The State-owned Land Development Agency (LDA) has struck a deal to pay more than €40 million to “bad bank” Nama to advance plans for as many as 2,500 “affordable” homes in north Co Dublin.
The development at Clongriffin will be the biggest single State housing project in decades, with building costs in the region of €1.2 billion.
The aim is to provide “cost-rental” apartments with rents typically set 30 per cent below market rates, although the LDA will not be on site for another year and must go to public tender for the building work. The deal will see the LDA buy a 24.7-acre property that was long under the control of developer Gerry Gannon, a Nama client who tried to sell the land two years ago.
The agency will also buy lands surrounded by the Gannon properties that were controlled by another Nama client, Barina Construction, which is in receivership. The Barina property is said to be akin to an “island” within the Gannon site.
The LDA, which was established to build homes on State land, will pay Nama up to €45 million for the two properties. The transaction is the first between the bodies and the first in which the agency will buy privately owned land for housing. Both the LDA and Nama declined to comment in reply to questions about the deal.
The Gannon site has planning permission for 1,823 homes and a 209-bedroom hotel, in a stalled development known as Project Capital North. The 15-block project includes permission for more than 22,000sq m (236,805sq ft) of commercial space. The LDA believes there is potential for another 700 homes on the former Barina property.
With many apartment developers hindered by funding constraints, construction inflation and rising interest rates, the LDA is likely to argue its intervention will ensure delivery of dwellings that might not otherwise be built for many years.
Mr Gannon had put a price tag of some €50 million on the Project Capital North development when trying to sell the property almost two years ago. Although developer Sean Mulryan came close to a €40 million deal for the site, the transaction never went ahead.
The LDA will pay “less than €40 million” for the Gannon property, with the Barina lands bringing the deal to about €45 million.
The LDA, established in 2018, took on additional responsibilities under the Government’s Housing for All plan, backing developers building “affordable” homes on private lands. Although it has set out plans to provide 8,000 new dwellings by 2026, it has been criticised for slow delivery as the housing crisis intensifies.
Taken together with other projects, the Clongriffin deal opens potential for the organisation to have definite plans for 5,500 on its books.