Council construction ‘considerably more expensive’ than private development - report

Social and affordable homes are likely to be "considerably more expensive" at Dublin City Council's Oscar Traynor Road site if built by the council instead of a private developer, according to a new council report.

Plans for more than 850 homes at the Santry site, one of the largest owned by the council, collapsed last November following the refusal of councillors to approve a deal with developer Glenveagh Homes.

The deal would have seen 428 sold privately by Glenveagh, 253 bought by the council for social housing and 172 sold to low- and middle-income workers qualifying for the upcoming affordable purchase scheme.

Councillors voted 48 to 14 against the deal and instead agreed the site should be developed directly by the council for public housing.

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However, in a report to councillors the council's head of housing Brendan Kenny said it "cannot deliver the value for money in construction that the private can do, even where there are no land costs".

The council would have been paying an average of €390,000 for the social and affordable housing at Oscar Traynor Road, while the average cost of directly built council homes is €430,000, he said.

“It is likely that the social and affordable homes will be considerably more expensive in any new plan, than what was on offer from the Glenveagh proposal.”

Public procurement rules mean the council cannot develop long-term relationships with sub-contractors where multiple, sequential projects can be scheduled to negotiate down on price.

“There is no workable procurement methodology for the City Council to negotiate on price with contractors. It is an open tender process.”

Many builders do not apply for public work contracts because of their complexity and “the level of oversight” the council carries out on sites.

“This often limits the field where increased competition might provide better prices.”

In order to meet density requirements, the council was also committed to building apartments, which were more expensive than houses.

While Glenveagh could have started construction this year, restarting the procurement process also meant the Oscar Traynor development would be delayed for “many years”, Mr Kenny said.

“No amount of wishful thinking or fanciful fast tracking can circumvent design requirements, statutory procurement procedures, planning, compliance with cost spending code, cost benefit analysis, necessary approvals, consultation and opposition all of which would be necessary in the formulation of a brand new plan and process.”

The council does not own the intellectual rights to Glenveagh’s design, so this process would also have to “start from scratch”, he said.

“All this would take at least five years to get a new plan to the advanced stage that the Glenveagh proposal was at when it was killed off,” Mr Kenny said.

“The abandonment of the project is a huge blow to the council’s housing programme.”