Rent Percent

the_syco

jdivision wrote:

No they'll simply pay less for the land.

I have but one question: if the developer buys land from two farmers (A + , and then builds 50 "affordable housing" houses on farmer Bs' land, how do they get the land at a "reduced" rate?

jdivision

That's not what I said. I said land without affordable and social housing obligations will attract a higher price. Are you talking about buying land from two adjacent farms, putting the sites together and then building the affordable units on one part of the land? The price per acre remains the same because the affordable element would have been taken into account when buying the land

jester77

Sharing a 65m sq. apt with my girlfriend in a really good location, works out at 14%.

spurious

Cleared the mortgage about five years ago.

DubDani

New 2 BR apartment ... about 18% of monthly Income, which I am very happy with...

the_syco

jdivision wrote:

That's not what I said. I said land without affordable and social housing obligations will attract a higher price.

I'm not saying what you said was wrong: I'm asking how does the above happen, if the land is sold from a private land owner. If it was sold by the goverment, the goverment could sell it cheaper if the developer agreed to put HD houses on it, but as it was sold by a private owner, how would the developer get the land cheaper if he put HD houses on it?

me87_ie

~46% not including bills, etc. and its only a bedsit!!!! :eek:

Ste.phen

He's saying that because the developers [may] have to put affordable, low profit housing on a piece land, that the overal worth of that land to the developer is decreased.

I think...

jdivision

Okay it works like this. Developers buy land. In most cases there's 20 per cent social and affordable commitment on it. So developer pays let's say e5 million an acre. Site next door is less than 0.25 of an acre and is sold by a different landlord which means no social and affordable housing obligations so developer pays the equivalent of e6 million (e5 million per acre plus the 20 per cent that what was needed for s&a housing on the other site) an acre for that site. Developer has the option of putting some social and affordable housing on site B but that allows him to reduce the amount he puts on site A, meaning the land price remains the equivalent. The cost does not get passed on to final home purchasers. Not sure what you mean by HD? Higher density?

jackbhoy

About 20% for me too....

dudara

Sharing an apartment with my significant other, works out at 16% of net pay.

the_syco

jdivision wrote:

Okay it works like this. Developers buy land. In most cases there's 20 per cent social and affordable commitment on it. So developer pays let's say e5 million an acre.

Sorry, meant AH, not HD:o I think I'm getting what you mean: if the developer says he'll build afforable houses, he pays less tax on the purchase of land?

A Random Walk

jdivision wrote:

The cost does not get passed on to final home purchasers. Not sure what you mean by HD? Higher density?

There seems to be a bit of a loaves and fishes job going on here with AH being magically created at a lower price to the final purchasers.

Frankly I've no idea what you're going on about, but in the case of AH someone has to take the hit for the lost profit on the AH houses. It's going to be either:
1. The landowner who doesn't
2. The developer who doesn't
3. The council who doesn't
4. The purchaser of the AH house who doesn't
5. The purchasers of the non-AH houses in a development who...

Cantab.

8%

patrickolee

A Random Walk wrote:

There seems to be a bit of a loaves and fishes job going on here with AH being magically created at a lower price to the final purchasers.

Frankly I've no idea what you're going on about, but in the case of AH someone has to take the hit for the lost profit on the AH houses. It's going to be either:
1. The landowner who doesn't
2. The developer who doesn't
3. The council who doesn't
4. The purchaser of the AH house who doesn't
5. The purchasers of the non-AH houses in a development who...

1 & 2 do take the hit. Not sure about 3. 5 does not, they'll pay as much as they can regardless of AH!

Noelie

jdivision wrote:

Okay it works like this. Developers buy land. In most cases there's 20 per cent social and affordable commitment on it. So developer pays let's say e5 million an acre. Site next door is less than 0.25 of an acre and is sold by a different landlord which means no social and affordable housing obligations so developer pays the equivalent of e6 million (e5 million per acre plus the 20 per cent that what was needed for s&a housing on the other site) an acre for that site. Developer has the option of putting some social and affordable housing on site B but that allows him to reduce the amount he puts on site A, meaning the land price remains the equivalent. The cost does not get passed on to final home purchasers. Not sure what you mean by HD? Higher density?

