View the recording of the RTE Prime Time Programme on Thursday 8th December in an article by Louise Byrne, Prime Time Reporter. Our sincere thanks to Louise Byrne, Philip Gallagher and the Prime Time Team for coming to Cork to investigate and highlight this issue.
On Thursday 8th December 2022, RTE Prime Time featured a segment with contributions by Members of Eagle Valley Association on the issue of the new Sarsfield Heights development. One long term tenant spoke of how this turnkey purchase was displacing her as an aspiring First Time Buyer. She and her family have rented in the area for many years and was hoping to buy one of the houses so that her family had could stay in the area where they had grown up.
Respond, an Approved Housing Body, is buying up the Sarsfield Heights estate in its entirety for use exclusively as social housing. Sarsfield Heights was presented as a mixed tenure development in receiving planning permission from Cork City Council. Yet the houses were never offered to individual purchasers and first time buyers on the public market as was presented in the original planning applications. Cork City Council is working with Respond and enabled the financing of the purchase through the provision of assured lease income from the Council’s social housing list and the provision of tax payer funds from the Department of Housing and the Housing Finance Agency, Ireland.
None of the parties concerned would appear on the programme but each issued Statements to RTE Prime Time. The Statements of Respond, O’Brien & O’Flynn Developers, the Minister and Department of Housing and Cork City Council are detailed below.
The Statements issued by each party appeared contradictory and evaded the substance of the issues raised by the Association’s Members in the Sarsfield Heights segment, specifically:
- Private Purchasers and First Time Buyers are being displaced by the purchase of the entire Sarsfield Heights Development exclusively for social housing by Respond, an Approved Housing Body. This is in an area which has a majority rental population and pent up demand to buy homes. The tenancy structure for Sarsfield Heights means that its residents will never have the opportunity to own their homes and the rental population in the area is further increased. For a sustainable community, the area critically needs more owner occupiers to achieve balance and integration across the four tenures in our community – affordable, social, private rental and private ownership.
- Respond is being enabled by Cork City Council and the Department of Housing with tax payers funds to part finance Respond’s purchase of Sarsfield Heights with the balance being raised from financial institutions on the basis of guaranteed 30 year lease income from Cork City Council – at the end of which the tax payer has nothing.
- Our public bodies appear to be circumventing the Planning System that they are obliged to uphold and ignoring the public consultation principle that is at the heart of the planning system to achieve their immediate social housing targets regardless of the consequences for the communities affected.
5 Major Questions for Public Bodies raised in RTE Prime Time 8/12/2022
The Prime Time programme clarified and raised five significant questions which the subsequent panel discussion did not address
- There were NO Viability issues with Sarsfield Heights – the drivers were Profitability and achieving Social Housing Targets
- How did Cork City Council ascertain that private purchasers – particularly first-time buyers – would not be displaced by the purchase of Sarsfield Heights exclusively for social housing?
- In holding the purse strings, how did the Department of Housing ensure that Respond, as an Approved Housing Body, was not competing with private purchasers ?
- Was there misrepresentation in the Planning Permission applications for Sarsfield Heights?
- “Do as I say, not as I do” – How is what our Public Bodies are doing in Sarsfield Heights different from the 2021 Mullen Park controversy over the bulk buying of estates and displacement of would be private home owners? Do we have a Planning System or not?
1. There were NO Viability issues with Sarsfield Heights – the drivers were Profitability and achieving Social Housing Targets
Respond issued a statement to Prime Time, repeating its previous statement to the Sunday Business Post on 19/11/2022 where Respond stated that they had enabled the viability of the estate and said “The scheme would not be built without this partnership, and the participation of Respond”
However, the developers, O’Brien & O’Flynn, stated to Prime Time that they “began building the estate in 2020 with its own resources and with a plan to sell it on an owner occupier basis. It was approached by Respond and a number of other parties and decided to sell the scheme to Respond to help expedite its completion.” Their statement clarified that there were no viability issues and that they had been preparing to sell to private individuals until they were approached by Respond and “other parties” (it is our understanding that the other parties were Cork City Council Officials).
