Mr. Sean O'Connor:

I will deal with cost rental first. The Senator is correct that it is a 50-year general designation. There are longer designations. The first homes we let last week on the Enniskerry Road in Stepaside have a 70-year designation because serviced site funding was used. There was blended funding on that project. Housing associations are not going anywhere. There is an element of funding in the designation of 50 years in that we look to the private market for funding. The HFA is our main funder but theoretically it is the funder of last resort. The State would prefer we secured funding through Irish banks or non-Irish banks. There is an issue around the designation and how that is treated. Make no mistake, there is no intention to sell these properties. We were talking earlier about the need to look again at the current funding system of relying on CALF-P&A. The sector would have not problem in signing up to social housing in perpetuity if a grant is provided. That has not been done because there are some funding implications.

With regard to management and maintenance funding, it is a difficulty, especially with associations that have older stock. Tuath and Oaklee, represented today, are quite youthful organisations but older organisations are starting to suffer with their stock. We get a management and maintenance allowance of just over €500 per annum. It has been left to wither on the vine for at least ten years. In the current situation of hyperinflation it is nowhere near adequate. On the average rent across the sector, differential rents apply, similar to in local authorities. The average is probably between €55 and €60 per week. That is not a lot of money to pay for management and maintenance costs, staffing and all the overheads. There is an issue with that.

On the funding system with P&A, there is money within that and it was designed to have money within that to allow for management and maintenance costs. We have to go through rigorous modelling when we have schemes approved and cash flow modelling when we present to banks. We all use a financial modelling tool called Brixx that shows a minimum of 30 years' investment. We have to provide those funds for investment. Often people will say to associations that they seem to have money in their reserves, ask them what that is about and if they could not use that money right now. It is there for long-term provision and capital investment. My association is currently making capital investment in the order of €3 million or €4 million per year to upgrade properties. Retrofitting will have an enormous bill and we hope we will be helped with it. We take it very seriously. We are very careful when we do new schemes that we model them out to ensure we can afford to maintain them properly.

The Senator's last question was about interest rates. We are indeed worried about them rising, not on the basis of what rising rates will mean for us financially but on the basis of what they might mean for development because schemes are starting to become unviable on paper. The inputs are land, construction and the money we need to borrow. When all those higher input costs are combined, we get a highly volatile mix that is leading to unviability in projects. That is where the main knock-on is. We all fix our money for 25 years and then we have a back-to-back payment agreement in the funding system that allows us to match one with the other so there is zero risk. It de-risks the whole thing.