State Provision of Housing

Geuze wrote: »

By lead the development, I do not mean 100% social housing.

LA own the land - do not sell the land
LA get loans from the HFA, as they already do, this already happens, nothing new here.
Or else LA gets loans from the EIB, again this already happens, although not as much as HFA lending

LA uses its own architect, or hires one, to develop a masterplan
LA brings services/utilities onto the site - LA Roads and Housing divisions should already have some experience here

LA hires QS and project managers, or maybe uses its own engineers

LA tenders for building contractor

A mix of units:
(1) sell some at market price, this helps repay some debt / cashflow
(2) sell some as "affordable housing"
(3) cost-rental
(4) social housing
(5) commercial units

Inside the canals in Dublin only workers eligible
Strict rules against anti-social behaviour.


Advantages:
eliminate developer profit margin (15%)
massively reduce finance cost (this is 20,000 per unit according to SCSI)

In a LA situation you would not be long eating up the developer margin of 15%(if it is that high) and 20k finance cost. LA ability to deliver projects are historically not great. Whether it is supplying utilities or houses.

The development on Dublin was similar to what you indicated and the councillors threw it out. Any professional hired by a LA only works at 40-60% of the productivity rate as one working for a private entity. Ass covering and box ticking become more important than project progression.

The LA in Dublin has stated that after the present project was shotdown it will take 5 years to replace it. There goes any potential savings and probably cost overdubs similar to the NCH.

Many ask what happened with the NCH. In essence it was trying to fit a square peg into a round hole. The obsession with attaching it to a teaching medical hospital was always going to cause site limitations. As well the obsession with building a state of the art project in such s location as opposed to fit for purpose.

When the Mater site was knocked on the head it continued with this obsession instead of looking at a green field site . It really came down to a project driven by medical(doctors and professors) and administrators rather than by professional engineers and builders.

They then decide to use a new method of delivery design/build contract. The only other major contract gone to D/B has been stopped the Dunkettle interchange. That tells it all.

Bass Reeves wrote: »

The development on Dublin was similar to what you indicated and the councillors threw it out. Any professional hired by a LA only works at 40-60% of the productivity rate as one working for a private entity. Ass covering and box ticking become more important than project progression.

AFAIK, the Oscar Traynor plan was to sell the land to a developer, and then that private firm is the developer.

Then, the LA would buy the social houses from the developer.

I am suggesting that the LA becomes the developer.

mariaalice wrote:

The 'public' or in other words the taxpayer wants an unreal level of accountability along with easy answers.

What degree of accountability are the taxpayer getting and how does that fit with your synopsis?

Villa05 wrote: »

Singapore is far more densely populated than Ireland. Achieving what they have done would be much easier here. Your argument is illogical

So you start with the acknowledgement that they are different, then imply it would be easy to replicate, then say my argument is illogical.

Singapore is a city state, funded by finance, they don't own cars, they don't own land, they rank and file their children from stupid early ages and they earn scraps. If you knew anybody from there, or had ever been there you would know its nothing like here.

The idea that social housing estates should be mixed is a popular idea but it is not based on much academia data. There is some evidence against it. https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.199.956&rep=rep1&type=pdf

Geuze wrote: »

Yes, I have similar concerns.

Look at the waiting lists in the HSE versus the private hosps, etc., etc.

I am open to any idea that drives down costs.

The current developers face high finance costs, they want 15% margins, and they pay huge prices for land.

I am open to any other model that drives down costs.

You are obsessed with the 15% margin. This would be a gross margin which there may still be costs to be taken out of it.

However the issue is if the LA got actively involved in house building what form would this take. It takes much more that designing and costing a housing project to get it build.

Would the LA's employ carpenters, blocklayers, plumbers, plasterer's and electricians???. Or will they tender for subcontractors to take on the work. With the last 40 years no LA directly build houses, instead they tender for small,. mid sized or large builders to complete the works. In general these got more and more inefficient, this is why with the last 5+ years LA have got housing association's to do specific development's for them. None of these seem to be coming in much cheaper than traditional builders this is why LA buy direct from builders as well as this achieving social integration.

At the end of LA tender the building to builders and these will still want a margin.....with all the added cost of inefficient public service administration added in to the overall cost as well

Yellow_Fern wrote: »

The idea that social housing estates should be mixed is a popular idea but it is not based on much academia data. There is some evidence against it. https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.199.956&rep=rep1&type=pdf

The big research in the area is Raj Chetty’s work.

https://opportunityinsights.org/neighborhoods/

Chetty’s studies of 40 million or so American children show that the kind of place you grow up in is a major determinant of how well you do later in life.

