The number of social housing units being leased to local authorities on a long-term basis has increased significantly this year despite criticism of the cost involved. A total of 918 homes have been leased so far this year.
The average per-unit cost of the leases was €17,000. That works out at over €425,000 over a typical 25-year term.
Although €425,000 is the typical price you would pay, the council will not own the properties after the lease is up. They will have to set up another lease agreement at the end of the previous lease making this a very costly proposal
The Government plans to discontinue these types of leasing arrangements as part of its new Housing For All strategy in favour of purchase agreements.
The department has approved 62 leasing projects so far this year under long-term leasing and enhanced leasing schemes. These will deliver 783 dwellings under long-term lease agreements and 135 dwellings under Part V lease agreements.
The Part V planning rule stipulates that developers must set aside at least 10 per cent of new housing developments for social units, which the local authorities can buy at a discounted rate or lease. The average lease cost may vary depending on the location of the home, its size and the property type.
New leases for social housing are expected to be phased out and local authorities directed to make compulsory purchases of vacant units as part of the Government’s new Housing For All strategy, which will be published later this month. The strategy is expected to expand existing funding for direct builds and ownership of social housing by the State.
This comes amid criticism that the leasing arrangements represent poor value for money for the taxpayer.