Affordable Housing - waste of taxpayers money.

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

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