Mr. Justin O'Brien:

I thank the Chairman and members for the opportunity to present on behalf of the Irish Council for Social Housing. We welcome this opportunity. The Chairman introduced my colleagues, Dr. McManus and Ms Gallagher.

The Irish Council for Social Housing is the national federation of approved housing bodies. We have 270 members which are spread throughout the country. We provide over 30,000 homes and related supports in about 500 communities in urban and rural areas. We provide a range of housing from what is termed general needs to what would be considered specialist needs, namely, that involving the elderly, the homeless and people with learning disabilities. We have grown over the past 20 years with the aid of Government funding. We are actively engaged as one of the pillars of the Social Housing Strategy 2020 and try to work with the Department and other bodies to ensure this is implemented. We are actively engaged with the Dublin Region Homeless Executive in terms of participation on the consultative forum and in the implementation and advisory group, which is trying to inform and advise on responses to homelessness in the city.

There is a need to reference where we are and where we were. In 2009, the approved housing sector produced over 2,000 new types of social housing homes nationally. This was in a context where about €400 million was made available for the sector around 2008. In 2013, that funding had been reduced to about €40 million so we have had to operate in a very constrained context over the past number of years. Capital funding spend for social housing in 2008 was about €1.4 billion. In 2014, it was reduced to about €270 million.

There has been a significant change for us to adjust to this different financial context. Up to 2011, we were reliant on 100% capital funding from the State to acquire or design and build. Since then, we have had to engage in different types of business and gear up for it through engaging with the private sector, developers, financiers, receivers and NAMA to enable the provision of new types of housing units. The sector has delivered nearly 2,000 NAMA-controlled units via leasing options, acquisition and the fitting out of distressed assets.

The funding context in which we operated previously was a 100% grant regime. The regime is now fundamentally altered to a maximum of 30% construction or acquisition costs funding from the State with the rest borrowed from the Housing Finance Agency or from banks to enable acquisition, design and build. We are into a different business model of development. It is a significant change for us but we are not afraid of it. However, in similar northern European countries, such as Holland, Britain, Germany and France, the transition from 100% capital funding to primarily private funding happened over a ten to 20-year period. We have been expected to adjust to this in a five-year timeframe. That is the context with which we are currently grappling.

Up to 9% of the housing stock in Ireland is social housing. We consider that far too small. The National Economic and Social Council, NESC, has commented on this in different reports over the years and has recommended 200,000 social housing units should be available to meet social housing need. We endorse that, believing social housing should account for 17% of national housing provision. It will obviously vary from region to region, area to area, based on social housing need. In its recent reports, NESC stated one third of people in need of housing will be unable to afford it from their own resources. Most people aspire to home ownership, but the reality is that there is a discordance between the aspiration to and the affordability of home ownership. That is where social housing becomes a central platform and an important one. Our fundamental message is that its provision needs to be increased.

One of the policy options in Social Housing Strategy 2020, with which we are linked, is the development of the affordable or cost-rental housing model. We believe this would meet the needs of people who are starting off, such as teachers or nurses who are on lowish incomes, but cannot get a mortgage. We support that type of provision where they would be able to rent at a reduced market rate and would live in mixed tenure schemes of social and affordable housing. We see that as being important for the way ahead.

In the area of homelessness, the maintenance of adequate rent allowance for people is critical. An inadequate allowance is the main driver of people becoming homeless in the Dublin area because of the unaffordability factor. The housing assistance payment, HAP, a key point of the social housing strategy, will not be cost neutral. It needs to be aligned with market rents and there needs to be security of tenure for people in that option. One can see from the homeless figures that those families presenting have mainly come about because of the lack of affordability. It is a key element of consideration for the future.

We provide high levels of housing support and are mainstream housing providers. Our dedicated purpose is to provide housing, which we believe we do reasonably well. We have to grapple with a more complex operating environment with regulation, funding and finance, however. Some of the developments we have tried to undertake over the past several years, particularly with some of the NAMA schemes, have been stymied by planning, technical and financial issues. They are not the impediments but the issues we have to deal with to get developments across the line.

In 2015, the sector provided 1,300 new units of accommodation via acquisitions and design and build. It is not always recognised publicly that we have reached that level of new provision. It is important that we rise to the challenge of delivery and enhance that.

Our paper represents some of the issues we think could make that easier for us.

One of the key issues, referenced clearly in the submission we made, is the assembly of suitable sites for housing. There was a low-cost subsidised sites programme administered by local authorities in the 1980s and 1990s. That was absolutely beneficial to the establishment of the sector, providing economy of scale and stability. That is critical. We also want to engage with the Part V provision, and we alluded to that in our submission, stating it should be 20% rather than 10%. That would provide good value for money.

An important point to consider in the submission is that when the Celtic tiger's housing market was booming in 2005, land costs were in some schemes totalling 40% of the cost. That is untenable and we have made recommendations about sites and unused State land being made available for the sector. That is critical. We also reference the Judge Kenny report from the early 1970s about land value. The Oireachtas committee considered that 20 years ago, indicating that it was not unconstitutional and should be implemented. It is back to the Department or the Minister to endorse that.

Housing associations have changed very much from what we were ten years ago. We have to deal with loan finance and housing management and we work in partnership with local authorities, developers and the Housing Finance Agency. There are 13 members accredited with the Housing Finance Agency and able to borrow money. That enables an additional provision and better value for money for government grants and loan finance that we borrow and repay via State funding. That enables development. We are also trying to look to the future and have alternatives to the Housing Finance Agency. We are trying to create a special purpose vehicle committee that would enable investors to come in and fund the sector for the provision of new housing. The larger member associations are very actively working at that to see if we can possibly avail of credit union money to enable the kind of investment that is required for us to access funding for the delivery of new housing.

We provide many schemes in rural areas; it is not just an urban problem. In County Clare there are many schemes for the elderly pioneered by people in local communities. It is a very vital contribution to Irish life. What is really needed in maintaining those elderly schemes is some sort of assisted independent living funding. When older people become less able they need more assisted support. They do not need to go to nursing homes but there must be a source of funding coming to the housing body so they can live independently. We have called for that for 20 years and got nowhere with it. We can make the case again but it is a very important contribution to community life, particularly in rural areas. To my mind, it is something that is often unrecognised as an example of what capital funding from the State has enabled over the past 20 years.

We welcome the idea of the cross-party committee. It is important in bringing the different stakeholders together and perhaps it could be ongoing and active, reviewing the delivery by different stakeholders, developers, ourselves as approved housing bodies and local authorities. We made particular recommendations in our report that the committee might wish to clarify or seek further information on, and we will happily engage on that.