Mr. Declan Dunne:

I thank the committee for inviting us here today to talk about the delivery of the Housing for All programme. As an AHB, Respond works closely in partnership with local authorities throughout the country, the Department of Housing, Local Government and Heritage, the Housing Finance Agency, HFA, and the Housing Agency to provide social and cost-rental homes for people in housing need. After 40 years of existence, Respond is still rooted in two principles, namely, social justice and the human right to housing. Working towards delivery based on those principles is what drives us every day in the work we do.

More than half of the 350 staff in Respond are involved in directly providing other supports in the communities we serve. Those supports include 17 early learning and school-aged care services, three day care centres for older people, refugee resettlement services for people who are programme refugees and six family homeless services. Delivery on this combination of housing, building communities and supporting people's needs is largely our reason for existence and it feeds into those principles of the human right to housing and social justice.

We have been able to support a small number of Ukrainian families as well by providing accommodation in the course of this year. It has been a privilege to do that. As well as community services, like other AHBs, we are very much involved in delivery of housing with more than 16,000 tenants in their tenancies. Coincidentally we have the same response as Circle Voluntary Housing Association regarding the satisfaction rating from our tenants. There are some areas where they identify there is room for improvement that we have to address and we take that seriously. As with other AHBs, we have a tenant engagement strategy that involves our tenants in decision-making in the organisation. Respond owns and manages over 6,000 social and cost-rental homes. Last year, we delivered 624 new homes to people and commenced on-site 778 homes. Our current construction schemes range in value from €15million to €65 million, with total programme value in excess of €1.5billion. This includes homes delivered since 2018, homes under construction and homes approved by the board, scheduled for delivery in 2023 and 2024.

Our principal focus is adding to the national housing stock. This is a unique approach we have in Respond. A small proportion of what we do is the acquisition of turnkey properties. A total of 82% of what we do is buying sites and entering into a contract to develop housing on that site. That is the methodology we use. I noted that in an earlier meeting of the committee there was discussion about the high interest rates when developers are involved in development of schemes. In our particular case, this does not occur because we carry the interest costs and we do not incur the very high rates that banks levy on developers. The model is buying the site and then making stage payments to the developers as the construction is delivered.

In the current context, we are all only too aware of the serious challenges around housing and homelessness in Ireland. In particular, we are aware of the inflation costs and associated costs in construction and the impact they are having on our ability to deliver. This applies not just to us but other housing associations as well and, in fact, the whole housing sector in Ireland.

Our current funding models, CALF and CREL are being stretched and it is proving increasingly challenging to deliver the homes that we need to, given that we have seen a 22% increase in construction costs over the18 months to July 2022. We also have the interest rate cost on top of that.

I will go on to make a few suggestions as to how we might address some of the challenges we are all facing. Like others, we are very much involved in the affordable housing cost-rental scheme. With our colleagues in Tuath, we did the first new construction cost-rental scheme in Enniskerry Road. We are pleased that the model is being tweaked and improved over time by increasing the ceiling amount available to drawdown for CREL of 45%, which makes some of the schemes more viable to deliver with a particular focus on lowering the rents for the tenants involved.

We have advocated strongly for cost rental over many years in our pre-budget statements and we are delighted that this has now been established. We think that has been a game changer in Irish society. We want to commit to delivering a lot more of these. The Affordable Housing Act 2021 has made it possible for us to have this form of tenure. As with our colleagues in Clúid, we have seen the same level of demand. In Glanmire, County Cork, we had 32 homes there and 1,300 applicants so clearly there is a massive demand for more affordable rents. People are very aware of just how high they are at the moment.

As with our other colleagues, we believe that our current funding model of 100% debt finance causes some difficulties that might not be immediately clear. It is a difficulty because we are being encouraged to source funding from other sources. It is not going to be possible to do that if we have 100% debt. It just will not be attractive to private finance people to do that. However, we are well supported by the Housing Finance Agency, HFA, at the moment. It is not an issue for us today but we can see that it is going to become a limiting factor as time goes on.

Respond is strongly committed to delivering Housing for All targets and increasing the national housing stock through direct construction, which is 82% of what we do. We want to achieve these targets, working with our partners to provide much-needed homes for families and individuals in housing need. We are focused on finding practical solutions to delivering more homes for people that need them. Regarding some of the current challenges, we have been engaging with our partners, including the Department of Housing, Local Government and Heritage, the housing agents and others to look at some proposals. I would like to go through some of those for both the short and long term. In the short term, it is important for us to address the challenge we are facing in rural Ireland. It is quite difficult for us to apply the CALF model in rural Ireland. There is just as much need for social housing in other parts of Ireland as in the main urban areas. For that reason we think it is important that all local authorities should fully support the independently acquired market rent evaluations that are done. Every AHB is required to produce two sets of independent evaluations. Only then will it be possible for us to be viable to deliver throughout the country.

With regard to CREL, we need a mechanism to assist us with cash flow issues that we experience. The nature of what happens when this model is being applied is that often there is a requirement to put in finance for a period, which could be three or seven years, and it could be a substantial amount. We have done that up to now and we are happy to do it but there is a limit to what we can do. If we are to deliver hundreds and hundreds of these homes, we need another way to fund the cash flow.

We believe that development contributions should not be applied to the delivery of any social housing and we would also recommend that it does not apply to cost rental. Currently there is inconsistency about the social housing and it does not apply to cost-rental housing.

We also believe consideration should be given to the removal or reduction of VAT rates on social and cost-rental homes. This is something we have recommended over a number of years in pre-budget statements.

We agree with our colleagues that there should be a move away from 100% borrowing by AHBs. We believe that CALF and CREL could be reconfigured as equity because they are not required to be repaid in the short term anyway. We think this could be a mechanism to give the State much greater assurance on the long-term use of these homes that we are building.

We do not have all the answers but we are working towards the same goal of delivering the quality social and cost-rental homes to those who need them as quickly and efficiently as we can. We look forward to engaging with committee members in this session and hearing ideas and views from them.