Councillor slams €390k cost of new ‘affordable’ houses

A Social Democrats councillor has raised concerns about the cost of a new affordable housing scheme in Grange, where houses cost up to around €390,000.

Last week, Cork City Council, in partnership with Citidwell Developments Ltd, announced it will launch a new affordable housing scheme at Seaberry Drive, Meadow Brome, Grange.

The development consists of 16 affordable homes, including 10 three-bedroom end-of-terrace and six three-bedroom mid-terrace A2-rated houses.

The local authority said the homes are for sale from about 20% below open-market values to those who qualify under the affordable housing scheme. For eligible applicants, the mid-terrace homes will be available from €313,500 and end-of-terrace from €321,000.

According to the development’s website, the maximum affordable purchase price for an end-of- terrace is about €389,500, while the maximum affordable purchase price for a mid-terrace is €375,250.

“On what planet is €389,498 for a three-bed house affordable? The plain fact is that these homes are not affordable,” Social Democrats councillor Pádraig Rice said.

“These so-called affordable homes will be out of reach for most people. There are so many families in Cork who are stressed and worried about securing a home. When so-called affordable schemes are priced at this level, it just adds to their stress.”

No-one, Mr Rice said, should be “saddled with this much debt to own an ordinary home”.

He added: “On top of the high up-front cost, the equity stake will need to be repaid in future. We can’t allow this to become the norm. There is another way of doing this. The council could build houses on state-owned land and sell or rent these at cost.”

Sinn Féin TD for Cork South Central Donnchadh Ó Laoghaire TD also said he believes the pricing of the new scheme is "still beyond the reach of far too many workers and families".

"While new homes are welcome, and I am sure those who move in will be very happy in them, the reality is that the minimum price will not be available to very many middle income families," he said. 

"We need to be much more ambitious for affordable homes. 

"So many workers and families who don’t qualify for social housing have very little options, they are relying on affordable housing schemes, but if they aren’t affordable where do they go?"

Under the scheme, purchasers will enter an affordable dwelling purchase agreement with the local authority, which will see the council retaining a percentage equity share in the house equal to the difference between its open-market value and the price paid by the purchaser.

The price to be paid for a new affordable purchase home by a purchaser, and the percentage equity stake taken by the local authority, are calculated by the local authority in accordance with government regulations. 

The price is calculated from an applicant’s maximum mortgage capacity subject to a minimum price set by the local authority for the home.

A spokesperson for Cork City Council said under the affordable housing purchase scheme, the council is "making homes available at a reduced price for buyers who are seeking to purchase a newly built home but need to bridge the gap between their mortgage and deposit to cover the full price of the home". 

"The Affordable Home Purchase Scheme is therefore aimed at households using their combined deposit and their approved maximum mortgage but who cannot afford the home at its open market value.

"In the case of the Seaberry Drive scheme, properties are supplied at approximately 20% below market value. 

"In the case of a three-bedroom end-of-terrace home, the maximum purchase price of this new home is €389,500, below market value, with a minimum purchase price applicable of €321,000. 

"For the most recent affordable schemes launched by Cork City Council, no purchasers needed to acquire the property at the maximum purchase price quoted, with an average of 50% of purchasers acquiring at the minimum purchase price. 

"Full details of our Seaberry Drive scheme are at www.seaberrydrivegrange.ie and the council’s team can be reached at affordablehousing@corkcity.ie," the spokesperson added.

Applications for the Grange can be made online between 12pm on July 30 and 12am on August 20 at www.seaberrydrivegrange.ie.