Oireachtas Joint and Select Committees

Wednesday, 26 September 2018

Joint Oireachtas Committee on Housing, Planning and Local Government

Future of Council Housing: Discussion

5:00 pm

Photo of Maria BaileyMaria Bailey (Dún Laoghaire, Fine Gael)
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At the request of the broadcasting and recording services, members and visitors in the Public Gallery are requested to ensure that mobiles phones are switched off completely or to airplane, flight or safe mode, depending on the device, for the duration of the meeting. It is not sufficient to just put phones on silent mode as this will maintain a level of interference with the broadcasting system.

No. 5 on the agenda is the future of council housing. Today's meeting will be split into two sessions. In the first session we will consider the recently published report, 'The Future of Council Housing: An analysis of the financial sustainability of local authority provided social housing'. On behalf of the committee, I welcome the authors of the report, Professor Michelle Norris and Dr. Aideen Hayden.

I draw the attention of witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.

Before I call Professor Norris, I wish to formally welcome our new clerk, Mr. Pádraig Grant. As we know, Ms Fiona Cashin has gone on maternity leave and we wished her the best last week. Mr. Grant has been with us from the start also and has been here for the last two years. I want to formally congratulate him on his new role. We wish him good luck. We are delighted he is able to stay with us and be such a fundamental part of the team. I call Professor Norris to make her opening statement.

Professor Michelle Norris:

I thank the committee for inviting us to discuss the findings of our report on the future of council housing. The opening statement sets out the objectives of the report, explains how it was researched and summarises its key findings and recommendations. The research was funded by two anonymous donors via the Community Foundation for Ireland and we are very grateful to these individuals and to the Community Foundation staff for their support. The project was inspired by the severe shortage of social housing in Ireland currently, and the problems regarding housing affordability and homelessness which this has caused.

In the past local authority-provided council housing would have been used to meet these needs but the past three decades have seen a significant reduction in the traditional role of council housing as the main source of accommodation for low-income renters. In 1994 council housing tenants accounted for 73% of the low-income renting households in receipt of Government supports but this had fallen to just 53% by 2016. In part, this development reflects the decline in housing output following cuts in funding after the economic crisis of the late 2000s. Total public funding for new council housing fell by 94% between 2008 and 2013. It also reflects longer-term issues such as the long tradition of selling council housing to tenants, which dates back to the 1930s. However, fundamentally, it reflects a redirection in housing policy and increased emphasis on using other housing supports for low-income households, such as not-for-profit sector approved housing bodies, AHBs, and Government subsidies for private rented housing, such as rent supplement and housing assistance payment, HAP.

The various housing policy statements which have been published since the 1980s flag several reasons for this increased reliance on alternative means for accommodating low-income households. Among these, the affordability of funding the sector for the Exchequer and the value for money achieved for this investment are the most intractable problems raised.

These funding challenges raise questions about the capacity of the Government to fund the delivery of sufficient additional council housing to accommodate applicants for social housing and homeless households, as envisaged in Rebuilding Ireland. They also raise more fundamental questions about the financial sustainability of the council housing sector, its decline since the 1980s and whether this decline can or should be reversed. The research aims to answer these questions by assessing the financial sustainability of council housing and generating recommendations to increase its future financial sustainability so that the supply of dwellings in this sector can be increased in a way which is affordable for the Government and provides a high quality and affordable housing service for tenants.

To implement the research, we carried out an extensive series of interviews with housing policymakers, together with case studies on the funding, management and maintenance of council housing in five local authorities. These case studies examined spending on council housing provision, management and maintenance issues, allocations policy, rental income adequacy, sales of dwellings to tenants and associated policies and procedures. We acknowledge the invaluable contribution of the five local authorities that participated in the study and are grateful for their time. We also held a half-day seminar, hosted by Dublin City Council, at which we debated the preliminary findings of the research with council officials from around the country.

I will now outline the conclusions of the study for the committee. The study indicates that council housing plays a critical role in housing low income groups particularly in urban areas where rents are high, housing supply is limited and subsidies for private rented housing such as rent supplement and Housing Assistance Payments, HAP, are difficult to operate. Approved Housing Body, AHB, social housing provision also plays a valuable role in housing low income households but homelessness cannot be addressed successfully without higher rates of council housing output.The central and local government officials interviewed for this study agreed that funding for new council housing provision had been cut too far during the economic crisis of the late 2000s and was increased too slowly as the economy and public finances recovered afterwards.

The report flags strong concerns about the financial sustainability of the current model used to fund the capital costs of council housing provision. This is currently done using central government grants, which cover the full costs of building or buying council housing upfront in a lump sum. This model is challenging for the Exchequer to afford, particularly when the public finances are under strain. As a result, council housing output has also been strongly pro-cyclical in recent decades.It has increased as the economy and the housing market has boomed and declined radically during periods of recession. This is inefficient from an economic perspective because investment in council housing reinforced rather than counterbalanced the building bust in the late 2000s. It also achieves poor value for money because spending is concentrated at the peak of economic cycles when land and construction costs are likely to be higher while during recessions, when costs usually fall, funding for council housing provision also declines. The boom-bust pattern of central government investment also generates staffing inefficiencies because many local authorities radically reduced staffing in their housing delivery and design departments when funding for council housing output was reduced in the late 2000s and had difficulties in increasing their staffing again when funding increased during the economic recovery.

A large number of interviewees from the local authorities expressed dissatisfaction with the Department of Housing, Planning and Local Government's speed of payment of capital grants for council housing provision and the extent of its scrutiny of funding applications. They also questioned the value of this scrutiny. However, the Department representatives we interviewed argued that these controls were necessary to ensure adequate oversight of Exchequer investment.

Despite the severe shortage of council housing in many parts of the country, local authorities are still obliged by central government to sell council housing to tenants at a discount of up to 60% of market value. The study highlights a significant dependence by local authorities on income from sales to fund council housing management and maintenance. Local authorities have a perverse incentive to sell council housing on at a loss. In accounting terms, the costs of selling houses to tenants are also disguised because the market value of council housing is not recorded on local authority accounts and the proceeds of sales are recorded as revenue. This system conveys the impression that sales generate a profit whereas the sale price rarely covers the cost of replacing these dwellings.

