This week councillors agreed to borrow nearly £12m in order kick start building on a brown field site near the entrance of Western Harbour.
It’s not much of a risk for the council however: Forth Ports pay back all the capital and interest costs of the council loan over ten years, and the loan is underwritten by the Scottish Government.
The 96 homes will be built by a subsidiary of Forth Ports, and made available for “mid-market rent” for the first five years of the project. To pay back the loan the developer will start to sell off the properties from year five, with all of them likely to have been sold by year ten.
None of the homes will be made available for social rent over the longer-term.
The properties will be managed by private firm Rettie, as opposed to a Housing Association.
Retties have been the target this year of a campaign by the Edinburgh Private Tenants Action Group, who say they have helped a number of private tenants win in the small claims court over illegally charged letting fees charged by the firm.
We're proud to announce that EPTAG members have just won a small claims action against Rettie for pre-2012 fees!
— eptag (@eptag) May 8, 2014
The minutes of the council meeting do not record whether any councillors voiced concern over the suitability of Rettie to manage the tenancies on behalf of the developer. Nor is it recorded how much profit Forth Ports or Rettie make from the deal.
The minutes do however reveal that another proposed loan deal that would have supported the construction of 341 mid-market homes on another eye-sore site brownfield site, Shrubhill, has apparently fallen through. They ask councillors to note that “alternative options were being explored to support the delivery of affordable housing on this site.”