# Affordable Housing - waste of taxpayers money.



## Howitzer

It would appear that many people who bought under the Affordable Housing scheme in the last few years may soon be able to buy out the Councils share for a trivial amount of money due to a combiniation of falling house prices and inflated initial valuations.

http://www.askaboutmoney.com/showthread.php?t=82122

Firstly, is this correct?

Secondly, where does this leave the financial status of our County Councils? Whilst this clawback amount does reduce over time it would have been likely that most councils would have booked some value to these assets that they had a share in, in some cases running to 10s of millions of euros.

A report in the Sunday Times from 2 weeks ago showed that the income for councils depended to a large extent on developer levies. In the case of Fingal Co Co 2/3s of their income for 2006 came from these fees. With reduced income and the potential for their assets to be, legitimately, stripped by a loophole in the Affordable Housing scheme, where does this leave their finances now?

And thirdly, this money is effectively our tax money, either directly or indirectly, which the councils administer. Have the councils just blown 100's of millions of euros of our tax money in property speculation?


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## Afuera

Howitzer said:


> It would appear that many people who bought under the Affordable Housing scheme in the last few years may soon be able to buy out the Councils share for a trivial amount of money due to a combiniation of falling house prices and inflated initial valuations.
> 
> http://www.askaboutmoney.com/showthread.php?t=82122
> 
> Firstly, is this correct?



I don't think this is correct. The clawback can be calculated in different ways depending on whether it's for a sale/remortgage and/or if negative equity is involved. I've responded with more details in the original thread, since the OP is more likely to find it there.


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## Howitzer

Given the fact that the Council will shoulder the loss no matter what there seems to be plenty of scope for abuse/exploitation. 2 parties could arrange to sell at a very significent loss to the original valuation so that the Coucil losses all their share.

That isn't the case in this thread but is the obvious end point.

Im selling Affordable home - Lower than the Valuation 

In fact once the seller is making zero profit they have absolutely no incentive to accept any price above their mortgage. If it was me I'd sell at the cost of my mortgage just to reduce my selling fees (estate agents still charge a % of sales price).


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## shnaek

On a broader level - do you think it is the job of state to give people houses? I mean, I am all for the state providing a roof over peoples heads. But cheaply rented accommodation can achieve this. Should the state be in the business of cheap mortgages?


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## truthseeker

shnaek said:


> Should the state be in the business of cheap mortgages?


 
In my opinion - no.


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## Cheeus

The state aren't giving people houses, they are enabling people to buy who couldn't afford to otherwise. People buying under affordable housing are tax payers so to say that it's a waste of tax payers money is daft. Should our tax stop funding the arts because not everyone has an interest in the arts? Should it stop funding roads because not everyone drives? Should I not have to pay prsi because I never make a social insurance claim? Stupid question. Housing is essential and the government is responsible for hiking up property prices in Dublin and other hubs by not providing nationwide infrastructure to support local development.

When people apply for affordable housing they pay an administrative fee of over €2,000. The council get the properties at cost from developers in return for planning permission for wider developments. The majority of people selling an affordable property will pay clawback and the council will make a profit. Where market values fall the council does not make a loss, it simply doesn't make a profit. The council don't buy the houses and sell them at a loss to begin with. I think the exception to this might be the affordable housing initiative only.

Current valuations on affordable properties are highly inflated. The council are selling substandard properties for substantially more than real market values. I am not speculating, I've been monitoring it very carefully. It is therefore essential that where people find themselves in a situtation of immediate negative equity that they are protected. Private buyers have more control over values because a private seller simply cannot inflate the price of their property.

Ultimately councils will still make a profit with affordable housing. A reduction in clawback to protect a buyer from negative equity does not amount to loss for the council, or a waste of tax payers money - it simply reduces the council's profit.


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## shnaek

Cheeus said:


> Should our tax stop funding the arts because not everyone has an interest in the arts? Should it stop funding roads because not everyone drives? Should I not have to pay prsi because I never make a social insurance claim? Stupid question.



