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 Post subject: The Social Housing Costs Thread
PostPosted: Fri Dec 23, 2016 7:26 am 
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I've always been slightly puzzled by the press coverage that accompanies announcements about new social housing development.

In many cases the build cost looks very high, often higher than just building existing units in the area.

Here's a thread for keeping track with examples.


Bray
Plans are afoot for a new build by Wicklow County Council of 42 units in Bray. Details are here: http://www.wicklow.ie/part-8-kilbride-lane-development-plan

An overall price of €14.7m has been given. Mention is also made of a boom-time purchase price of €6m for the land. From what I can tell this is not included in the €14.7m.

So we are looking at a cost of €350k per unit just to build. 14 of these are apartments and there a lot of one-bed units. So an underwhelming total of 79 bedrooms in the whole lot, or €186k per bedroom.

It is an infill site in a built-up area so presumably no issues with electricity, water, gas connections, etc. There will be a single road on the whole site.

€350k is a lot of money. About ten years of full-time work on average wages.

In 1978 output per worker in Ireland was about £9000, wages per worker were likely lower. New houses cost just over £20,000, a much lower ratio than today.

Why is new social housing so expensive today compared to then?


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 Post subject: Re: The Social Housing Costs Thread
PostPosted: Fri Dec 23, 2016 1:30 pm 
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This doesn't make sense. There is a major new mixed development nearby in Newtownmountkennedy of hundreds of homes. The 3 beds are going to 230K. See:

http://www.daft.ie/wicklow/property-for-sale/newtownmountkennedy/?s%5Badvanced%5D=1&searchSource=sale

If the private developer can sell at that cost (and that would include the site cost), then there is something fishy going on in Bray.

Why not just buy a load of the houses in Newtown? Would save a lot of money.


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 Post subject: Re: The Social Housing Costs Thread
PostPosted: Mon Dec 26, 2016 10:40 pm 
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At €166k per unit [url=www.rte.ie/news/2016/1219/840069-arson-cherry-orchard/
]for 72 three-bed homes[/url] this seems more reasonable.

Story makes clear that the site was already owned by DCC.


Last edited by Skippy 3 on Fri Dec 30, 2016 10:03 pm, edited 1 time in total.

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 Post subject: Re: The Social Housing Costs Thread
PostPosted: Fri Dec 30, 2016 9:00 pm 
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Skippy 3 wrote:
At €166k per unit for 72 three-bed homes this seems more reasonable.
Story makes clear that the site was already owned by DCC.

That link brings me to google luxembourg :nin


Last edited by temene on Fri Dec 30, 2016 9:15 pm, edited 1 time in total.

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 Post subject: Re: The Social Housing Costs Thread
PostPosted: Fri Dec 30, 2016 9:10 pm 
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The Government says for a 3bed in Dublin €205k, national €154k - based on current unit cost ceiling data prepared from State tender returns

That is lower than the Society of the Surveyors of Chartered Surveyors Ireland costings

As Colm McCarthy said on Newstalk this morning to Pat Kenny.."We have to admit that my house and your house is overvalued" :)


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 Post subject: Re: The Social Housing Costs Thread
PostPosted: Fri Dec 30, 2016 10:04 pm 
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Fixed that :D

That link is useful.

Not at all clear why Dublin build costs should be 1/3 higher than outside.


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 Post subject: Re: The Social Housing Costs Thread
PostPosted: Sun Jan 01, 2017 9:34 pm 
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if Bray was not a social welfare shithole already...
One day I was sitting in a car outside polish shop next to Supervalu in north Bray and I was looking at people.. I saw mostly immigrants or dodgy characters.
I felt almost like on worst parts of Tallaght when I used to live there.

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Why is it so windy here?

This is my best finding this year:
06/2007: Central Bank predicts soft landing for housing
http://www.independent.ie/business/iris ... 96858.html
It's all grand


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 Post subject: Re: The Social Housing Costs Thread
PostPosted: Sun Jan 01, 2017 9:49 pm 
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Skippy 3 wrote:
Fixed that :D

That link is useful.

Not at all clear why Dublin build costs should be 1/3 higher than outside.


Do they assume that all labour is strictly local? That would probably increase costs by at least a bit, assuming that Dublin wages are higher than other locations. Higher local storage costs for plant and materials might also bump it up a bit. Still, a third is hard to justify.

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People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.


Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations
Book I, Chapter X, Part II,


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 Post subject: Re: The Social Housing Costs Thread
PostPosted: Sun Jan 01, 2017 10:22 pm 
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Madness of Crowds wrote:
Skippy 3 wrote:
Fixed that :D

That link is useful.

Not at all clear why Dublin build costs should be 1/3 higher than outside.


Do they assume that all labour is strictly local? That would probably increase costs by at least a bit, assuming that Dublin wages are higher than other locations. Higher local storage costs for plant and materials might also bump it up a bit. Still, a third is hard to justify.


Had a builder quote me for a job in Dublin that he had previously done for a friend in Wexford. It was a third more expensive. Ie 100k to 150k. I queried this and his response was that people have more money in Dublin! He was actually serious and couldn't see anything wrong with this...


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 Post subject: Re: The Social Housing Costs Thread
PostPosted: Sun Jan 01, 2017 10:43 pm 
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greentree wrote:
Had a builder quote me for a job in Dublin that he had previously done for a friend in Wexford. It was a third more expensive. Ie 100k to 150k. I queried this and his response was that people have more money in Dublin! He was actually serious and couldn't see anything wrong with this...


That's a half more expensive!

Price discrimination is normal in many markets - ie, charging more for the same product to customers with a higher willingness to pay - but I can't see a builder getting away with charging 50% more just because and not being undercut by competitors.

Dublin is somewhat more expensive than the rest of Ireland, but not the way Paris or London are to the rest of France and England.


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 Post subject: Re: The Social Housing Costs Thread
PostPosted: Mon Jan 02, 2017 2:27 am 
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greentree wrote:
Had a builder quote me for a job in Dublin that he had previously done for a friend in Wexford. It was a third more expensive. Ie 100k to 150k. I queried this and his response was that people have more money in Dublin! He was actually serious and couldn't see anything wrong with this...

Given that your housing costs (for a start) are double in Dublin, it's likely that the person with the same job as you in Wexford or wherever has more money.


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 Post subject: Re: The Social Housing Costs Thread
PostPosted: Mon Jan 02, 2017 3:15 am 
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If you're sitting round the table at the Department of Finance (and thus barely numerate and probably cross eyed ) it makes perfect sense
- the State sold a lot of property at below cost of construction to foreigners as Nama unwound
- to balance the 'other side' of the equation the State must now buy property at above the cost of construction
Simples


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 Post subject: Re: The Social Housing Costs Thread
PostPosted: Mon Jan 02, 2017 11:01 am 
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The state would be working against its aims if it bought too cheaply


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 Post subject: Re: The Social Housing Costs Thread
PostPosted: Wed Jan 04, 2017 4:03 pm 
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This website claims that for a house price of €236k.. €76k is taxes. Is that true?
Typical Irish home build costs
Per Unit: Amount:
Site Cost €50k
Build Cost @ €100 psf, Size Average 1,100 = €110k
Roads & Infrastructure €15k
Utility Connections €2k
Legal Fees on Acquisition and Disposal, Marketing, Estate Agency Fees. €6k
Architects, Quantity Surveyors, Consultants, Homebond and Stamp Duty. €2,500
Part V Contributions to social housing €5k
Council Levies ~€10k
Cost of Finance €7,500

Total Costs €208k, VAT @ 13.5% €28k
Sale Price €236k (equivalent French starter home €160,000)


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 Post subject: Re: The Social Housing Costs Thread
PostPosted: Wed Jan 04, 2017 5:37 pm 
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The above costs refer to the construction of semi detached units with a density of 8 -10 per acre. We need to move away from considering that crud as being a sustainable form of housing. It isn't.

Victorian and Period housing was typically 30-35 units per acre and the Garden City designs of the 20th Century typically had 20-25 per acre. Higher density produces perfectly desirable housing.

If the State grants a fixed contract to a builder to build 1000 units then the profit margin could be reduced from 17.5% to less than 5%. The economy of scale would hugely reduce the construction costs, material costs, infrastructure provision costs etc. The State already owns the land (or could acquire it for 10k per acre), but this shouldn't be an excuse for constructing masses of ugly sprawl. For social and affordable housing we should be aiming at 30 units per acre, terraced housing (750-800sq ft), mid rise apartments, mixed in with work/live units, larger multi generation units that encourage families to care for elderly family at home and in their community.

There is no shortage of urban design examples from around the world to show how to create desirable housing in healthy communities with good facilities and good prospects. All it takes is a bit of vision.

Affordable housing can easily be provided for €90k per unit including all costs (site, infrastructure contribution etc).


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