The revenue costs of council housing management and maintenance are funded by rents paid by tenants which are determined on the basis of their income. This model has significant equity and anti-poverty benefits, particularly in view of the low average incomes of tenants in this sector. However, it is problematic from the point of view of the efficiency of the housing service because there is no guarantee that revenue funding from rents will be sufficient to fund the management and maintenance of dwellings. There is no relationship at all between rents and the costs of providing social housing. The evidence presented in this report indicates that rents do not generate enough money to maintain council housing properly. Almost all of the rental income received is devoted to response maintenance, that is, responding to tenants’ maintenance requests. There is under-investment in planned maintenance, that is, the repairs and upgrading that are necessary to protect the fabric of dwellings and improve standards. There is an over-reliance on central government funding schemes for estate regeneration, refurbishment of empty dwellings and to fund repairs to dwellings that would usually be carried out as part of planned maintenance programmes. This is an inefficient and costly approach because the costs of deferred maintenance do not simply accumulate; they multiply. Dwellings that have not been maintained for long periods require much more spending to upgrade than dwellings which are regularly maintained. Arrangements for funding the revenue costs of council housing provision have played an important role in shaping these inefficiencies. The low level of rent charged to council housing tenants and the disconnect between the rents charged and the costs of the housing service means that local authorities have neither the resources nor the incentive to maintain dwellings efficiently or to ensure they are swiftly re-let when they become vacant.

There was also a strong consensus among the council officials interviewed that there are significant regional differences between the needs of urban and rural local authorities. In the case of authorities with rural operational areas, price pressures were lower, housing could be procured from the market reasonably efficiently and subsidies for private renting households such as HAP and rent supplement operate reasonably effectively. In urban areas, by contrast, the costs of council housing provision and maintenance were much higher, affordability problems for households were much more acute, the subsidies for private renting households were difficult to operate and demand for council housing was much stronger. However, the model for funding council housing is the same in both urban and rural areas, which many interviewees felt was inappropriate. Some representatives of rural authorities felt a more efficient and less intrusive version of the central government grant system would be adequate for their needs in delivering adequate council housing supply. Urban local authority representatives complained that the property tax system redistributes income raised in urban areas to rural areas, which, in practice, means that revenue is redistributed from areas of high housing need to areas where housing need is lower. They argued that urban local authorities should be allowed keep a higher proportion of property tax revenue if it is spent on council housing provision. Some interviewees suggested that together with rents which reflect the costs of housing provision, revenue from property tax could be used to service loans to build council housing. This would approach would help to smooth out the peaks and troughs in investment in this sector and higher rents would incentivise local authorities to ensure their dwellings are quickly reoccupied after tenants leave.

The report sets out a comprehensive suite of recommendations intended to strengthen council housing's financial sustainability in order that the supply of dwellings in this sector can be increased in a way that is affordable for Government and provides a high quality and affordable housing service for tenants. Some of the recommendations address relatively minor administrative and management changes such as requiring local authorities to ring-fence income from rents to spend on council housing, which is not done currently, removing maximum rents from council housing rent determination schemes; and allowing for the compulsory deduction of council housing rents from social welfare payments. The report also recommends that local authorities regularly conduct comprehensive condition surveys of their housing stock and that the local government accounting code of practice be reviewed to bring it into line with international standards of transparency and disclosure for councils' housing operations. It further recommends the valuing the council housing stock and the recording of valuations in local authority accounts as well as the condensing and streamlining of the Department's approval process for new council housing developments.

In terms of more radical reforms, the report suggests suspending the tenant purchase scheme for council housing at least for the duration of the current shortage.

It also suggests removing the availability of successor tenancies, that is, the ability of a council housing tenancy to be inherited between parent and child, building smaller council housing units to enable tenants to downsize and free up larger dwellings for larger families, enabling urban local authorities to keep more property tax revenue to spend on council housing, and using income from property taxes on council housing to enable councils to establish sinking funds to fund long-term maintenance. Extending the shared services model was also mentioned. That has been used to reform some local authority services and to organise some council housing services on a regional basis.

There is also a set of more radical suggestions in the report for restructuring of arrangements to fund council housing. These include linking the rents of council housing to the cost of housing provision and not to tenant incomes, making HAP available to council housing tenants who cannot afford pay cost rents to ensure affordability is protected, and enabling local authorities to borrow some or all of the costs of council housing provision and to remunerate these loans using cost rents and the proceeds of property taxes.

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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I thank Professor Norris and Dr. Hayden for attending and for producing the report. The report is an important piece of research and that is one of the reasons we invited them here. It was regrettable, through no fault of the authors, that some of the media coverage at the time of report's launch did not give a true sense of the recommendations or the depth of the report. I hope we can overcome some of that. I ask them to give a little more detail to the committee on a number of issues.

One of the important aspect is their attempt to grapple with the core issue of how we finance local authority houses on an ongoing basis. Will they elaborate on how that will work? I refer to both the full cost of response maintenance and cyclic maintenance, etc. One of the concerns some of us have, if we accept the principle that the local authority should get the full cost recovery on a month-to-month basis, is the impact that has on the rents tenants pay. Rather than having the HAP model, where a tenant gets hit with a substantial rent bill and then he or she applies for the payment to subsidise it, would it make more sense to continue with differential rent, or a version of it, with the local authority getting an availability agreement payment from the Department of Housing, Planning and Local Government centrally, as approved housing bodies currently do? That cuts out the unnecessary administration of a HAP-type payment system. It would mean the local authority would get cost recovery without having to necessarily jack up the rents significantly for low-income tenants. Would that achieve the same objective as the witnesses are suggesting?

I have questions on two other issues not dealt with in the report but I am sure they came up in conversations. They will also be pertinent to our later discussion. We are not just interested as a committee in how the units are properly maintained once they are built and ensuring that local authorities have adequate finance; we are also interested in how we get the units up and running in the first place. There has been much public discussion recently, and we have dealt with it in committee previously, about what happens after planning permission is granted through Part VIIIs and before construction starts - that 18 to 24-month process, if lucky, involving approval from the Department and tending and procurement. Will Professor Norris and Dr. Hayden give us their thoughts on that too? How can that be made more efficient to try to speed up the delivery of social housing? I am interested to hear the thoughts of the witnesses that might have arisen from their research and their own expertise.

Professor Michelle Norris:

I shall respond first. I thank the Deputy for his questions. Some of the media coverage of the report was a little disappointing in that there was a big emphasis on proposed increases in rents. The impression was conveyed that the affordability of social housing provided by the council was not a concern but that is absolutely not the case. The report makes the point that many other countries manage to fund social housing in an efficient way, which is also affordable for tenants. Our system manages to fund social housing in a way that is affordable for tenants but which generates much inefficiency. We could achieve both objectives with some reform.

