Housing

Social housing PPP programme

An overview of the Public Private Partnership scheme announced last year that will deliver 1,500 social housing units in three bundles.

 

Announced in Budget 2015, the National Development Finance Agency (NDFA) has been tasked with procuring and providing financial advice on major public private partnership (PPP) infrastructure programmes across the education, justice, healthcare and social housing sectors.

The PPP model has been used throughout Ireland to build a number of courthouses, primary health care centres, roads and school projects but this is the first time the state has entered into such a partnership for the delivery of social houses. This PPP scheme is tasked with delivering 1,500 social housing units in three bundles at a total cost of €300 million. The agreement will also see private developers service the developments over a period of 25 years following construction. This service agreement will include the maintenance and upkeep of housing and the return of the housing, in prime condition, to the state after 25 years. In 2015 a significant amount of work was carried out with the sites for the first bundle identified, appraised and selected.

The housing units will be delivered through an availability-based PPP model. This model sees a private sector company design, build, finance and maintain the social housing units. To finance the development and upkeep of these houses, the state will make a monthly ‘unitary payment’ for 25 years. These payments will commence once construction is complete. As the model is based on availability, the private sector partner is responsible for ensuring that units are available for occupation while it is the local authority’s responsibility to allocate tenants. Tenants will be allocated to PPP units from the local authority social housing waiting list based on each local authority’s allocation scheme.

The state will provide the site for these projects on a licence. This means the site will stay in the ownership of the state throughout the years of the scheme. Similarly as part of the agreement, the private sector company will construct housing units under a licence that will prevent the development of private housing units on the sites.

Each bundle is being developed over a number of sites, spread across different local authorities. Each individual site is to provide between 50 and 100 social housing units. The first bundle was announced last October. The €100 million project comprises of six sites which will deliver over 500 units in the Greater Dublin Area. Funding has also been agreed for the second bundle of PPP sites, located outside of the Greater Dublin Area. These sites, which will deliver a further 500 units are currently being identified and are due to be announced shortly.

At present, the first bundle’s project team is currently being established. The NDFA estimates that the first bundle will be developed to planning permission stage in advance of commencing the PPP procurement at the end of 2016 or the first quarter of 2017.

 

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