Government to provide Cork developers with over €50m worth of subsidies

The scheme aims to subsidise the building of apartments in cases where developers can point to a ‘viability gap’, which means an apartment would cost more to build than its market sale price.

The Government is to provide over €50m worth of subsidies for the development of 372 apartments in Cork.

Figures from the Housing Agency detail that three separate contracts for apartments in Cork have been signed, with the largest, for 274 units, to be completed by the end of 2026.

The subsidies fall under the Croí Conaithe Cities scheme, which will provide 582 apartments between Cork and Dublin, with five contracts signed with developers.

The scheme aims to subsidise the building of apartments in cases where developers can point to a ‘viability gap’, which means an apartment would cost more to build than its market sale price.

The maximum funding due to be provided as subsidies to developers across all five contracts is €78.7m.

Concerns have now been flagged about the high level of subsidy per apartment, estimated to be €135,000 per unit at present.

Sinn Féin’s housing spokesperson Eoin Ó Broin said the subsidies are much higher than initially estimated by Government, which allocated €450m under the scheme to build 5,000 apartments by 2026.

“Back in 2022, the assumption was that the subsidy would be in the region of €80,000 per apartment,” Mr Ó Broin said.

“On the basis of the figures provided by the Housing Agency, the taxpayer is now paying €135,000 per apartment. 

"It is also not clear whether this will take the form of equity in the property, a grant to the developer, or a loan to the buyer.”

Sinn Féin spokesperson on housing, Eoin Ó Broin said the subsidies are much higher than initially estimated by Government. Picture: Leah Farrell

A spokesperson for the Department of Housing said that the maximum funding that can be attached to each apartment is €120,000.

“However, this can be exceeded by no more than 20% in certain cases in regional cities where lower market prices mean that the viability gap is larger."

Mr Ó Broin also questioned if the overall target of 5,000 apartment completions by 2026 under the scheme was possible, with just five contracts signed.

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“Croi Cónaithe Cities was launched in May 2022. Minister [Darragh] O’Brien said it would deliver 5,000 new build apartments by the end of 2026,” Mr Ó Broin said.

“Given that apartment developments typically take two years to complete, time is running out for contracts to be signed to meet the target. 

"This is yet another scheme where the minister made big promises which clearly won’t be delivered.”

The largest apartment scheme in Cork City is being developed by Glenveagh at Blackrock Villas.

A Department of Housing spokesperson said a second round of proposals is being examined by the Housing Agency.