THE DEPARTMENT of Finance has rejected a proposal from Dublin City Council aimed at raising funding for the refurbishment of some 700 vacant social flats and houses.
Almost 5,000 individuals and families are on the council’s housing waiting list. The council has vacant available units, but cannot let them to tenants until they have been refurbished.
A recruitment embargo, curbs on using outside contractors, and cuts to council funding have left the council unable to fund the refurbishment of the 700 homes.
The council sought permission from the Department of Finance to issue municipal bonds which could be bought by the public or institutional investors in order to fund infrastructural projects, in a similar way to the National Solidarity Bond.
The council’s head of finance, Kathy Quinn, last June wrote to the department proposing that the council be given permission to issue guaranteed bonds or be approved to nominate infrastructural projects which would be funded by a bond issued by the National Treasury Management Agency (NTMA). The department has rejected both options. It said the proposals “would not contribute to the creation of a more sustainable self-financing local government system or the stabilisation of local government or exchequer finances”.
It said there could be “no question” of issuing State guarantees on municipal bonds in the current economic circumstances. It also rejected the proposal to earmark revenue for specific projects. The department did not intend to engage further with the council on these proposals it said.
Chairman of the council’s finance committee Labour councillor Killian Forde said the response was deeply disappointing and short-sighted.
“It is extremely frustrating to have this council asset of around 700 units sitting there unused while the housing waiting lists get longer.”
The issuing of bonds totalling about €55 million would bring these flats and houses back into commission, Mr Forde said. Bonds could also be used to develop other council infrastructure such as converting older swimming pools into modern leisure centres, he said
“The bonds would have given Dubliners the opportunity to invest in their city while earning interest, and would have been a cost-effective way for the council to develop its infrastructure. It’s deeply disappointing that the Department of Finance knocked it back without even having a meeting with the council.”
