Cairn Homes gets lukewarm response from senior civil servant to 'affordable rent' pitch

Secretary-general of the Department of Public Expenditure and Reform, Robert Watt. Photo: Sam Boal/RollingNews.ie

A request for government funding for a new, long-term affordable rent initiative proposed by a leading property developer was given a lukewarm reception by one of the country’s top civil servants over the summer.

The secretary-general of the Department of Public Expenditure and Reform, Robert Watt, claimed Cairn Homes was looking for more support for its housing initiative from taxpayers at a time when the State was “already meeting part of the costs for too many households”. 

Documents released under freedom of information legislation show the chief executive of Cairn Homes, Michael Stanley, and chief financial officer Shane Doherty, held two meetings with Mr Watt and his officials in May to discuss the company’s proposal.

However, in an e-mail to Mr Stanley between the two meetings, Mr Watt wrote: “We agree with the objective you are seeking to achieve but believe that the focus should be on reducing the cost of a house rather than reducing the price-rent by in effect support by the taxpayer.” 

We are increasingly against measures which are viewed as demand measures and we believe that the focus should be on cost reduction and supply.

Mr Watt said he was also “worried” about another scheme to tackle the country’s housing problem.

However, he acknowledged that it was his “initial view” on the initiative proposed by Cairn Homes.

In its entry on the Lobbying Register, Cairn Homes described the purpose of the meetings as an opportunity “to provide an overview of the current Irish homebuilding sector”. 

Managing partner at PwC Ireland, Feargal O’Rourke, was also involved in lobbying for Government support for the initiative.

Mr O’Rourke contacted Mr Watt in early May to explain how Cairn Homes was “championing a scheme” they had put together on affordable housing.

The PwC executive said the building firm had got input from a wide variety of interested parties and was keen to try and “build a consensus across a range of stakeholders around the proposition”. 

Mr Stanley, a co-founder of Cairn Homes, said all the sites had a diverse range of housing unit types.

Details of the plans were not released by the Department of Public Expenditure and Reform as they were deemed to contain commercially sensitive information.

However, Mr Watt observed: “We tend to support affordable rent which would leave housing stock in public ownership to be recycled for future use.” 

Records show officials from the Department of Public Expenditure and Reform also highlighted to the developers that the State had difficulty in making open-ended subventions for capital costs and rents because of their fiscal impact.

However, they acknowledged there was a need to tackle the problem of the “affordability gap”, particularly in the greater Dublin area, for people seeking to buy or rent who were not eligible for social housing.

In July, Mr Stanley informed the department that they had not progressed the company's plan due to the formation of a new government but intended to re-engage with politicians and civil servants on the issue.

Cairn Homes, which is listed on the Irish stock exchange, is one of the country’s large home builders.

In September, it secured planning permission for a €338m apartment complex with 611 living units on former RTÉ lands in Donnybrook which it acquired for €197.5m in 2017.

The company gave indicative prices of €521,377 for two-bed apartments in the scheme and €472,797 for one-bed apartments.