Rents currently are related to income so that is affordable for tenants in most cases. The average income in the local authority sector is low and there are high rates of benefit dependency, so protecting affordability is important. The problem with having rents related to income is that it is difficult for a local authority to project rental income and, therefore, rental income does not reflect the cost of managing and maintaining dwellings. We know from the local authority officials we interviewed that, in practice, there is inadequate investment as a result in regular upgrading of dwellings and in the more significant upgrading that might be done after 30 years. The expenditure on that is too low because rental income is too low. That means the costs do not disappear. They are generally funded at the end by means of a regeneration scheme, money from the Department or, increasingly, from central grants for increased investment in turning around vacant dwellings and reletting them.

That is an inefficient way of funding the service. It is also a way of dealing with major management and maintenance and upgrading costs that is often destabilising for the communities living on these estates. In many cases, the estates are demolished or significantly refurbished and the communities have to move out. A more efficient way of providing revenue finance to meet management and maintenance costs is simply to link those costs and to charge what are called cost rents. That is the case in the vast bulk of other countries in western Europe. Ireland is unusual in having income-related rents. The concept with cost rents is that they are linked to cost. The rental income can then be projected forward and refurbishment and upgrading can be planned after 15 years as well as more significant refurbishment and upgrading after 30 years.

In many countries, these cost rents are also used to repay loans for the housing. It also puts in positive incentives for efficiency in the system. If a low rent is being received, there are not the same incentives to ensure the dwelling is relet quickly. It is hard to plan for spending on reletting it quickly. In a system like this, it is important to protect affordability by having some subsidy for tenants that cannot pay the cost rents. We suggested using HAP because it is in existence and administered by local authorities. That proposal was just an administrative efficiency proposal. Other ways of subsidising it could be examined. AHBs at the moment get an availability agreement payment from the Department. That payment is linked to 92% of the local market rents. I have never understood the reason that is the case. If there was a payment availability agreement, it could be linked to cost. That would also protect the State from fluctuating rents in the private market. Our concern is to ensure affordability but in an efficient way. I would not have an objection to that.

I will move on to the questions about approval times by the Department and the turnaround times for building new council housing developments. A couple of issues were raised by interviewees. Planning for council housing development has been streamlined in recent years and it is now reasonably fast. Some public procurement issues that apply to council housing, which can slow up the process, and there may be potential for streamlining them. The main concern, however, among the people we interviewed was the level of scrutiny by the Department of proposals and the value of the scrutiny. For instance, some of the issues mentioned included that local authorities employ architects or they contract in architects to design their development. Aspects of that development, however, are then scrutinised by central government architects and reworked.

It is similar for costings. Cost proposals are tightly scrutinised, even though they have been put together by a quantity surveyor. This period of over and back on queries about cost can slow up developments significantly. The local authorities' key issue then was that after all of that scrutiny, the project goes out to tender and the market decides the cost. Questions were raised, not about the value of oversight - it was acknowledged that oversight is needed - but about the benefit of all the scrutiny. I refer to the Department and the local government audit side of things.

They explained the need for accountability in the spending of public money and for proper auditing. There was no criticism of that by the local authorities, it was just the value of the actual scrutiny that is put in place.

Dr. Aideen Hayden:

Professor Norris has covered a lot of the issues. Working backwards, one of the things that struck us was an apparent historic mistrust between the Department and the local authorities. Some of the comments made to us were about the ball being kicked backwards and forwards and one architectural team having to go back and redraw because the Department's architect wanted a window in a different location. Many of the local authorities found that sort of thing incredibly frustrating. The point was made on a number of occasions that if some of the larger local authorities have full architectural departments, accountants, audit services and so on, the process should not have to go backwards and forwards. The feeling that large local authorities are second guessed at every turn when time is, in theory, of the essence came across to us as a criticism, in particular from those large authorities. Some of the smaller local authorities felt that for them the best way to do business would be to receive an envelope of funding and be allowed to get on with it. There was a great deal of support for the idea of shared services whereby one would have a regional lead local authority which would provide services to the smaller local authorities. That could also cut out a great deal of the duplication that goes on between the local authorities and the Department.

On the point of oversight, no one suggested the State's money should not be guarded and that every penny should be spent properly. The point was made that, as it stands, there is a great deal of oversight in any event of local authorities. It is not as if they are permitted to spend willy nilly without oversight. In fact, in their opinion, a lot of the toing and froing between the Department and local authorities was unnecessary.

As to the manner in which the lack of rents based on a differential rental basis could be subvented, we are not dedicated to the HAP system, as Professor Norris has said. However, we were of the opinion that while the availability agreement scenario, which is currently there for the approved housing body sector, had short-term benefits on its establishment in 2011, it does not represent good value for the State going forward. It is not good value for the State to commit itself to paying 92% of market rents over a period of 20 years plus. Those are, in effect, only going in one particular direction. It does not go with the principle of what we are proposing, which is that rents should be based on cost and not on what the market will bear. For that reason, HAP seemed to be a reasonable compromise in terms of making up the difference between what tenants could afford and what the cost-rent would be. The important point is that it is a cost rent. It is the cost to the local authority of providing that housing.

There are other issues at which we did not look in the report, including stop transfer whereby local authority stock is transferred into an off-balance sheet mechanism that might allow local authorities to borrow. While we considered them, we did not raise these issues in the report. There is only a certain number of things one can look at in a particular report. The real point is that the system incorporates local authorities, approved housing bodies, HAP, RAS and everything else. They are layers of an onion which have been put one on top of the other. There is no transparency in the way housing is delivered at the moment and, certainly, there are features which could be addressed by changing the model.

Photo of Maria BaileyMaria Bailey (Dún Laoghaire, Fine Gael)
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We are running a little late. I will take a couple of members at a time and I ask members not to repeat questions. I call Deputy Pat Casey who will be followed by Senator Victor Boyhan.

Photo of Pat CaseyPat Casey (Wicklow, Fianna Fail)
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I thank the witnesses for the report and recommendations which are concise and easy to understand. Some of them relate to matters which it is already within the power of local authorities to do themselves, including ring-fencing income from housing rents. It is in the hands of local authority members to do that at the moment. One of the recommendations was that income from the property tax levied on council housing could be used to establish sinking funds. It is hard to understand why the councils charge themselves property tax because it is simply a contra entry. They charge themselves and they pay it out. It serves no real purpose and it is not real money in that sense because it is a contra entry in the books. It is not really there to put into anything.

The witnesses referred to suspending the tenant purchase scheme for council housing. Should it be amended or suspended completely? What is the witnesses' medium term view on the tenant purchase scheme? Should it be kept and amended or disbanded? On the long-term funding of local authority housing, I assume the witnesses are looking at the cost-rental model as the most sustainable way to provide local authority housing on a long-term basis. Regardless of how we fund this, the level of funding required to solve the housing crisis is not within fiscal space. The element missing from this is the off-balance sheet model which needs to be controlled. I hope we can find a local authority or State-owned off-balance sheet model which could deliver social housing on a cost-rental model on a long-term basis.

