University of Limerick pays €630000 each for 20 houses for students ...

At an average cost of more than €629,000 each, the price per house is more than double that typically paid for similar properties in the same area, according to recent Property Price Register data. Local residents say they are at risk of being priced out of the area and the chairman of the Dáil’s Public Accounts Committee raising questions about the price paid.

The Property Price Register data shows last October the university paid €11.44m for the 20 new homes in the Drominbeg estate, Rhebogue, about 3km from its campus.

A stamp duty bill would bring the total outlay to €12,583,208. The University of Limerick (UL) said it is engaging with Revenue about the charge.

Legislation introduced in 2021 to limit the number of new homes being purchased by institutional investors means any entity buying more than 10 homes in a year is liable for 10pc stamp duty unless they are a local authority or an approved housing body.​

The deal raises more questions about UL’s governance, the use of state funds and its due diligence procedures around property purchases.

Last month the university conceded it overpaid for a controversial city centre site bought five years ago. A Sunday Independent investigation later revealed how that €8m deal was rushed through after normal approval processes were bypassed, with the value of the site later written down by €3m in UL’s accounts.

Now, UL’s purchase of the 20 homes has angered locals who say the deal is a further drain on the undersupply of housing in the area.

A local residents committee complained to Limerick City and County Council about the matter.

Postgraduate students and researchers moved into the homes last October.

The council later told UL and the developers of the scheme new planning permission is needed for students to live there.

A subsidiary managing UL’s student accommodation is expected to argue the occupation of homes by a particular type of tenant does not raise new planning considerations if the homes are used as designed and permitted under an original planning permission.

The council said it cannot comment on live planning matters.

However, the university will again be called before the PAC to explain the purchase.

PAC chairman Brian Stanley, a Sinn Féin TD, said he does not believe the homes represent value for money.

“They overpaid for the Dunnes Stores site by a massive amount. That was questioned by the PAC and others. Here it looks to me like no lessons have been learned,” he added.

“They face a significant stamp duty bill, have planning issues to deal with and are looking at a total cost of €12.5m.

“All third-level colleges are short of money. We want them to be well resourced. A lot of tutors in the sector are on part-time contracts, lecturers complain they are on 11 to 15 hours a week and want better conditions, but here we are with a university throwing money around like confetti.”

The new homes were built by Silvergrove Developments and were initially earmarked for social housing.

Locals raised dozens of objections against the housing plans when they were first put forward amid concern over a lack of amenities in the area. Silvergrove was granted residential planning permission in 2018 with 14 conditions attached. It planned to house 80 students there. The initial plans were to develop a mixture of two, three and four-bed homes.

Some of these related to the look and feel of the development. They required the developer to carry out landscaping works and to agree to use certain materials and finishes.

The plans appeared to have stalled during the pandemic until UL announced in August 2022 it was going to buy the homes with full planning permission attached.

Some locals said the new development is preferable to having a vacant site in the area but complained the finished homes, with modern grey plasterwork and slate surfaces, jar visually with nearby yellow and redbrick homes.

They have other issues too.

Rhebogue Residents Association chair Sarah Beasley said locals are worried about a potential increase in anti-social behaviour, pointing to housing estates closer to UL’s campus which have been the subject of similar complaints.

“This is a residential area of estates and we have about 1,000 people living here. A lot of people moved here with young children who have since grown up but there are kids still around, and we don’t have facilities for them,” Ms Beasley added.

“Anywhere where students move in, families move out because it just becomes a worry.

“If UL can landgrab in this way, when the next new build happens somewhere, who is to say it won’t be an approved housing body buying them but UL? That means ordinary folk cannot buy a house where they want to, or near their parents or a child’s school. We are being priced out of it.”

Ms Beasley would like to see the homes returned to their intended use.

Limerick, like other parts of the country, has a shortage of housing. This also affects the university amid significant demand for college places and student accommodation.

The availability of the homes in ­Rhebogue was a significant factor in UL’s purchase, because it almost immediately added to the university’s housing stock. A process to design, procure and develop other accommodation options would likely have taken five to six years before relieving demand.

Mr Stanley said he would have preferred to see UL use the money to develop on-campus accommodation or look at other opportunities.

“What they have done is the least preferable option because of the possibility of distorting the market. There is no first-time buyer who can come up with €630,000 for a standard three or four bedroom house,” he added.

“We want more student accommodation but other options should have been looked at. With blended working and increased working from home, other options are becoming available now through commercial buildings which could be repurposed for student accommodation.”​

A spokeswoman for UL said it would not be appropriate to comment on the university’s engagements with Revenue about the stamp duty bill.

“The capital costs of the development will be fully recouped over a medium time period given that rental income is being generated by Plassey Campus Centre, which own and manage UL’s on-campus accommodation,” she added.

“UL continues to strongly engage with all stakeholders, including Government, to find solutions to the current accommodation crisis. UL’s senior leadership has engaged extensively with residents in the Rhebogue area and there has been no negative impact reported to date.”

The latest deal comes after UL paid €8m for a site in Limerick city, with the value later written down by €3m. It was the subject of significant criticism from the Dáil’s PAC.

In an email sent to students and staff two weeks ago, university president Professor Kerstin Mey said the former Dunnes Stores site has a current market value of about €5.4m plus Vat. The email said a valuation report carried out last year showed UL overpaid for it by about €1.5m in 2019.