As confirmed by the Developers, there was no issue of viability. However, selling to one buyer (Respond) rather than individual private purchasers, lowers costs and maximizes profitability for the Developer.
The Association has had reports of at least 4 other estates where Cork City Council has made approaches to the Developers of housing estates which are under construction and have gone through the public planning process as mixed tenure developments. Respond has then purchased the housing developments en bloc before they are ever offered to the public.
Cork City Council helps Approved Housing Bodies like Respond purchase the developments by securing funding from the Housing Finance Agency (Capital Advance Leasing Facility (CALF). This funding, together with the assurance of a secure income stream of rental income from 30 year leases by Cork City Council for tenants from the Council Housing list, enables Respond to secure finance from financial institutions.
It appears that our publicly funded bodies and public representatives, who should be upholding the planning system and providing equal treatment to all constituents, are effectively doing what might be called“insider trading”
By bulk buying estates off the plans, public bodies are apparently “gazumping” private purchasers, particularly first-time buyers, with Approved Housing Bodies acting in the same way as Institutional Investors. “Housing for All” rings hollow as political rhetoric.
2. How did Cork City Council ascertain that private purchasers – particularly first-time buyers – would not be displaced by the purchase of Sarsfield Heights exclusively for social housing?
Cork City Council’s statement to Prime Time referred to a Sustainable Community Report (which is not publicly available) that it commissioned to determine the need for social housing in the area.
However, it made no reference to how it ascertained that the purchase of Sarsfield Heights for Social Housing would not displace private purchasers and first time buyers as it is required to do under the Department of Housing’s Housing Guidelines in Circular 31/2019, “Arrangements for the Provision by local authorities of Social Housing through Turnkey Projects” from the Dept. of Housing, Planning & Local Government (TurnkeyCircular_31_2019.pdf)
LAs (Local Authorities) should satisfy themselves that any turnkey acquisition by them, is not removing housing from the market that would otherwise be available to private purchasers, in particular to first-time buyers.”(Page 1 of 4 Department of Housing, Planning and Local Government, 4th October 2019 Circular: Housing 31/2019 “Arrangements for the Provision by local authorities of Social Housing through Turnkey Projects
On 12/2/2023, the Right2Own petition, which was publicised only in the immediate locality of Sarsfield Road, demonstrated that over 100 house buyers in the immediate Sarsfield Road area, including over 90 First-Time Buyers, have been displaced by the sale of Sarsfield Heights exclusively for Social Housing.
Over 70% of the houses in the greater Sarsfield Road area rented.
The area needs more owner occupiers to redress the balance and integration across the four tenures in our community – affordable, social, private rental and private ownership. For a sustainable community, tenure does matter. More owner occupiers would redress the current imbalance by increasing people with a personal financial stake in the long term maintenance and development of the area. The tenancy structure for Sarsfield Heights means that its residents will never have the opportunity to own their homes and the rental population in the area is further increased.
For long term Renters in the area, Sarsfield Heights was a rare opportunity to own a home and stay in our community where their families have grown up. They live in fear of when their landlord decides to sell and they lose their tenancy and have to move. They won’t be eligible for social housing or emergency accommodation. As first time buyers, they need the “Help to Buy” scheme and the “First Home” Schemes which are only available for new build homes like Sarsfield Heights.
3. In holding the purse strings, how did the Department of Housing ensure that Respond, as an Approved Housing Body, was not competing with private purchasers?
The Department of Housing stated to Prime Time that “The funding for Housing Charities is designed so they do not compete with private buyers.” A specialist social housing consultancy company, The Social Housing Co. (SHCO) www.shco.ie notes:
“It is vital that any development which involves an Approved Housing Association meets the following criteria or payments for the development may not be issued:From SHCO https://shco.ie/building-a-social-housing-development-where-to-start/
– the conditions of the Planning Permission relating thereto;
– the Local Authority Development Plan;
– Design Brief;
– all Housing Guidelines issued by the Government Department
Why is the Department of Housing paying tax payers monies to enable Respond to purchase Sarsfield Heights?
