Mr. Kieron Brennan:

On behalf of Co-operative Housing Ireland I thank the Chairman and members of the committee for inviting us to consider the statutory regulation of approved housing bodies, AHBs. Co-operative Housing Ireland was formed as NABCO in 1973 to represent, promote and develop the co-operative housing movement in Ireland. We work with local housing co-operatives to help households meet their own housing needs in any tenure and we have supported 3,500 families into home ownership through local building co-operatives. The society is also an AHB in its own right and today manages more than 1,800 social rented homes through a network of affiliated local co-operatives across Ireland. The organisation is fully committed to playing its part in delivering the objectives of the social housing strategy and we have plans to deliver a further 1,500 homes by 2020.

Co-operative social rented housing is distinctive because tenants are also share holding, owner members of their local society. Members elect the management committees of their local societies and select representatives to the national board of the organisation. Co-operative Housing Ireland has a board with majority tenant representation, supplemented by external expertise in governance and housing. Housing co-operatives are typically formed as industrial and provident societies and registered with the Registrar of Friendly Societies. They apply for AHB and charitable status in the same way as other housing bodies.

Co-operative Housing Ireland signed up to voluntary regulation on publication of the voluntary regulatory code in autumn 2013. The society has participated in two years of regulatory assessment. In addition, the society has participated in further voluntary oversight of financial performance in 2015. The experience of the voluntary regulation code has been a positive one. The interim regulation office has engaged on a proportionate basis and with a view to enabling compliance with the terms of the code. This spirit of enabling and facilitation should be brought forward into the emerging statutory framework.

Co-operative Housing Ireland welcomes the move to statutory regulation of the AHB sector. While the motivation for introducing this legislation may be to protect public investment or to promote further investment by the private sector, it is the view of the co-operative housing movement that the primary aim of regulation must be to provide assurance to tenants of AHBs that their homes are secure now and into the future. We recognise that the suite of powers developed for the regulator has been drafted with a view to the worst case scenario, requiring legal enforcement and even the transfer of an AHBs housing commitments. Nonetheless, we remain convinced that the main approach of the regulator should be towards enabling the sector to play a fuller part in delivering social housing and in recognising the diversity of approaches that the sector can bring to bear.

To be effective, the regulator must be independent and must be seen to be independent. While the context of the current legislation is to facilitate private sector investment by way of meeting the ambitions in the social housing strategy, the regulator must have an eye to long-term sustainability. For this reason we advocate establishing the regulator on an entirely independent footing and creating a clear distinction between the regulator and the Housing Agency. We advocate that positions on the board of the regulator be advertised publically and that provision be made for appropriate tenant representation on the board.

The enabling approach which we recommend for the regulator will be critical in the period during which the Act comes into force and in the early period of its operation. We suggest a process whereby AHBs who do not hold stock, or do not intend to develop stock, can notify the regulator before they find themselves subject to the full set of statutory requirements. It is also key, especially for smaller and voluntary AHBs, that the regulator is given sufficient flexibility to engage informally around compliance before the statutory powers are invoked.

We welcome the clear recognition of the role of industrial and provident societies in providing housing and that the Office of the Registrar of Friendly Societies is mentioned throughout. We ask that the Bill would also mention, under heading 11(3)(a), the term "rules" which are the co-operative equivalent of the constitution or memorandum of association.

The explanatory notes to the Bill suggest that AHBs are not expected to contribute to the running costs of the regulator. We would suggest this provision is removed from the Bill so any future change of policy in this area would require new legislation. The proposal in the Bill that AHBs would contribute to a fund to be used in the event of a future AHB asset transfer should also require further legislation. AHBs already pay local property tax for their stock and pay contributions to the PRTB. Further requirements to fund the operation of the regulator would add another unwarranted financial burden that would hamper the ability of AHBs to meet pressing housing needs. Heads 13 and 17 relate to the issuing of further standards and guidance. Due consideration should be given to the proportionate impact these further standards would have on the sector. We recommend that a regulatory impact analysis be carried out on these standards and that consultation with the sector is a requirement.

In our response to the committee’s questions we raised concerns about the proposed restrictions on the disposal of assets. The suggested limitations do not appear to be proportionate or appropriate and we question whether they will assist in promoting confidence in the sector among private lending institutions. We are also concerned about the proposed process for the transfer of housing between AHBs. The acceptance of new housing by the recipient AHB does not necessarily mean that it gains an asset; there are potential liabilities attached to any properties. Due consideration should be given to the supports that may be required, including the provision of State funding, other than the lending from AHB funds described in the Bill.

We thank the committee for its engagement around this vital issue. Co-operative Housing Ireland will make a full submission on the Bill by 21 December 2015 and we have already submitted answers to the detailed questions posed by the committee.