€35 million spent on long term leasing by SDCC ‘not value for money’

Local TD Mark Ward has blasted South Dublin County Council’s policy of providing 25-year leases instead of traditional social housing as “short sighted and not cost effective.”

The Sinn Féin TD was speaking after receiving a response to a parliamentary question which said that over the lifetime of the lease it will cost on average €442,000 per house.

Up to now, SDCC have leased at least 80 of these homes with an estimated cost of €35 million.

“SDCC are implementing Government policy of providing 25-year leases instead of traditional social housing,” Deputy Ward (pictured above) said.

“Figures I received today tell me that SDCC are spending on average €442,000 per house over the lifetime of the lease.

“After the lease the house returns to the landlord or investment firm.

“So effectively SDCC are paying a mortgage on a house and after 25 years they have nothing to show for it.

“Also, after 25 years SDCC are still obliged to secure another tenancy for their tenant.

“This scheme in addition too not being cost effective is very short sighted.

“My understanding is that so far SDCC have leased at least 80 homes on this scheme which will cost €35 million.

“That’s €35 million without having an asset at the end of it.

“The Council are also responsible for the maintenance and tenant management of the property, which adds additional costs.

“This is the ideology that has created the housing crisis that we find ourselves in today.

“This Government have learned nothing from the past.

“They continue to rely on the private market to provide solutions to public housing.

“This strategy of investment firms buying up homes and then leasing them back to the Council is also another barrier stopping first time buyers obtaining a home for their family.

“It’s absurd and wrong that a lot of the homes that SDCC advertised were originally Council houses to begin with.

“Effectively SDCC are paying over the odds to lease a home that they once owned and sold at a discount.

“This is just bonkers.”

In response to Deputy Ward’s parliamentary question asking the Minister for Housing Darragh O Brien the average cost of leasing a private home back to the local authority on a 25-year lease in South Dublin County Council, he received the following reply from the Minister.

“The Social Housing Current Expenditure Programme (SHCEP) supports the delivery of social housing by providing financial support to local authorities for the leasing of houses and apartments,” the Minister said.

“Long term lease arrangements, including the enhanced lease of privately owned dwellings, can be entered into by either local authorities or approved housing bodies (AHBs) for periods of between 10 to 25 years.

“The average lease cost will vary by local authority having regard to the location of the dwelling, size and property type.

“The average cost is calculated based on claims for operational new units submitted by local authorities and recorded on my Department’s SHCEP financial management system and does not necessarily represent the amount delivered in that period.

“Up to the end of 2021, the average annual cost of a long-term lease for 25 years with South Dublin County Council was €17,679.

“This reflects the higher cost of units in the Dublin area as lease payments are linked to market rents and discounted appropriately.

“This data includes local authority direct leasing, enhanced leasing, and AHB private leasing.”