Stupid question indeed, as preserving our cultural heritage (the arts), providing infrastructure (roads) and providing for old age or illness causing inabilty to work (prsi) are all functions of government. Thus they have their own ministers and departments. Giving someone a cheap house, one could argue, is not a function of government. This is why there is no minister for housing, or department of housing. The government could provide houses on a cheap rental basis, thus taking care of their social obligation.


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## Howitzer

Cheeus said:


> The council get the properties at cost from developers in return for planning permission for wider developments. The majority of people selling an affordable property will pay clawback and the council will make a profit. Where market values fall the council does not make a loss, it simply doesn't make a profit. The council don't buy the houses and sell them at a loss to begin with. I think the exception to this might be the affordable housing initiative only.


I don't believe this is correct

State loses cash windfall in swap for affordable homes


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## Cheeus

Housing is a function of government and is looked after by the department of environment along with our cultural heritage. Get the chip off your shoulder, taxation serves a variety of purposes. To rent out cheap houses the council would have to purchase them, furnish them, upkeep them,administer them. With affordable housing the purchaser puts up the cash, maintains the property,pays the administration fee and pays the clawback when they move on - and everyone will move on because the properties are mainly smaller than average one or two bed apts.

Ultimately as house prices even off or rise the council will make a profit. A tiny minority of people could buy the council out now because the market values of their properties were totally inflated by the council a year ago - these same properties were for sale privately almost immediately for a lower price. Back to my point on protecting buyers from negativity equity where the control of values is strictly with the council. 

The council went against the spirit of affordable housing in accepting some 'swaps'. These were opposed by advocates of affordable housing at the time and were welcomed by the normal begrudgers who didn't want affordable housing in their areas. Perhaps now those begrudgers are bemoaning the change of tide... delighted to be able to keep the begrudgers unhappy, they have to have something to moan about.


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## shnaek

Cheeus said:


> Housing is a function of government and is looked after by the department of environment along with our cultural heritage. Get the chip off your shoulder, taxation serves a variety of purposes.



There is no chip on my shoulder my friend. I am simply engaging in a debate. You will notice I offered no personal opinions, I just thought that it would make an interesting topic for debate. That is, after all, what this particular forum is concerned with.



Cheeus said:


> To rent out cheap houses the council would have to purchase them, furnish them, upkeep them,administer them. With affordable housing the purchaser puts up the cash, maintains the property,pays the administration fee and pays the clawback when they move on - and everyone will move on because the properties are mainly smaller than average one or two bed apts.



A reasonable point.



Cheeus said:


> The council went against the spirit of affordable housing in accepting some 'swaps'.



I agree.


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## Cheeus

The affordable housing scheme needs to be reformed on a number of levels - some to give the purchaser more protection, some to ensure the cost effectiveness of the scheme for the council. Submissions on reform of the process are currently being sought from interested parties. You do have an opportunity to offer feedback.

The OP mentioned that purchasers could now buy the council out for trivial amounts. These purchasers really are in a tiny minority and are in a handful of developments where prices were ridiculous to begin with. More importantly the council are probably now reaping the rewards of increases in values on properties that were sold 5 years ago - people are paying their clawback and the council is getting their cash.

Perhaps they could use some of that cash to monitor current affordable properties and prevent people abusing the scheme by renting them out - now that is a clear waste of tax payers money and should be stopped.


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## Howitzer

Cheeus said:


> More importantly the council are probably now reaping the rewards of increases in values on properties that were sold 5 years ago - people are paying their clawback and the council is getting their cash.


Again I'm not sure where you're gettng your facts from. Here is a blog post by Joan Burton from September 2005. Now I'm not saying this is the most accurate peice of information but I gave google 30 seconds and this is the what I found.

[broken link removed]



> This government committed itself to delivering 10,000 affordable houses under the terms of the Sustaining Progress national pay deal. Instead it has delivered only 374!


 
September 2005 was close to the peak of the market and only 374 units had been delivered by then. I'm pretty sure the bulk of AH units have appeared over the last couple of years.

