4th Quarter 2007

• Social housing output looking more positive if the National Development Plan commitments are delivered on.

2007 will likely see an increase in the output of social housing output from local authorities and voluntary housing associations. This will have included an increase in new social housing completions as well as the number of social housing units currently on site or in progress which is a good indicator in assessing the number of likely completions in 2008 and 2009.

In addition, the number of completed Part V agreements agreed between local authorities and developers to supply social rented housing has increased which has contributed to the increase in social housing supply. However, there a number of existing Part V agreements that are awaiting funding approval which will bolster and if funded would increase the overall social housing output from voluntary housing associations.

• Surplus capacity should be utilised to provide a ‘softer landing’ in the construction sector

The ICSH believes that the surplus capacity in the residential construction sector, due to the projected fall in the supply of private homes, should now be transferred to the increased delivery of social rented housing by housing associations. As well as providing more social housing which will allow households on the local authority waiting lists to be housed sooner, increased social housing will provide a ‘softer landing’ for the residential construction sector in keeping construction workers employed and in turn boosting the Irish economy. Surplus capacity in the residential housing sector can be most directly transferred from private housing to social housing to utilise similar construction workers such as bricklayers, roofers etc. who have directly transferable skills. In addition, a significant part of the cost of new social housing will also be recycled back to the exchequer through various forms of taxes.

• Better value for money for state investment in social housing

The current trading conditions of surplus capacity in the residential construction sector will ensure that high construction price inflation in the social housing sector, which characterised the last NDP from 2000-2003 and effectively eroded the value of state investment in social housing would be much less a problem in 2007. This would arise from more competitive tender prices aligned with rigorous procurement requirements which provide the Government with ‘more bang for their buck’ in the delivery of more social housing for the increased state expenditure in social housing.

• More delivery capacity available from housing associations

One of the key positive indicators for the increased delivery of social housing is that in 2007 there is a considerably increased number of active voluntary housing associations with ongoing building programmes and plans for new social housing projects compared to the start of the previous National Development Plan in 2000.Voluntary housing associations currently have the capacity to provide at least 2000 new homes per annum in line with the government commitments to provide 2000 social rented homes in the period from 2007-2009.

• Key tools to be used for delivery

Some of the key tools for increased delivery of social housing by housing associations involve firstly ensuring that current Part V agreements with developers are funded and sanctioned in ensuring faster completions. Secondly, increasing significantly the available capital funding from the state Housing Finance Agency that provides funding for social housing for low-income families for housing associations. Thirdly, while capital funding is a significant driver of the provision of new social rented housing, dedicated revenue funding for the on site care and support costs for sheltered and supported housing for older people, people with disabilities and the homeless is required. Fourthly ‘aligning’ the capital funding limits between local authorities voluntary housing association to create a level playing field between both is essential for voluntary housing associations reach their potential. The recent changes announced by Minister Batt O’Keefe, Minister of Housing, in relation the capital assistance scheme will provide an important benefit to the voluntary housing sector, especially to housing associations planning to provide housing for vulnerable groups such as the homeless and people with disabilities. These changes to allow 100% capital funding together with a proposed alignment of capital funding limits would create a more positive environment for voluntary housing associations in the future planning and development of housing projects.

• Ultimately reduced waiting times for social housing

The delivery of increased provision of social housing by housing associations and local authorities should result in waiting times for those seeking social housing being reduced. Demand for social housing has in recent years has been recorded at between 43,000 and 48,000 and in some high demand areas can result in social housing applicants waiting years for the offer of a house. The total social housing stock of local authorities and housing associations is in the region of 130,000 available homes for rent and is still too low to be able to allow generally speaking social housing applicants to receive the offer of a home in a realistic time period. A more realistic and optimum waiting list level for social housing in a modern economy such as Ireland should be in the region of a manageable 15-20,000 households seeking social housing. Countries such as Austria and Cities like Vienna demonstrate with a large social rented housing stock maximum waiting times even for high demand areas would be less than 6 months. Waiting times for social housing in Ireland can be reduced with a larger social housing stock.

• Resolving outstanding problems

There are still outstanding problems such the slow availability and assembly of building sites for housing associations and the need for streamlining approval measures which are key to ensuring the timely delivery of voluntary housing projects.

• Increased social housing provision multiplier affect

The current conditions for providing more social rented housing by housing associations reflect the fact it is the most favourable period in the last ten years to increase the supply of social housing. It is dramatically different to that last NDP 2000-2006 where previously construction industry representatives stated due to capacity constraints, there was no capacity available to provide any more additional housing whether private or social. In the current climate increased social housing will have strong societial benefits in reducing waiting lists with more social rented housing to more appropriate levels as well boosting the Irish economy through continued investment in social housing as part of the National Development Plan.

Therefore, the focus for the ICSH will be on the new 2008 estimates process at the end of the month to discover whether a positive forecast for the voluntary housing sector can be realized for the coming year.

Donal McManus
1st November 2007