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There's no reason to rejoice over rip-off modular houses. Let's build proper homes instead

Modular homes are exceptionally poor value for money in the long term, writes Dublin councillor Cian O’Callaghan.

Cian O'Callaghan

ALAN KELLY LOOKED content as he stood for photos outside a new modular home in Poppintree, Ballymun, last month. It was the culmination of a long PR campaign aimed at presenting a solution to the housing crisis that has left thousands trapped in emergency accommodation across this country.

With backing from homeless charities and NGOs, the minister had initially promised that families would be moving into the houses before Christmas 2015. It didn’t quite work out that way, with protests, storms and an insufficient number of tender applications being alternatively blamed for delays.

After months of delays and spiralling costs, it appears that the units – the first batch of 500 modular homes being constructed in Dublin – will finally be ready over the coming weeks. However, a number of questions remain about the cost and long-term value of the modular model.

1. Upfront costs

The cost of each three-bedroom unit at Poppintree is estimated to be €191,000. This is more than double the €80,000 estimated cost per unit initially announced by Kelly last October.

The price tag is all the higher when considering that there was no land acquisition costs, no development levies, no part V contribution and no marketing and sales costs.

For the purposes of comparison, this is what is available for sale at present on the open market in Ballymun:

  • Two-bed apartments from €90,000
  • Two-bed duplexes from €105,000
  • Three-bed houses from €169,950

The price of modular homes – so called as they are partially constructed off-site knocking weeks off the building period – will fall considerably as larger contracts are awarded and a full and competitive tendering process is brought in.

However, the initial indication is that the upfront costs are exorbitant. This ultimately means that less resources are available to provide housing for homeless people.

31/3/2016. Housing Forum Conferences Source: RollingNews.ie

2. Long-term value for money

The modular homes constructed in Ballymun have a maximum life span of 60 years.

Whereas a home built for a cost of €191,000 by traditional building methods will accrue substantial value over a 60-year period, modular homes will depreciate in value, until they are worthless and fit for demolition. In short, modular homes are exceptionally poor value for money in the long term.

Achieving value for money is a much repeated mantra in public decision making and disappointingly there has been a notable absence of any cost effectiveness evaluation comparing modular construction to traditional build.

Given that public resources are constrained, finite and limited in tackling rising homelessness, it seems worrying that value for money is not part of the decision making process here.

3. Rapid build housing

The main selling point of modular housing is that it provides a rapid build solution to the lack of emergency accommodation for homeless families. This claim does not stand up to scrutiny.

The first homes at Poppintree have been completed in a period of about four months. The bulk of the time saved was due to Dublin City Council circumventing the normal planning and procurement processes.

Further provision of modular housing at other locations is taking considerable time as the normal planning and tendering processes are adhered to.

The actual use of modular build rather than traditional build has shaved a number of weeks off the building processes. However, it is highly questionable that the time saved by utilising this faster building process justifies the premium paid.

Simply put the drawbacks of modular housing – their short-term lifespan, high cost and poor value for money – are not compensated for by any significant decrease in building time compared to traditional construction methods.

Better solutions

The provision of appropriate accommodation to meet the needs of homeless families is a welcome step forward away from the failed and expensive policy of paying for hotel rooms.

However, it remains puzzling that modular housing has been chosen to address this issue rather than traditional build. Achieving value for money, building sustainable communities and making the best use of limited resources including available land must be part of our approach in tackling homelessness.

Ireland’s housing market in recent years has suffered from a short-term and incoherent vision. We need solutions that make sense in the long term, and we should be wary of quick-fix political solutions.

Cian O’Callaghan is a councillor on Fingal County Council. 

Read: Homeless family sue council over allocation of housing

Read: House prices are rising all across the country – and will keep going up

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