Virtually every Affordable Housing unit is technically in negative equity compared to the initial valuations.

Please, if you have figures to indicate otherwise I'd be genuinely interested in seeing them.


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## Cheeus

I don't have official facts and figures either. 
I do know 2 people selling their affordable properties from 5 years ago. They made good profit on them themselves and have also paid substantial clawback to the council.

Take another example of the Belfry where affordable properties were sold 3 years ago - prices have fallen below the original market value, but they have not fallen below the cost price. The council are not making a loss. If people sell now they will pay clawback (granted it's a reduced rate), but the council are not actually losing. How many are selling anyway? I suspect that most people are happy with their homes for now and will pay higher clawback down the road.

The only real examples of people being able to buy out the council seem to be where the developers perhaps advertised apts at close to cost to get rid of them - I'm thinking of Erris Square last year. This was one or two duplexes that were well overvalued to begin with. 

I am interested to see real cases where people have remortgaged to the detriment of the council. I suspect it will even out and with the current review underway hopefully the scheme will be closed to any potential abuse.


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## phil1147

Howitzer said:


> Given the fact that the Council will shoulder the loss no matter what there seems to be plenty of scope for abuse/exploitation. 2 parties could arrange to sell at a very significent loss to the original valuation so that the Coucil losses all their share.
> 
> That isn't the case in this thread but is the obvious end point.
> 
> Im selling Affordable home - Lower than the Valuation
> 
> In fact once the seller is making zero profit they have absolutely no incentive to accept any price above their mortgage. If it was me I'd sell at the cost of my mortgage just to reduce my selling fees (estate agents still charge a % of sales price).


 
I think the council send someone out to agree with the valuation when someone agree's to buy the property. I would imagine the council have thought this thru'.


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## Cheeus

phil1147 said:


> I think the council send someone out to agree with the valuation when someone agree's to buy the property. .


 
Which is a scary thought given that the council's initial valuations are often far too high. There certainly needs to be some control of resales but I can see this scenario trapping an affordable purchaser in a substandard apt while the council insist that they hold out for what the private, bigger, higher spec apts are fetching.


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## shnaek

Cheeus said:


> I do know 2 people selling their affordable properties from 5 years ago. They made good profit on them themselves and have also paid substantial clawback to the council.



This can hardly be condoned either, can it? If the state is providing housing that's one thing, but for the state to be providing windfalls to people - that surely is wrong. If the state gives somebody a house, is it legitimate that those people can sell the house for a profit?


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## Cheeus

shnaek said:


> This can hardly be condoned either, can it? If the state is providing housing that's one thing, but for the state to be providing windfalls to people - that surely is wrong. If the state gives somebody a house, is it legitimate that those people can sell the house for a profit?


 
Yes it is legitimate. If I buy an affordable property for 300k I am entitled to make a profit on that 300k investment. You do not profit on what the council put in - that is the clawback that you pay back to the council.

The situation now is very different to 5 years ago anyway. Because the market values are so inflated it will be difficult for affordable purchasers to even maintain their investment inline with inflation. Inflated clawback means that the purchaser loses out. People purchashing now are doing so because they need a home. People purchasing 5 years ago were lucky that they yielded a profit - a very legitimate profit, the council did fine too.


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## shnaek

Cheeus said:


> If I buy an affordable property for 300k I am entitled to make a profit on that 300k investment.


Apologies - I thought we were debating the council providing housing, not investments. My mistake.


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## Cheeus

You are clearly incapable of a reasonable discussion and are just someone who chooses to bash the process without the remotest desire to understand it. Unfortunately it's people like you who spread public misconceptions about worthwhile council initiatives. You have no real interest other than to bash it. Waste of time.


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## shnaek

Cheeus said:


> You are clearly incapable of a reasonable discussion


On what basis to you make this allegation?



Cheeus said:


> and are just someone who chooses to bash the process without the remotest desire to understand it.


On the contrary, I am attempting to understand it by taking the position of devils advocate. I have many friends who have benefited from the scheme and I am delighted for them. However I always find a worthwhile position can withstand honest argument, and if it cannot then we must re-examine it. 



