Mr. Declan Dunne:

The Housing Alliance thanks the Chair, Deputy Matthews, and the committee members for inviting us to discuss the issue of affordable housing. Cost-rental is the one that applies mostly for approved housing bodies.

The Housing Alliance is a collaboration of six of Ireland’s largest approved housing bodies, namely, Circle Voluntary Housing, Clúid Housing, Co-operative Housing Ireland, Oaklee Housing, Respond and Tuath Housing.

The Housing Alliance was formed to promote the delivery of social and affordable housing, address barriers and challenges to delivery, and promote strong professional approaches to housing management.

We warmly welcome the cost rental scheme. We await further clarity on receipt of full details of the conditions and will reflect on those details when received. We have responded enthusiastically to the expression of interest for funding, which was oversubscribed, demonstrating the commitment of Housing Alliance members to contribute to the new initiative. It is our contention that, in time, affordable cost rental will be seen as marking a significant and important development in housing policy. It provides a long-term affordable housing solution for those households that choose to rent, with the advantages that this bestows on the wider economy. The housing sector has lacked an affordable rental option for some time. The provision of affordable cost rental homes is an important initiative for those households whose income falls between private and social rental. It brings Ireland more in line with other European housing systems, which tend to have a cost rental element in their housing provision.

Many households become trapped in the private rented sector, unable to move to a more secure or affordable tenure, yet their incomes are above the threshold to qualify for social housing. They are not earning sufficient income to purchase a home of their own. The cost rental equity loan, CREL, represents a remedy at a critical juncture in housing policy. While the initial 440 homes is a relatively small number, given the proportion of households in need of an affordable rental option, we believe that the success of this initial year will provide the evidence and demonstrate the value of significantly increasing recurring budgetary allocations to allow many more cost rental homes to be provided in future.

As is clear to everyone, housing affordability is an increasing challenge in the Irish context. Without a secure place to call home, it can be challenging to engage in many aspects of life, including employment, education, training and recreation. Never has the centrality of the home been more acute than during the Covid-19 crisis, with the call to action to stay home and stay safe. For many households, having a secure home of their own is out of their reach and unaffordable. For example, 16% of households spend more than 30% of their net income on housing, with this figure rising to 70% for the lowest quartile of the income distribution, according to ESRI research in 2018. That study also found a variation in affordability in respect of age group, location and household formation.

In social and economic terms, lack of access to affordable housing impacts on family life, household job prospects, household finances, family formation as well as national competitiveness and growth. Furthermore, according to most recent figures, the median gross income per household in Ireland was €45,256 while nearly two thirds of Irish households had a gross income of less than €60,000. Despite marginal reductions in rents in recent months, market rents in Dublin city are still at almost €2,000 per month, comprising more than 69% of the net income of a household on a gross income of €45,000 and just over 56% of the net income of a household on a gross income of €60,000. Rents in other cities, including Cork and Galway, continue to rise at a rapid pace.

Cost rental housing in Ireland is providing discounted rental housing developed by approved housing bodies, AHBs, and local authorities; guaranteeing long-term security of tenure to tenants; charging rents of at least 25% below prevailing market rents, with affordability likely to increase over time; and assisting tenants with housing assistance payments, HAP, after six months should they temporarily lose employment. As in other European countries, cost rental properties act to counter the boom and bust cycles that often plague the housing market. For example, in Austria where two thirds of the population live in subsidised housing-----