This isn’t about throwing up some units, especially when we are talking about large developments. It’s about building good places for children to grow up in.

Creating balanced neighborhoods is a really good policy.

Geuze wrote: »

I am open to any model that reduces costs.

I do not see the LA directly hiring staff plumbers, sparks, etc., no.

I am suggesting that the LA become the developer and hire a building contractor.

This may add to LA costs - yes.

This eliminates the 42,670 developers margin.

The builders margin remains.

I am suggesting the NTMA / HFA / EIB do something to reduce the finance costs from 16,700.

I am suggesting the laws be changed / referendum if required / implement the 1970s Kenny report / ANYTHING and everything to drive down land costs from 60,800.

If good quality agri land is 10k, then land around rural towns should be sold at this price + 25% for housing.

By this I mean around towns of 5k-20k pop, rezoned land should be 12.5k per acre, to the developer.

If that takes a referendum, so be it.

I think like many you have no understanding of house building and specifically the issues with development of a housing project. You are fixated on site cost, finance cost and developer's margin. I am no fan of it either but a bit like democracy I haven't found a better system yet.

The reason developers make money is they make decisions. It not decision by committee. It like Harry Truman said the buck stops here. So we will get rid of the developer and tender out the projects and get builders to build. But now instead of the building process taking 3-5 month's it will take 7-8 to build a single house . The builder now has to finance the house costs for 2-3 months longer less the site interest on the site cost. However as he has no equity in the project the Banks will expect him to pay 1-3% more for borrowing . I forgot as well he want a margin imagine that. Developers do not hire builders, they subcontract out different. parts of the project to smaller specialist contractor's that either lay the blocks, roof the house, plaster it etc. Builders tendering will do exactly the same All these guys work on a margin as well. Depending on the size of the project will depend on the amount of builders that can tender for these project's. much the same as road projects

Finance costs might remain similar to present costs however legal coats would increase. at present a developer will have fixed legal costs to do with site purchase and house sales in theory. Now you have a LA trying to protect its liability and you now are adding in legal contract costs between the builders and the LA.

Finally while there may be some savings with you site costs its silly to imagine that agri land costs can be assumed at 10k/acre. In a CPO situation you have associated costs. and loss. Take a fam where 10-15% of the land is being taken by CPO. The farmer cannot not jut go put and replace that land. He has to be compensated. for losses associated with the CPO. Take even the CGT @33% straight away the farmer is at a 10-20% loss depending on his original land valuations . Assume minimum land costs on CPO at 50k/acre. Outside of Dublin that would be near enough what developers pay farmers for land. As well CPO's would have to allow for existing values. So development land already outside of farm ownerships would have to be valued at a minimum of last sales pricing

Geuze wrote: »

Ok, fair enough, I don't have time now to reply in detail.



I am curious as to how 4-bed semis, 1365 sq ft, can be sold for GBP 211.5k new in Derry?
https://www.propertypal.com/the-bluebell-semi-oak-country-manor-crescent-link-derry/544979/property-units

New 4-bed semis in Galway city suburbs are 375k.

But costs do need to be reduced.



1600 sqft 4-bed det in Derry for GBP 290k, similar house in GY city suburbs would be 425k?


We need to reduce costs.

I don’t think you can compare Derry and Galway. Firstly, it is 2 different countries. Secondly, Derry is a kip, Galway is not.

mariaalice wrote: »

https://www.myhome.ie/residential/ireland/new-homes/property-for-sale?maxprice=250000

Has to be land prices

Different laws but yes land in Ireland is ridiculously overpriced and government policy to keep vested interests happy is the main reason. It adds a significant cost to construction.

If taxed appropriately, then at least the exchequer would reap most of the benefit from crazy land prices and could give some back when builders need support in downturns.

antoinolachtnai wrote: »

It needs to make land available

Where? D4?

Sweet.Science wrote:

If house prices are driven down like you suggest the government is forcing thousands of people into negative equity

Which act creates negative equity

Creating a stable affordable housing market
Or
Letting vested interests have free reign to manipulate a market for personal gain

Sweet.Science wrote: »

If house prices are driven down like you suggest the government is forcing thousands of people into negative equity

A one percent drop per year wouldn’t drive anybody into negative equity.

Hubertj wrote:

Creating a stable affordable housing market under the current climate would. Further government interference without proper planning would make things worse. Then there are the fools that think it is as easy as Sinn Fein say.

Fools are the people who pursue the same policy and expect different results unless of course there is something in it for them on a personal basis at cost to the majority.

Creating a stable affordable market is the right thing to do at anytime. This has been forgotten over the last 25 years at great cost to this country and its citizens except for the few that gained from that policy of course