Photo of Victor BoyhanVictor Boyhan (Independent)
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I thank Dr. Hayden and Professor Norris for the very interesting work they have done and the interesting paper they presented today. Conscious of the time, I will focus on some of the things that were said here today. The witnesses referred to the regular conduct of a comprehensive condition service of local housing stock. As someone who has been involved in local government for many years, I know there is a different application for the management of housing stock versus the standard inspectorate that would go with the private sector and with the local authorities. I made contact with a particular local authority recently which told me it did not have the time or resources and, in any event, it was always sure of its own stock. However, it is not always sure of its own stock, which is why we have this problem with the turnaround of a lot of our stock and the length of time it takes to bring a void back. Some of units are in a very bad state. I have spoken to council tenants who say that, in 30 years, they have never had an inspection or an official from the local authority in their properties. The only person who may come is a subcontractor regarding a set of works. Many people just get on and do the works rather than waste time. That is interesting. We should have a level playing pitch and the rigorous inspectorate system we have for the private sector, which is right and correct, should also apply to social housing.

The witnesses talked about suspending the tenant purchase scheme for council housing. They do not quantify that but Professor Norris suggested doing it for a while until we get out of this crisis. I ask the witnesses to tease that out. There are arguments for and against tenant purchase of housing. This is valuable housing stock and people's housing needs change. That is a reality now which it is very difficult to explain to tenants. It is a challenge for housing authorities to say that housing need changes. The witnesses might flesh that out a bit.

The witnesses might be surprised about this but I have major concerns about removing the availability of successor tenancies. I know people who have stayed back and cared for an elderly parent and who may have issues personally. They have put a lot into their homes. It should be remembered that we are not talking about houses; we are talking about people's homes. We are talking about people who live in these homes and about people who are integrated into these communities and who have a right to stay in them. I accept that we have a crisis, but I ask the witnesses to tease that out for me and to explain their thinking.

I accept fully that there is a lot of merit in the shared-services model. We see that in other sectors in HR, payroll and across the local authority sector where it is done well. Dr. Hayden spoke about a growing awareness of a suspicion between the Department and local authorities. I agree with her more and more. I came here thinking a lot of the issues were for the local authorities, conscious that there were a number of local authority representatives here and that we were hearing one side of it. When one meets departmental officials, they tell one another side. There is a gap there and there is an issue we need to address between the officials in the Custom House who say we have problems and councils saying something else. There is a lot of blame in this business. We need to meet the two and bring them together.

The two need to be brought together, and we must find out what the real story here is. The blame game cannot continue. We have to ask why local authorities are telling us that they have substantial lands zoned. I am thinking about Shanganagh Castle and other places around Dublin in particular, which I know well. We need to know what is holding up these developments.

What is the honest assessment of the witnesses in terms of the housing assistance payment, HAP, scheme? We know that many people do not want to take HAP, and their reasons for that. Perhaps both witnesses can share what they really think about HAP and how it can work going forward.

Photo of Ruth CoppingerRuth Coppinger (Dublin West, Solidarity)
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I thank the witnesses for their presentations. When I read this initially I was taken aback in terms of the social policy, but I am mindful that we have not been given the full report and that we have only some of the recommendations. I will hold fire for that reason. When I read that there should be a removal of the maximum rent I thought of the situation in Fingal a few years ago where the manager lifted the cap and many people faced huge rent rises. The witnesses are not advocating the removal of the differential rent scheme, but that situation was something similar. The compulsory deduction of council housing rents from social welfare payments was also mentioned. That does not apply to people in the private rental market. When I read the recommendations I remembered the Taoiseach, speaking during questions on promised legislation, saying that Solidarity stand for people who pay for everything being in one estate. He stopped himself and did not go on to say it, but the obvious implication was that people pay for nothing in the other estate.

The term "social housing" has been stigmatised. When I was growing up the term did not exist; I lived in a council house. Nobody called it social housing. It tags people as social welfare cases. Many of the recommendations listed in the presentation concern making tenants pay more and making them pay for the cost of council housing. The reality is that the Government cannot pay the cost of public housing, in the same way it cannot pay the cost of public transport. Certain things need to be subsidised. However, there has been a dramatic change in the type of person living in council housing. In the 1970s people living in council housing were workers, and then, after the neo-liberal type policy of providing a surrender grant of IR£5,000, council estates were turned into ghettos overnight for lower income people. The rents are lower. As an alternative to the plans of the witnesses, the council suggests that public housing could be built in a way that is also accessible to people on higher incomes who cannot buy houses in the private market, which is most people and most workers in the country. Perhaps the witnesses concur with that approach in the full report. In that way higher rents would accrue to the council. I am not saying that the witnesses are advocating such an approach, but some of the recommendations seemed to be in that vein.

The idea of calling for public investment in maintenance was mentioned. There was a dramatic cut, of some 92% or 94%, in social housing or council housing provision, which means that the council just does not have the money to do the things that have to be done. Council tenants get a really bad rap, and I feel the need to defend them. In the estate I live in - a mixed estate - some council tenants are paying a management fee of €10 a week to a management company. That fee has been reduced recently. I want to counter the notion that people do not pay for things. Rent and mortgage payments should not eat up the entirety of people's and make their lives miserable. The reality is that council housing saved hundreds of thousands of families from dire poverty. It took people out of the tenements, and I shudder to think what would have happened to my family if we did not get a council house. That fact is not widely broadcast anymore, and it should be. I know that the recommendations were perhaps not the entirety of the views of the witnesses, but I baulked at some of them.

Photo of Maria BaileyMaria Bailey (Dún Laoghaire, Fine Gael)
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I ask members to be aware that we are aiming to finish by 6.20 p.m. because we have the local authorities in after that and we cannot go beyond 8 o'clock. If members could ask questions where possible it would be really helpful.

Professor Michelle Norris:

I want to clarify the view of council housing put forward in the report. Ironically, the opening statement in the report concerns the value of council housing. Some 22% of the housing stock in Ireland was originally built by local authorities. Only 8% is now in local authority ownership because of sales to tenants. The opening statement in the report mentions the enormous value of their contribution in terms of providing affordable housing to lower income households, and in terms of increasing the housing stock in the country, and the quality of that stock. The intention of the report is not to denigrate the sector but rather the opposite. It asks how we can provide more council housing in a more efficient way.

