Promoting sustainable communities
Housing report
In association with
Housing for All: A new Housing Plan for Ireland Right now, Ireland’s housing system is not meeting the needs of enough of our people. My colleagues in Government and I are keenly aware of this. Minister for Housing Darragh O’Brien TD writes. As we finally – and thankfully – come out the other side of Covid-19, the Government has stated loudly and clearly that the housing crisis will be given the same attention and focus as the pandemic. We say this because we know that the impact of the housing crisis is felt in every family across our country. Be it the hardpressed tenants stuck in a rent trap or those at the sharpest edge of the crisis, who will spend tonight sleeping in emergency accommodation or worse, sleeping rough on one of our city streets. Criticism of the Plan has, predictably, ranged from it being too ambitious to it not being ambitious enough. It is ambitious. It needs to be. It sets out, over four pathways, a series of bold actions that rise to the challenges we are facing, backed up by an unprecedented financial commitment in excess of €4 billion per annum. Over 300,000 new homes will be built by the end of 2030, including a projected 90,000 social homes, 36,000 affordable purchase homes and 18,000 cost rental
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Credit: Fianna Fáil
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Promoting sustainable communities
Promoting sustainable communities
housing report
“At the heart of the Plan is massively expanding the role of the State into providing affordable homes for purchase and rent while building historic levels of new social housing.” homes. It's the largest State-led building programme in our history. This eclipses the heydays of the 1940s and 1950s. At the heart of the Plan is massively expanding the role of the State into providing affordable homes for purchase and rent while building historic levels of new social housing. A new First Home Shared Equity Scheme will see the State step in to bridge the gap between the finance a person has and the price of a new home. This scheme will help those currently paying high rents to pay down a mortgage on their own home instead. The local authority-led Affordable Purchase Scheme will see affordable homes delivered at an average price of €250,000 while the newly enhanced Local Authority Home Loan Scheme will see a greater number of people eligible for a State-backed mortgage. The income eligibility limit for a single applicant will increase from €50,000 to €65,000 in certain areas, while the interest rate will be decreased for new borrowers. Cost rental is a very exciting aspect of Housing for All which will, for the first time ever in the State, deliver long-term security of tenure at affordable and predictable prices. Over the course of the Plan, 18,000 cost rental homes will be delivered across the country at rates a minimum 25 per cent below open market value.
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Promoting sustainable communities
The eligible tenants, people who are above the social housing income limits, and who wish to rent or are unable to buy their own home, will be charged rents that cover the cost of developing, financing, managing and maintaining the homes only.
housing report
Already tenants are in situ in their cost rental homes in Balbriggan in north County Dublin where some tenants are availing of rents which are approximately 50 per cent below the market rate in the area. As well as the significant ramping up of cost rental homes, the Government will introduce measures which include indefinite tenures and minimum building energy ratings in private rental accommodation. We will introduce new short-term letting regulations through a Fáilte Ireland registration system meaning more rental properties in the long-term rental market. We have already restricted any upfront payment upon the commencement of a tenancy to a total value that does not exceed two months’ rent i.e., a deposit and one month rent in advance. Crucially, we have extended rent pressure zones (RPZs) and linked rents to general inflation putting an end to the annual 4 per cent rent increases which we were seeing. At the time of introducing this legislation, which we did so expeditiously, I acknowledged inflation was rising and said that I would keep the need for an overall cap under review. As part of rent reforms due to be brought before the Oireachtas this session, we will introduce a cap so that rents in RPZs will only go up, if necessary, in line with general inflation to a maximum cap which will be determined in conjunction with the Attorney General and the advice from my department. The commitment given by government for the eradication of homelessness by 2030 was made with careful and thoughtful consideration. Protecting the most vulnerable has to be our priority. The rapid and joined-up response by our homeless services – and their extraordinary commitment throughout the pandemic – resulted in an unprecedented upscaling of services to keep people safe. The strong collaboration that has developed must continue and I will do everything I can to ensure that vital health and mental health supports are provided in tandem with housing for our most vulnerable. In this respect, the commitment given under Housing for All for an additional 1,200 Housing First tenancies over the next five years is key. Housing First provides homeless people with high support needs with housing and the essential
“This Plan will ensure that we achieve a more sustainable housing system with a planning system that is fit for purpose and that will create long-term vibrant communities with the necessary supporting infrastructure.”
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Promoting sustainable communities
wraparound supports required to maintain a tenancy. The tenancy sustainment rate is approximately 85 per cent under Housing First and this means we can help those rough sleeping or experiencing long-term homelessness to successfully exit into secure safe tenancies – something we must continually strive towards.
housing report
Having homes vacant in the middle of a housing crisis is unacceptable. Whether they are vacant local authority homes, known as voids, or derelict eyesores in our towns and villages it’s not something we want to see. Through Housing for All, the Government has set out a number of steps it will take to alleviate this problem and to bring life back into our cities, towns and villages. Last year, 3,607 vacant social homes were brought back into productive use with a further 3,000 targeted for refurbishment and reletting this year. Changes have already been made in respect of the Fair Deal scheme to ensure that there are no disincentives to a person selling the principal private residence and further changes will be made to exempt rental income from being calculated as part of an applicant’s income. This will unlock the potential for thousands of homes to be sold or rent without financial penalties, should a person wish to do that. The new Croí Cónaithe (Towns) Fund which will be established, will be a gamechanger in terms of servicing sites and refurbishing vacant properties in regional towns and villages for prospective homeowners. We all look around our towns and see vacant or run-down sites which we know would be perfect for housing and close to all essential services. This fund will unlock that potential while also providing financial assistance to those wishing to purchase a vacant property in a town or village to refurbish so that they can live in it. A nationwide, local authority-led, Compulsory Purchase Order (CPO) Scheme to purchase vacant homes will be rolled out and this is something I want to see councils get involved in. At least 2,500 vacant properties are to be targeted nationwide. On the other side of this issue is the need for penalties for those who wilfully leave homes and sites vacant. A new vacant site tax will be introduced to replace the vacant site levy which we know has not worked the way it was intended. Information will be gathered through the Local Property Tax returns with a view to introducing a vacant property tax. We need this information because as we all know homes can be left vacant for any number of reasons and this way the tax will be targeted at those who wilfully leave a home idle. These measures combined will make a muchneeded impact in tackling vacancy. Housing for All is not just about delivering the necessary homes for private, social and affordable housing. It is also about setting out a pathway to economic, societal and environmental sustainability in the delivery of housing. Our measures relating to the construction sector, including costs, will help make the delivery of housing more economically sustainable in the long-term. This Plan will ensure that we achieve a more sustainable housing system with a planning system that is fit for purpose and that will create long-term vibrant communities with the necessary supporting infrastructure. The implementation of this Plan is now of the utmost importance. Oversight will be provided by the Cabinet Committee on Housing. Actions will be continually monitored and updated annually to account for the latest analysis, performance against our targets, and any new or corrective actions that may be necessary in order to stay on track towards our targets. By working together to implement this Plan, the Government will make every effort to accelerate the delivery of Housing for All and work towards a long-term sustainable housing system for this and future generations. I am determined this Plan will work, we have the solutions, ability, drive and determination to make a real impact, and importantly we have a plan that is fully financed.
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Promoting sustainable communities
Building sustainable and inclusive communities New CEO of The Housing Agency, Bob Jordan talks to Owen McQuade about supporting the delivery of Housing for All and the importance of affordability and social inclusion in housing and communities.
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Promoting sustainable communities
Bob Jordan takes the helm at The Housing Agency as the Government publishes its new housing strategy. Commenting on the new strategy, Jordan outlines his belief that Housing for All is “a once in a generation opportunity to deal with the issues around the delivery and supply of housing in Ireland”. The housing sector’s confidence in terms of delivery has been buoyed by a promise of multiannual funding totalling €4 billion each year.
“The role of The Housing Agency has always been to support local authorities and approved housing bodies [AHBs] in their delivery programmes; everything from procurement advice and advice on design to new construction methods. For example, over the last number of years our Projects and Procurement team has collaborated with around 50 AHBs. We are also regularly in touch with every local authority in the country. We provide support in sourcing properties for social homes and we share information and best practice on a whole variety of issues,” Jordan explains. Under the previous plan, there was an emphasis on The Housing Agency acquiring vacant properties through the Acquisition Fund. In Housing for All there is an additional focus on advising local authorities on compulsory purchase orders (CPOs). The Agency will establish a central advisory service to assist local authorities with a CPO programme to acquire vacant properties to provide homes. The Housing Agency will manage the Croí Cónaithe (Cities) Fund which will “bridge the viability gap that exists for those build-to-sell apartment blocks of four storeys or more” on
“There are a lot of people attracted to urban living in apartments and we need to ensure there is compact growth in our cities through the use of higher density developments,” Jordan remarks, adding: “It’s about getting developments moving that already have planning permission. “When we were all restricted within our 5km perimeters during the Covid crisis, we had the opportunity to observe every detail of our local neighbourhood. I heard people, particularly young people, remarking on the significant number of vacant properties in their area. There must be a real focus on bringing these vacant properties back into use.