I don't see how you're coming up with this. The developer pays the land owner for the land, lets say he pays €2million an acre. The developer decides to put 20 units on an acre, if he has a 20% AH requirement that means he only has 16 units left to make his profit from, if there was no AH he would have 20 units to make his profit from.

if he hoped to make €1mil profit from the site that's a 62,500 profit from each unit. when he builds AH, but only 50,000 when he doesn't build AH. So costing non AH purchasers 15K extra.

These number are only picked out of my head to make sums easy, I've no idea what costs or profits are like

A Random Walk

patrickolee wrote:

1 & 2 do take the hit. Not sure about 3. 5 does not, they'll pay as much as they can regardless of AH!

I can assure you neither 1 and 2 are taking a hit to their profits. They are amongst the most powerful lobbyists in the country and they have been mostly unconcerned by the AH rules.

PeakOutput

Noelie wrote:

if he has a 20% AH requirement that means he only has 16 units left to make his profit from, if there was no AH he would have 20 units to make his profit from.

you see i think this is where the problem comes in are we right to assume that the developer has to sell the 20% to the council at cost price or does the council pay the market value and they take the hit by selling to the person on the ah list at a reduced price.

If the developer is obliged to sell the 20% of houses to the council at cost price then they will TRY to make more profit on the other house they are selling on the open market HOWEVER they can only sell the houses for what people are willing to pay so it will have been worked out long in advance of buying the land and building the houses weather or not it is viable to build 20 houses and only be able to sell 16 of them for a profit

amtc

maybe not popular - I live in an estate where some houses are being sold off for affordable housing. I am relatively well off in that I earn quite good money but still the interest rate rises are crippling me. I had to save, show a good record, and have a good job before the banks would even consider me as a single applicant (and I earned over 90k last year). I have no objection to people qualifying for such schemes - but you get what's left. I fully expect this not to be popular but it annoys me when people don't recognise the breaks they have.

PeakOutput

amtc wrote:

maybe not popular - I live in an estate where some houses are being sold off for affordable housing. I am relatively well off in that I earn quite good money but still the interest rate rises are crippling me. I had to save, show a good record, and have a good job before the banks would even consider me as a single applicant (and I earned over 90k last year). I have no objection to people qualifying for such schemes - but you get what's left. I fully expect this not to be popular but it annoys me when people don't recognise the breaks they have.

i agree with you that the op is out of order and that people should realise a good thing when they get offered it BUT i completely disagree that just because you dont want to have to pay more than your neighbour even though you can afford it schemes like this should not exist.

amtc

I've no problem with the concept, it just annoys me when people believe they are entitled as a right.

I fully accept that as a 30 year old female that I am lucky enough to be able to afford my own home and furthermore that it is in the area I am from. However on my own I am paying 1500 euro for the privilege per month

Forgive me, it is a gripe. But when I see people looking for compensation it annoys me! Like anyone else they should all have to go through the hassle I did in saving etc. (!)

PeakOutput

amtc wrote:

Forgive me, it is a gripe. But when I see people looking for compensation it annoys me! Like anyone else they should all have to go through the hassle I did in saving etc. (!)

maybe you have already researched this and found it not to be the case but I am pretty sure to be eligible for affordable housing you have to save a certain amount each month both as a way of proving you can put a certain amount aside and of saving for the deposit /house when the offer actually arrives. so they are not simply given a house and a mortgage they are simply helped to afford something they could not have afforded regardless of how much they worked.

also i want to know what career your in that has you at 90K a year at 30 as im starting college again and need to get me a piece of that action when i finish:p

A Random Walk

AH purchasers are generally good savers who get to buy a house in an area they otherwise couldn't afford. I've no problem with that, but I do have a problem with it being a sneaky tax on all the other householders in the neighbourhood who paid full whack for their houses. This should be paid for out of general taxation.

It's a pity that most people don't realise this and particularly the OP who is looking for "compensation".

SimpleSam06

A Random Walk wrote:

Frankly I've no idea what you're going on about, but in the case of AH someone has to take the hit for the lost profit on the AH houses.