In terms of the point raised about the HAP, provision of social housing by councils or approved housing bodies, AHBs, is a much more efficient way of providing for low income households because it provides additional supply, counterbalances the market and helps to bring prices - and rents in particular - down, whereas schemes such as HAP do the opposite in that they subsidise rents and help to increase rents in the private market. Also, the costs of council housing, if funded properly, are very predictable for the State in the long-term, whereas the costs of HAP are completely unpredictable. HAP costs will go up as rents go up. A major concern of mine is that the risks associated with the subsidisation of private rents are never called out, whereas there is a lot of scrutiny of the efficiency of councils.

Councils could ring-fence rents, but in practice they do not do so. One of the things raised in the report is the fact that there is enormous variation between local authorities in different parts of the country. In a rural local authority that has a relatively new housing stock because many dwellings have been tenant purchases, the maintenance costs can be low, and it may be the case that rents reflect the maintenance costs more closely. In those cases, income from rents can be spent on other services. That raises an ethical issue in that the rents of relatively low-income households are spent on subsidising other services rather than on their housing. In urban areas it is different because the housing stock is generally older. Flats, for example, which dominate Dublin City Council stock, are much more expensive to maintain, and the rental income achieved is not enough to maintain the stock, particularly in urban areas. As a result, the stock runs down and people end up living in poor conditions in some cases. We also have to go in via a regeneration scheme or upgrading after a long period in a way that is very destabilising and undermining to the communities living there. The report advocates replacing income-related rents with rents that reflect the cost of provision as a way of ensuring that there is an adequate rent scheme to manage and maintain the dwellings and that maintenance can be done on an ongoing basis rather than having to go in with a big regeneration scheme at the other end. In order to address affordability there would have to be a subsidy in place for tenants who could not pay the rent. Linking rents to costs has many efficiency benefits, one of which relates to the off balance sheet model that Deputy Pat Casey raised.

Funding social housing off-balance sheet is very challenging. One of the criteria used by EUROSTAT in making assessments about what is on-balance sheet and off-balance sheet is the level of subsidy from the State being less than 50%. Under the current model whereby the sector is funded by income related rents, it would be almost impossible to achieve an off-balance sheet model. The subsidy from the State would have to be well over 50%. Also, any system funded using loans, which is generally the way the off-balance sheet model is funded, needs a predictable source of income to enable repayment of the loan. Income related rents are not a predictable source of income. It is not that Dr. Hayden and I are not concerned about showing affordability; we are. The point I am making is that we need to achieve affordability in a different and more efficient way than by income related rent.

Reference was made to sales of dwellings to council tenants. Our concern is around the discounted nature of sales rather than the sales per se. The fact that the dwelling is sold at a significant discount and well below replacement cost creates inefficiencies. When there is a loans-funded scheme, it is difficult to sell dwellings at a major discount because there is a loan outstanding on the dwelling and that creates further inefficiencies.

Use of successive tenancies varies throughout the country. In rural areas, they are seldom used. The problem with successive tenancies is that they are more common in urban areas. They are more commonly used and people use their right to inherited tenancy. It is more commonly used in urban areas where demand for housing is very high. It raises equity issues for people on the waiting list who are trying to get into council housing.

Photo of Maria BaileyMaria Bailey (Dún Laoghaire, Fine Gael)
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We will pause for a moment. There are votes in the Chamber. Senator Boyhan will take the Chair and continue with the meeting. Next up is Deputy Darragh O'Brien, but we will come back to the other speakers on our return. We will be back by the time Senator O'Sullivan, Senator Murnane O'Connor and Deputy Boyd Barrett have spoken. Is it agreed that Senator Boyhan can take the Chair while we vote? Agreed.

Senator Victor Boyhan took the Chair.

Photo of Darragh O'BrienDarragh O'Brien (Dublin Fingal, Fianna Fail)
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I do not mind. I will be quick, if that is okay.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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When we resume, it will be with those who went to vote. Is that correct?

Photo of Darragh O'BrienDarragh O'Brien (Dublin Fingal, Fianna Fail)
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I thank the deputation for the presentation. I was at the launch of the report, which I have read, as well. I thank Professor Norris and Dr. Hayden for being here. I am going to confine my comments. There is a great deal in the report. The deputation has raised serious issues about the sustainability of the current rental model. I do not believe that social housing tenants get a bad rap either, but I believe we can improve the scenario. The housing assistance payment is completely and utterly unsustainable. It will keep eating up our housing budget as it increases. We need permanent solutions. People will see in the budget this year how much additional funding will be available. Obviously, families are on HAP and we cannot simply stop the payments. The problem with aspects of Rebuilding Ireland is that 50% of those deemed housed in the targets are housed through HAP tenancies and that is not a sustainable model. The deputation is perfectly right to highlight that.

I want to focus on one element. Professor Norris has been able to say many things that some of our friends in the Gallery from local authorities would probably like to say but cannot. One aspect I intend to focus on is condensing and streamlining the approvals process. I am unsure whether the deputation looked into the cap that is set by the Department of Housing, Planning and Local Government on local authorities. They have to submit anything more than €2 million to the Custom House. That is insane. Basically, in my county, Fingal, it probably means a scheme of over eight, nine or possibly ten units has to be submitted. Anything over that will go to the Custom House, join the 59 week merry-go-round and be delayed. What is the appropriate level? Obviously, we need oversight and we do not want standards to be reduced in any way, shape or form. My view was that cap could be up to €10 million. It would let local authorities at it and allow them to build schemes of 40 to 50 units. Did the deputation get any feedback through the conversations and engagement with local authorities? If local authorities were let at it, most of them would be able to deliver more than they are delivering now. That is my firm opinion.

Another point relates to off-balance sheet model. The special purpose vehicle was approved by the Central Bank. The SPV is not in place but the credit union model of investing in social housing was given approval on 1 February this year. Does the deputation see that model operating? If we created a special purpose vehicle for investment whereby local authorities could borrow, would that meet the EUROSTAT requirements relating to off-balance sheet? Is rent going to be the problem?

The deputation is right in that the cost rental model is the only way forward. If it needs to be supplemented for some tenants by HAP in the interim, then that is fine, but we are going to have to be serious about delivering thousands more social homes. That is what I want. We also have to be serious about levels of rent and sustainability. The report is very good and I hope people will listen. I will be back, but I have to go and vote now.

Photo of Victor BoyhanVictor Boyhan (Independent)
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We will wait for the answers to those questions. We will push on to the next speaker, Senator Grace O'Sullivan.

Photo of Grace O'SullivanGrace O'Sullivan (Green Party)
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I, too, was at the launch. The report is a great contribution to the issue of local authority housing. I came back from the Netherlands in 2000 as a single parent with three children and went into social housing, so I know what it is like. As someone said earlier, it is very different from 30 years ago. The demographic has changed and the type of people who need support from the councils has changed. I am very grateful to the local authority in Waterford that facilitated me.

