SUBMISSION FROM THE IRISH COUNCIL FOR SOCIAL HOUSING (ICSH)
TO THE
DÁIL COMMITTEE ON HOUSING AND HOMELESSNESS
26 TH APRIL 2016
1. INTRODUCTION
1.1. The Irish Council for Social Housing is the national federation of housing
associations. We represent 270 housing association members who provide
housing for low income families, the elderly, people with disabilities and
homeless people. Housing associations collectively manage over 30,000
homes in 500 local communities, and the sector has an ambition to initially
provide for another 5,000 households in the coming years.
1.2. Housing association new housing supply peaked in 2009 with 2,011 new
homes completed that year before the property market collapse. Whilst the
traditional funding regime of social housing was 100% state capital funding for
local authorities, since 2011 housing associations have adopted the mixed
funding model of 30% state finance together with 70% loan finance. In other
countries, this model has been progressively used over the last 30 years,
whereas the rapid transition to this model is still less than five years in
operation with housing associations in Ireland.
2. OVERCOMING OBSTACLES IMPEDING PROGRESS
2.1 Impediments exist for delivery across all housing tenures and whilst the main
focus of housing associations is to provide social housing, we recognise the
need to address difficulties for owner occupiers and households in the private
rented sector. The ICSH believe the following actions would significantly
enhance the ability of the sector to increase delivery and fundamental to this is
the availability of the €3.8bn earmarked in the Social Housing Strategy.
Recommendations:
2.2 Introduce a new Cross-Departmental National Housing Agreement overseen
and led by the Department of an Taoiseach, with input from relevant
responsible Government Departments i.e. Environment, Social Protection,
Health, Finance, Expenditure and the Dáil Committee on Housing and
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Homelessness as well as key Social Partners with involvement in housing. A
Minister for Housing is essential but requires clearly defined responsibilities.
2.3 Establish a single, dedicated unit centrally co-ordinated (in the Housing Agency
or Department) with responsibility for increasing delivery by housing
associations for all funding schemes, and co-ordinating policy implementation
for the sector as it has, and will focus on the future on new intermediate forms
of rental housing.
2.4 Support housing associations in their establishment of a sector led financial
Special Purpose Vehicle (SPV) or intermediate fund to provide long term
finance for the sector such as with investment/pension funds who look to
realise a return in the long-term.
2.5 Streamline procurement and funding approval processes to ensure best value
and most efficient and quicker delivery of social housing. This includes
increasing the threshold for assessment all social housing construction (local
authority and housing association) undertaken by the local authority up to a
value of €5m.
2.6 Seek a 20% requirement of social housing under Part V and allow for
opportunity for cost rental (for wider income categories) alongside traditional
social rental housing. This would act as seed capital for the development
sector.
2.7 To prevent further incidences of homelessness amongst families and
individuals, ensure rent allowance payments are kept in line with the market
price for rent and continue to expand the HAP scheme.
3. SPECIFIC MEASURES TO ENHANCE SUPPLY AND CAPACITY
3.1 The use of state land for delivery of social housing is an important policy
instrument with huge potential. Housing associations, who have a specific
focus and expertise in housing development and management can ensure
value for money and the development of sustainable communities.
Since 2011, housing associations have built up their capacity in the areas of
development, finance and housing management by employing staff expertise
and board members in these areas. In parallel, a new housing association
regulatory structure has been established with a forthcoming statutory
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regulator to enhance investment into the sector. In turn, there are enabling
factors that are required to further enhance the capacity of the sector to assist
local authorities in meeting their housing need.
Recommendations:
3.2
Proactive land management through a delivery agency to lead and coordinate a continuous pipeline of building land for social housing, and other
housing in partnership with local authorities.
3.3
Translate the current mapping process of sites by the Housing Agency into
an action plan similar to site resolution plans that were established under
the programme for ‘Unfinished’ estates undertaken by local authorities.
3.4
Identification and transfer of ‘ready to go’ sites from state sources and
NAMA for social housing to housing associations to create a five year
development pipeline for housing supply.
3.5
Implement joint ventures between housing associations and housing
authorities including stock transfer, regeneration and housing management
programmes to improve quality of life for tenants using the mixed funding
scheme of state CALF and P & A and loan finance raised by housing
associations.
3.6
Bringing forward Government site levy to 2017, in order to stimulate more
building land coming onto the housing market.
