cost area given the requirement on private developers to provide for social housing", said Ms Mitchell. "The unit cost, even at this high density and before a block is laid or any services provided, could be £75,000."

Arguing that the council could have secured land from private developers through the provisions of the Planning and Development Act, Ms Mitchell said: "there is no shortage of such private developments planned for the area. These developments will yield large amounts of social housing to augment those planned for the council's existing land bank.

"A further concern would be the council's apparent intention to concentrate its social and affordable housing almost exclusively in one area. Apart from this site, there are plans to build council housing in three other locations in the Sandyford area, including a large site in its ownership on the Blackglen Road. This would appear to run contrary to both Government and council policy of achieving social integration and a social mix through its housing policy."

Ms Mitchell rejected suggestions that the concern was simply over a new local authority estate in the area, pointing out that there had been no opposition to council housing at other sites on the road.

She warned, however, that she was also concerned the council's payment would artificially inflate the price of land in the area. "I would be worried that in fact the council has paid too much for the land. Because the site access is by way of a narrow driveway, no private sector developer could reasonably have expected to get planning permission for anything like 40 units, so it is unlikely that the bids came anything close to the council's bid.

"The council would not be subject to the same uncertainty about its development potential. A local authority can, under Part 10 of the Planning Act, grant itself planning permission after a period of public advertisement of its plans. Developers cannot do that. Unfortunately, sealed bids were required, so we have no way of knowing what the market rate actually is," she said. The Sandyford area will be well served by the proposed Luas line and the proposed South Eastern Motorway.