Did the deputation meet Department officials? What was their reaction to the report? The question of succession is something of a bugbear for me. I see it in my area in and around Waterford. There may be a family in a council house. Through the course of the years the children grow up and move out. Perhaps one member of the family is left with an ageing mother who then dies and then a single person is occupying a house that was designed for a family of five. These are some of the inefficiencies in the system. Is the deputation aware of that? Did they come across it while writing the report? Does the deputation have a best example of a local authority from the research? The report covers the future of council housing. Does the deputation have an example of another European country where council housing is being rolled out in an efficient and effective way? Could we look at such an example as a model?

Photo of Victor BoyhanVictor Boyhan (Independent)
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We will take Dr. Hayden and Professor Norris. They might like to address those questions first and then we will go to Senator Murnane O'Connor after that. We have some time.

Dr. Aideen Hayden:

There were rather mixed views about succession among the people we interviewed. On the one hand there was a desire to ensure we have stability within communities. As Professor Norris has said, it is not practised uniformly throughout the country. Our job as researchers is to reflect the views of the people we interviewed. There is certainly abuse of the succession tenancy situation. Also, as Professor Norris said, there are issues of equity in terms of one person taking over tenancy of a three bedroom house while we have families in hotels. That was simply a response given to us in one of the interviews. We fully accept that succession tenancies create a difficult situation.

The question of succession tenancies was brought up in the context of tenant purchase as well. If we have strong succession tenancies, then, in reality, tenancies never come back to the local authority. That leads to another dynamic of in effect selling houses off cheaply. This is because if the properties are never going to come back to the local authority, there is no incentive on the part of the local authority to keep them within the local authority stock. It is something that we did not embrace in the recommendations but it certainly came up frequently in the interviews.

The reliance of local authorities on the proceeds of sales through internal capital receipts has led to a scenario where because they are underfunded to meet their housing functions, they have been using the proceeds of sales of housing to subvent the carrying out of their functions, which is a perverse incentive to sell housing stock.

I am not sure if we should address the other issue now.

Professor Michelle Norris:

I will wait to answer Deputy Darragh O'Brien's question.

Photo of Victor BoyhanVictor Boyhan (Independent)
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I suggest the delegates answer Senator Grace O'Sullivan's questions.

Photo of Grace O'SullivanGrace O'Sullivan (Green Party)
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I asked about the best examples from the local authorities and abroad.

Professor Michelle Norris:

We have looked at the challenges local authorities face in managing stock effectively. The local authority sector is extremely efficient. There is a 99% collection rate of council housing rents in most local authority areas. The sector is run very efficiently. The point we are making is that it is very difficult to run it efficiently because of the funding model used. The funding model makes efficient management and maintenance very difficult. One of the big issues with it is that it is the same countrywide, whereas the issues faced in urban local authorities are very different from those faced in rural local authorities. Tenant purchase may be perfectly viable in a rural area where the council can easily buy replacement dwellings. They may decide that it is very appropriate because they can replace an older house that has been purchased by a tenant with a newer house that will cost less to manage and maintain. In Dublin, Cork and Galway and parts of the country such as Kinsale where demand and costs are very high the tenant purchase scheme is very difficult to operate because the dwellings are irreplaceable to the council. Governments in the 1960s, 1970s and 1980s spent a lot of money on council housing, but it was then sold off to tenants at a huge discount. The tenants individually benefited, but the State had to come along again in the 1990s, 2000s and now and fund replacement council housing. We are on a treadmill where there is a constant need for reinvestment because the profits are privatised and the costs socialised. Removing tenant purchase would remove that incentive.

With regard to models abroad, relatively few countries have council housing which is a legacy of our colonial past as part of the United Kingdom. Lots of countries have efficient social housing sectors. Austria is a very good example of a country of similar size that has managed to control house prices and rents, not necessarily by putting in place rent controls but by intervening in the market through increased social housing supply when the market is underproviding and to balance the market. It has done it through a model based on long-term affordable fixed-rate loans which are repaid through cost rents and subsidies for tenants where they need them. A benefit of cost rents is that even though the cost may be relatively high today, for example, the cost of providing an apartment in Dublin, it is eroded through inflation. The Austrian model includes a mix of dwellings, for some of which the costs are high, while for some they are lower. There is also a cross-subsidy built in. In time, if we do not sell off our dwellings, we can manage to provide social housing in a way that is relatively cheap for the State. If we do sell off our dwellings at a discount, each successive Government will need to reinvest. That is the point.

Photo of Jennifer Murnane O'ConnorJennifer Murnane O'Connor (Fianna Fail)
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I read the report. We all have concerns, particularly about local authorities.

I raise the issue of rent payments. The reason for the 97% figure is that they scald people. Letters are sent constantly. I have a concern. We are not a bank. I was a councillor for 20 years. As a councillor I worked with the housing department. If one misses one payment, one can be guaranteed to receive a letter from the local authority. The local authority represents the people who most need it. It is not good to constantly send letters. I have said this to the local authorities. We are not a bank and should remember this. I see what has happened as rents have gone up. It depends on how many people are in the household. If there are five people bringing in an income, the rent is based on their combined income. I have dealt with several cases recently where the local authority had not been informed of an extra income and then backdated the payment when it was so informed. I am dealing with tenants who owe thousands and will have to come to some agreement. Some local authority tenants would have a mortgage repayment that would be cheaper than what they are paying to the local authority. Are we losing the sense of what the role of a local authority should be? I am very respectful of the local authorities and will always work with them, but we need to say we are not a bank. That is my biggest concern. The reason 97% of rents are paid is that local authorities send letters.

I will ask about the tenant purchase scheme. It did not work from the beginning. It was stopped for a few years and then the new scheme was brought forward. The new scheme is not fit for purpose as there has to be an income of 50% coming into the household. It is not fair. There might be people living in local authority houses who never want to buy their own house. That is fine and we must respect that view. If one has worked all of one's life and has a pension and wants to buy the house after 20 or 30 years, that is an entitlement which I do not think should be taken away from any person. Adding the 50% income criterion has done a disservice to people. People have come to my clinic whose children have been reared and who now have a little pension. They were able to enjoy life and wanted to buy their house, but they do not qualify. I had another person come to who had won money and wanted to buy his house, but because he was not working he was not able to buy it. I totally disagree with this. If someone has been a good tenant, done up his or her house and never engaged in anti-social behaviour, it is unfair to take that right away from him or her. It is unjust and I do not agree with it. Perhaps 80% of people will not want to buy their house and we are respectful of that decision. We are like the AHBs because they do not do it. We are turning that corner and like Clúid, Respond and Tinteán which do not allow tenants to buy their houses. Every time a tenant wants to do something, he or she has to ring and find out. I do not think that is good. The entirlement should not be taken away. The scheme is not fit for purpose and needs to be looked at. It is unfair to have a rule about having an income of 50% before someone's case is even looked at. Loads of people have applied and been told that they qualify, but they still have not received any word about it. I am not here to criticise any local authority as I worked in the system, but there is never a timescale. If someone goes into the local authority with a form and has qualified, for how long does he or s he have to wait? There does not seem to be a timescale. It is something that needs to be addressed.

