The Dublin City Council-owned St. Michael's site in Inchicore has been selected as one of two ‘pathfinder’ developments for Cost Rental homes in Ireland. It is estimated that this site can accommodate approximately 470 homes in a high quality mixed-tenure development, including approximately 330 Cost Rental homes.
Under the Cost Rental model, rents cover the cost of delivering, managing, and maintaining the homes only, less both the profit margin seen in the private rental sector and any financial supports provided by the State/local authorities. With the resulting rents significantly below market levels, this would mean that many households on moderate incomes will have access to a more affordable and stable form of rental tenure than would otherwise have been the case.
The rents for Cost Rental units will obviously depend upon the overall cost of each development and will vary according to the site and design specifics. However, my Department has identified several factors that can put downward pressure on costs and make Cost Rental more affordable for tenants - these include low/zero land costs, a design approach with value engineering and long-term maintenance in mind, and subvention through the Serviced Site Fund, where €310 million is being made available to local authorities over three years, 2019 to 2021, to support the delivery of infrastructure for affordable housing.
More competitive rental levels under the model can also be supported by accessing low-cost, stable finance that is paid back over an extended period of time. This long-term financing has, for example, been accessed via the European Investment Bank (EIB) who have indicated a strong interest in the St. Michael’s project. My Department’s engagement with the EIB has facilitated a research project into the development of the broader Cost Rental sector in Ireland.
Plans regarding the development of the St. Michael's site are, in the first instance, a matter for Dublin City Council and my Department is engaging with the Council to support the process. Potential financing options for the project are under consideration, and long loan maturities may form part of the financial model. A working group is meanwhile working to develop a sustainable national approach to Cost Rental, so that the lessons from pathfinder projects like St Michael’s can be applied to future larger-scale projects.