The Dublin City Council-owned land at Emmet Road, Inchicore, which is largely comprised of the former St Michael’s Estate, is a cost rental ‘pathfinder’ pilot development. It is estimated that this site can accommodate 484 homes in a high quality mixed-tenure development. It is envisaged that 375 homes will be cost rental, with the remaining homes reserved for social housing. Taken together with an adjacent development of integrated social housing for older people, the overall tenure mix for the area will be 30% social and 70% cost rental.
The homes at Emmet Road will be complemented by commercial, retail, community and open space, including the existing Inchicore Community Sports Centre. To facilitate community engagement, Dublin City Council has established the Inchicore Regeneration Consultative Forum, bringing together local residents, business owners, and civil society organisations. It is envisaged that the development will form a central element in the longer term economic and social regeneration of the Inchicore and Kilmainham areas.
Based on the agreed tenure mix, it is anticipated that the funding for the 30% social housing units will be provided by my Department through existing funding programmes. The 70% of homes that will be available for cost rental will be funded through borrowing, and officials from Dublin City Council and my Department have recently met with the EIB who have reiterated their interest in being involved in supporting this cost rental pilot.
Cost rental is housing where the rents charged cover the cost of delivering, managing and maintaining the homes only. It is not designed to replace traditional social housing provision for low-income households, which remains a priority for the Government. Cost rental is a new tenure option for Ireland, and is one of several schemes which my Department is pursuing to deliver on the Rebuilding Ireland Action Plan and ultimately provide more affordable housing.
While noting that the financial modelling for projects of this level is heavily influenced by the base case assumptions made, it is my understanding that initial projections by advisers engaged by Dublin City Council have estimated that rents of up to approximately 40% below market rates are achievable.
In order for this project to succeed as a cost rental development, it is important that project funds are recouped on an ongoing basis. As the rent paid by a household in a cost rental tenancy simply reflects the cost of delivering, managing and maintaining the property, a number of measures can be used at the outset of a development in order to make rents more affordable. In the case of St Michael's, this includes the provision of land; the design of housing with value engineering and long term maintenance in mind; a potential State contribution to development costs via the Serviced Sites Fund, and the availability of low-cost, stable finance that is paid back over a long period of time.
In relation to current progress on this project, a Development Framework Plan has been completed on behalf of Dublin City Council. Cost consultants have also completed a report on the construction costs of the plan and assessed the scheme in light of the objective to develop a pilot Cost Rental scheme. The Council is in the process of developing a Stage 1 Capital Works Management Framework application for the social housing element of the development and will submit this to my Department. The Council is also procuring an architect-led integrated design team, who will be responsible for designing the development and taking it as far as the planning stage. Tenders are due before year end and it is envisaged that the design team will be appointed in January 2020.