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Supporting delivery
between 70,000 and 80,000 planning permissions, 40,000 of which are in Dublin.
“There are some good examples where this has already happened. Recently, I was in Cork city when the Taoiseach opened the new Peter McVerry Trust regional office and we saw a former bank in the city centre converted into five onebedroom apartments. There are lots of opportunities like that in our cities and towns right across Ireland.”
Affordable housing The Housing Agency also has a role in advising on the new Part V requirements. Under Part V of the Planning and Development Act 2000 (as amended), developers are required to provide 10 per cent of zoned residential land to the State for social housing. Under revised legislation passed in the summer, this is being increased to 20 per cent and affordable housing will be provided as well as social housing.
COST R ENTAL S C H E M E S Enniskerry Road, Stepaside, Dublin 18
Taylor Hill, Balbriggan, County Dublin
Lancaster Gate, Cork
In September 2021, the applications process began for 50 purpose-built cost rental homes at Enniskerry Road, Stepaside, Dublin. These cost rental homes will be managed by Respond and Tuath Housing and are being delivered on land provided by The Housing Agency under the land aggregation scheme. The 50 two-bedroom apartments will be let at the beginning of 2022 at a monthly rent of €1,200, a significant reduction when compared to market rents for two-bedroom apartments in this location. Having managed the transfer of lands to Dún Laoghaire-Rathdown County Council as part of this project, The Housing Agency has worked closely with the local authority as well as with the Department of Housing, Local Government and Heritage, Tuath, Respond and the Housing Finance Agency in bringing this project to completion.
In August 2021, the first tenants moved into Clúid Housing’s cost rental homes in Balbriggan, County Dublin. The 25 new homes are a mix of two-, three-, and four-bedroom properties. Under the cost rental scheme, rents for the homes are set at a minimum of 25 per cent below open market values with prices for the Taylor Hill, Balbriggan homes starting at €935 per month – around 40 per cent below local market rates. The Balbriggan homes are conveniently located close to social, educational, commercial, transport and recreational amenities. The properties are semi-furnished with white goods and flooring supplied.
In August 2021, Clúid announced construction of Cork city’s first cost rental homes. A mixed tenure development of cost rental and social homes will be developed on the site. The 88 new apartments will consist of 73 cost rental homes. When complete, the scheme will be a mix tenure community of one-, two-, and three-bedroom properties. Monthly rent for Clúid’s Lancaster Gate homes will start at €990 per month, over 30 per cent below local market rates. Lancaster Gate is being delivered in partnership with O’Callaghan Properties, one of Ireland’s longest established property development and investment companies. When complete, the Building Energy Rating (BER) will be A2.
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“Regardless of which organisation we are supporting, there is a need to focus on the family or individual in need of a housing solution. Whether it is a family affected by pyrite, a person living in fear of losing their home because of mortgage arrears, or the person who is homeless and needs a home, we must always keep them at the top of our mind.” Housing for All aims to expand the affordable segment of the housing market and The Housing Agency will have a central role in those efforts, having established an internal affordable housing unit last year. The Housing Agency is advising the local authorities on how they can deliver both social and affordable housing. “The affordable segment bridges that gap between social housing on one hand and the private market on the other. People who do not qualify for social housing, but who cannot afford to buy or rent on the open market,” Jordan explains. The Housing Agency will support local authorities with the Local Authority Affordable Purchase Scheme. Under the scheme, local authorities deliver, or facilitate the delivery of, new homes in areas where there are affordability challenges, targeting average prices of €250,000.
Cost rental model The Housing Agency has been central to developing a vision for cost rental homes in Ireland. “Cost rental is a new tenure model in Ireland,” Jordan notes, adding: “As far back as 2004, the National Economic and Social Council [NESC] was talking about the cost rental model. The rent is based on the cost of financing, constructing, managing, and maintaining the
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property rather than on open market rents. It is a more sustainable model of providing rental housing.” Alongside Dublin City Council, The Housing Agency promoted the concept of cost rental to many policymakers in the Irish housing sector when it hosted an exhibition of the Vienna model of cost rental homes in 2019. “It has gone from concept – a policy proposal in the early 2000s – to something tangible for people,” Jordan recounts, adding: “It then went into the Affordable Housing Act 2021 and currently, there are projects being delivered in Stepaside and Balbriggan and a scheme is planned in Cork. It is now very real, with more schemes on the way in 2022.” Tenants in cost rental schemes are set to pay at least 25 per cent below the local market. As cost rental grows over time, it is anticipated to have a dampening effect on overall rents. “Our role is to help embed this new tenure with solid foundational documents, legal agreements, and the cost rental equity loan scheme,” The Housing Agency head outlines. When asked if he believes that Ireland is ready for the ‘pure’ Vienna type scheme, whereby tenants pay below 30 per cent of their income; Jordan replies that the model will likely evolve over time in Ireland but emphasises: “Cost rental is different to
Promoting sustainable communities
social housing and has some features of home ownership. Tenants on moderate incomes can feel a sense of security in their homes, they can put down roots in their communities, and they can invest in maintaining their homes knowing they will enjoy the benefits.”
Social inclusion and sustainability
The second component is having a varied mix of property types; one-, two-, three-, and four-bedroom properties. Through his previous role leading the Housing First programme, Jordan remains cognisant of Ireland’s 4,500 single homeless adults and their needs. Most single adults experiencing homelessness require onebedroom properties. However, only a small proportion of new social housing properties are one-bedroom. He observes that while this type of property is very important for those exiting homelessness, as well as older people, sometimes it is stigmatised in communities. In this respect, Jordan highlights Ireland’s changing demographic landscape. “Households are getting smaller and many people on social housing lists need one-bedroom homes. It is time to shift the focus away from the traditional three-bedroom semi-detached house,” he says. Overall, mixed communities must be socially inclusive. That means the housing needs of older people and those with a disability should be integrated into developments. Simultaneously, as well as being socially inclusive, sustainable communities must also be climate resilient. As Ireland responds to the climate crisis, housing has a role to play in addressing how we use energy more efficiently. This can be achieved, Jordan explains, by facilitating compact urban growth and ensuring that building regulations are applied so that new homes do not add to greenhouse gas emissions, while the energy efficiency of the existing housing stock is improved.
Future Having worked across the sector, in the Department of Housing, as an adviser to the Minister, as the CEO of Threshold, and in Dublin City Council, Jordan’s passion for housing is widely regarded. Having equipped The Housing Agency CEO with the advantage of having “walked in their shoes”, this experience also gives him an insight into how each component of the housing sector delivers its programmes. As such, he is cognisant of the priorities of each of these stakeholders.
the family or individual in need of a housing solution. Whether it is a family affected by pyrite, a person living in fear of losing their home because of mortgage arrears, or the person who is homeless and needs a home, we must always keep them at the top of our mind. In doing so, we are equipped to design better programmes and deliver better responses for local authorities and AHBs. We must mirror the focus on people contained within Housing for All.”
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Having conducted research into mixed tenure housing, Jordan highlights two crucial components. The first is achieving the widest possible mix of tenures in a neighbourhood. “Tenure is really a proxy for income; therefore, it is about people with different incomes living within the same neighbourhood,” he says.
organisation we are supporting, there is a need to focus on
P RO F I L E
Bob Jordan
Bob Jordan is CEO of The Housing Agency. A native of Dublin, he has lived in Dublin city centre for the last 30 years. Bob has over 20 years’ experience working across the housing sector, starting with Dublin Simon Community. He was CEO of the housing charity Threshold for 10 years, helping people who are at immediate risk of losing their tenancies in the private rented sector, “an issue that is still as relevant today as when I started with Threshold”. As Special Adviser to the then Housing Minister, Simon Coveney TD, he was very much involved in the preparation and implementation of Rebuilding Ireland. Immediately before joining The Housing Agency, he was the National Director of the Government’s Housing First programme, working collaboratively with local authorities, HSE, AHBs and NGOs to provide permanent housing and wraparound supports to people with a history of rough sleeping and long-term homelessness. His interests outside work include “participating in the Dublin arts scene and getting the best out of urban living”.
