AGREEMENT HAS BEEN found in a dispute over a newly built Co Carlow housing estate that saw suddenly half of its homes switched to the private market following a dispute over costs.

The homes had been destined for social housing, but would-be tenants in the town of Tullow expressed dismay last June after they learned that many of the 48 houses would end up on the private market.

Under an agreement confirmed on Thursday, the homes will be occupied by council tenants by late November.

Developer BHA Construction had shifted half the homes to the private market due to sharply rising construction costs involved in the €14 million project, according to multiple parties with knowledge of the site.

Since June, the builder, Approved Housing Body Co-operative Housing Ireland (CHI), Carlow County Council and the Housing Agency had been engaged in talks to rescue the situation and allocate the entire estate for social housing.

In a statement on Thursday, CHI credited each party for having “been able to reach an agreement that will ensure the delivery of all 48 homes this year” for people on the housing waiting list.

The Department of Housing contacted Carlow County Council on Wednesday to confirm it had approved increased funding to allow CHI to buy the new homes from the builder. The sum of the increased figure is not known.

“We are delighted to deliver all 48 homes,” CHI told The Journal. “We work constructively with a variety of partners to deliver as many social-rental affordable homes as possible.”

Minister of State and Carlow TD Jennifer Murnane-O’Connor posted on social media, calling the confirmation “good news” for tenants.

“I was delighted to work with Minister Browne, the Department and Carlow County in getting this vital housing project over the line and bringing homes to the people of Tullow,” Murnane-O’Connor said.

The funding for the purchase of the homes is through the Capital Advance Leasing Facility (CALF), a government funding scheme for Approved Housing Bodies to build and buy social housing.

Inflation in construction

Inflation, particularly among social housing projects, has emerged as an increasing issue facing housing plans.

A recent housing conference in Croke Park heard one Approved Housing Body outline that the costs involved in the building of new homes have increased by up to €20,000 due to the US war with Iran.

Before that, last year, a major public-private partnership for 500 social homes was scrapped due to rising costs.

Carlow County councillor Will Paton told The Journal that there was also a sense that the department had decided the Tullow homes “were value for money after all”, after initial attempts to find a breakthrough.

“Everybody realises the original costings were just unrealistic compared to the cost of construction today,” Paton said, as he welcomed the news that the homes would be occupied by late November.

Criticism of funding model

The controversy raises questions over a model of social housing delivery that sees councils contract projects out to private builders rather than directly building.

Critics of the system say it can often leave local authorities with a weakened hand when dealing with partners on a new development.

Sinn Féin housing spokesperson Eoin Ó Broin said that he welcomed the progress in the negotiations, but said the Department of Housing should have intervened earlier to avoid “months of delay” to the homes.

He urged for the housing minister to implement a protocol to ensure immediate conciliation when issues arise so that no new social homes are delayed.

Ó Broin outlined that with so many parties at the table – from the builder to CHI and to state officials – that it is critical that all can “brought into the room” together to hammer out an agreement after costs balloon on a project.

“There has to be value for money for the taxpayer, but also that when we’re in an inflationary environment, that they don’t result in lengthy delays to delivery of social housing and the possible collapse of a project,” Ó Broin added.

Carlow County Council confirmed it had received the approval from the Department of Housing, before directing media queries to CHI.

BHA Construction was contacted and did not respond in time for publication.