Cheeus said:


> Unfortunately it's people like you who spread public misconceptions about worthwhile council initiatives. You have no real interest other than to bash it. Waste of time.


Frankly that is offensive, and I would suggest that perhaps getting hot under the collar is not the way to counter my arguments above. Hysteria has no place in lively debate. Concentrate on attacking the argument, not the person making it.

So I ask once again, is it a worthwhile council initiative to help people with 'investments', or would that money be better spent on education or health for example?


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## Cheeus

shnaek said:


> Apologies - I thought we were debating the council providing housing, not investments. My mistake.


 
Apologies if my reaction offends but if you cannot understand what is being said and have to depend on sarcasm then that is a waste of time. I have put forward a balanced view of both the positive and negative aspects of system. This discussion has become fruitless.


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## ubiquitous

Cheeus said:


> This discussion has become fruitless.



It always does once posters forget the debate and resort to personal attacks


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## Afuera

Howitzer said:


> Given the fact that the Council will shoulder the loss no matter what there seems to be plenty of scope for abuse/exploitation. 2 parties could arrange to sell at a very significent loss to the original valuation so that the Coucil losses all their share.


There is definately some scope for abuse of the provision in that way alright. Colluding to sell the property below market value in a private sale would be asking for trouble though. The sellers would probably have to have some way of proving that they are selling the properties at the going market rate. I think the only way they could do that is if they put them up for public auction, and go through all normal procedures involved (having it advertised in the paper, etc.). If they did that it's possible they would be able to sell it for a lot less than the original valuation and the council would end up taking the hit on the loss. However there is always the chance that other bidders could push the price up, so it is not risk free.


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## Howitzer

Afuera said:


> There is definately some scope for abuse of the provision in that way alright. Colluding to sell the property below market value in a private sale would be asking for trouble though. The sellers would probably have to have some way of proving that they are selling the properties at the going market rate. I think the only way they could do that is if they put them up for public auction, and go through all normal procedures involved (having it advertised in the paper, etc.). If they did that it's possible they would be able to sell it for a lot less than the original valuation and the council would end up taking the hit on the loss. However there is always the chance that other bidders could push the price up, so it is not risk free.


What is the market price? In the current market someone looking to make a quick sale may accept a price 20-30% below 2006 valuations, maybe more. 

Houses for sale not dropping their price are staying on the market for 6/8/12 months and more. Are the Council going to prevent owners from selling their own property at a price which they feel reasonably reflects the current market?

2006 prices were inflated. 2006 AH prices had seemingly another 10-20% stuck on top. Any 2006 AH propeties being resold now would almost certainly have to to be priced at a level whereby the Council lost all it's interest in order to sell.


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## Afuera

Howitzer said:


> What is the market price? In the current market someone looking to make a quick sale may accept a price 20-30% below 2006 valuations, maybe more.


There's no doubt that the market is a lot lower than it was 2 years ago.



Howitzer said:


> Houses for sale not dropping their price are staying on the market for 6/8/12 months and more. Are the Council going to prevent owners from selling their own property at a price which they feel reasonably reflects the current market?


This is the problem with a private sale. The Council could easily turn around after the sale and claim it was sold below the market value. That is why I mentioned taking it to auction. It would be very hard for the Council to claim that the price it sold at auction was not the market rate.


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## Howitzer

So when you buy and your valuation, and the valuation of the bank, differ from the Council you have to accept. Well I guess they're giving you something for nothing so fair enough. But when you sell and your valuation, the valuation of the buyer, and the valuation of the back differ from the Council then the Council still have the final say even even though it's your property. Hmmmm. I'll await that court case.


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## Afuera

Howitzer said:


> But when you sell and your valuation, the valuation of the buyer, and the valuation of the back differ from the Council then the Council still have the final say even even though it's your property. Hmmmm. I'll await that court case.