Remarking on conversations with his colleagues in The Housing Agency, Jordan concludes: “Regardless of which
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Credit: Merrion Street
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Promoting sustainable communities
Housing for All: A plan for the ‘squeezed middle’ Taoiseach Micheál Martin TD, Minister Eamon Ryan TD, Tánaiste Leo Varadkar TD and Minister Darragh O'Brien TD at the launch of Housing for All.
“Right now, Ireland’s housing system is not meeting the needs of enough of our people,” reads Housing for All, the Government’s new housing plan. The recently published plan will act as the Government’s blueprint for solving the housing crisis, replacing the previous plan, Rebuilding Ireland, five years after it was introduced. The challenges facing the Irish housing sector are manifold, but they are neatly summed up in the seven bullet points that appear at the beginning of Housing for All: 1. there are not enough houses to buy or rent in the private sector; 2. there are not enough houses being built by the State for those who need social housing; 3. housing has become increasingly unaffordable for the ‘squeezed middle’ who would once have expected to be able to purchase their own home; 4. too many people are experiencing homelessness or are unable to access appropriate housing; 5. the cost of building housing is too high; 6. too much vacant housing stock remains unused; and 7. housing stock needs to be more environmentally friendly. A foreword jointly attributed to the three leaders of the Government parties, Taoiseach Micheál Martin TD, Tánaiste Leo Varadkar TD and Minister for
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Promoting sustainable communities
Environment, Climate and Communications Eamon Ryan TD states that the plan’s objective is “that everybody should have access to sustainable, good quality housing to purchase or rent at an affordable price, built to a high standard, and located close to essential services, offering a high quality of life”. The way that Housing for All seeks to achieve this, and to solve the above issues, is by building 312,750 new homes between 2022 and the end of 2030, constituting what Minister for Housing, Local Government and Heritage Darragh O’Brien TD heralded as the “largest State building programme in our history”.
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90,000 of these homes are set to be social housing, whose leases will be managed either by local authorities or housing bodies; 53,800 affordable and cost rental homes will also be built. In order to provide for this State building of homes, the Land Development Agency will have its budget increased by €1 billion to €3.5 billion. 170,550 homes will be privately-owned or rented. The Economic and Social Research Institute (ESRI) has previously estimated that 33,000 new homes would need to be built every year until 2030 in order to address housing demand in Ireland;
30%
Housing in Ireland, Q2 2021
20% 10%
Dublin
Leinster (excl. Dublin)
Munster
Connacht/Ulster
0% -10% -20% -30% -40% -50% -60%
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Housing for All pledges to deliver 33,450 homes in 2024 and 40,500 in 2030. Affordability is also a key kernel of the plan’s attempt to tackle the housing crisis, and there is within the plan two affordable housing schemes that are to make 4,000 affordable homes available each year, along with a new affordable purchase shared equity scheme for first-time buyers. Prices for homes that qualify as “affordable” vary based on their locale, with a cap of €225,000 in rural areas, or up to €450,000 in the most expensive parts of Dublin. As much as 20 per cent of the cost will be covered by the State, or up to 30 per cent if the Help to Buy scheme is not used in conjunction. A local authority-led affordable purchase scheme will “see new homes delivered, many built by local authorities in key areas facing the most acute affordability constraints” with average purchasing prices of “approximately €250,000”. The Help to Buy scheme’s extension into 2022 was confirmed in Budget 2022. An “owneroccupier” guarantee is to be introduced before the end of 2021, legislating for houses in new estates to be ringfenced for first-time buyers and other owneroccupiers. The Local Authority Home Loan scheme is also to be expanded in order to widen its scope and extend eligibility to single applicants with gross income of up to €65,000 in the Greater Dublin Area, Cork, and Galway.
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The lynchpin of the Government’s attempts to tackle ever-increasing rents is the delivery of an average of 2,000 cost rental homes per year, 18,000 by the end of 2030. Under the cost rental model, rents are based on the cost of building, managing, and maintaining the homes, with rents generally coming in at around 25 per cent below the market average. Rent Pressure Zones limiting increases in highcosts districts will be extended to 2024, and, in an attempt to combat the fact that “short-term letting has increasingly taken the form of tourism letting”, the Government will “will bring forward revised regulatory controls in this area with a view to ensuring the availability of residential accommodation, balanced with the needs of the tourism sector, as appropriate”. The precarity of renting is to be addressed via the introduction of legislation for tenancies of indefinite duration, similar to types of rental agreements seen often in other European countries, “subject to legal advice”. An annual registration process will be introduced in order to strengthen oversight of tenancies, while the Government will also facilitate increased enforcement of registration of tenancy requirements through measures such as the expansion of data-sharing arrangements between the Revenue Commissioners and the Residential Tenancies Board (RTB).
Average house prices and price changes by area, Q2 2021 €700,000
80%
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60%
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40%
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rth W Co es u So t C nty ut ou Du h nt b y l NoCou Du in b r n Du th D ty D lin bl ub ub in li li So Cit n C n ut y C ity h Du ent bl re in L C W ong ity es fo tm rd ea th O ffa l La y Ki ois lke nn Ca y W rlow ex f W ord ick l Ki ow ld a M re ea th Lo Lim ut h er ick Cla Co re un Co K ty rk er Co ry u W Co nty a W te rk C at rfo it er y fo rd C Limrd C ity er ou ick nt y Tip Cit pe y r Do ary ne g Sl al ig G Ma o G alw y alw a o ay y C Ro Co ity sc unt om y m o C n M av on an ag h Le an itri m
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Housing for All versus Rebuilding Ireland The most immediately obvious comparison between Housing for All and the plan it has replaced, Rebuilding Ireland, which was introduced by the Fine Gael-Labour government in 2016, is that the Rebuilding Ireland Home Loan scheme has been extended to include single applicants with gross income of up to €65,000 in the Greater Dublin Area, Cork, and Galway as stated above, with the scheme now known as the Local Authority Home Loan scheme.
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Average price
Source: Daft.ie
Promoting sustainable communities
The new plan also sees an increase in scope and ambition when compared with its predecessor. For example, in terms of social housing, Rebuilding Ireland planned for the construction of 47,000 social units between 2016 and 2021, averaging 9,400 social units per annum for five years. Housing for All, on the other hand, plans 90,000 social units to be delivered from the beginning of 2022 until the end of 2030, equating to an average of 10,000 units per annum for nine years.
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Plans for the delivery of all homes are also similar, but again have been scaled up in response to the increasingly squeezed demands of the housing market. When Rebuilding Ireland was published in 2016, just 12,600 new homes had been delivered in 2015, and the plan contained the goal of reaching 25,000 homes per year by 2021, almost doubling the rate of construction in five years. For various reasons, this goal was not reached, but figures for 2019 and 2020 illustrate where the construction sector is now in terms of housing completions. 21,087 homes were completed during the Covid-19-hit year of 2020, a 1.9 per cent fall from 2019’s 21,241. Housing for All’s target of 40,500 homes built in 2030 would once again look to almost double Ireland’s construction rate, this time over the timespan of 10 years. Analysis of the overall housing planned to be constructed also makes for interesting comparison: Rebuilding Ireland’s plan of reaching 25,000 houses per year with an average of 9,400 social houses included would have resulted in social housing accounting for 37.6 per cent of all new housing built; whereas, Housing for All’s plan to deliver 90,000 social houses within a total output of 312,750 means that social housing accounts for 28.8 per cent of new housing built, a reduction of almost 10 per cent.
“[Housing for All] will give the squeezed middle a real chance to realise their dreams of homeownership.” Minister Darragh O’Brien TD
It is clear within the forewords and the comments of the Government ministers involved in the creation of Housing for All that the main difference between the two plans is the newest plan’s focus on what the Government is terming the “squeezed middle”, those who earn above the threshold to qualify for social housing, but who are still unable to access a sufficient mortgage to buy a home of their own. Indeed, Minister O’Brien explicitly states that Housing for All is “a plan for the squeezed middle”. As such, an average of 6,000 affordable homes for purchase or rent are set to make up a proportion of the planned average of 33,000 homes delivered per year, meaning that they will account for 17.3 per cent of that total. This will mean that taken together, social and affordable homes will represent just under half (46.1 per cent) of the houses to be delivered by 2030. In terms of the rental market, the most notable difference between the two plans is the presence of cost rental plans in Housing for All. The term “cost rental” appears 44 times in the full document of the new plan, it does not appear once in Rebuilding Ireland. Housing for All plans to bring at least 2,000 cost rental properties to the market per year, with rents intended to be at least 25 per cent below market value. The contribution under Part V legislation by developers has also been increased from 10 per cent to 20 per cent in order to provide more affordable and cost rental housing. Upfront deposits and rent payments, another area untouched by Rebuilding Ireland, will now be capped at two months’ value. Writing in the plan, Minister O’Brien says: “The State will move ambitiously in order to break the rent trap and prevent homeownership becoming a relic of the past and the preserve of the few. It will give the squeezed middle a real chance to realise their dreams of homeownership.” The thrust of Housing for All distinguishes itself from its predecessor by virtue of this focus on the “squeezed middle”, attempting to solve Ireland’s housing by a multipronged approach that addresses shortages of supply at every tier. However, what Minister O’Brien and his colleagues in government intend is that — unlike its predecessor — Housing for All will ensure the tangible delivery of the overarching ambition detailed within; the delivery of sufficient housing supply, including social and affordable homes.
