Submission from the Irish Council for Social Housing (ICSH)to the
Dáil Committee on Housing and Homelessness
26th 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 supplypeaked 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
2.1Impediments 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:
2.2Introduce 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 Homelessness as well as key Social Partners with involvement in housing. A Minister for Housing is essential but requires clearly defined responsibilities.
2.3Establish 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.
2.4Support 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.
2.5Streamline 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.
2.6Seek 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.
2.7To 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
3.1The 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 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:
3.2Proactive land management through a delivery agency to lead and co-ordinate a continuous pipeline of building land for social housing, and other housing in partnership with local authorities.
3.3Translate 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.
3.4Identification 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.
3.5Implement 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.
3.6Bringing forward Government site levy to 2017, in order to stimulate more building land coming onto the housing market.
3.7Re-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.
3.8Increase the use of house/apartment acquisitions in the current market to be targeted for social housing.
3.9Further use of vacant properties that should be transferred from financial institutions to the social housing sector where there is a housing need.
3.10Consider the treatment of VAT, includinga further reduced rate of VAT for developing housing for social purposes. A number of EU countries have further reduced VAT rates for social housing provision to improve supply measures[1].
4.Enhancing Housing options, Supports and Services
4.1Widen use of rapid build housing (modular, timber frame) beyond solely target group of homeless families to mainstream social housing projects.
4.2Continue with allocation priority of social housing for homeless households.
4.3Implementation of the ‘Assisted Independent Living Scheme’ – a housing related support model which for every €1 spent has the potential to save the public purse €1.90[2]. This would enable delivery of supported housing options to older persons and other vulnerable groups.
4.4Develop choice based letting options to include housing association tenancies to improve speed of nominations and ensure parity with housing authority tenancies.
4.5Support an intermediate affordable rental model earmarked at 75-80% of market rent to promote the development of mixed tenure neighbourhoods.
4.6Support measures to promote security of tenure in the private rented sector by:
4.6.1Supporting 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;
4.6.2Enhancing security of tenure is essential for the Housing Assistance Payment (HAP) to be an effective means of delivery for tenants.
4.7Introduce a reformed Mortgage to Rent Scheme.
4.8Develop a ‘real time housing needs assessment’ process capturing both housing and support needs.
4.9Introduce housing management performance measures for all social housing providers.
4.10Include 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.
5Background and context
5.1The 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.
5.2Housing 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.
5.3In 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 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.
5.4Approved Housing Bodies (AHBs) – also known as housing associations – are non-profit 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.
5.5The 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.
5.6The 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.
5.7Social housing waiting lists have spiralled from 43,684 households in 2005 to 56,249 to 89,873 households in 2013.
5.8Historically, 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.
5.9This 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.
5.10Negotiation 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.
5.11With 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.
5.12However, 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.
5.13Joint 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.
5.14Social 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 new housing should form an enhanced part of the national response to the housing crisis. Housing associations have both an offer and an ask.
5.15There 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 / / Twitter @_icsh.ie)
Further information on housing associations and social housing contact
1
[1]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”.
[2] This is based on the cost value analysis of the Supporting People model operating in Northern Ireland.