The problem is that all other parties have an advantage in getter a lower price for the property. The buyer, obviously wants to buy it at the lowest price. The bank would prefer to have it undervalued so that there is more of a cushion in the LTV. The seller does not stand to profit from a vastly reduced price, however they do not lose out either, and a big reduction would guarantee a fast sale for them.

The only real loser would be the Council so they would be well within their rights to take people to court if they thought they were colluding on this. If the seller went down the auction route it would make it more open and possibly avoid some serious probing by the council later on.


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## Howitzer

Affordable homes are too pricey for us council is told



> A recent local authority report outlined how a massive 80pc of affordable home offers in Dublin city are now being rejected.


 
[broken link removed]



> DUBLIN CITY Council is to discount its total stock of affordable homes to get rid of a backlog of 300 unsold houses that are costing the council upwards of €300,000 a month in bridging loans and fees.


 


> To date, the council has had to buy 300 homes from developers because they were rejected by buyers. The council is paying about €1,000 a month in bridging loans on each of these units. However, the council is facing even greater debts as it has a total of 630 affordable homes on offer to applicants.
> If it was forced to buy the remainder of these homes through further rejections from applicants, it would be paying monthly fees in excess of €630,000


 
Now surely all must accept the crazyness of the AH scheme, that this scheme is costing the tax payer unbelieveable amounts of money; money that we just don't have any more, and must be wound up NOW.


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## Howitzer

I find it hard to believe that these stories are unrelated.

Over 1,000 workers face the dole as councils slash costs

Affordable Housing bankrupts Local Authorites - Local Authorites lay off workers.

And all for what?


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## Howitzer

[broken link removed]



> LOCAL AUTHORITIES are to be allowed to sell affordable houses on the open market to get rid of a backlog of 3,700 unsold houses which are costing councils millions of euro in bridging loans and fees.
> Minister for the Environment John Gormley is to send a circular in the next two days to city and county councils permitting them to sell affordable houses at market value to private buyers. This would allow private buyers who do not qualify for affordable housing to acquire an affordable house and not have to pay a “claw-back” to their local authority.


 
This appears to be the end of the Affordable Housing fiasco. Quite whether the Councils will be able to recoup enough money from this fire sale to remain solvent is debatable. I don't think they will and believe a number will go the way of the Liverpool City Council of the 80s.


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## room305

Cheeus said:


> The state aren't giving people houses, they are enabling people to buy who couldn't afford to otherwise. People buying under affordable housing are tax payers so to say that it's a waste of tax payers money is daft. Should our tax stop funding the arts because not everyone has an interest in the arts? Should it stop funding roads because not everyone drives? Should I not have to pay prsi because I never make a social insurance claim? Stupid question. Housing is essential and the government is responsible for hiking up property prices in Dublin and other hubs by not providing nationwide infrastructure to support local development.



What you don't seem to be acknowledging in both this and subsequent statements are two costs to the taxpayer

1) Opportunity cost - the taxes spent on "affordable housing" could have been put to more worthwhile initiatives like health, education and policing

2) The additional costs borne by other house buyers. By commandeering 20% of all new developments for their own purposes, the state increases the cost of purchase for the remaining 80%.

I can generally accept the argument that my taxes should subsidise and provide shelter for those who need it. But why should I pay higher house prices and additional taxes so the chosen few can get a "discount house"?



Cheeus said:


> When people apply for affordable housing they pay an administrative fee of over €2,000. The council get the properties at cost from developers in return for planning permission for wider developments. The majority of people selling an affordable property will pay clawback and the council will make a profit. Where market values fall the council does not make a loss, it simply doesn't make a profit. The council don't buy the houses and sell them at a loss to begin with. I think the exception to this might be the affordable housing initiative only.



Unless I am very much mistaken the application administrative fee was €60 not €2,000. Since most of the affordable housing purchases took place at the peak of the bubble (it was an attempt by the government to rig the market and prolong the bubble), I very much doubt the council will ever see a profit. Not in any of our lifetimes anyway. Also note, that "cost price" is not just the cost of building a similar sized house but also factors in the land price as well. These land values are being written down by anything up to 90%. So it is very easy for the market price to fall below the cost price. In fact, I will be startled if they don't since it would provide a huge incentive for developers to buy the now considerably cheaper land to develop and easily undercut this price.