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Respond: Delivering over 1,400 homes across Ireland
Santry, Dublin
Advertorial
Respond, the Approved Housing Body and community services provider, has a building programme in excess of €1 billion and delivers homes in 15 to 18 months from commencement on site at an average cost of less than €300,000 including site and all other costs, based on the homes in its current building programme. These homes are newly constructed lifetime homes delivered on fixed price contracts, adding to the national housing stock. Respond currently have 1,484 homes in construction on site and say that they have the potential to significantly increase their delivery based on their additional construction pipeline for commencement between the remainder of 2021 and the first quarter of 2023, which marks the end of the organisation’s current strategic plan. 46
These are a selection of Respond’s newest developments. All of these homes were supported by the Capital Advance Leasing Facility from the Department of Housing, Local Government and Heritage, private finance from the Housing Finance Agency and in partnership with the local authorities.
69 new homes in Kilbarry, Waterford City, Waterford Kilbarry, Waterford
housing report
The development of 69 homes is a mix of oneand two-bedroom apartments and two- and threebedroom houses. The site is close to the city centre and a wide range of amenities such as health care, schools, food and retail outlets. These homes are a partnership with Waterford City and County Council under Rebuilding Ireland.
55 new homes in Northwood Avenue, Ballymun Cross, Santry, Dublin The development of 55 homes is a mix of one-, two- and three-bedroom apartments built for general needs housing. The homes are located at Santry Demesne, near Ballymun town centre, and are a short distance from Dublin city centre. The homes come with parking and two private garden areas. These homes are a partnership with Fingal County Council under Rebuilding Ireland.
Santry, Dublin
50 new homes in Nuncio Road, Deansground, Kilkenny (phase 1) The development of 50 homes comprises of oneand two-bedroom apartments and three- and fourbedroom houses. The site is a short distance from Kilkenny city centre, within close proximity to a number of schools, sporting facilities, supermarkets and retail outlets. Phase 1, comprising of 28 homes, was delivered in 2020 and the remainder homes in Phase 2 are scheduled for delivery in Q4 2021. The homes were a partnership with Kilkenny County Council under Rebuilding Ireland.
46 new homes and a community building in Duntahane, Fermoy, County Cork
Nunico Road, Kilkenny
Advertorial
This Respond led development was undertaken through Part VIII planning process, in collaboration with Cork County Council and the Housing Agency. The scheme consists of 46 homes and one community building and is a mix of two-bedroom apartments and two-, three- and four-bedroom houses. It is located South West of Fermoy town centre. The homes provide general needs housing, housing for persons with disabilities and older persons housing.
T: 01 808 7700 E: info@respond.ie Social: @RespondHousing
Duntahane, Fermoy, Cork
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Promoting sustainable communities
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Sustainable housing and zero carbon construction Enabling a sustainable housing system is one of the explicitly stated goals in the Government’s new Housing for All plan. eolas examines the targets within that goal in detail and how it is being achieved elsewhere.
Credit: William Murphy
“The future environmental sustainability of our housing stock, including low-carbon housing, is imperative. Sustainable communities are a key focus: people of all incomes living side-by-side, with the right community infrastructure in place to help our cities, towns and villages thrive,” Housing for All reads, setting out the Government’s stall for how sustainability will factor into its attempts to vastly ramp up the delivery of Irish housing stock over the next decade. While there are four key pathways outlined within the housing plan, the plan also contains a separate goal that is “supporting the four pathways”: enabling a sustainable housing system. Five initial steps are outlined within the plan for the achievement of this goal: 1 the investment of €4.5 billion in water infrastructure, which will facilitate new home building; 2 the reduction of the cost of construction through “a coordinated government approach to productivity in residential construction”; 3 the embedding of compliance with the Building Regulations and Building Control Regulations in the construction sector through the establishment of registers of competent builders by placing the Construction industry Register Ireland on a statutory footing;
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“The project made headlines in renewable energy circles due to its status as the first construction site in the world where all machinery, such as excavators, diggers and loaders, was electric… In total, the project saved 35,000 litres of diesel and the 92,500kg CO2 eq.”
4 the strengthening of delivery teams for local authorities to drive housing delivery; and 5 the establishment of a Commission on Housing and the holding of a referendum on housing. The investment of €4.5 billion in water infrastructure is said to be vital to reaching the Government’s target of building over 300,000 homes by the end of 2030, with the funding set to be spent on vital infrastructure up to 2025 and “particular focus” placed on those projects that support future housing delivery. The extension of the local authorities’ capacity through the new Local Authority Housing Delivery Action Plan will enable local authorities to not only build new housing stock, but to improve the quality of existing stock. In order to make the existing stock more sustainable, local authorities will retrofit 36,500 homes to a “B2/cost optimal” Building Energy Rating (BER) by 2030. A minimum BER for private rental properties will be introduced, “where feasible”, from 2025. Under the 2019 introduction of the nearly zero energy building regulations in 2019,
Promoting sustainable communities
all new homes must reach a minimum BER of A2. However, while achieving this goal would mean that all new homes would be highly energy efficient, it does not take into account the carbon that is emitted during the construction of these homes, which typically accounts for more than half of the lifetime emissions of the new homes constructed.
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The Irish Green Building Council has introduced its own zero carbon standard for new homes within Ireland to adhere to as part of their Home Performance Index. Within the index, a zero carbon home is defined as one where “100 per cent of the operational energy use associated with the project must be offset by new on- or off-site renewable energy” and “100 per cent of the embodied carbon emissions impacts associated with the construction and materials of the project must be disclosed and offset”.
Construction using electric machinery at the Olav Vs gate zero emission construction pilot project. Credit: Climate Agency, City of Oslo.
Zero carbon construction Cities such as Oslo, Helsinki and Copenhagen are among those leading the way when It comes to carbon-free construction, with the Nordic cities looking to curb the emissions of one of the world’s highest polluting sectors. The construction industry accounts for more than 11 per cent of global greenhouse emissions, but it is when CO2 emissions from energy use are considered that the industry’s impact becomes even more clear: it accounts for 38 per cent in this case. One of the most high-profile cases of zero carbon construction came on a site situated on the Olav Vs gate street in Oslo. When work began in September 2019 to transform the street into a fully pedestrianised area, the project made headlines in renewable energy circles due to its status as the first construction site in the world where all machinery, such as excavators, diggers and loaders, was electric. The project served as a pilot project for the world’s first zero-emission urban construction site, and although it did not reach completion entirely emission free in the end, due to issues such as a propane burner that could not be rebuilt or replaced by a carbon-free alternative, it did save 99 per cent of emissions when compared to a scenario of using diesel-powered machines. In total, the project saved 35,000 litres of diesel and the 92,500kg CO2eq. Both Helsinki and Copenhagen have been quick to follow on the heels of Oslo, with both cities beginning their own zero carbon construction pilot projects in 2020. In November 2020, the mayors of four cities (Oslo, Los Angeles, Mexico City and Budapest) became the first mayors to sign up to the C40 Clean Construction Declaration, which aims for a 50 per cent in construction emissions by 2030. Of course, Oslo’s ability to lead from the front has not occurred in a vacuum; even before its attempts to achieve zero carbon construction, construction accounted for 7 per cent of the city’s emissions and the city is the capital of Norway, a country where 98 per cent of the electricity grid is powered by renewable energy. The lessons to be learned for Ireland, where construction sector emissions are not officially recorded but must account for their fair share of energy related CO2 emitted by both the transport and industry sectors (40 per cent and 21.3 per cent of total energy related CO2 respectively), are manifold and not just exclusive to the construction sector itself. On top of its commitment to the Clean Construction Declaration, Oslo has also committed to making all of its municipal construction sites zero-emission by 2025 and all construction work zero-emission by 2030, goals which six further cities have agreed to. The lesson for Ireland would seem to be that major investment in an electricity grid powered by renewables enables this kind of sectoral change, yet SEAI figures show renewable targets for 2020 have most likely not been met, with just 33.2 per cent of electricity coming from renewable sources in 2018. If Ireland is to rebuild its housing stock in a sustainable fashion, there is work to be done.
