Maman Poulet | Clucking away crookedly through media, politics and life

Affordable housing to get affordable?

January 21st, 2009 · 4 Comments · Affordable Housing

Since the crash/collapse of property prices in Dublin and the rest of the country there’s been a bit of a problem with affordable housing. It’s wasn’t affordable anymore. While there are several thousand people on the waiting list (Including yours truly) nobody is buying anything. The difference between the market price and the affordable price was getting to be less than €5,000 in many cases. Affordable housing is generally sold at 2/3rds the market price with penalties/clawbacks being paid by the purchaser should they sell within 20 years.

With little or no difference between the market price and affordable price nobody was buying – and indeed Dublin City Council didn’t even seem to ring people to offer anything. Also financial institutions are only offering 80% of the valuation to borrowers leaving many unable to buy.

Yesterday Dublin City Council announced further reductions will be introduced to make the affordable housing they cannot sell more affordable and if these apartments still do not sell then they will be rented to people in need of social housing.

I don’t know if my phone will ring with an offer now things are getting cheaper – Malahide Road and Ashtown were mentioned as areas that DCC are paying a lot of money on bridging loans on (aka desperate to shift!). Not quite areas on the top of my list. Also I like many others would have problems arranging finances in the current climate – wonder if now that the state owns and guarantees banks these days Minister Gormley could have a word in their ear? Or isn’t that sort of reckless lending what got them into a mess they are in at the moment – ah but that was lending to builders to build houses, hoard land and pump up the prices for consumers in the first place.

You’d get dizzy following it.

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4 Comments so far

  • pk

    I respectfully disagree. I think that Irish society has focused too much getting people on to the equity ladder and not enough about quality homes for all. [If you own less than 20% of your home you are just renting it from the bank any way.]

    Tenants not owners need more protection. I don’t know if my experiences are accurate but I felt that most rights are on side of the owners. I appreciate that the historical reasons for this but I worried that pump priming the property market is just a bad idea.

    If the DCC had a counter-cycical strategy (cash under the mattress) it could buy at great prices some great homes around the city that it could rent to people in need of a good home. We need to focus on the principle of protecting our people.

    Thanks for the opportunity to rant.

  • SeanR

    The affordable housing scheme is a nonsense to my mind, you still need a whopping deposit, if you have owned a property before you’re not eligible (what about people who’d ended up losing their homes?)and there are stupid rules about holding the property for 20 years… if you buy an affordable housing property (say a 2-bed apt), you’re very likely to need a bigger gaf down the line or you might have to move to take a new job (outside of Dublin/ abroad, etc.) … so where is the flexibility? Give it another year, and all those apts around Ashtown (which are dark (=unoccupied)at night) will be affordable! Again, 1916 aspirations and all that jazz Minister!

  • Brian Greene

    this highlights the stupid policy that has the councils building < 2000 social units p/a in the boom years, 200,000 plus units empty in the country and 40,000 plus on the housing waiting lists. For every one required there is still 4 more empty.

    The council has removed need and its ability to provide housing from its criteria. Councils like the Labour Party have endorsed the market system that has profit at its core.

    from RTE news “Chairman of the Council’s Housing Committee Eric Byrne said the Council is facing a financial crisis as it has borrowed money to buy these units and is now liable for management fees.

    He said if the units were given over to social housing the Council could face a backlash and even legal action from those who already bought privately.”

    Not very revolutionary Eric. Plus it was councillors that voted in the HATED management fees that sees the builders appointed teams (in many cases builders family and solicitors) profiting off home owners year after year where private estates that are older are in care of the council for roads lighting bins greens and graffiti cleaning.

    Now that the boom has turned to bust the policies that council and its funder the government got away with are exposed as tax burden shifting PD in FF clothing policies that need repealing.

    Eric change the system.

  • Gerard Horgan

    The Affordabale Housing scheme is a sham, mere tokenism at best!!

    I refused to buy any property and I refused certainly to be pushed onto this scheme by others who didn’t know what the hell they were talking about.

    There are more than several thousand on the scheme, there are in fact 56,000 and many more waivering. The scheme is for the insane and I will tell you why. Yes, there are ridiculous clauses that keep you tied to the property etc (think it has been reduced from the 20 years), but ironically the biggest problem is the price of these houses.

    At the beginning of 2008, out of curiousity I attended an ‘affordable housing’ open day in Cork County Council’s shiny and space age looking foyer. There the banks and agents were represented as the ass had fallen out of their market.

    The Council at one stage were proposing apartments in Cobh for over a quarter of a million, I think the price was 280,000 for a bloody apartment. Now Cobh has a 40% higher incidence of cancer than the rest of the country, and although beautiful looking there have been consistent rumours of social issues etc

    Last Saturday, on the back page of the property supplement of the Irish Examiner, the County Council were offering solid looking H-O-U-S-E-S for guess what?

    €144,500 with 97% finance!!!!!!!!!!

    I guarantee you in a year from now the County will be giving away houses because they are sitting on their books, purchased as they were at the height of the boom from builders………

    I urge people to hold, watch the market crumble, before you buy anything get the house fully checked out by an engineer, as I am hearing horror stories of houses with serious structural problems, if you can avoid it, DO NOT BUY AN APARTMENT, they appreciate poorly, are restrictive by their very nature and can be hard to sell on.

    Houses will be available at knockdown prices by Sept. 2011, they will depreciate by between 10-15% this year alone, with a crippled economy, terribly uncertainly and rising unemployment, a person would want their head examined if they were to buy anything in 2010!!