Cheeus said:


> Ultimately councils will still make a profit with affordable housing. A reduction in clawback to protect a buyer from negative equity does not amount to loss for the council, or a waste of tax payers money - it simply reduces the council's profit.



See my post above on why councils will not make a profit on this madness. In fact, it will likely bankrupt most of them. It's costing Dublin City Council nearly €4M a year just to service the interest on these properties. This will lead to cutbacks in other services.



Cheeus said:


> The affordable housing scheme needs to be reformed on a number of levels - some to give the purchaser more protection, some to ensure the cost effectiveness of the scheme for the council. Submissions on reform of the process are currently being sought from interested parties. You do have an opportunity to offer feedback.


 


Cheeus said:


> Perhaps they could use some of that cash to monitor current affordable properties and prevent people abusing the scheme by renting them out - now that is a clear waste of tax payers money and should be stopped.



What cash? I agree that it is unfair for people to avail of this subsidy and then rent out their properties. Equally some of the assumptions of the scheme are plainly ridiculous. For example, subjecting people buying a 1 bedroom "affordable home" to a 20 year clawback. Very few people plan on living in a one bedroom unit for 20 years. Most of the units built in the bubble-era won't even last that long. One of my abiding memories of the scheme was listening to a woman on the radio talking about being denied her right to buy a €1M affordable home in Kinsealy. Some labour TD chimed in to agree with her that the scheme should be extended to include "exclusive neighbourhoods" and people on above average earnings. Eery stuff.

The solution is not reform, it is simply to abolish this abominable waste of taxpayer funds. Let the market decide the price of housing. If you can't afford to buy a house, then buy a different one or none at all. I'll never be able to buy a Bentley but I don't lobby my TD to use government to buy me one, I just buy a car I can afford.


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## Howitzer

Dublin City Council announces €30m in cuts

Budget day is always a good day to bury bad news. 

At this stage Dublin City Council may have a liability of €630,000 (~7M pa) a month in bridging loans to finance AH units it is obliged to purchase, whilst simultaneously it has to cut it's own housing budget (maintenance, etc) by ~7M pa. It doesn't take much to join the dots.


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## charliemacck

Cheeus said:


> I am entitled to make a profit on that 300k investment.


 
You are no more "entitled" to make a profit on an investment than you are "entitled" to win a bet.


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## Howitzer

Affordable home sale rules could be scrapped



> THE Government is considering scrapping a 20-year sale clause on people who have acquired homes under an affordable housing scheme.
> In a move to help shift the market’s oversupply of houses, the Department of the Environment confirmed it is "giving consideration" to abolishing the clause.


 
The taxpayer is getting taken to the cleaners on this one. The notion advanced on this thread that councils would make a profit on these units looks laughably naieve right now.


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## Cheeus

I don't think they'll be able to scrap it for those who have already bought as it was part of the contract of sale. It makes sense that they scrap it for unsold properties. The council's loss will be huge if they don't. At least this way they can actually shift the properties.

The tide has certainly turned for affordable housing and it looks like the council are doing nothing to try to minimise their losses.

It is ridiculous that Sth Dublin Co Co and now Dun Laoghaire Co Co are still trying to sell affordable units with clawback for higher than the market values. If they can't sell them without clawback they'll be forced to change their use to social housing and that would cost the tax payer much more.

As for those who bought at the peak and are now hoping to remortgage and buyout the council without clawback - very few will be able to in reality because the loan to value ratio won't be high enough, what the banks will lend has dropped significantly and lots of peoples' wages will have been cut. I only bought through affordable housing last year and prices have dropped by 100k. I wouldn't have a hope of remortgaging with any bank now so I'll probably still pay clawback down the road.

In the last year Dun Laoghaoire Rathdown have allowed extra properties to be sold by developers as affordable housing instead of selling their existing stock. They have just got the go ahead to build yet more affordable housing and are going ahead with it - despite not being able to sell what they have.