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Sustainable business performance of social housing providers In a very short period, sustainability has become part of the daily vocabulary of society. It is driven by the desire to make a visible contribution to a better world: benefitting the planet (mitigating climate change), and the people (reducing social inequality), writes Director of Business Development and Sustainability Lead at RITTERWALD, Ad Hereijgers. Dedicated professionals want to be held accountable for their ESG credentials. Sustainability has also entered the social housing sector by showing its positive impact on tenants (the S), by meeting serious retrofitting challenges (the E) and by being compliant in a regulatory environment (the G). Social credentials are distinctive, governance is without discussion. However, the route to net zero carbon will become a bumpy ride: ageing properties, ambitious EU goals and timelines, externalities, and different facts and metrics and various opinions. Although we acknowledge the complexity, this should not become an excuse to delay action by approved housing bodies and local councils in Ireland. We suggest this call for action and response is supported with five guiding principles.
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1. Look at two sides of the coin Yes, decarbonisation of homes is complex and urgent. No, there are no quick fixes (power grid is an externality), but there is low hanging fruit (educate tenants with energy savings to avoid energy poverty) and no excuse to wait for others (government support will only be part of the solution). Yes, decarbonisation is expensive. No, there is no lack of funding, but it may need re-allocation among new housing delivery, retrofitting and community 50
development to reorganise debt capacity. Moreover, partnerships with investors for cost-rental housing will help. Yes, private landlords as well as homeowners should also contribute their share. No, social housing providers do not have to be solely responsible.
2. Create opportunities The social housing sector has a track record of addressing challenges that effect society. It often starts with engagement with government to partner in tackling the issue. However, government will not provide all the answers let alone all funding, although it is likely to wield the stick. Although decarbonisation affects the entire sector, there will not be a one sector solution. It becomes more evident that appropriate responses require leadership from frontrunners. First movers will turn challenges into business opportunities. And yes, success and failure will alternate as part of ultimate successful innovations. One of the effective ways to show leadership is to make the individual corporate decarbonisation agenda part of the regular asset management strategy. Then decarbonisation integrates regular business operations of a residential real estate company with a social purpose.
3. Think with the head, act from the heart The urgency for mitigating climate change comes with many emotions in society, understandably, because society at large may have waited too long. There is increasing awareness of the implications of climate change and there is a growing desire to leave a better world for future generations. However, there is a danger that actions are driven by emotions and less by evidence-based facts. Also, in social and affordable housing we should stay aware, that homes are inert and capital intensive to build, maintain and operate. Sustainability combines capital investment and consumer operation of homes. To incorporate and prioritise sustainability responses in a social housing organisation, a materiality analysis can be a useful tool in designing a sustainable implementation strategy (see Figure 1).
4. Follow the money Because equity does not have access to approved housing bodies in Ireland, debt capital is the main source of funding. And debt capital markets across Europe are showing a fast-growing interest in sustainable related debt instruments such as green, social, and sustainable
retrofitted home also requires a different behaviour (windows, installations, ventilation). And even more important, prior to retrofitting, a tenant can pick the low hanging fruit by savings in energy consumption. The other is to create a learning environment among housing staff: what works best and how to accomplish that best.
Figure 1
bonds and sustainability-linked loans. Current ESG investors and new entrants (all working with growing ESG mandates) are increasingly identifying social and affordable housing on their radar. To support them in their allocations of capital, an ESG accreditation is helpful. We have developed the Certified Sustainable Housing Label that is instrumental in countries across Europe. In combination with a Sustainable/Social Finance Framework and ESG Reporting (for instance by following the UK Sustainability Reporting Standard), also approved housing bodies in Ireland can become more visible for international ESG investors.
5. Use economies of scale Due to their sizes, although still relatively modest, approved housing bodies can make a difference in successful retrofitting. House archetypes require different approaches. Pilot projects and other test bedding can lead the way to economies of scale. Scaling can often be aligned with cost reduction and therefore affordability for tenants. And don’t forget, there are no failed pilots: there are always lessons to be learned also how not to proceed.
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To conclude, we would like to invite the approved housing bodies to further develop pathways to decarbonisation and integrate these in regular business operations. Professional asset management is key. New technologies (particularly in installations) are going to help but are not fully test bedded and available yet. Installations (need alternative power) therefore we need to address both the fabric and the consumer, tenant. The fabric for future proofing the brick and mortar and to control energy poverty. The tenant to engage and ensure they get the maximum benefit from low hanging fruit in energy savings. The graph below (Figure 2) shows an indicative pathway.
E: ad.hereijgers@ritterwald.nl W: www.sustainable-housing.eu
Two success factors that come with scale: one is to engage tenants in an early stage, to make them aware that a
Figure 2
Collate & analyse data including pilots
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Anticipate regulatory requirements and reflect in strategy & business planning. Engaging with residents & stakeholders Review asset management & development strategy
Business model evolves to enable financing of CO2-reduction measure Financial resources freed through company efforts, e.g. cost savings in operations, external/debt/lease funding Personnel resources allocated accordingly
All levers are activated to reach a maximum reduction in CO2 levels — carbon neutrality Mobilise means beyond housing company (e.g. rising CO2 emissions prices) and government subsidies
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Adequate housing in Ireland housing report
The 219-page Monitoring Adequate Housing in Ireland report proposes a set of six indicators for monitoring the right to adequate housing in Ireland and provides baseline figures across a range of dimensions and across different social groups in Ireland. Jointly published by the Irish Human Rights and Equality Commission (IHREC) and the Economic and Social Research Institute (ESRI) in September 2021, Monitoring Adequate Housing in Ireland considers six metrics for housing adequacy. These are: access; affordability; security of tenure; cultural adequacy; housing quality; and location. Adequate housing as a right is referenced in Article 25 (1) of the Universal Declaration of Human Rights (UDHR): “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.” This is elaborated upon in Article 11 of the International Covenant on Economic, Social and Cultural Rights (ICESCR). Article 11 determines: “The states parties to the present covenant recognise the right of everyone to an
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adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions.” The UN Committee on Economic, Social and Cultural Rights explains this in General Comment No. 4 (1991) and in General Comment No. 7 (1997). The characteristics of the right to adequate housing are: Legal security of tenure; affordability; habitability; availability of services, materials, facilities, and infrastructure; accessibility; location; and cultural adequacy. Monitoring Adequate Housing in Ireland outlines the centrality of adequate housing to quality of life. “Housing provides safety and shelter and underpins people’s ability to hold employment, participate in education, and otherwise engage with civil society,” it notes. In her foreword to the report, Sinéad Gibney, Chief Commissioner at the IHREC argues that Irish housing policy “must urgently move away from primarily treating housing as a commodity”. Amid the removal of emergency legislation enacted during
the crisis to protect tenants, she advocates for the enshrinement of a right to adequate housing in Bunreacht na hÉireann. “A rights-based approach to housing not only acknowledges that housing is more than bricks and mortar,” Gibney writes, adding: “It combats inequality in housing which is pervasive across the Irish housing sector.” Referencing an IHREC 2020 survey, in which 82 per cent of respondents indicated that they consider housing to be a basic human right, she maintains that adequate housing enables all members of society to achieve their full potential, while contributing to a more just and inclusive society. Monitoring Adequate Housing in Ireland establishes a framework to monitor adequate housing through the identification of indicators to measure progress, while providing baseline figures on the housing circumstances of several social groups either prior to, or during the onset of the Covid-19 pandemic. The rationale underpinning the report is the development of indicators to
Promoting sustainable communities Monitoring adequate housing in Ireland: The six dimensions and their indicators Dimension
Indicator
Access to housing
Homelessness Tenure type
Housing affordability
The 30/40 rule Poverty after housing costs Rent and mortgage arrears in the last 12 months Tenure in years
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Security
Subjective sense of housing security due to affordability Cultural adequacy
Selected indicators on cultural adequacy are not individual-level survey data but are instead drawn from national/aggregate level statistics
Housing quality
Over-crowding Housing quality index Ability to keep home adequately warm
Location, access to services and local environment
Access to services Safety walking home at night
understand progress towards achieving adequate housing and to demonstrate inequalities in housing outcomes. It is primarily descriptive and not intended to analyse the factors behind disparities in outcomes. A single metric, the report contends, would not accurately reflect the complexity and multidimensional nature of housing in Ireland. Undertaking consultation with 30 stakeholders representing a range of civil society groups, government departments and agencies, alongside researchers, the research also explored several national datasets. The report proposes a baseline
measurement framework of six key indicators, similar to those identified in the ICESCR: access; affordability; security of tenure; cultural adequacy; housing quality; and location. Across these selected dimensions, it is intended that the report will provide a baseline to measure the progression and/or regression on the right to adequate housing. Simultaneously, it can also determine experiences and outcomes for groups such as ethnic minorities, women, lone parents, younger and older people, and migrants. Acknowledging its limitation in providing a “snapshot of adequate
Source: IHREC/ESRI
housing” prior to or in the initial stages of the pandemic, the report suggests it can “inform debates about the appropriate policy responses to the pandemic and provides a baseline for monitoring progress in achieving adequate housing”. The report produced five primary findings and identified four key challenges. Findings: 1. Lone parents disproportionally affected: Less than one-quarter of lone parents reported home ownership when compared with 70 per cent of the total population. Lone 4 parents were more likely to report
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home affordability challenges (19 per cent) when compared with the general population (5 per cent) and are more vulnerable to housing quality problems such as damp and a lack of central heating (32 per cent) when compared with the population as whole (22 per cent). 2. Ethnic groups at higher risk of overcrowding: More than 40 per cent of Black/Black Irish people, 39 per cent of Irish Travellers and over 35 per cent of Asian/Irish Asian people live in overcrowded accommodation, compared with 6 per cent of the total population.
