COMHAIRLE CONTAE ÁTHA CLIATH THEAS
SOUTH DUBLIN COUNTY COUNCIL
MEETING OF SOUTH DUBLIN COUNTY COUNCIL
Monday, October 12, 2009
HEADED ITEM NO H-I (11).
REPORT IN ACCORDANCE WITH SECTION 6( 8 ) 0F THE HOUSING (MISCELLANEOUS PROVISIONS ) ACT ,1992
Proposed Agreement between South Dublin County Council and the HELM Housing Association Ltd for the Management & Maintenance of 103 Council owned unsold Affordable Properties which have been assigned to Social Use
The Council has identified 103 homes which it purchased for onward sale under the Affordable Homes initiative but which, despite its best efforts, it has been unable to sell mainly because of the collapse in the housing market for temporary use as social homes in the furst instance.
This is in accordance with the terms of circular letter Circular Letter AHS 1 2009 Measures to deal with Unsold Affordable Homes and Related Issues received on 15th April 2009. A meeting was held with the Department officials to gain clarification on a number of issues arising from the terms of the circular. The terms of the circular provided a means of providing for social housing need and eliminate some financial constraints on the Council’s finances.
The Circular mainly provided for:
(1) Effective action to achieve early sale of units to eligible affordable home purchasers, with particular emphasis on pursuing a broadly-based and efficient approach to marketing and sales supported by availability of local authority loans to fund affordable home purchases. To assist in this, the limit for local authority loans is being increased to €220,000.
(2) Alternative measures to deal with units which, it has been satisfactorily established, are not likely to sell to affordable purchasers in current market conditions.
The Council put forward a preliminary outline proposal having carried out an overall evaluation of options to identify the most appropriate and effective approach to deal with unsold affordable housing which was provisionally approved by the Department on 25th June 2009 subject to a number of conditions the Council was required to fulfill and completion of a detailed template as a formal proposal. The factors considered by the Council in accordance with the terms of the Circular regarding potential for sale of affordable housing included :
· The main factor(s) inhibiting sale in particular developments, whether related to the overall housing market or the affordable sector, and the scope to address these and increase probability of sale.
· Length of time individual units are on sale
· Sales levels for both affordable units and comparable units on the open market
· Price levels – if price is considered to be the main factor inhibiting sales, would further discounting be likely to result in early sales?
· Is inadequacy of credit inhibiting sale and would provision of increased local authority loans help to address this?
In formulating the proposal, all options as set out in the Circular were investigated and considered. Following this detailed review and careful consideration and in view of the cost of servicing the loans for the unsold properties and having particular regard to the current pressures on our finances, the Council prepared a proposal to lease the unsold units for social use and put forward the detailed proposal to the Department to which we received formal approval on 18th September 2009.
The homes identified by the Council for the proposed leasing have been vacant for a period of time and the cost of servicing the bridging loans drawn down by the Council and of securing the properties proved to be a heavy burden on Council funds at a time when the onus is on minimising waste and maximising Council resources. The annual cost of the loans to the Council is approximately €500,000 per annum at current revised interest rates. The Council made every effort to sell the units at the agreed affordable prices but due to the economic crisis which greatly affected the construction industry the market drop in house prices proved it impossible to sell. Equally any discounts that would be required to be applied were be too considerable for the Council to contemplate.
The Department of Environment, Heritage and Local Government made provision of €20M nationally this year to fund the leasing of vacant homes for social housing purposes in accordance with the above Circular and have now agreed to make funds available from this programme which the Council is about to draw down to cover the full loan costs on these homes and has approved an application from the Council to utilise these homes as social homes provided that an attempt is made after five (5) years to sell them as Affordable units.
The Council in preparation for approval to our submission wrote to the next applicants on the Council waiting list for the property types in the particular locations involved inviting expressions of interest and offering them a 5 year tenancy of the new properties and the option to purchase the properties at the 2009 cost price to the Council at any time within the 5 year tenancy. It was also pointed out that there may well be discounts available off the frozen price depending on the regime used to sell the units.
