Financing for Land, Regeneration and Energy Options: A Dublin City Council Perspective Report to National Social Housing Conference (ICSH) 26 th October 2018
Funding Options Examples
Summary More and Better Public Housing on public lands Need to significantly ramp up our capital works programme City Capital Works Plan 2019-2040
Houses: 12,827 Flats: 8,862 Senior Citizens 3,555 Total: 25,244 A high proportion of buildings are in need of renewal/redevelopment 6,391 units across 109 flat complexes built from the 1930s onwards
Strategic objectives More Better Quality Sustainable Compact City
Where are we going? More Homes Increased public housing built on public lands Achieved through more efficient and effective use of public lands. Better Homes a plan for every apartment complex to ensure the delivery of quality, safe, warm, sustainable and energy efficient homes. needs of the elderly and disabled Improved neighbourhoods Catalyst for the renewal of underutilised areas Reducing anti-social behaviour Future proofing homes
Compact City
Each site needs to be reviewed in conjunction with elected members and residents. Decanting no longer an option/innovative solutions A one size fits all is not appropriate
Deep retrofit? Phased demolition and rebuild New build extensions to blocks? New build blocks on site? Additional floor to the blocks?
Funding Options
Funding Challenges State funding for replacement housing is likely to be challenging Should be more available where we achieve significantly higher densities Focus will be on development potential and additionality Grant vs Loan? How is any loan repaid? Differential vs Economic vs Market Rent To enable DCC to raise/borrow finance some form of State funding is required over the term
9 Funding Options 1. Continue to seek funding from the Department of Housing 2. Seek funding from the Housing Finance Agency 3. Seek funding from Corporate bonds 4. Set up an arms-length company to deliver the programme 5. Investigate Public Private Partnership options 6. Land Disposal 7. Leverage land through long-term leasing 8. Transfer some apartment complexes to Approved Housing Bodies 9. Negotiate with adjacent landowner
Multi-Criteria Assessment of options Cost benefit analysis PSC 4 Criterion: 1. Cost (double weighting) 2. Does the option facilitate the ramping up of regeneration programme? 3. Does DCC retain control of lands? 4. Risk assessment
Continue to seek funding from the Department of Housing Up to 100% grant funding No pay back required Risk: Focus on new builds
Seek Funding from the Housing Finance Agency HFA: LAs are an attractive lending proposition Most efficient model: 1. DCC to identify a project requiring finance 2. HFA to lend up to 100% 3. DHPLG agrees to underwrite an adjusted Payment and Availability Agreement Contraints: P&A only available to AHBs Borrowing envelope availability Current indebtedness to HFA > 500m
Seek funding from Corporate Pay back funding? bonds 2001 Act precludes DCC engaging with bonds as a source of funding Compared with other sources?
Set-up an arms length company to deliver programme 4 Dublin examples: 1. DDDA 2. BRL Ltd 3. Grange Gorman Development Agency 4. Temple Bar Cultural Trust Control? Transfer of assets? Why? If repayment costs higher?
Investigate Public Private Partnership options DCC has had mixed fortunes with PPPs UK National Audit Office (NAO) have formally recognised PPPs as high risk and not recommended for LAs.
Control? Timing? Proportion? Partial Land Disposal Finance vital community infrastructure/services?
Leverage land through longterm leasing Freehold is retained by LA Leasehold for 45 years issued by LA to investor Development is funded by investor at their own risk After lease expired, LA retains entire built site
Transfer some apartment complexes to Approved Housing Bodies at the heart of social housing provision Government s Social Housing Strategy 2020 Capital Advance Leasing Facility Payment and Availability Agreement
Negotiate with adjacent landlord HSE CIE/Dublin Bus Religious Instutiions Educational Institutions and Dept of Education Private Developers NAMA
Multi-disciplinary project team convened to: Review the development potential of all housing apartment complexes across the five administrative areas Meet with councillors across the five area committees to discuss a rolling implementation plan
DCC s Construction Pipeline 22 projects on site (638 units) AHBs leading 19 11 projects at tender (387 units), AHB leading 6 16 at initial stages of approval process (628 units) (AHBs leading out 9) Challenge: to triple output
General master planning and financial strategy Deliver social housing and community infrastructure in first/second phase Introduce mixed income/tenure during subsequent stages
Dolphin House 1950s 436 unit scheme (incl 44 Dolphin Park) Failed PPP Phase 1: 63 deep retrofit; 37 new units Phase 2: Delivery of social
Dolphin House Phase 1: 63 deep retrofit; 37 new units Phase 2: Delivery of social Phase 3: Mixed tenure
St Theresa s Gardens
St Theresa s Gardens Phase 1: 54 units Strategic Regeneration Development Zone (1,100 mixed tenure units)
Failed PPP Dominick Street
Dominick Street 72 units 5 Townhouses 67 Apartments Commercial - 12m own resources: retail strategy to recoup return on investment being developed
O Devaney Gardens Failed PPP. 54 houses being constructed. Housing Land Initiative: 30% social; 20% affordable and 50% private residential Competitive Dialogue Process. Going to tender
Charlemont St (PPP)
Charlemont Street
Fatima Mansions (PPP)
Herberton (PPP)
St Michael s Estate 30% social 70% cost rental (10% of these may be affordable purchase)
St Mary s Mansions Cluid 21m redevelopment of 70 year old complex Expected completion mid 2019 80 homes 2 additional floors
St Mary s Mansions
Affordable Cost Rental Challenges What is affordable? Viennese model
Summary More and Better Homes Need to gear up significantly
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