“Adequate housing is essential to quality of life. Inadequate housing is associated with poor physical and mental health and restricts people’s ability to participate in education, employment, and the community.” Helen Russell, research professor, ESRI adequacy as defined by the UDHR are not being met. Challenges:
3. Almost half of migrants live in the private rental sector: Only 9 per cent of people born in Ireland live in the private rental sector, compared with close to half of migrants (48 per cent). Migrants from Eastern Europe (28 per cent) and non-EU countries (27 per cent) in particular are more likely to live in overcrowded conditions. 4. Disabled people more likely experience housing quality problems: 29 per cent of people living with a disability are experiencing housing quality problems, compared with 21 per cent of those without a disability. Disabled people are also more likely to report fuel poverty and rent/mortgage arrears. 5. People experiencing homelessness continued to be denied basis housing adequacy: In March 2021, 5,894 adults were availing of homeless services, including 913 families who had 2,166 dependents. For these people, the most basic metrics of housing
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1. Covid-19 and homelessness: The potential for homelessness to rise once pandemic protections are removed, allied with limited housing supply amid construction restrictions, is a “real risk”. The report emphasises that homeless figures do not account for ‘hidden homelessness’ or those not in contact with homeless services. 2. Rent inflation exceeding wages: Since 2007, rent costs have increased at a rate of almost 40 per cent in Dublin and around 20 per cent elsewhere. Each of these rates exceeds the average wage in Dublin and elsewhere. A 2020 estimate suggests that the average monthly rent cost in Ireland is 31 per cent of average monthly earnings. 3. Policy shift to private rental accommodation: Those with housing needs, including at risk groups, have been exposed to challenges relating to security of tenure and housing quality by the policy of addressing housing need
through the use of private rental accommodation through HAP. 4. Inadequate data: As a result of increased discrimination in their search for accommodation, ethnic minorities are more likely to experience overcrowding and homeless. Conversely, across most existing metrics of housing adequacy, there is no measure of ethnicity or asylum seeker status. Research professor at the ESRI and lead author of the Monitoring Adequate Housing in Ireland, Helen Russell asserts: “Adequate housing is essential to quality of life. Inadequate housing is associated with poor physical and mental health and restricts people’s ability to participate in education, employment, and the community. “This research provides a framework for monitoring adequate housing in Ireland and highlights key challenges to achieving adequate housing including the lack of housing supply and affordability issues. Security is increasingly important given the growing reliance on the rental sector, but we currently lack appropriate measures of security at the individual level.”
Acorn and Oaklee Housing thinking outside the funding box
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Over the three-year period between 2017 and 2020, the Acorn Housing fund enabled the acquisition of a variety of high quality, new build and second-hand one-, two-, three- and four-bedroom homes, leveraging supply from both the Housing Agency and the Vacant Homes Purchasing Initiative as well as private developers. Once tenanted with a mix of families and individuals across a spectrum of ages, these groups of homes had the added benefit of enabling the development of communities which we are delighted to see have settled in extremely well. In the end, Acorn Housing facilitated the acquisition and delivery of 217 new homes.
Emerging from the financial crisis and restrictions in exchequer funding, in 2016, Oaklee Housing launched its three-year corporate strategy. With homelessness at an alltime high, the strategy outlined our ambitious plans to deliver increased numbers of social housing in an efficient, cost effective and timely manner, writes Siobháin Bunni, Head of Communications and PR at Oaklee Housing. Delivering on those plans meant a fresh approach to funding was needed to complement our traditional, primarily Housing Finance Agency-sourced facilities.
Detailed engagement with lenders, legal and financial advisors as well as key stakeholders in the Housing Agency and
Showcasing our ability to innovate and find fresh, alternative ways of financing our projects, Oaklee was the first AHB to establish a financing structure of this type and secured an attractive rate of borrowing over the term of the loan.
Approved housing bodies, with an already established remit and vested understanding of how to deliver social and affordable homes need to step up to the plate to assist in the funding of this national plan. “Initiatives like Acorn Housing is what will make the difference,” says Ceillier. “Commercial banks and funders are more than willing to collaborate with AHBs like Oaklee Housing to develop new funding propositions, we need to think outside the funding box and innovate.”
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With support from the Department of Housing’s Innovation Fund, Oaklee’s finance and development teams, engaged with Centrus Financial Advisors to manage a staged process through which we could secure private finance at competitive rates. Centus ran a competition for Oaklee, inviting over 25 banks and financial institutions, domestic and international, to participate. And so, in 2017, Project Acorn was born and Acorn Housing, a wholly owned subsidiary and charity, or special purpose vehicle (SPV), of Oaklee was established.
the Department of Housing followed. In December 2017, we completed the funding phase of Project Acorn and reached financial close on a €50 million debt facility with Nord/LB. The debt facility is based on a project financing structure secured through Acorn Housing.
The Government’s Housing for All strategy is an enormously ambitious plan that comes with some strenuous challenges. It is accepted the Irish Government cannot entirely fund the delivery of the 33,000 homes the strategy says we need to deliver each year to eradicate homelessness by 2030.
E: Siobhain.bunni@oakleehousing.ie W: www.oakleehousing.ie
“As the social housing arena becomes more and more competitive, it is hugely important for Oaklee, not just as a charity but as a commercial enterprise with a social conscience, that we can demonstrate our relentless drive to simultaneously deliver excellent quality homes and value for money,” says Oaklee’s Head of Finance Aaron Ceillier. 55
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Credit: Uwe Hiksch
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“It was an incredibly clear victory. A majority of Berliners in all but two [of 12] districts supported the initiative. Which means the whole city said: ‘We don’t want speculators to have a say in our housing’. And that’s a decision that political leaders simply can’t ignore.” Kalle Kunkel, Expropriate Deutsche Wohnen and Co campaign
Expropriation and the battle for Berlin rents Over one million Berliners have voted in favour of expropriating the housing stocks of large residential investors. On 26 September 2021, alongside the Berlin state and German federal elections, Berliners participated in a public referendum on housing. During this plebiscite, over one million Berliners voted in favour of the expropriation of rental apartments from real estate companies – or corporate landlords – with portfolios of 3,000 or more units.
Context In 2020, German Property Foundation (ZIA) calculations indicated that new tenancies in Berlin had increased by 27 per cent between 2013 and 2019. Similarly, a seven-month investigation, published by Der Tagesspiegel in April 2021, identified Berlin at the vanguard of real estate investment (primarily domestic) among European cities. A total of €42 billion was “spent on large apartment deals in Berlin and the surrounding area between 2007 and 2020”, eclipsing the combined totals of Paris and London.
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A campaign to arrest this upward march of rental costs for Berlin apartments has successfully contested a referendum on a radical proposal to expropriate large corporate landlords.