It has been made clear to them that if they are not in a position to buy the units at the end of 5 years they will be offered for sale to other parties and they must agree to move to alternative homes to facilitate the sale. The Council for its part has agreed to provide suitable alternative homes as close as possible to the units being let to them and is guaranteeing not to require them to move until such alternative, suitable accommodation has been sourced.
If the Council is unable to sell the homes to alternative purchasers a new 5 year tenancy will be granted to the tenant. The exercise will be repeated after a further 5 years and, at that stage, if the sitting tenant or an alternative purchaser is not found the home will be taken permanently into social housing stock.
In exercising this “rent to buy” social housing model the Council—consistent with its policy of promoting social integration through carefully managed tenure mix - has ensured that it does not overload any development with social housing.
The schedule of units as approved by the Department of the Environment Heritage and Local Government is as follows:
Millrace, Saggart 4x 3 bed apartments
Priorsgate 9x 1bed and 17x 2 bed apartments
Chaplains Court,
Rowlagh 2x 3 bed duplex units
Mount Seskin,
Killinarden 3x 3 bed apartments
Mount Talbot,
Clondalkin 1x 1 bed apartment
Aylmer Heath, 2x 1 bed apartments; 6x 2 bed apartments and 1x 2 bed duplex unit
Newcastle
Castlegate,
Adamstown 4x 1 bed apartments;6x 2 bed duplex units;5x 3 bed duplex units and
4x 3 bed apartments
Eaton Square ,
Rathcoole 6x 2 bed apartments
The Paddocks,
Adamstown 7x 2 bed apartments
Slade Castle
Saggart 23x 2 bed apartments
Broadfield Hall, Towncentre, Tallaght 3x 1 bed apartments
One of the conditions laid down by the Department of the Environment, Heritage and Local Government on the Council is that the management and maintenance of these homes be contracted out to a Voluntary Housing Body.
In accordance with Circular letter Circular N3/09 from the Department of the Environment Heritage and Local Government on leasing of vacant private housing units in the County as one of the mechanisms to meet the Housing need the Council placed an advertisement in the national press seeking expressions of interest for the Council to explore. This was followed up by a further advertisement by the Department of the Environment Heritage and Local Government on behalf of all local authorities. The response to this initiative was disappointing and has not been progressed to date. However 5 Voluntary Housing Bodies contacted the Council and expressed an interest in delivering or managing the leased homes. The Council carried out a further tender process, limited to the 5 Voluntary Housing Bodies who had expressed interest.
This tender procurement is considered appropriate for the Council in the selection of a voluntary Housing Association for the purpose of the management and maintenance of the 103 units and is proposing the selection of Helm Housing Association to manage the homes. They will take 100% Council nominees as tenants, will mirror the Council’s management, maintenance and anti-social regimes and will charge the 10% differential rent that the Council charges and will retain the differential rents as their fee. They have also agreed to use only fully qualified and certified tradesmen and craftsmen who are tax compliant and pay the recognised trade rates to maintain the properties.
HELM has demonstrated their experience and the dynamic, innovative attitude required to deliver leadership. Their work is guided by the principle of public, voluntary and private sector partnerships on a not-for-profit basis. The organisation’s primary motivation is to assist Councils in providing safe, quality housing at best value to the ‘public purse’ and to offer choice to tenants whilst helping to build mixed, sustainable communities. They have a track record working also with Dublin City Council, Fingal County Council and Dun Laoghaire Rathdown County Council.
HELM Housing Association has approved status under Section 5 of the Housing Act 1988 for the purposes of Section 6 of the Housing (Miscellaneous Provisions) Act, 1992 ie to provide and manage voluntary and social housing. The Association was established in the Republic in 2000 and has approved status for Voluntary Housing. It is registered with the DoEHLG, has charitable status and is a member of the Irish Council for Social Housing.
The agreement of the terms and conditions for the engagement of a Voluntary Housing Body to manage and maintain Council owned housing stock is a reserved function as set out in Section 6(8) of the Housing (Miscellaneous Provisions) Act 1992.
Accordingly it is hereby recommended that the Council agree to the engagement of HELM Housing Association for the purpose for the Management & Maintenance of 103 Council owned unsold Affordable Properties which have been assigned to Social Use as set out in the foregoing report.
Details of HELM Housing Association are available on the attachment.