The regeneration of Oliver Bond House would have cost up to €700,000 per flat under Dublin City Council’s plans, the assistant secretary of the Department of Housing has told an Oireachtas Committee.

Paul Benson said it was “extraordinary” his department would be accused of “penny pinching” in relation to regeneration and that more than €20 million remained available to the council for the refurbishment of the complex.

Benson was addressing the housing committee after the department said it would not fund the plans submitted by the council for the first phase of Oliver Bond regeneration because of the reduction proposed in the number of flats in the complex.

The complex of 391 flats in 16 blocks in the southwest inner city has been plagued with social and structural problems, with residents enduring damp, mould and rat infestations. All the flats in the 1936 complex are below the minimum size standard.

In 2023 the council secured approval from the department to design the first phase of the regeneration to combine 74 small flats to create 46 larger new ones. However, on April 27th the department told the council it could no longer support “such a large reduction of homes during a housing crisis”.

The department instead proposed reducing the number of bedspaces per flat to meet the size standards. Currently the 74 flats have 196 bed spaces. Under the council’s proposals the 46 larger flats would have 144 bed spaces. The department’s proposal would result in all flats being used as studios or one-beds and bed spaces would be reduced to 114.

The department “has not refused regeneration funding for Oliver Bond House” and funding of more than €20 million “unequivocally” remains in place, Benson said. However he said the council had been asked to submit revised proposals so there was “no significant reduction in homes post regeneration without adequate justification”.

Sinn Féin TD Eoin Ó Broin said the department’s plans to reduce the number of bedspaces in the flats to meet size standards meant fewer people would be housed in Oliver Bond.

Benson said 83 per cent of Dublin City Council’s housing waiting list was made up of single adults and couples looking for studios and one-bed flats, and it would be “shortsighted not to make provision for those people”. He said it was common for larger homes, such as three-beds, to be under-occupied.

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Ó Broin said the department’s acknowledgment that under its proposal fewer people would be accommodated in Oliver Bond meant the issue was not about the reduced number of homes. “This is about the amount of money the department is willing to spend,” he said.

Benson said: “Deputy, I find it quite extraordinary you would sit there and you would say to me the department is penny pinching, effectively. The department has funded [Dublin City Council] to the tune of almost €1 billion since 2016 for regeneration projects.”

In relation to value for money, Benson said the council’s proposal “to turn eight one-beds into four three-beds is going to cost €3 million-odd. That’s over €700,000 per three-bed, per social home.”

The council’s head of housing, Mick Mulhern, said the council submitted a proposal to the department for €21 million at an average cost of €460,000 per home. Benson intervened to say this did not include design fees, provision for inflation, or contingency “for a whole lot of fees and charges that will arise”. Mulhern said the costs did factor in provision for inflation and other charges, but not design fees.

Oliver Bond resident Gayle Cullen-Doyle told the committee it was “particularly distressing” the project was being framed as not representing value for money.

“The value of human life, health and dignity must be central to any assessment. Us residents wish to emphasise our lives are valuable, our community is worth investing in. The current conditions already represent a cost – social, health-related, and economic – that will only increase if left unaddressed.”

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Earlier in the Dáil Taoiseach Micheál Martin said it was officials in the Department of Housing and not Minister for Housing James Browne who had made the decision in relation to Oliver Bond.

“The Minister will engage and is of a view that this can be resolved satisfactorily. Funding has not been refused. Funding has not been withdrawn at all. Funding remains in place,” Martin said.

Stressing “there has not been a refusal of regeneration for Oliver Bond House”, he said “engagement is going to be the key here and hopefully we can get this resolved fairly quickly”.