How is Sarsfield Heights in conformance with Circular 31/2019 Housing Guidelines from the Department of Housing?
How is Sarsfield Heights in conformance with the Planning Permission when An Bord Pleanála has yet to decide on the Section 5 Referral case by Eagle Valley Association: RL28.313638 Sarsfield Heights, Doughcloyne, Sarsfield Road, Cork (R705/22)?
4. Was there misrepresentation in the Planning Permission applications for Sarsfield Heights?
Was there misrepresentation in the 2018 and 2021 Planning Applications for Sarsfield Heights to avoid public representations on the change of use of Sarsfield Heights to exclusively social housing?
- 2018 Planning Permission for the 2nd stage of Sarsfield Heights with 27 additional units (Cork County Council PA Ref 85275) The development was presented as a mixture tenure development with 6 units designated for social housing. The planning application was made 18/05/2018 and Permission was granted 5/9/2018.
The Planning & Design Statement in the planning application emphasised its Design Approach to support Sustainable Residential Communities i.e. promoting social integration and provide for a diverse range of household types, age groups and mix of housing tenures. The Statement of Housing Mix stated its influence by a range of factors including the desirability of providing mixed communities and a range of house types and tenures. The Design Statement was specific as to the quantity and specific locations of the 6 proposed Part V Social Housing units.
There was even a site layout plan no. 16118-P-010 illustrating the specific locations of these 6 units . This was provided on foot of the Cork County Council Housing Officer’s insistence, in further information exchanges with the developer on 16/5/2017, that the 6 units be pepper potted throughout the estate to keep with the Guidelines for Sustainable Communities .
- 2021 Planning Permission for the 3rd stage of Sarsfield Heights with 4 final units (Cork City Council PA Ref 2140139/ An Bord Pleanála ABP-311519-21 The developer identified the 4 final units No. 66-69 as Family Homes and the permanent private residence of the Applicants, Finbarr, Tony and Patricia O’Flynn, O’Brien O’Flynn Construction Unlimited). The planning application was made 28/04/2021 and granted on 2/9/2021.
Respond stated to Prime Time that they had been in discussions with the developers to buy the estate since 2018.
On the 5th October 2021, when Respond tweeted the visit of Minister Darragh O’Brien to the Sarsfield Road site, Respond and Cork City Council were obviously long involved in the development with no mention of this in the 2021 Planning Application. The tweet confirmed the development partnership between Respond, Cork City Council, the Department of Housing and the Housing Finance Agency, Ireland.
Why was the public consultation process that is supposed to be at the heart of the planning system circumvented by our public bodies?
5. “Do as I say, not as I do” – How is what our Public Bodies are doing in Sarsfield Heights different from the 2021 Mullen Park controversy over the bulk buying of estates and displacement of would be private home owners? Do we have a Planning System or not?
In May 2021, there was public outrage following an RTE Prime Time programme that highlighted how first time buyers were being displaced by institutional investors buying up new estates. Within a matter of weeks, the cabinet responded with plans to block institutional investors from such purchases with new legislation enacted in December 2021.
- Minister O’Brien announces new planning permission conditions & an owner occupier guarantee, 18 May 2021
- Planning rules to be revised to tackle bulk purchase of houses, 19 May 2021
- Up to 50% of future housing estates to be set aside for owner-occupiers, Ministers announce May 18th 2021
- Planning Reforms Intended to Limit Institutional Investors from Bulk Buying New Houses or Duplexes, 26 May 2021
This was the commentary from our Politicians and Public Bodies in May 2021 ?
- 21st May 2021 Social housing providers not squeezing out buyers. Social-housing providers have defended their role in the housing market following suggestions that their bulk leasing and buying of homes was squeezing out first-time buyers.