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## Howitzer

You may have bought but it looks like we're all paying.



Cheeus said:


> In the last year Dun Laoghaoire Rathdown have allowed extra properties to be sold by developers as affordable housing instead of selling their existing stock. They have just got the go ahead to build yet more affordable housing and are going ahead with it - despite not being able to sell what they have.


What is wrong with these people?


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## Cheeus

If I hadn't bought you'd be paying.

Why don't you get on to your local council and ask them what they're doing to sell their remaining stock? That's what I've been doing for the last few months because I do think it's a disgrace that they are sitting on empty apts instead of selling them whatever way they can. 

Over a year ago I did the same for South Dublin County Council - if they had listened they'd have sold their properties now. The Docklands apts sold when clawback was lifted.

Trouble is that people are up in arms then when the councils make that decision.

What do you see the solution as being yourself?


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## Howitzer

Stop the scheme today and manage the existing AH units through their lifetime. Essentially do a NAMA on it. Take the losses and move on. Get all the issues out in the air and sorted (remortgage, renting out, clawbacks).

There are obviousy legally binding contracts that prevent them rowing back on existing deals but when you make a mistake at least try and learn from it. There was obviously some valid thinking in the inital concept but the point at which this made sense disappeared a long time ago (07 I'd say). Why continue entering into contracts after that point when you can't shift your existing stock? I'm not suggesting corruption, I'm saying plainly there is incompetence at the heart of this.

There is a latent inability to admit making mistakes in Public bodies. So instead they're digging a bigger and bigger hole, except it's with our money.

Perhaps John Gormley will see the light and draw a line through it in the same way as he did with the Voting Machines. The problem is that the general public still think that the AH scheme is a good thing. Until it becomes politically acceptable I don't think he'll act and neither will anyone in the individual Local uthorites. Gormley can stop the scheme as he has no previous with it and can simply lay the blame on his predecessors.

Ask prospective Coucillors calling to your door what their opinion of the scheme is and you'll see this won't happen for a long while.


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## Cheeus

Howitzer said:


> I'm not suggesting corruption, I'm saying plainly there there is incompetence at the heart of this.
> 
> There is an latent inability to admit making mistakes in Public bodies. So instead they're digging a bigger and bigger hole, except it's with our money.


 
I totally agree. Properties in DLR Co Co were ready in late 2007. There were a large number of people interested in them. They weren't sold until late 2008, now many are unsold. If the scheme had been administered properly it might have worked. I agree with affordable housing in principle but the schemes have been poorly managed and even in the last few months as pitfalls have been pointed out to the councils they are still not acting.

Maybe people should ask the councillors canvassing at their doors their opinions on the losses being made by the council now. I contacted our local councillors months ago about this and got no reply. In the meantime developers have sold lots of properties in the development here while  the council can't shift theirs - a little creative thinking and the council would have offloaded them by now.


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## Cheeus

Howitzer said:


> Perhaps John Gormley will see the light and draw a line through it in the same way as he did with the Voting Machines. The problem is that the general public still think that the AH scheme is a good thing. Until it becomes politically acceptable I don't think he'll act and neither will anyone in the individual Local uthorites. Gormley can stop the scheme as he has no previous with it and can simply lay the blame on his predecessors.


 
Didn't he already announce that local councils can sell their remaining properties on the open market without clawback restrictions? The councils aren't doing it though.

When I asked the council if they could lower their prices I was told that they couldn't because they'd be selling at loss. So sell on the open market and don't make a loss. Affordable housing prices in DLR Co Co are generally still equal to, or a bit less than market values. So if they sold them on the open market they'd break even? They should learn by the mistakes of the other councils who didn't do this while the properties still held some value.


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## Howitzer

I didn't hear it but aparently Ciaran Mullooley did a very strong piece on the Affordable Housing Scheme on Drivetime, RTE Radio 1, yesterday.

There's a follow on piece today. If you want to know where your tax Euros have gone this is the time and place to start listening.