3.7
Re-examination of the recommendations of ‘Kenny Report’ to ensure there
is a continuous supply of affordable land, and reintroduction of a builder’s
licencing scheme enabling them to access state land to provide fixed price
affordable ownership housing.
3.8
Increase the use of house/apartment acquisitions in the current market to
be targeted for social housing.
3.9
Further use of vacant properties that should be transferred from financial
institutions to the social housing sector where there is a housing need.
3.10 Consider the treatment of VAT, including a further reduced rate of VAT for
developing housing for social purposes. A number of EU countries have
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further reduced VAT rates for social housing provision to improve supply
measures1.
4. ENHANCING HOUSING OPTIONS, SUPPORTS AND SERVICES
4.1 Widen use of rapid build housing (modular, timber frame) beyond solely
target group of homeless families to mainstream social housing projects.
4.2 Continue with allocation priority of social housing for homeless households.
4.3 Implementation of the ‘Assisted Independent Living Scheme’ – a housing
related support model which for every €1 spent has the potential to save the
public purse €1.902. This would enable delivery of supported housing options
to older persons and other vulnerable groups.
4.4 Develop choice based letting options to include housing association tenancies
to improve speed of nominations and ensure parity with housing authority
tenancies.
4.5 Support an intermediate affordable rental model earmarked at 75-80% of
market rent to promote the development of mixed tenure neighbourhoods.
4.6 Support measures to promote security of tenure in the private rented sector
by:
4.6.1 Supporting those insecure private sector tenants with the development
of a ‘rent switch programme’ to enable housing associations to step in where
investors, receivers or funds want to exit or sell those rental properties. This
rent switch programme could prevent families or households becoming
homeless;
4.6.2 Enhancing security of tenure is essential for the Housing Assistance
Payment (HAP) to be an effective means of delivery for tenants.
4.7 Introduce a reformed Mortgage to Rent Scheme.
4.8 Develop a ‘real time housing needs assessment’ process capturing both
housing and support needs.
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Category 10 of Annex III of the European VAT Directive (Dir 2006/112) (‘Annex III’) namely “provision, construction, renovation and
alteration of housing, as part of a social policy”.
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This is based on the cost value analysis of the Supporting People model operating in Northern Ireland.
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4.9 Introduce housing management performance measures for all social housing
providers.
4.10 Include social clauses in contracts in social housing and publicly funded
projects that would benefit the locally based unemployed e.g.
apprenticeships, and retraining for long-term unemployed.
5 BACKGROUND AND CONTEXT
5.1 The Irish Council for Social Housing (ICSH) was established in 1982 and acts as
the national representative federation for housing associations in Ireland.
Housing associations housing includes the provision of housing and support
services for families, older people, homeless households and people with
disabilities. Housing associations known as approved housing bodies (AHB’s)
range from housing associations who provide housing in their local community,
often for a specialist group such as older people, the homeless and people with
disabilities to those larger housing associations (such as Respond!, Cluid, Tuath,
Circle) who provide housing for families often in different locations throughout
the country offering choice to housing waiting list applicants. The ICSH supports
the Social Housing Strategy 2020 and housing associations are a key pillar in
the delivery of the Strategy.
5.2 Housing associations have a long-term commitment to whatever community
or neighbourhood they are operating in which is demonstrated by housing
associations, such as the Iveagh Trust, who have been providing social rental
housing in Dublin since the 1890’s. Up until 2011, the traditional model of social
housing delivery by housing association was by way of up to 90/100% capital
funding from the state. Two successful capital funding schemes were utilised
by housing associations. The capital assistance scheme (CAS) focusing on
special needs groups such as the homeless, elderly and people with disabilities,
and the capital loan and subsidy scheme (CLSS), primarily for families were the
key capital funding schemes that were used by housing associations.
5.3 In 2009 the capital loan and subsidy scheme for family housing was terminated.
In 2011, a new mixed funding regime was introduced for housing associations
where housing associations could access up to 30% of the construction or
acquisition costs from the state, and the remaining 70% was to be raised by the
housing association as a long-term loan from either the Housing Finance
Agency (HFA) or a private financial institution. A significant part of the delivery
by housing associations from 2011-2015 involved sourcing and acquiring
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suitable properties, often vacant, from the private market as well as long-term
leasing. This comprised also obtaining some properties that NAMA has
responsibility for as well as long-term leasing of NAMA controlled properties.
