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Tuesday 15 October 2019

Taxpayer funds may be used to boost developer's profits

Council leaves door open to paying Bartra more for 'affordable' homes

Controversy: The publicly owned site at O’Devaney Gardens in the capital is due to be refurbished by Bartra Capital
Controversy: The publicly owned site at O’Devaney Gardens in the capital is due to be refurbished by Bartra Capital
Luke Byrne

Luke Byrne

Dublin City Council is leaving the door open to using taxpayer funds to further boost the profits of developer Bartra Capital after it hands over the publicly owned site at O'Devaney Gardens for development.

Bartra, which is behind the controversial plan for a co-living development in Dún Laoghaire, has been chosen as the preferred bidder to develop 768 homes at the site - including 411 to be sold privately, 192 social units and 165 "affordable" units.

Last week, the Irish Independent revealed the developer could make up to €67m profit on the back of the public land, if it sold all the properties at their highest estimated value.

The company refused to release its estimate, saying the procurement process was not complete and its plan "was deemed to be most economically advantageous by the city council".

Bartra will benefit from around €50,000-per-unit from the Serviced Site Fund for the affordable houses and a development levy of around €10,000 will be waived for the social units and deferred for the affordable ones.

However, it has now emerged it could also benefit from further payments from the council, not contained in a report by deputy chief executive Brendan Kenny, presented to councillors last week.

The council said "at the moment" it was not the intention to pay Bartra any more for the affordable homes to make up the difference between the affordable price and the perceived market value at the time of sale.

But a spokeswoman added: "It is not possible to confirm this will always be the case."

The project has been criticised because at the top end of the "affordable" scale, a household would have to earn at least €108,000 a year and have savings of €42,000 to buy a €420,000 three-bedroom house at the development.

Central Bank lending rules mean a first-time buyer can only borrow 3.5 times their salary and must have a deposit of at least 10pc.

The council has also now admitted Central Bank lending rules were ignored when determining the price of "affordable" housing at the proposed redevelopment.

"The Central Bank lending rules are not part of the consideration when arriving at an Affordable Purchase Figure," a statement said.

"Basing any house price on the vagaries of Central Bank lending rules, ie how much potential buyers could borrow, carries with it the supposition that a discount could be provided no matter what the price. Which is patently not the case."

Irish Independent

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