Dublin City Council said €6m guesthouse would pay for itself in seven years

Ken Foxe

A local authority said buying a guesthouse for a reported €6 million would pay for itself within seven years because of the sky-high cost of providing homeless accommodation.

Dublin City Council bought the 20-bedroom Avondale House on Gardiner Street late last year, saying it was the most cost-effective solution for emergency housing.

An appraisal report said the investment would result in a “permanent public asset” and would reduce dependency on the private sector.

It said while direct short-term contracts with hotels and B&Bs could be quickly deployed when demand spiked, there was a “high cost” involved.

Long-term leasing also provided certainty about accommodation but “the long-term cost exceeds the cost of purchasing a similar property.”

The report said rapid or modular housing could be put in place quickly but was generally “lower quality [and a] shorter term solution.”

In documents submitted to the Department of Housing, Dublin City Council said the new property could be adapted and specifically developed for emergency or transitional housing.

It added: “This approach builds public confidence in the state's role in addressing homelessness and aligns with Housing for All and Housing First principles.”

The city council withheld the exact purchase price of the property, saying it was commercially sensitive.

However, the guesthouse had a guide price of around €5.75 million when put up for sale, and it has been reported that it was bought for €6 million.

The appraisal report said the two interconnected properties were purchased in late 2023 by the previous owner following around “five years of vacancy.”

It said they had since been fully refurbished and upgraded.

The report said the site was “exceptionally well-served” by healthcare facilities and multiple public transport options.

It added: “All rooms have been upgraded in terms of electrical and mechanical fitout and finished to a high standard.

“The integration of bathrooms and services has been carefully balanced with the retention and restoration of historic features.”

The report explained that the property was very well suited to the provision of homeless accommodation given its location.

It said there was excellent security provision and external, secure, private amenity areas for residents housed there.

The property would be easy to manage while “remaining large enough to be cost-effective.”

“Crucially, the scheme is vacant and can provide a rapid move-in option to relieve pressure on emergency housing, particularly as the winter approaches,” said the report.

It said that if the homelessness crisis eased, the property could be repurposed for transitional housing.

The report added: “Based on … projections, the capital cost will be paid back over seven years approximately.

“On completion of the purchase, the new emergency accommodation can become operational within four to six weeks as only minor fitout throughout the building would be required (beds and furniture).”

It said Dublin City Council would also be moving from some other nearby accommodation “thereby not further contributing to the over-concentration of services” in the north inner city.

Asked about the purchase, Dublin City Council did not respond to a request for comment.