Delivery of social and affordable homes at a standstill because of Government row

Apart from the fall-out in stopping homes being built, the impasse is, according to sources in the industry, damaging the relationship between developers and Approved Housing Bodies. File picture: Denis Minihane

The construction of hundreds of social and affordable homes has been brought to a virtual standstill for the last five months because of a row within Government, the Irish Examiner has learned. 

Amid an ongoing housing crisis, a range of sources has confirmed the Department of Housing has refused to sign off on cost-rental schemes since last August in a move that will impact on completion targets for homes for the next two years. 

According to sources in the industry, Approved Housing Bodies (AHBs) have been told not to submit any other proposals for the time being. 

The department denies that there has been an effective block on these schemes, but Sinn Féin housing spokesperson Eoin Ó Broin has written to the minister expressing serious concern at what he says is feedback from across the industry.

One of the reasons behind the blockage is a row between the departments of housing and finance on whether to put more emphasis on purchasing “turnkey” homes or providing finance to housing bodies to build the homes. 

According to sources in the industry, Approved Housing Bodies have been told not to submit any other proposals for the time being. File picture

Apart from the fall-out in stopping homes being built, the impasse is, according to sources in the industry, damaging the relationship between developers and AHBs.

“The developer strikes a deal with the AHB to provide so many units and the AHB must get this sanctioned by the department,” one source said. 

“When they’re coming back without the OK the developer is left high and dry. 

"In some cases, the developer then just goes to the private market looking for funding and your cost-rental homes are gone.”

Mr Ó Broin has written to Housing Minister James Browne asking for an explanation for the delays in starting new builds under the Cost Rental Equity Loan (CREL) scheme and the social housing unit scheme, the Capital Advance Leasing Facility (CALF).

“From talking to AHBs, councils, and developers, I am aware of a significant number of CREL and CALF funded projects that are awaiting Departmental approval to proceed,” Mr Ó Broin wrote. 

“Most of the projects I am aware of have been awaiting approval since September/October last year, but some are as far back as July/August. 

"I also understand that in addition to project approval delays, AHBs and local authorities have been told not to seek any further increases in their current pipeline.

Eoin Ó Broin wrote that he is 'aware of a significant number' of Cost Rental Equity Loan and Capital Advance Leasing Facility funded projects that are awaiting departmental approval to proceed. Picture: Leah Farrell

“Given that this is happening against the backdrop of yet another year of missed social and affordable housing targets, it is hard to understand why the outgoing Government would have allowed this situation to occur in the first instance.”

Construction Industry Federation director of housing and planning Conor O’Connell said it has been repeatedly informed by members that the CREL and CALF schemes are not being sanctioned by the department for months. 

“As we understand it, the schemes have been delayed because there is no money to proceed with. 

"The AHBs enter into negotiations with builders and then they have to get approval. 

"There needs to be multi-annual funding for these schemes. 

"If funding was released, we could construct thousands of cost-rental apartments in Ireland and get housing supply delivery straight away,” he said.

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Last December, it emerged that concerns were raised by the Department of Finance about the level of risk being incurred by the Department of Housing in relying on AHBs. 

The secretary general of housing pushed back against the concerns and emphasised the importance of the AHB sector in meeting housing targets.

A spokesperson for the housing department said it is not correct to say there has been a failure to sanction CREL schemes. 

“Since August, final approval has been provided to AHBs for 12 proposals which are projected to deliver in excess of 1,000 cost rental homes.”

The spokesperson also said that AHBs are continuing to submit applications to the housing agency who “manage the scheme on behalf of the department with new applications received during January.”