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Deutsche Wohnen and Co enteignen (Expropriate Deutsche Wohnen and Co), a campaign so named because Deutsche Wohnen (DW) is one of the largest corporate landlords in Berlin, possesses the stated objective of “socialising 240,000 homes [11 per cent of total apartments] in Berlin and transferring them into public ownership”. A significant portion of these apartments were once public housing units that had subsequently been sold to private investors.
Expropriation demands With a projected cost to the State of between €8 and €14 billion, the campaign is pressuring the Berlin Senate to initiate “all measures necessary”, to enact legislation which would include: •
the expropriation of private, profit-oriented real estate companies that own more than 3,000 apartments in Berlin through Article 15 of the Basic Law in order to transfer their holdings into public ownership (excluding cooperatives);
•
the compensation of affected companies “well below market value”;
•
the creation of a public-law institution, Anstalt öffentlichen Rechts (AöR), to manage the socialised housing stock; and
•
the management of socialised holdings via “majoritarian democratic participation of the community and renters” through AöR.
Constitutionality Articles 14 and 15 of Basic Law for the Federal Republic of Germany, otherwise known as the German Constitution, establish a possible legal basis for the expropriation of property. Article 14 (1) outlines: “Property entails obligations. Its use shall also serve the public good.” While Article 14 (3) determines: “Expropriation shall only be permissible for the public good. It may only be ordered by or pursuant to a law that determines the nature and extent of compensation. Such compensation shall be determined by establishing an equitable balance between the public interest and the interests of those affected.” Meanwhile, Article 15 reads: “Land, natural resources and means of production may, for the purpose of nationalisation, be transferred to public ownership or other forms of public enterprise by a law that determines the nature and extent of compensation. With respect to such compensation the third and fourth sentences of paragraph (3) of Article 14 shall apply.”
Referendum Between April and June 2019, 77,001 signatures were collected, 58,000 of which were validated, meeting the 20,000-threshold necessary for a legal review by the Berlin Senate. This review was conducted between July 2019 and September 2020. Then, between February and June 2021, a second signature collection garnered 350,000 signatures, exceeding the 175,000-threshold required to initiate a public referendum. The success of the campaign hinged in achieving a simple majority of those voting, and at least 25 per cent of Berlin voters. Of a total of 1,749,923 votes, 56.4 per cent were ‘yes’ and 39 per cent were no, meaning that both the qualifying criteria had been met. However, the result is not legally binding, and the campaign was opposed both by the largest party in Berlin, and now Germany, the SPD, alongside the major opposition parties (the CDU, the AfD and the FDP). On the other hand, it is supported by the Left and ostensibly by the Greens.
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Credit: Uwe Hiksch
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Striking a conciliatory tone, following the referendum, Rolf Buch, CEO of Vonovia SE, asserted: “In the new legislative period, we’ll need far more mutual engagement than confrontation. Vonovia is ready to work closely with a new state government and the key social stakeholders in Berlin, so that, together, we can handle the challenges of the city’s housing market.
Earlier in 2021, Germany’s Federal Constitutional Court ruled that the rent cap imposed by Senat von Berlin – Berlin’s executive authority – was unconstitutional. This cap had come into effect in February 2020, fixing rental costs at their June 2019 level for five years for flats constructed before 2014 (90 per cent of Berlin apartments). However, this state law was in contravention of an existing federal rent break imposed in 2015, enabling landlords to increase rents by 10 per cent above the local market level. The rent freeze was lifted in April, with the result that landlords can increase costs of existing leases and seek backpay on erstwhile frozen rents. The experience subsequently fuelled the rage of Berlin renters, culminating in the success of the expropriation referendum. Yet, undoubtedly, the precedent casts a shadow on the victory of the expropriation campaign.
Commentary While the referendum result would be politically difficult for the Berlin Senate to ignore, it would also be legally challenging to pursue. Having vocally opposed expropriation during her campaign, leader of the Berlin SPD Franziska Giffey, now Berlin’s first female mayor, has conceded that legislation must now be drafted.
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Whether it can be rendered legally impermeable seems unlikely. Speaking to ARD, Giffey reiterated: “I am still of the opinion that expropriations do not help to create even a single new apartment or solve the big question of affordable housing,” adding: “Such a draft then has to be checked and if it is not constitutional, then we cannot do it.” In a move which establishes one of the largest institutional investors in Europe, a majority (50.49 per cent) of DW’s share capital has since been acquired by its nearest rival Vonovia creating a combined housing portfolio of 550,000 units worth in excess of €80 billion. Interestingly, prior to the referendum, as part of DW’s Future and Social Housing Pact with Vonovia, it sold 10,700 homes back to the city of Berlin for €1.65 billion. Signposting their next move, the two companies have suggested voluntarily capping their rents in Berlin for the next five years, as well as building 13,000 new residential units. Such action is calculated to generate political capital. Such developments are an indication that while large investors are quietly assured of the improbability of expropriation, they are cognisant of a growing disquiet among Berliners, which resulted in majority support for the radical measure.
“Expropriation won’t solve the many challenges in Berlin’s housing market. In view of such major challenges, Berlin cannot afford years of deadlock which will now result as the newly elected Berlin Senate needs to set up a draft law on nationalisation in the face of some obvious constitutional concerns… By entering into a Future and Social Pact for Housing, we have sent a signal that we want to change something in the relationship between policymakers, society and housing companies in Berlin.” In comments made on Euronews on behalf of the Expropriate Deutsche Wohnen and Co campaign, Kalle Kunkel insisted: “It was an incredibly clear victory. A majority of Berliners in all but two [of 12] districts supported the initiative. Which means the whole city said: ‘We don’t want speculators to have a say in our housing’. And that’s a decision that political leaders simply can’t ignore.” Referencing Giffey’s opposition, Kunkel added: “You can tell she realised she can’t just be indifferent to a democratic decision. Sure, she’ll try to use all the legal and formal tricks at her disposal to delay or circumvent its implementation, but we have over 1,000 activists around the city and they’re not going to be robbed of this victory.” As such, it is anticipated that the Berlin Senate will utilise the referendum result to leverage further concessions from the monolithic investors. Therefore, while the large landlords are likely to win the constitutional battle on expropriation, with public pressure on legislators, it is entirely possibly that it will be a Pyrrhic victory. For now, the battle for Berlin rents rumbles on.
The how of Housing for All
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Executive Director of the Housing Alliance, Camille Loftus, discusses the role of local housing action plans in achieving the ambitions of Housing for All. The Housing Alliance is a collaboration between the six largest not-for-profit social and affordable housing providers (AHBs) in Ireland: Circle Voluntary Housing, Clúid Housing, Cooperative Housing Ireland, Oaklee Housing, Tuath Housing, and Respond. Housing developed by AHBs can maximise value for public funding, secure housing assets for the long-term, and provide high-quality, well-managed, secure and affordable homes for people locked out of the housing market. Recognising that this kind of housing is central to solving Ireland’s housing crisis, the Housing Alliance was formed to rise to that challenge. In that context, the Alliance is eager to work with government at both national and local level to achieve the targets for social and cost rental housing set out in Housing for All. Any policy strategy is only as good as its implementation. Housing for All puts local authorities centre stage in delivering the Strategy, every local authority must submit a detailed five year housing plan to the Minister before the end of 2021. It is in these local housing action plans that the State’s housing delivery capacity will be detailed: if Housing for All is the ‘what’, local housing action plans are the ‘how’.
This is a potential game-changer in realising a planned approach to meeting housing need. By January 2022, every local authority should have a detailed road map setting out how many homes, of what size and tenure, where and by whom, housing will be developed over the next five years. This kind of detail should be invaluable in ensuring that sufficient serviced land is available for housing over coming years. The requirement to align housing development with housing need is welcome. Housing need is changing in developed economies, and Ireland is no different. For example, single person households account for over half of all households on the social housing waiting list. We also need more adaptable housing, so older people and people with disabilities can live with dignity at home. Nearly half of all social housing currently in construction is being developed by not-for-profit providers; with Housing Alliance members accounting for 39 per cent of the total in Q1 2021. Our members also delivered Ireland’s first cost rental homes this year, a new tenure to Ireland, and one with the potential to improve the quality, security and affordability of rented tenancies in Ireland. The Irish Government Economic Evaluation Service finds that AHBs build
“a much larger proportion of apartments”, typically one-beds. This is the housing that Ireland needs. Housing Alliance members build housing that remains in the stock of social and affordable homes. We borrow money to build, including from the State, and repay it with interest. We make no profits, but provide high quality, lifetime secure, and affordable homes designed to meet the needs of households for whom the market does not provide. The Housing Alliance wants to, and can, play a greater role in delivering the housing that Ireland needs. Our hope is that the forthcoming plans will allow us to realise that ambition. We are eager to work with local authorities to develop the detail, and with national government on the policies and programmes to support implementation. The time is now.
