Department denies reports that works on social housing sites are delayed due to building costs

In March, housebuilder Cairn Homes said inflation added €20,000 to the average cost of building one of its new homes in 2022, and that it expects more increases but at a more modest rate this year. Picture: Getty

The Department of Housing has denied that building on 74 social housing sites has been delayed because of soaring building costs.

On Sunday, RTÉ's This Week programme said that the sites would be delayed for months because of the renegotiation of funding under the Capital Advance Facility Loan (CALF), due to inflation in construction costs.

Government sources said that just one site — a 65-home project in Sandyford, Co Dublin — has seen work stopped due to costs.

A spokesperson for the Department of Housing said it has considered in the region of 74 projects which were submitted for reassessments under the Capital Advance Leasing Facility (CALF) on the basis of construction price inflation. CALF is a loan facility, which is exclusively available to Approved Housing Bodies (AHBs) to assist them in financing acquisition, construction, or refurbishment projects that will deliver homes to be made available for those on the social housing waiting lists.

The department said the average turnaround time on all CALF applications for 2022 was four weeks, and this continues to date in 2023. 

It said the originally agreed loans would still be accessible during the negotiations. Housing industry sources said the renegotiations were "occasionally onerous, but understandably so". They said the department requests evidence of value for money in all applications. However, sources said they had not heard about mass stoppages to works.

The department said it has no role in negotiations between AHBs and developers.

"Under CALF the original approval is still valid while the reassessments are being carried out and payments can still be made under the conditions of the original approval letter which would be standard procedure. The reasons for a project stalling might be unconnected to awaiting approval of increased funding. 

The department has no control over the negotiations that take place between the AHB and the developer on the issue of construction costs reassessments, or how long these negotiations might take. In all cases, the process starts with discussions between these two parties.

The Department of Housing said over a third of the projects which have been reassessed have, in fact, already been built.

"These 74 projects have not stalled nor "ground to a halt" as was reported — the applications were dealt with in a timely manner by the Department taking an average of four weeks to complete. Out of the 74 reassessed projects, approximately 35% have been built. The remaining projects have received funding approval, with continued delivery expected across 2023, 2024 and 2025, as originally intended."

In March, housebuilder Cairn Homes said inflation added €20,000 to the average cost of building one of its new homes in 2022, and that it expects more increases but at a more modest rate this year.