Last month, Dublin City Council listed new houses as affordable at €475,000 on Oscar Traynor Road. The ‘market’ price is even higher. This is a discounted price, which is meant to be affordable, but €475,000 is not affordable for most of us.
There is another housing scheme introduced in 2020 which seeks to address the crisis in affordability. The ‘cost rental’ housing which is increasing since that time find its inspiration from the so called ‘Vienna’ model. That is, housing rented out at no profit. The rent pays for the cost of the house and maintenance.
When activists were advocating this game changing solution in the period 2015-2020, they envisioned if introduced at scale, rents would become affordable at say €700-800 per unit. By the time the scheme was introduced, its first units were renting out at €1200 per month on the southside of Dublin for 2 bed houses and the first cost rented units at €1200 in Balbriggan for 3 bed houses.
Cost rental housing is administered through Approved Housing Bodies and others including the Land Development Agency. If we had cost rental housing over decades, the model would have served us, as a state, very well because housing rent would not only pay for itself but would also generate income at the end of loan terms.
In terms of sustainability, it is a preferred method to social housing rent, which is housing that is rented based on the household income. In Dublin City Council, this is 15% and in Fingal this is 12% of net income. There are people in older social housing developments who say the rent they have paid has more than paid for their housing. This is true, if they have been renting since the 1970s, when the average house price was less than €10,000.
Today though, houses and apartments are being acquired by AHBs and local councils at a cost of €400,000 and €500,000 each. They are then rented out at social housing rents (15% and 12% in the case of Dublin City and Fingal) which is at an average of €280 per month. Of course, it is vital that social housing is provided at an increased level because we are in a situation where we have 14,000 or more homeless.
Cost rental housing has not unfortunately delivered affordable rents to the ‘squeezed middle’. The cost rents have risen significantly since 2020 because the cost of buying houses has increased significantly. Recent cost rents advertised in Fingal list 3 bed houses renting out at €1600 and €1700 a month. This is more than most recent mortgages.
So affordable houses are listed at €475,000 and affordable rents are €1700 a month and we have more people in housing need than ever before, what policy is going to address the situation of a crisis in housing affordability.
Last year, it was announced the government has commenced the construction of up to 2,000 modular housing units at a cost of €145,000 each. They were built to provide accommodation for Ukrainian refugees. First look inside Cork’s modular homes as Mahon prepares to welcome Ukrainian families (irishexaminer.com)
People may remember modular housing was presented as a solution as far back as 2014, after the death of homeless man Jonathan Corrie. It was presented as a rapid build low cost solution to a growing crisis in housing and homelessness. One year on from Jonathan Corrie’s death, we’re still relying on short-term solutions (thejournal.ie) Dublin may be getting five modular housing sites – here’s where they’ll be (thejournal.ie) However, between regulations and objections to the notion of ‘flat pack’ housing, modular housing did not feature in the delivery of social housing over the years.
Having walked by one of the newer build ‘estates’ in Sligo built for Ukrainians, I was very impressed with their presentation. They do look different from standard housing, but they do look great. They are small at 45 sqm for a two bed house, but small is what you get for €145,000.
With the roll out of these schemes around the country, it led me to think, why not provide small low cost rapid build modular housing for anyone who wants it. At a cost of €145,000, this would lead to a cost rent of €500 per month. The nature of cost rent administration is that it would be provided to people who choose it, not simply forced there. Surely it could be provided to people on social housing lists too, particularly through the Choice Based Lettings schemes.
More and more I think about it and although I tried to raise it as a solution in various arenas, I thought I would use this podcast to delve deeper into the topic. I warmly welcome your feedback. As well as my two guests, I spoke to representatives of three other modular building companies. These are companies already getting busy in providing housing on a one off basis sometimes in back gardens but sometimes also as one off housing.
I spoke to Ciaran Byrne, Marketing Co-ordinator of The Pod Factory and to Housing Finance Commentator Karl Deeter to discuss more.
Have a look at the website of The Pod Factory and see what they do The Pod Factory | Bespoke Affordable Homes
and here are some images of the modular builds being delivered currently
OPW Ukrainian Modular Housing | COADY Architects
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