Social Democrats TD Cian O’Callaghan has called on the Minister for Housing to explain the absence of independent market rent valuations for multi-million euro leases the State has entered into with developers for the provision of social housing.
Deputy O’Callaghan, who is the party’s Housing spokesperson, said:
“Records released to me under the Freedom of Information Act from the Department of Housing show that the State has signed up to 25-year long-term leases for social housing without undertaking any independent valuation.
“In one particular instance, with the approval of the Department, Dún Laoghaire Rathdown County Council signed up to a long-term lease for 87 homes without undertaking any independent valuation of market rents in the area. Instead, the council relied entirely on valuations supplied by the developer.
“At Herbert Hill in Dundrum, rents of more than €2,300 per month per unit are being paid out by the State based on market rents calculated by the developer’s agents.
“I cannot understand why the Department of Housing gave the green light to this multi-million euro contract without insisting on an independent valuation of market rents. The lack of due diligence is indefensible. The State should be using its bulk purchasing power to drive down rents – not support high rent levels sought by developers.
“The Minister must explain how widespread the practice of signing leases without independent valuations is and what measures he has put in place to ensure this never happens again.
“The use of long-term leasing of social housing from developers instead of purchasing or building homes has grown significantly in recent years. Long-term leasing is poor value for money for the State, which is left with no asset at the end of the lease period, while providing a win-win deal for developers.”
April 12, 2021