- O’Brien welcomes new plan to sell Mullen Park homes to individual buyers Darragh O’Brien, Minister for Housing, Local Government and Heritage on Twitter said “I’ve been very clear that funds snapping up homes where there is a clear demand from buyers and no viability issues is totally unacceptable so I’m pleased to hear that homes in Mullen Park, Maynooth, will now be sold only to owner occupiers and not to an institutional investment fund”
- Investment funds buying complete housing estates ‘unacceptable’ Micheál Martin, Taoiseach, Fianna Fáil TD for Cork South-Central said “The purchase of completed housing estates by global institutional investment funds is “unacceptable” Micheál Martin has also called on county councils not to engage in long-term leases with such firms. Mr Martin said: “First of all, may I state unequivocally that the purchase by institutional investors of completed housing estates is unacceptable and not consistent with government policy. We do not want institutional investors competing with first-time buyers. Our priority is first-time buyers.” He added: “Institutional investment was brought into the country over eight years ago, through various measures, to add supply, not to displace supply. That is the critical differential point”.
- Are we right to fear the ‘ghetto’? 10/8/2018 Just before the launch of Rebuilding Ireland, the then Minister for Housing and TD for Cork South Central, Simon Coveney told Pat Kenny that “Building new social housing estates is not the answer to solving the current homeless crisis”. This was because concentrated areas of social housing “create areas of deprivation and disadvantage”. Coveney committed not to make “the same mistake” but instead to create “integrated communities” to encourage social mobility.
Statements issued to Prime Time 8/12/2022 by the Department of Housing, Respond, Cork City Council and O’Brien & O’Flynn Developers
8/12/2022 Respond Housing Association Statement to RTE Prime Time
Respond declined to be interviewed for the programme but issued a statement saying that it had been in discussion with the developers since 2018 and that:
“Viability is the biggest facing housing delivery at present,Source: Respond Housing Body
Reports that Respond purchased multiple new properties that would otherwise have been available to individual private buyers are extremely misleading.”
Planning permissions are not required to state whether a scheme is for social or affordable or private housing.”
We are always keen to engage with be local communities before and after tenants move into their lifetime homes.”
8/12/2022 O’Brien & O’Flynn Ltd., Developers, Statement to RTE Prime Time
Developers of Sarsfield Heights, O’Brien & O’Flynn Ltd., also declined to come on the programme and told Prime Time that
They began building the estate in 2020 with its own resources and with a plan to sell it on an owner occupier basis.Source: O’Brien & O’Flynn Ltd., Developers of Sarsfield Heights
It said it was approached by Respond and a number of other parties and decided to sell the scheme to Respond to help expedite its completion.
The estate, they said, is fully compliant with planning permission.
8/12/2022 Cork City Council Statement to RTE Prime Time
Cork City Council also did not appear on the programme but told Prime Time
Cork City Council said that it commissioned a Sustainable Community Report to determine that there was “sufficient demand and the necessary facilities in the locality” for the social housing at Sarsfield Heights.Source: Cork City Council
The Report examined the sustainability of having a social housing scheme in the locality
The council said such a report would also look at the amenities in the locality to see if there are sufficient public transport, educational facilities, recreational facilities and medical facilities.
8/12/2022 Department of Housing Statement to RTE Prime Time:
The Minister for Housing Darragh O’Brien was not available to come on the Prime Time programme but the Department of Housing issued a statement to Prime Time
“The AHB sector does not compete with private purchasers for the limited supply currently in the market but rather seeks to increase supply across the board.”Source: Department of Housing
The Department says that where land is not available to provide housing, local authorities have struck deals with developers who have land. The Department says this means sites which developers would not have resulted in completed homes.
The Minister recently established a dedicated Land Fund, which is being funded by the Department and will be managed by the Housing Agency. It will work to supply land to Approved Housing Bodies and local authorities.“
The Department of Housing told Prime Time that
“The funding for Housing Charities is designed so they do not compete with private buyers.
The Department of Housing said its funding schemes for approved housing bodies enable supply that would not otherwise have been built, adding that the sector “does not compete with private purchasers but seeks to increase supply across the board
They say local authorities assess whether there is a need for social housing and are also in a position to assess the impact on the local market”