# Social Housing



## Purple (23 Jun 2017)

Has anyone seen any information on the relative cost of building social housing versus the state renting from the private sector?


If a build costs €200,000 net (VAT, Levied etc go back to the State whether it is publically or privately built) and the rent on a private home costs €1000 a month then there’s a 20 year pay back. Assuming upkeep and refurbishment costs etc are 25% of the rent cost then the return is 25 years.

Given that the landlord in the private home will be paying tax on that income the net cost goes down and the return is even longer.

We need social housing and the State has to pay for it but is what we are doing the most cost effective way of providing those houses? Could we be housing more people in similar accommodation with the same money?


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## Firefly (23 Jun 2017)

Purple said:


> If a build costs €200,000 net (VAT, Levied etc go back to the State whether it is publically or privately built) and the rent on a private home costs €1000 a month then there’s a 20 year pay back. Assuming upkeep and refurbishment costs etc are 25% of the rent cost then the return is 25 years.



I would imagine the upkeep and refurbishment costs are higher for social housing in any case. Perhaps a public-private partnership model would be better suited where the private operator build and operate the houses and the state enter into long-term rental agreements?


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## odyssey06 (23 Jun 2017)

Firefly said:


> I would imagine the upkeep and refurbishment costs are higher for social housing in any case.



I remember reading something from a few years back and Dublin City council cited this as a reason why they were reducing the social housing they provided. It wasn't the build cost, it was the cost and manpower involved in upkeep. 

DCC clearly have the capital money when they are paying €2 million for 'emergency housing' for 13 units of glorified bedsits on one of the most expensive streets in the entire country.
https://www.irishtimes.com/news/env...lontarf-properties-when-crisis-ends-1.3119302


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## cremeegg (23 Jun 2017)

Do I recollect correctly that DCC fail to collect more than 30% of all rent due on their properties.


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## Leo (23 Jun 2017)

cremeegg said:


> Do I recollect correctly that DCC fail to collect more than 30% of all rent due on their properties.



23% in 2012 it seems, leading to arrears in excess of €20M. Full report.


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## Delboy (23 Jun 2017)

The LA's record at collecting mortgages from their customers is even worse

http://www.independent.ie/business/...il-mortgages-not-paid-in-a-year-34980636.html


> New data from the Department of Housing shows that just over half of the 17,700 loans provided to borrowers are considered to be 'performing'. One in four is in arrears of more than 90 days. Almost 3,000 loans have not been serviced for more than a year.



I can only presume no safeguards or better procedures are being put in place by LA's to streamline rent/mortgage collections or to deal with arrears. And a major ramping up of social housing about to get underway.
I see a huge black hole ahead with no accountability....true Irish style


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## cremeegg (23 Jun 2017)

Great link Leo thanks.

I also found another nugget there.

_The percentage yields from the main revenue collection accounts were as follows: 

6.1 Rates 

2012 2011
Rates                                  80% 80%
Housing Rents and Annuities 77% 79%
Housing Loans                     68% 71%
Domestic Refuse                  19% 58%
Commercial Water Charges   60% 57%  _

No wonder the rest of us have to pay 50% tax on the rent we collect


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## The Horseman (23 Jun 2017)

I am not so sure we are going to see a lot of new social housing owned directly by the State. We are seeing housing agencies like Cluid, Focus Ireland etc supplying properties for those on the housing list. The cost implications for the Local Authorities in maintenance, non payment of rent and the associated costs are prohibitive. The local authorities are actively trying to contract themselves out of the landlord/tenant relationship.

One of the main reasons the Rental Accommodation Scheme, the Rent Assistance scheme has been phased out and replaced by the Housing Assistance Payment is for the very reason of non payment of rent. What people fail to realize with HAP is the downside of a non paying tenant, it is the landlords problem not the local authorities.


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## TheBigShort (24 Jun 2017)

Purple said:


> If a build costs €200,000 net (VAT, Levied etc go back to the State whether it is publically or privately built) and the rent on a private home costs €1000 a month then there’s a 20 year pay back



Could depend on market value of the property also. If build costs €200,000 and market value is €250,000, the State (Council) assets have increased by €50,000.

Paying a private landlord leaves the State vulnerable to extortionate rent increases courtesy of the 'free' market.