Its factored into developments in the same way that tax on profits is factored in - developers don't raise their prices to compensate for taxes! Nobody likes paying tax, but its the law of the land. There is a strong need for affordable housing, in the same way that you need social welfare; it prevents a much worse social situation on a larger scale. Tenants' rights are nowhere near developed enough in Ireland for renting to fill that need, especially if you want to raise a family. Around certain times of the year landlords can and do raise rents, and if you don't like it, you may very well find yourself homeless.

What I do object to is Councils buying second hand homes purchased by specuvestors as Affordable Housing. This is a bail-out for those who invested unwisely (driving up prices for those around them), coming directly from the tax coffers, which will lead us to an interesting situation whereby houses are bought with a tax take which is rapidly decreasing because fewer houses are being bought.

This will end well.

jdivision

PeakOutput wrote:

you see i think this is where the problem comes in are we right to assume that the developer has to sell the 20% to the council at cost price or does the council pay the market value and they take the hit by selling to the person on the ah list at a reduced price.

The developer sells to the council at cost price, the council then adds an administration fee to cover their costs.

jdivision

A Random Walk wrote:

Frankly I've no idea what you're going on about, but in the case of AH someone has to take the hit for the lost profit on the AH houses. It's going to be either:
1. The landowner who doesn't
2. The developer who doesn't
3. The council who doesn't
4. The purchaser of the AH house who doesn't
5. The purchasers of the non-AH houses in a development who...

It's 1 takes the hit. They get less per acre for their land. However, land prices have surged, capital gains tax was halved and Ireland is one of the few countries in the world where the increase in value from rezoning of land goes in full to the landowner so they benefit in other ways.

Noelie

jdivision wrote:

It's 1 takes the hit. They get less per acre for their land. However, land prices have surged, capital gains tax was halved and Ireland is one of the few countries in the world where the increase in value from rezoning of land goes in full to the landowner so they benefit in other ways.

Do you know this for a FACT? as it seems hard to believe that the land owner would take the hit. Like in all business it's the final customer that usually takes the hit.

PeakOutput

jdivision wrote:

It's 1 takes the hit. They get less per acre for their land. However, land prices have surged, capital gains tax was halved and Ireland is one of the few countries in the world where the increase in value from rezoning of land goes in full to the landowner so they benefit in other ways.

The only way this can be true is if the developers started taking the hit and then decided to pay less for the land thus bringing the price of land down.....as far as I know this has not happened.

assuming the house is sold at cost price to the council then it makes no difference to the land owner or the developer as the entire cost of the house is paid for ie the land its on and the construction of it. the only argument that is left is that it lowers the value of the remaining houses, at the moment this may hold true as some developers can buy out their obligation but if this was not an option then every new estate would have ah therefore every estate would be on an equal footing so the value would not go down.

jdivision

PeakOutput wrote:

The only way this can be true is if the developers started taking the hit and then decided to pay less for the land thus bringing the price of land down.....as far as I know this has not happened.

The developers aren't taking a hit by paying less for the land. Land values have risen anyway because house prices were going up. It's very hard to sell land in Dublin at the moment because house prices are going down. Most developers have owned land for years and years, they make huge profits from the land (through rezoning it and increased land values) anyway if they sell it on to another developer. According to the Construction economist Jerome Casey:
"Over one-half of development land for housing in the Fingal area is currently controlled by 25 individuals/organisations"

Noelie, yes I do. You can see it by comparing the price per acre for a site with social and affordable housing obligations compared to the price per acre that a site in the same area without s&a obligations sells for. Development is a risk-based business (although you wouldn't know it in Ireland over last 15 years), therefore you minimise your risk upfront by paying less for the land.

PeakOutput

jdivision wrote:

The developers aren't taking a hit by paying less for the land.

that is not what i said. I said that the only way the land owners are taking a hit is if the developers decide, en mass, to pay less for land so that THEY DO NOT have to take the hit.

Noelie, yes I do. You can see it by comparing the price per acre for a site with social and affordable housing obligations compared to the price per acre that a site in the same area without s&a obligations sells for.

does all land that is zoned residential not have a s&a obligation of 20% on it though? if it dosnt then that is the problem and all land for residential should have the obligation and there should be no buy out clause