5.4 Approved Housing Bodies (AHBs) – also known as housing associations – are nonprofit organisations that provide and manage good-quality housing at affordable
rents for households in housing need. While housing associations have traditionally
focused on social rental housing, a number of larger developing housing
associations are pursuing both affordable and cost rental housing options for
households who may not choose traditional social housing, or cannot afford to
become a homeowner. Housing associations can play an important role in the
tenure neutral policy approach that was introduced in 2011.
5.5 The Irish housing system is still heavily interdependent between the different
tenures-ownership, private rental and social housing. The most recent failures in the
private market, both with home ownership and the private rental sector had a huge
negative spill over effect into the social housing sector.
5.6 The stock of social rented housing in Ireland, managed and owned by local
authorities and non-profit housing associations of around 150,000 homes is about
9% of the total housing stock. This is significantly below the EU average of around
17%. The Irish social housing stock has to increase to a scale of at least 200,000 social
homes for rent. A figure recommended by NESC, advising the Government as far back
as 2004.
5.7 Social housing waiting lists have spiralled from 43,684 households in 2005 to 56,249
to 89,873 households in 2013.
5.8 Historically, increased social housing delivery throughout the world played a central
role when housing market failure arose, and when a housing system needed
rebooting. Social housing delivery brought a greater certainty and predictability of
supply.
5.9 This contrasts with the private market which depends often on a range of different
stakeholders, such as landlords and developers. These interests often have very
different motives for entering the housing market, many on a shorter term basis. This
has resulted in new housing supply available for lower income groups in the private
sector being much harder to predict. Homelessness has been the clearest
manifestation of housing market failure, and in turn the housing exclusion for
growing numbers of families and single persons.
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5.10 Negotiation by a Government on the distribution of resources for the ‘fiscal space’
has to ensure that housing, and in particular social housing be prioritised. Good
quality and affordable housing provides the stability and platform whereby families
can access other public services such as health and education. Improved quality of
life, better educational attainment and enhanced employment opportunities have
been life changing opportunities for those families living in good quality, well
managed social housing.
5.11 With discussion on the ‘fiscal space’, this mixed funding model for housing
associations can allow the state capital expenditure for social housing to be
stretched. For every one euro of state capital, this can leverage in at least a further
3 euro of non-state funding. Many housing associations have offered to take on this
greater financial risk. This model is used for new build and acquisitions-the
traditional social housing delivery routes. The model can be also a key option for
implementing ‘Part V’ (the 10% developer’s social housing obligation) as well
assisting local authorities’ with regeneration programmes in areas such as Limerick,
Dublin and Cork.
5.12 However, delivery of social housing can still face resistance as outlined in Kitty
Holland’s article Irish Times 5Th April, ‘Dublin residents object to social housing
development’ Most people believe social housing is needed but a few still don’t want
social housing in their neighbourhood. It is important that national social housing
commitments are translated and supported locally, including from elected members
who are responsible for local housing strategies. Some of the ‘Part V’ objections to
social housing from 2005 to 2009 should not be repeated.
5.13 Joint ventures and partnerships between local authorities and housing associations
should be central to the mixed funding delivery model becoming mainstreamed.
Local authorities can bring sites and housing applicants. Housing associations bring
to the table non state loan finance and a specific housing management focus and
expertise. Housing associations accommodated over 2,300 households in 2015 from
new build, acquisitions, NAMA and through vacancies. This could rise significantly
with the sector’s initial ambitions for another 5,000 new homes. Private developers
should see the strong potential here for partnership.
5.14 Social housing became one of the key social infrastructure deficits from 2009 to
2014. Expenditure was sacrificed more than most other public services. We are now
looking at a generation of investment to address this, although not always in the
traditional way. Greater enabling by the state of housing associations for supplying
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new housing should form an enhanced part of the national response to the housing
crisis. Housing associations have both an offer and an ask.
5.15 There are number of measures included in this submission which could assist in the
short-term for the more efficient use of the existing housing stock. It is important
that in increasing the supply of housing, both private, social housing and private
rental, there are a number of measures which if implemented now will lay the
foundations for a more balanced and sustainable housing system well into the
future.
Dr Donal McManus
CEO
Irish Council for Social Housing (ICSH)
01 6618334 / www.icsh.ie / Twitter @_icsh.ie)
Further information on housing associations and social housing contact www.icsh.ie
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