Fine Gael ministers Eoghan Murphy and Catherine Byrne have publicly clashed over plans for the State’s first “cost-rental” housing estate in the Dublin suburb of Inchicore.

Ms Byrne, who is Minister of State at the Department of Health, said the plans to build rental housing for low and middle income workers, instead of affordable homes which could be bought, at the site of the former St Michael’s estate would “destroy” the local community.

On Monday, the Minister for Housing, Mr Murphy, announced plans for the site which would see the construction of about 470 homes, 30 of which would be used for social housing with the remainder available on a cost rental basis - for rent to low and middle income workers, earning up to €50,000 or €75,000 as a couple, at between 15 to 25 per cent below market rates.

Andrew McDowell, vice-president of the European Investment Bank with Minister for Housing, Eoghan Murphy at the event. Photograph: Tom Honan

Speaking at an event in Richmond Barracks beside the proposed housing site, Mr Murphy said the development would be the State’s first not-for-profit rental scheme, would be a “game changer” for the rental market and had cross party support.

However, Ms Byrne, who was not an invited speaker at the event, took to the podium to castigate her senior colleague’s proposals. “It’s probably one of the worst plans I’ve seen put forward for this site,” she said.

The cost rental model would not create a sustainable community but would encourage “transient” renters, such as those working in the nearby St James’s Hospital, she said.

Sprung on the local community

“It doesn’t make sustainable communities. It doesn’t give young people within this parish who get up every morning and go to work the opportunity to put down their roots and live in this community,” she added.

Prior to Monday’s announcement the site had been approved by Dublin City Council for a mixed tenure development of 30 per cent social housing, 20 per cent affordable rental, and 50 per cent private homes for sale.

Minister for Housing Eoghan Murphy at the announcement of the redevelopment of Dublin City Council lands at Inchicore. Photograph: Tom Honan

The new plan had been sprung on the local community with no warning, she claimed. “I’m seeing images here for the first time as a junior minister in my own Government,” she said, adding that St Michael’s Estate must not be used as a testing ground for cost rental housing.

“I am pleading with you Minister Murphy, as a colleague and as a member of this Government,” she said. “It’s the wrong decision at the wrong time and I will not stand idly by anymore and not give my opinion.”

Several left wing politicians who also attended the event came to Mr Murphy’s defence. Independents4Change TD Joan Collins said she supported the principle of the cost rental model, which she said had worked well in other countries.

Sinn Féin councillor Greg Kelly agreed cost rental would be a “game changer” and said he was “over the moon with the model”.

People Before Profit TD Bríd Smith also said she supported the plan.

Mr Murphy thanked Ms Byrne for “her words”, but said the council’s previous plan, “ was not going to work for people in the community in terms of being able to afford to live in their own community. This will increase the opportunity for people living in the community or working in the community to actually live here.”

The details of the scheme were “still being fleshed out” he said, and there may be an opportunity to include 10 per cent affordable purchase homes. “We have a site in our community that’s ready for development. We can say no to everything and nothing will happen here for years to come.”