Affordable Rental Pilot Scheme Should be Prioritised
Monday, 22nd January 2018
The Irish Council for Social Housing (ICSH) has today expressed its hope that the three affordability measures, in particular the state’s move towards an affordable rental scheme, represent a commitment to embed affordability in our housing system. However, the measures still indicate that the state is relying heavily on the private sector to deliver on affordability, offering the sector significant incentives to do so.
One of today’s measure includes a pilot project to deliver an Affordable Rental Scheme using a cost rental model involving Dun Laoghaire-Rathdown County Council, the Housing Agency and an Approved Housing Body and using publicly-owned land. Commenting on the announcement, ICSH CEO Dr. Donal McManus said, “The ICSH has been calling for the State to develop mixed tenure affordable rental solutions and so we’re glad to see the pilot scheme being announced. This is also in line with recommendations from the National Economic and Social Council (NESC) to grow non-profit cost-rental housing provision so that it will gradually shape the overall rental sector. Our housing association members are well-placed to play their part in delivering this type of housing. However, the ICSH is not seeing the scale of ambition and urgency that is required here. A year ago, we had hoped for a forward-looking state rental strategy examining measures over the next two decades and aimed, fundamentally, at changing the behaviour of all stakeholders in the rented sector.”
In relation to today’s measures to make homes more affordable to purchase, Dr McManus added, “A key international housing affordability benchmark is ensuring that households are not spending more than 30% of their disposable income on access to decent and affordable housing. So, in this respect, the Rebuilding Ireland Home Loan is to be welcomed. However, the €320,000 limit in the Greater Dublin Area still represents expensive housing. With regard to the Affordable Purchase Scheme, this is already underway, so there’s nothing new there.”
While housing affordability cannot ultimately be achieved by any one stakeholder, non-profit housing associations have a strong track record in the provision and management of housing and have the experience to assist the Government in the delivery of new rental schemes that produce affordable rents.
For further information, please contact:
Ken Reid, Information and Communications Coordinator
Tel: (01) 661 8334
Notes to Editor:
- The 2014 National Economic and Social Council (NESC) publication 'Social Housing at the Crossroads: Possibilities for Investment, Provision and Cost Rental' defines cost rental as follows: ‘all rental housing, irrespective of ownership, the rents of which cover only actual incurred costs of a stock of dwellings’ (1992: 34). The basic idea of cost rental is that a social-housing provider raises the finance to provide accommodation and charges rents that are sufficient to cover current and capital costs. Because of maturation, these costs tend to fall in real terms over time, allowing cost-based rents to fall also. Cost renting may involve pooling the historic costs of individual dwellings across a large housing stock.’ The publication may be downloaded at: http://files.nesc.ie/nesc_reports/en/138_Social_Housing.pdf
- Measures introduced in other countries that have enhanced the rental markets include affordable rental (often less than full market rents) and cost rental (reflecting the costs of building and managing new rental housing). The ICSH believes that shifting to a cost-rental model will also require a re-examination of the income-based differential rent scheme that successive governments have been wedded to in the social housing sector. Differential rents, a rent system based on household income fails to address the link between the cost of providing and managing rental housing, and the economic rents that are needed to meet these costs for those bodies managing such housing. There has never been a meaningful attempt by governments to address some of these contradictions.
- The Irish Council for Social Housing (ICSH) is the national federation for non-profit housing associations, representing approximately 270 members that provide social housing. The sector manages over 32,000 homes for families on a low income, older people, people with disabilities and homeless households.
Monday, 22 January, 2018