Main pic: Donegal County Council HQ in Lifford.
Donegal County Council says it has made an increased offer to a developer for 17 social housing units in Milford and that it remains committed to the project.
Two weeks ago, election hopeful Declan Meehan told Donegal Daily he was laying the blame for the homes lying vacant at Lough Fern Heights, squarely on the local authority.
Mr Meehan said the developer of the houses, PJD Construction, has had no direct contact with the council since June 2020. As a result, he added, the builder entered into discussions with an approved housing body, Cooperative Housing Ireland (CHI) Ltd, with a view to them purchasing the properties for social housing. In order to raise the required finance, CHI sought funding from the Capital Advance Leasing Facility (CALF) which is administered by the Department of Housing. However, Mr Meehan claimed the application could not proceed as the council refused to support the application.
In a lengthy response, the council said the issue of a developer seeking to sell the houses to an approved housing body is ‘not accepted nor appropriate practice for public bodies funded by the state’ to be competing against one another.
It argued that it was wrong for two public bodies to engage in ‘a competitive situation’ to acquire the same houses, where the state through different funding mechanisms would in essence fund the acquisition of the houses.
“Such a scenario would result in driving up the cost of the houses for the taxpayer, and indeed would have a knock-on effect to the private housing market with increased prices,” the council statement read.
Speaking at Tuesday’s meeting of the Letterkenny-Milford Municipal District, Cllr Liam Blaney said that “emotions are already high” regarding the stalemate and that reports on the matter will escalate concerns for those on the housing waiting list.
“I would ask the developer to do the right thing and to sell the houses to the council, it wasn’t a signed contract but it was a mutual agreement,” Cllr Blaney said.
“The people of Milford are waiting on these houses, and we should try and get these houses one way or another.”
Read the full council statement below:
“The developer entered into a turnkey procurement process with Donegal County Council, on foot of an advertisement in January 2018, and progressed through the various steps and stages of the process including obtaining the various statutory approvals such as planning permission and Irish Water agreement. Immediately prior to commencing works on site, the developer tendered his final costs to the Council in January 2021. The Council subsequently obtained departmental approval in February 2021 in the sum of €3.47m, to acquire the 17 houses for the purposes of social housing. This was based on the maximum construction cost ceilings at the time of construction.
The houses were designed and laid out to meet the specific needs of the Council for Milford and the surrounding area, and comprise of nine 2 bedroomed, and eight 3 bedroomed houses. The Council provided ongoing inspection during the construction of the houses as they would become Council houses. The houses were substantially completed in July 2022.
As a result of delays in completing the construction works due to Covid 19 and associated inflation costs, the developer sought an uplift increase on his tendered costs. The Council employed an independent Quantity Surveyor to identify appropriate and relevant cost increases in line with inflationary cost increases and departmental guidance. An increased acquisition offer was then made to the Developer in March 2023, which to date has not been accepted. The uplift in costs amounted to €361,000. The uplift calculations were consistent with other developments that were approved within the turnkey process at that time, and in line with department guidelines. The uplift is added only to the items that were impacted by the increased prices.
The Department will sanction the monies based on the year that the construction costs were incurred, which was 2021 and 2022. It is acknowledged that since 2022, the Department sanction would be for a higher figure in respect of the construction years 2023 and indeed 2024 for the same houses. This is based on the inflation and costs prevailing at the actual time of construction.
The Council has allocated significant resources to the delivery of this project and remains committed to acquiring these units for the existing social housing need, subject to contract. Council officials most recently met with the Developer on the 10th of January 2024 and again reaffirmed the Council’s offer to acquire the 17 housing units.
In the context of the developer seeking to sell the houses to an approved housing body, it is important to note that it is not accepted nor appropriate practice for public bodies funded by the state, to be engaged in a competitive situation to acquire the same houses, where the state through different funding mechanisms would in essence fund the acquisition of the houses. Such a scenario would result in driving up the cost of the houses for the taxpayer, and indeed would have a knock-on effect to the private housing market with increased prices.
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