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## Tebbit (24 Jun 2017)

I can never understand this      I read here on AAM that some huge amount was owing on LA rents! I can't see why this was ever tolerated.    Money should be automatically taken frrom income then people would know they were not going to get away with it.   If they knew this was going to happen they wouldn't stop paying.


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## TheBigShort (24 Jun 2017)

It may have something to do with the fact LA's house people who have lost jobs and have no incomes. You can't take blood out of a stone.
What would you do, evict them? Who would house these people then?, oh wait, LA's.


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## cremeegg (24 Jun 2017)

TheBigShort said:


> It may have something to do with the fact LA's house people who have lost jobs and have no incomes. You can't take blood out of a stone.
> What would you do, evict them? Who would house these people then?, oh wait, LA's.



I don't think that this is the reason.

LA rents are assessed based on means. If a tenants loses their job, their rent is adjusted to reflect their income from social welfare.


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## Purple (27 Jun 2017)

cremeegg said:


> I don't think that this is the reason.
> 
> LA rents are assessed based on means. If a tenants loses their job, their rent is adjusted to reflect their income from social welfare.


Now now, stop letting reality get in the way of a socialist agenda.


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## Purple (27 Jun 2017)

TheBigShort said:


> Could depend on market value of the property also. If build costs €200,000 and market value is €250,000, the State (Council) assets have increased by €50,000.
> 
> Paying a private landlord leaves the State vulnerable to extortionate rent increases courtesy of the 'free' market.


That can be overcome with long term contracts with large scale landlords. Large companies who specialise in the area could build and run the units.


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## Firefly (27 Jun 2017)

As a short-term measure, why not allow bedsits again for say a 3-5 year period?


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## TheBigShort (28 Jun 2017)

Purple said:


> That can be overcome with long term contracts with large scale landlords. Large companies who specialise in the area could build and run the units.



Sounds appalling to me, but I accept you haven't actually provided much detail.
Images of an Amazon, Netflix, Spotify, Apple, Sky etc  type landlord comes to mind. Where nobody actually owns anything anymore (save the giant landlord) and the citizenry, or consumer, or (most likely) peasantry, provide continuous stream of rental, or subscription based fee for the services provided.
Fine for the latest movie or album, but for a home? No thanks.
All somewhat apoplectic I admit, but perhaps you would care to expand your idea?


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## TheBigShort (28 Jun 2017)

Firefly said:


> As a short-term measure, why not allow bedsits again for say a 3-5 year period?



Because in a modern civilised society, with a system of governance and wealth creating enterprise, that - despite our failings - has brought about a minimum standard of living, we should resist all policies and ideas that support a return to lower standards, and in turn, less wealth and poor governance.


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## odyssey06 (28 Jun 2017)

TheBigShort said:


> Because in a modern civilised society, with a system of governance and wealth creating enterprise, that - despite our failings - has brought about a minimum standard of living, we should resist all policies and ideas that support a return to lower standards, and in turn, less wealth and poor governance.



Are bedsits lower standards than B&Bs? Hotel rooms?
The glorified bedsits DCC are putting into former B&Bs?
Is a bedsit better than a shop doorway?
Were the people living in bedsits unhappy with them if they were clean and in convenient locations and they could afford the rent?
Banning bedsits without adequate supply to replace them was poor governance.


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## TheBigShort (28 Jun 2017)

odyssey06 said:


> Are bedsits lower standards than B&Bs? Hotel rooms?



Not necessarily



odyssey06 said:


> Is a bedsit better than a shop doorway?



Yes.



odyssey06 said:


> Were the people living in bedsits unhappy with them if they were clean and in convenient locations and they could afford the rent?



Subjective, why were they banned?



odyssey06 said:


> Banning bedsits without adequate supply to replace them was poor governance.



Agreed.


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## Firefly (29 Jun 2017)

odyssey06 said:


> Are bedsits lower standards than B&Bs? Hotel rooms?
> The glorified bedsits DCC are putting into former B&Bs?
> Is a bedsit better than a shop doorway?
> Were the people living in bedsits unhappy with them if they were clean and in convenient locations and they could afford the rent?
> Banning bedsits without adequate supply to replace them was poor governance.



Thanks for saving me the trouble. We would all love to live in a utopia where the best of everything is provided to all. Sadly, the reality is quite different. We have a homeless crisis and I think bedsits should be brought back in as a short term measure. As you said, a lot better than a doorway!


