Some housing associations in Glasgow are borrowing £100,000 to build just one high quality home, a councillor has told a meeting.
Labour councillor Elaine McDougall said the need to borrow cash can push rent up.
She made the claim at a City Administration Committee meeting yesterday as councillors revealed plans to erect about 6,500 affordable homes up to 2028.
READ MORE: Glasgow five-year £535m housing plan could see almost 6,500 homes built
They agreed to ask the Scottish Government for £535 million to deliver the properties as it prepares to submit its Strategic Housing Investment Plan.
Councillor McDougall said some housing association properties are “coming in quite expensive” at £200,000. She pointed out the registered social landlords are having to borrow “private finance, which pushes the rents up.”
She said: “I agree with good quality housing but I don’t think the housing association grant is covering that. I think you are probably getting the basic with what the housing association grant is giving you.”
The politician said some registered social landlords have to borrow £100,000 per home - pointing out they could be delivering 50 units.
Housing convenor Councillor Kenny McLean, SNP, said they are aware of the issues with the registered social landlords and “there are ongoing discussions with the Scottish Government” about supporting them.
A council report laid out current construction challenges with increased costs involved in building affordable homes, constraints on labour supply and higher material costs due to Brexit.
Another issue is designing new housing to the Glasgow Standard, which has higher energy efficiency requirements.
Councillor Susan Aitken, SNP, said: “The quality element is not something we want to compromise on.
“I think our developing housing associations in the city tend to borrow in order to deliver developments.”
The council leader points out higher quality housing leads to lower maintenance costs - generating a saving. She said the higher standards in Glasgow mean delivering units is “more expensive.”
The council’s Strategic Housing Investment Plan priorities include building 60 homes with four or more bedrooms annually, developing more adaptable and accessible housing and erecting low and zero carbon properties.
Ten per cent of all homes in developments of 20 properties and above must be wheelchair readily adaptable.
Councillor Mclean said: “Glasgow’s Affordable Housing programme has been a huge success. It has helped transform Glasgow and improve thousands of lives. It’s now time to take that to the next stage.
“Over the next five years a total of at least £535 million is needed to deliver around 6446 affordable and sustainable homes for all types and sizes of household and meet the challenges many of our citizens face.
“Investing in and increasing the supply of affordable housing will improve the health and well-being of our local communities.
“It’s about much more though. Increasing the number of new homes which are energy efficient will contribute towards fighting the climate emergency in a just transition to a net zero Glasgow. It will not only help citizens address fuel poverty but introduce and increase new skills to new and established workforces and make a significant contribution to the city, regional and national economy.”
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