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## Howitzer

[broken link removed]


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## Howitzer

New taxes on way to plug €5bn council debt.


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## Howitzer

[broken link removed]



> The local authority hopes to dispose of 42 houses, deemed affordable, in towns and villages in north Cork, as it has been unable to find buyers for them.
> 
> Some of the homes have remained unoccupied for over a year despite a significant marketing campaign.
> 
> The lack of take-up has left the cash-strapped council with millions of euro worth of houses it cannot shift. They were acquired through affordable housing schemes.


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## Howitzer

> Two of the country's biggest property developer dynasties ended up with prime city sites in return for discounts on housing, writes Roisin Burke





> In 2006, the State-owned Broc House on Nutley Lane, Donnybrook, Dublin 4, just opposite Elm Park Golf Club, was swapped with Alanis for discounts totalling €9.05m on 89 affordable three-bed homes at Phibblestown Wood, Ongar, Dublin 15.
> 
> These were mostly three-bed homes sold at their discounted price for between €227,000 and €330,000.
> 
> Even if the discounts were good value, a price tag of €9.05m for Broc House was a bit of a steal for the developer, zoned as it was for residential use, with agent Jackson Colliers Stops promoting it as perfect for high-end residential development.
> 
> Alanis didn't respond to a request for comment on how well it had done out of this exchange. The AHP didn't respond to a request for comment on Friday on the extraordinarily good value both this and the Harcourt deal gave the developers involved.
> 
> Broc House had been bought by the State for a reported €9.02m five years before. Just a year earlier, the Office of Public Works sold the former Veterinary College at Ballsbridge, also Dublin 4, a two-acre site, for €171.5m, and it sold nearby property at Lad Lane, Dublin 2 for €22.5m.
> 
> House prices in Ongar were already dropping by 2007, and affordable housing buyers complained that some of the Broc House exchange discounted units were too highly priced. The developer reduced the price, then the AHP paid it an extra €3m to make up the difference -- our taxes compensating the developer for the market risks that arguably should have been all its own.


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## Howitzer

[broken link removed]



> The one- and two-bedroom apartments cost €132,000- €180,000, and had been offered to all 1,900 applicants on the affordable housing waiting list
> ...
> Director of housing Charles McNamara said every effort had been made by staff to increase sales and fast-track closings. But a number of factors were preventing sales. These included difficulties for potential purchasers in securing sufficient, or any, funding from mortgage lenders. The drop in house prices on the open market had also caused problems and applicants were reluctant to commit to a purchase because of uncertainty of employment or because they were waiting to see if market prices dropped further.
> 
> “It is now clear there is no interest from affordable [housing] applicants for these units,” Mr McNamara said.
> 
> He said the council could consider four options to deal with the unsold homes, including renting the properties to social housing applicants, selling them to a voluntary housing body on the open market, or offering them to affordable housing applicants on a “let-to-buy” basis.
> 
> While conscious that no single solution would be suitable to deal with all the unsold properties, Mr McNamara said he was eager to try the let-to-buy option on a pilot basis with up to 20 units. He cautioned councillors that options open to them now might not be available in the future.


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## Howitzer

[broken link removed]



> AN INCREASING number of local authorities are running into trouble with their affordable housing schemes because of rapidly falling prices and a general reluctance by qualifying buyers to make commitments in the present unsettled market.
> 
> ....
> 
> The logjam proves yet again that local authorities are not good housing managers. They should continue to look after social housing and leave the “affordable” sector to private industry. They will obviously need deep pockets if they don’t exit that market immediately.


We'll be lucky if this doesn't bankrupt our local authorities.


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## colc1

Howitzer said:


> [broken link removed]


 
They'd be brave speculators!


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## Howitzer

*Councils face bankruptcy over deals struck on housing during the boom*

*



			At the time this scheme was being pushed through, the council said it would be a 'shot in the arm' for Dun Laoghaire. A shot in the head would be more accurate.
		
Click to expand...

*


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## Howitzer

Affordable housing scheme axed


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