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## Firefly (29 Jun 2017)

It's the Sun n'all, but....

"_Housing Minister Eoghan Murphy in favour of lifting ban on bedsits which could see 5,000 homes back on the market"

https://www.thesun.ie/news/1194546/...hich-could-see-5000-homes-back-on-the-market/
_
Maybe he reads AAM_ 
_


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## Purple (29 Jun 2017)

TheBigShort said:


> Sounds appalling to me, but I accept you haven't actually provided much detail.
> Images of an Amazon, Netflix, Spotify, Apple, Sky etc  type landlord comes to mind. Where nobody actually owns anything anymore (save the giant landlord) and the citizenry, or consumer, or (most likely) peasantry, provide continuous stream of rental, or subscription based fee for the services provided.
> Fine for the latest movie or album, but for a home? No thanks.
> All somewhat apoplectic I admit, but perhaps you would care to expand your idea?


It works in other cities all over the developed world. 
You don't like people renting with long term lease (say 10 or 20 years) and rents tied to inflation (like in those other countries) but you have no problem with people taking out mortgages for 20 years and paying a bank twice the value of the property over that period. Strange. 
My only reservations are the competence of our politicians, as I doubt their ability to legislate to protect the tenant and landlord, and the ability of our public servants to frame the legislation and then regulate the sector to ensure that the laws are being upheld. 
I'd like to see harsh sanctions against landlords who break the rules up to and including prison. I know of a builder who built 3 bedroom apartments when he only had planning permission for 2 beds. He said that it would be 5 years before he was forced to convert them to 2 beds and in the mean time he'd make a killing. If it took 6 months to force him to correct things and he was facing 6 months in prison at the end of it he's have a different attitude.   
I'd like to see the same sort of harsh rules apply to tenants; noise pollution, litter and dirt, not paying the rent on time and in full and antisocial behaviour should all be things that see tenants evicted within weeks, not months and years. Willful damage to a rental property should be paid for by the tenant through a deduction from their welfare payments or wages if necessary.


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## TheBigShort (29 Jun 2017)

Purple said:


> You don't like people renting with long term lease (say 10 or 20 years) and rents tied to inflation (like in those other countries) but you have no problem with people taking out mortgages for 20 years and paying a bank twice the value of the property over that period. Strange.



Where did I ever say anything like that?



Purple said:


> My only reservations are the competence of our politicians, as I doubt their ability to legislate to protect the tenant and landlord,



Makes the whole thing pointless then if it can't be legislated for to protect both landlord and tenant.


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## Firefly (29 Jun 2017)

TheBigShort said:


> Makes the whole thing pointless then if it can't be legislated for to protect both landlord and tenant.



Yip. I don't recall there every being such a mess when the market was freer.


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## Purple (29 Jun 2017)

TheBigShort said:


> Where did I ever say anything like that?


 Yea, fair point. 



TheBigShort said:


> Makes the whole thing pointless then if it can't be legislated for to protect both landlord and tenant.


 It does indeed. I'd rather see the effort being put in to that legislation and protection instead of potentially wasting hundreds of millions of Euro hiding incompetence behind a screen of ideology.
If it turns out that the best option is for the State to build Houses then the State should build the houses. If it tuns out that long term renting is the better option then that's what we should do. Either way left or right wing ideology and some BS about greedy developers or exploitation or whatever just shouldn't enter into the discussion.


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## TheBigShort (30 Jun 2017)

Purple said:


> If it turns out that the best option is for the State to build Houses then the State should build the houses. If it tuns out that long term renting is the better option then that's what we should do



So who decides the best option?
Don't get me wrong, I don't disagree with  the sentiment. We have the CSO, ESRI etc to inform us of best practice, but ultimately it will take a political decision. If the answer is more social housing, but we elect a government that disagrees (or typically, supports the independent body, but dilutes and amends the recommendations) and thinks the private market is the answer, what do we do?


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## Purple (3 Jul 2017)

TheBigShort said:


> So who decides the best option?


The people, through their elected government. For all it's faults that's still the best option.


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## TheBigShort (3 Jul 2017)

Purple said:


> My only reservations are the competence of our politicians, as I doubt their ability to legislate to protect the tenant and landlord,





TheBigShort said:


> So who decides the best option?





Purple said:


> The people, through their elected government. For all it's faults that's still the best option.


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