I want to talk about the local property tax. People are only surviving, about which there is no question. Particularly in rural Ireland, including in my area of Carlow, people are only making ends meet. Increasing the tax is not good, but I know that we have to get finances. If one talks about repairs and the money coming in, the problem is there is a different system for carrying out repairs in every local authority. One local authority will carry out four or five repairs in a house. It might fix the windows and doors, put in a kitchen or fix a leak. Other state they do not do any of this because their funding is too low. They will only fix electrical problems or roofs because they are health and safety issues. If a roof is leaking, they will fix it.

The delegates mentioned a seminar held with county managers. There is a need for a policy across every local authority. It is very unfair that some local authorities are not receiving the same money as others, which means that they are not carrying out the same repairs. It is causing conflict. I am not blaming the local authorities, but a policy needs to be put in place.

I will be addressing that with the local authorities.

There are massive issues with HAP, as previous speakers have noted.

Photo of Victor BoyhanVictor Boyhan (Independent)
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While the Senator's comments are very interesting, she might ask specific questions of the witnesses. The focus of the meeting is the report.

Photo of Jennifer Murnane O'ConnorJennifer Murnane O'Connor (Fianna Fail)
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I do not think HAP is working. It only allows an increase of 20%, and that is as far as it goes, across the board. To take an area like my own, Carlow is not in a rent pressure zone although all areas should be in a rent pressure zone at this stage, Carlow in particular, given two neighbouring counties are in a rent pressure zone, which is very unfair. What way do the witnesses believe we should go with this? While the 20% discretion is there, should there be a clause for, say, medical issues or hardship? Would the witnesses recommend that?

I believe local authority mortgages are the way forward. Local authorities could do a really good job of giving mortgages but, again, the problem is there is no timescale and people who apply have to wait six to eight months. Do the witnesses believe this should be no more than four to six months, and if people get it, they get it, and if they do not, they do not? I could ask many more questions but I will come back in later.

Dr. Aideen Hayden:

Working backwards, I will deal with HAP, which was also raised by Senator Boyhan. I was asked why people do not take up the HAP scheme when they are eligible for it. They do not take it up because it is in the private rented sector, which is incredibly insecure, and they would only get the security that a tenant in the private rented sector would get. Being realistic, we are all aware there are enormous difficulties in the private rented sector, although we are not here to discuss that today, so I will not go into it. That is the first point.

Second, with regard to rent collection and local authorities, from the local authorities we spoke to, it was certainly our view that they have an enormous sense of responsibly and obligation to their tenants and see themselves very much as the authority of last resort - in other words, there is nowhere to go beyond a person's local authority. They are not in the business of evicting tenants and that is the bottom line. While we do have evidence of very high levels of collection of rents, we also have evidence of very high levels of rent arrears and collecting rent arrears is a difficulty for local authorities. A number of local authorities made the point to us that they are not in a position to go to court, even where rent arrears are quite significant and where the tenant is not interested in co-operating or facilitating the local authority. In some instances, they really are stuck between a rock and a hard place.

Photo of Jennifer Murnane O'ConnorJennifer Murnane O'Connor (Fianna Fail)
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Carlow County Council is very good and it does not bring them to court. The problem is that people get letter after letter. It is not right to bring them to court, and Dr. Hayden is right on that. The only way the councils can get rid of a tenant is due to rent arrears and they are not allowed to get rid of a tenant for anti-social behaviour or anything like that. I agree with Dr. Hayden on that.

Dr. Aideen Hayden:

I cannot talk specifically about the methods that local authorities engage in with regard to letter writing and so forth but, as I said, it was certainly our view that local authorities take their role very seriously as housing authorities, and they certainly feel a significant duty to their tenants.

With regard to the tenant purchase scheme, yes, there is a very significant difference between the current incremental tenant purchase scheme and the previous, historical tenant purchase scheme that has been in situsince the 1960s or 1970s.

The Senator mentioned the approved housing bodies and, again, we are reflecting the views that were given to us. There was a diverse set of views on the whole issue of tenant purchase. Some interviewees were very much of the opinion there was no difficulty whatsoever in selling dwellings as long as they could be replaced. The difficulty was with the level of discount, not the principle of tenant purchase. Many very positive things were said about tenant purchase and the impact tenant purchase has had historically in giving people a stake in their community and so forth. However, the point was also made that, in the current environment, where most local authority estates are not as large as they were in the past and are small-scale estates, it is not possible to re-state those properties in the market either through Part V or any of the other methods. Given the level of the crisis we are currently in, the overwhelming position of the people we interviewed was for a suspension of the scheme in the current environment.

Professor Michelle Norris:

Will I answer Deputy Darragh O'Brien's questions?

Photo of Victor BoyhanVictor Boyhan (Independent)
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As many members are waiting and a number of votes are taking place in the Dáil, it would be no harm if you could answer Deputy Darragh O'Brien's questions. At least we would have that on the record of the House. I am conscious that people are here and we have a long evening ahead. If you can recall the detailed questions, you might proceed to answer them. Is that agreeable?

Professor Michelle Norris:

Yes. I think there are only two issues. The first is the proposal for the deduction of rent from social welfare payments. That is really to address the issue affecting local authorities whereby, on the one hand, they have very high rates of collection but, on the other, they find arrears very demanding or impossible to deal with, and they are loath to seek possession of the dwelling in the courts. That is the reason for the proposal.

In regard to Deputy O'Brien's question around trying to fund an off-balance sheet model for the provision of social housing or council housing, there are two issues that need to be taken into account in a plan of that type. The first is the source of the investment. The Deputy mentioned the Central Bank has approved funding from the credit unions, which would certainly be a non-State source of investment, so it would fulfil that side of the equation. The second issue is the source of revenue. One would need a situation where less than 50% of the revenue is coming from Government, and cost rents would be a way of achieving that, particularly if council housing was let in a way that took account of the need to have financial sustainability of the estates, not just having this based solely on need. At the moment the income limits for access to social housing cover people at the lower end of medium earnings but, in practice, because there is such a long waiting list for council housing, the vast majority of people getting allocations are people on social welfare. As several people have pointed out, that is quite different from the position a number of years ago. If dwellings were let to a mix of people, whether on social welfare or on lower incomes, who would pay the cost rents themselves, we could easily end up with a situation where less than 50% of the revenue coming into the development from rents was subsidised by the State. That would allow it to be off balance sheet, which is the model used in the rest of Europe.

