International investment funds are “having a laugh” at the Government over its housing strategy and its social housing policy is a “shocking mismanagement of public funds”, according to businessman Dermot Desmond.

In private letters sent last December and February, Mr Desmond criticised Government policy on housing and the over-reliance on international institutions and the private rental sector for social housing, The Irish Times reports.

Mr Desmond told Minister for Housing Darragh O’Brien that the State’s treasury agency was borrowing at an average of 0.02 per cent when the State is paying 5 per cent on average to international institutions to fund publicly owned housing.

“In such a low interest environment, the current policy of buying and leasing social housing from private developers and investment funds is a criminal waste of public money,” the businessman told Mr O’Brien in a letter dated December 15th, 2020.

“The international funds are having a laugh at the Irish Government and making a lot of money in the process.”

Mr Desmond’s letter to Taoiseach Micheál Martin in February included criticism of social housing policy, describing the Part V legislation where developers provided at the time 10 per cent but since increased to 20 per cent of any project for social housing as “one of the worst pieces of legislation ever passed and clearly not fit for purpose”.

He called price tags of €600,000-€960,000 for apartments for social housing a “failure in policy and a criminal waste of public funds”.

Leasing from the private sector and subsidising rents to private landlords was “not good policy and it is not in line with the social housing policy in most other countries,” Mr Desmond said.

He described this as a “misguided strategy” which has left housing in Ireland “prey to greedy developers and international investors”.

“Allowing the private market to dictate the price of social housing is a shocking mismanagement of public funds – you might as well hand out blank cheques,” he wrote.

“It is astounding that Government cannot see this and persists in pursuing what is clearly a deeply flawed national housing model to the detriment of all.”

The Business Post first published the letters, obtained under the Freedom of Information Act, on Sunday.

In a meeting between Mr Desmond and Mr O’Brien on April 1st, the businessman said the Part V legislation was “unwieldy and complicated”.