Photo of Jennifer Murnane O'ConnorJennifer Murnane O'Connor (Fianna Fail)
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I believe that is wrong. If there are children in a house, all of it is taken into consideration.

Photo of Victor BoyhanVictor Boyhan (Independent)
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I am conscious of time. We will proceed with Deputy Boyd Barrett, so we can keep the flow.

Deputy Maria Bailey resumed the Chair.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I thank the witnesses for the report. There is a lot of interesting stuff in it, including tables, statistics and facts. Obviously, I welcome some of the recommendations the authors have made, particularly the fact they argue for the merits of social housing and the point that the AHBs do not have the capacity to deliver and that there is an excessive reliance on them. However, I have to take the authors up on a number of issues where I have a bone to pick, I am afraid. They seem to be using terms like "move away from income-related rent", and I have to say this is a significant problem for me. I do not buy the idea, although I am not even sure of the economics of paying for council houses and believe we need to look into it. A lot of this has to do with how long the cost is spread over.

If we insist that it pays for itself within 30 years, we are going to have to charge high rents. It will pay for itself over a long time. There are all sorts of issues with maintenance, the exact calculation of how much rent comes back and the changes in the demographics of those in council housing and the consequent changes in the amount of rent coming back to local authorities.

I ask the witnesses to comment on the failure to raise income thresholds, which is one of the big problems. They should be raised significantly to achieve the social mix about which the Government keeps talking. In some instances, the Government uses the social mix to justify the privatisation of public land. That is not the way to deal with the problem of council housing paying for itself, which has been mentioned by the witnesses, or to get the social mix. We should not abandon income-related rents. We should have a much broader mix of incomes in council housing. I would go further by asking why anybody who wants to live in a council house should not be able to do so. This is the case in many European countries. I ask the witnesses to comment on that.

If we say that some people are eligible for council housing because of their income and other people have to go to the private market, surely that automatically creates a stigma. Why should we not provide, in line with the requirements of differential rent, that one can pay a fair proportion of one's income towards one's rent regardless of whether one has a low, medium or high income? That would be a fair system. If anyone were allowed to apply for council housing under such a system, we would get higher revenues from council housing, which would then cover some of the maintenance issues that have been mentioned. I ask the witnesses to comment on that.

I always think context is important for framing a debate like this about the financial viability of council housing. Notwithstanding the important work the witnesses have done here, surely it is important for us to ask questions about the alternative that is being presented at the moment. I refer to the financing and economics of the social housing model that is being pursued at the moment under Rebuilding Ireland. Of the 137,000 social houses that are supposed to be delivered under Rebuilding Ireland, some 80,000 will come under the HAP scheme, some 4,000 will come under the rental accommodation scheme and some 10,000 will involve leasing. The vast majority of these social housing units will be sourced from the private sector and, therefore, will be vulnerable to whatever the private sector chooses to charge the local authority for them. While there may be problems with the economics of social housing, it is superior to the current approach in terms of the cost-to-value ratio for public money. Perhaps the witnesses will comment on that.

Photo of Maria BaileyMaria Bailey (Dún Laoghaire, Fine Gael)
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I will give Professor Norris three minutes to wrap up.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I should also have mentioned that I disagree with Professor Norris on successive tenancies.

Professor Michelle Norris:

We will have to agree to disagree on that one.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Is there not a strong case for successive tenancies in the interests of maintaining the coherence of communities, rather than having communities turning over all the time?

Professor Michelle Norris:

Such a strong case does not exist in the context of the current housing shortage. I agree with the Deputy that the provision of social housing and council housing is fundamentally much more efficient than relying on HAP and the subsidisation of private rents. The use of mechanisms like HAP and rent supplement creates many risks for the State. As rents are unpredictable, the subsidy that will be required in the future is also unpredictable. These mechanisms create lots of other knock-on problems. They contribute to rent inflation, which creates problems for other people in the private rental market. My position is that more social housing is inherently more efficient. The issue is whether the way in which the social housing sector is funded can be reformed in a way that makes social housing easier to provide and to manage more efficiently. There is evidence that income-related rents for the current cohort of households in council housing do not even cover the management costs, let alone the costs of provision.

The Deputy is correct when he says that the characteristics of people in the council housing sector have changed radically since the 1970s. There are now many more low-income people and people on benefits in the sector, which has a depressive impact on rent receipts. There is a strong argument for letting to a wider range of income groups. Even within the current income limits, many of the local authorities we have studied have moved towards time-on-the-list methods for allocating social housing, rather than allocating based solely on need. This has led to a wider range of income groups going into council housing. That would be a mechanism for addressing the concerns of policymakers about large concentrations of lower-income households. It would also increase the revenue to the sector. I agree with the Deputy, but not on income-related rents. I think income-related rents are the problem.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Would Professor Norris like to comment on successive tenancies?

Professor Michelle Norris:

The problem with successive tenancies is that they are rarely taken up in rural areas where demand for housing is low. The primary take-up is in urban areas where demand for housing is higher. The system of successive tenancies is not sustainable when there is a severe shortage of council housing in urban areas.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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What if it leads to the eviction of family members?

Dr. Aideen Hayden:

I will be brief. When we asked in the interview process about the issue of raising income thresholds, we were told that as long as there is choice-based letting and there are other systems of allocation based on need, increasing the thresholds will make no difference unless an appropriate quantum of housing is available. This brings me back to the purpose of the compilation of our report. We compiled our report to see how we could increase the quantum of council housing within the housing system. It can be seen somewhere in the body of the report that our opinion is that to bring balance to the housing system, approximately 30% of all housing needs to be provided through local authorities or public housing providers. That is the bottom line of where we are coming from with this.

Photo of Maria BaileyMaria Bailey (Dún Laoghaire, Fine Gael)
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I thank Dr. Hayden and Professor Norris for coming before the committee. I found their report and their presentation in Buswells Hotel valuable. We will take it from there. I apologise for the inconvenience of the vote during their presentation. I propose that we suspend for a few minutes to allow the next witnesses to take their seats. Is that agreed? Agreed.

Sitting suspended at 6.47 p.m. and resumed at 6.54 p.m.