E: info@housingalliance.ie W: www.housingalliance.ie
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Housing for ‘Once and For All’ housing report
an 80 per cent windfall land tax; changes to the planning code on apartment sizes and the introduction at one point of a two-year planning rule. Some measures didn’t have the desired impact with many removed or changed significantly following implementation.
It will take time to absorb the myriad of measures contained in the Government’s recently published Housing for All report and the likely implications and consequences of same, writes Marie Hunt, Executive Director of CBRE Ireland. While the full detail is still forthcoming, the Government is to be commended for allocating significant funding towards housing and producing a comprehensive set of proposals, to once and for all attempt to tackle the
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housing crisis this country faces. Unlike many of the plans that have been produced previously, this needs to be a plan that is implementable. We now need to draw a line in the sand on government intervention and policy changes as we are in very real danger of losing the trust (and patience) of the very developers, funders, investors, and other intermediaries that we are relying on to deliver the end product if we can’t provide certainty on housing policy. 60
Over the years, as several governments and many different housing ministers took on the challenge of ‘fixing’ the housing problem, there have been countless different proposals and measures introduced, many of which were implemented without sufficient industry consultation, which meant that they had unintended consequences or failed to deliver and were subsequently removed. In the last decade, we have seen a plethora of changes including several changes to stamp duty, capital gains tax and mortgage interest relief. We have seen the introduction of residential property tax; Part V legislation to deliver social and affordable housing; the Living Over the Shop scheme; the Help to Buy scheme; vacant site tax; Rent Pressure Zones;
This summer it was unexpectedly announced that the 4 per cent rental cap that has been in place in the residential sector for the last number of years was to be replaced with a system whereby rents will be linked to inflation going forward. Within weeks, there were calls on the Minister to amend this measure on the basis that inflation is currently higher than it has been historically. Trying to attract and retain developers, investors, and funders (that we are reliant on to help deliver the end product) to commit to developing housing when policy keeps changing and current policy is regularly in the process of being replaced with something bigger and better, is extremely difficult. We need to ensure that policy is easily understood and implementable but more importantly we need the Government to have the courage of its convictions and give assurance that policy is consistent. All of the various stakeholders are tired of the rules being changed half-way through the game not to mention the fear of them being changed again before the full-time whistle. The Government has put months of work into producing this new multiannual plan. The intention is good albeit the plan is unlikely to result in a meaningful improvement in housing supply in the short-term. Arguably, the situation will get worse before it gets better. Hopefully, in time the plan will provide housing for once and for all.
Marie Hunt Executive Director, CBRE Ireland T +353 1 618 5543 M +353 87 272 7115 E: marie.hunt@cbre.com W: www.cbre.ie
housing report
Promoting sustainable communities
Homelessness continues to fall July 2021’s homelessness figures show a slight decrease in the number of homeless adults in Ireland and a bigger decrease in the number of homeless families. These figures will have made welcome reading for the Government, who unveiled Housing for All one week after the publication of these figures including within it a pledge to eradicate homelessness by 2030. Homeless adults by age group, July 2021 (Source: Department of Housing, Local Government and Heritage)
27%
2%
16% 18–24 25–44 45–64 65+ 55%
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July 2021’s number of homeless adults as recorded by the Government stood at 6,003 a slight increase in terms of three-month (5,889 in April 2021) and six-month (5,987 in January 2021) intervals, but a slight yearly decrease from July 2020’s number of 6,077. As always, it should be noted that the official homelessness figures are dependent on the number of people accessing official homelessness services throughout the country, and therefore the true number of homeless people is always likely to be higher. An analysis of the demographics and locations of the 6,003 homeless adults
Promoting sustainable communities
The southwest region (defined in this report as Cork city and county as well as Kerry) is the next area with the highest proportion of homeless adults, recording 492 people and accounting for 8 per cent overall. 413 of these are said to be within Cork city and county boundaries. The Greater Dublin Area, defined in the homelessness report as the mid-east and made up of counties Kildare, Meath and Wicklow, is next in terms of numbers of homeless adults, with 306, over half of which are in Meath, accounting for 5 per cent of the overall figures. In terms of age, those in the 25–44 age bracket are by far the most likely to experience homelessness, with 55 per cent of adults recorded as homeless in July, a total of 3,326, being within those ages. The 45–64 age group accounts for 27 per cent of homeless adults, a total of 1,616, and the 18–24 age group accounts for 16 per cent, 943 homeless adults in total. The over-65 age group accounts for just 2 per cent of homeless adults, 118 in all. The July 2021 homeless report is notable for being the first of its kind to accurately identify the number of children within the homeless families that are recorded in the monthly reports. Previously, the monthly reports had “enumerated the number of individuals accessing homeless services broken down by adults and dependants”, which “resulted in a number of adults being listed among these dependants, most frequently in the case of children over 18 being associated with a homeless household, but also other adult family members”. 930 families were recorded as homeless in the month of July 2021, showing an increase on April 2021’s total of 925, but a decrease from the 966 recorded in January 2021 and a marked decrease from the 1,142
recorded in July 2021. Included in these 930 families were 1,502 adults and 2,129 child dependants, meaning that the total number of people within the families was 3,631, with the average homeless family unit having almost four people in it (3.9 people). Again, the vast majority of homeless families were recorded in the Dublin area, with 700 out of the 930 in the county, a proportion of 75.3 per cent. The western region, made up of Galway city and county, Mayo and Roscommon, was the next worst affected area in terms of familial
tenancies over the next five years to be provided for “people with a history of rough sleeping, or long-term use of emergency accommodation and who have complex needs” through the Housing First National Implementation Plan. The plan also lays out government plans to end long-term leasing of social housing by local authorities and approved housing bodies through the phasing out of new entrants in order to focus on new-builds to provide social homes, strengthen the Mortgage to Rent scheme to meet the needs of those in long-term arrears, make improvements in the quality and
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in July shows that males account for exactly two-thirds of the homeless population, totalling 3,942, or 66 per cent, with females accounting for the remaining 34 per cent, 2,061 people. Unsurprisingly, it is in Dublin where the vast majority of homeless adults are located, with 4,220 (70.3 per cent) of all those recorded as homeless in July being in the county.
July 2021 homelessness figures yearly, six-monthly and three-monthly changes (Source: Department of Housing, Local Government and Heritage)
7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Homeless adults Jul-20
Jan-21
homelessness, with 66 homeless families recorded, accounting for 7.1 per cent of the total number.
Homeless families Apr-21
Jul-21
quantity of Traveller-specific accommodation and provide capital funding for vulnerable people through the Capital Assistance Scheme.
The plan to eradicate homelessness Housing for All, the Government’s flagship housing plan that seeks to address the related homelessness, housing price, rental rate and housing construction crises all contained within the Irish housing sector, contains within it a pledge to “work towards eradicating homelessness by 2030”. The first step within the plan towards achieving this goal is the delivery of 10,000 social homes per year from 2022 until the end of 2030, with 1,200
A new National Homeless Action Committee will also be convened in order to “examine the complex individual health and family circumstances that contribute to homelessness”, along with the development of a new Youth Homelessness Strategy. Both of these initiatives are to be done with the goal of providing “a coordinated response to ensure homelessness continues to decline with a focus on prevention and permanent housing solutions”.
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housing report
Tenant engagement and tenant first At Circle Voluntary Housing Association, we firmly believe that how we interact with our tenants, communities, colleagues, and key stakeholders is of fundamental importance, writes Liz Clarke, Director of Services. Tenant engagement is, and will continue to be, at the heart of everything we do. We strongly believe that our tenants should have a real opportunity to influence and shape the services they receive from Circle. This ethos underpins our approach to tenant engagement, and is set out in our new corporate strategy, in the structure of engagement activities on offer, and in our full commitment to improving and creating new opportunities for tenant involvement.
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Supporting Communities has been working with us to help develop the structures for a Tenant Advisory Group (TAG) and ensure that everyone involved has the tools and resources to enable a meaningful partnership between tenants, staff, and our board. Since December 2020, tenants and staff have been taking part in training and focus group work to develop a common understanding of tenant engagement and how they want to proceed. We are delighted to report that our board has approved a brandnew Tenant Engagement Strategy, written by the tenants themselves. This is a major milestone for us with many hours of work behind it. The Strategy is accompanied by a three-year action plan, written and designed by tenants and staff. The result? A tenant-led, inclusive, and sustainable tenant engagement structure which enables our tenants to hold us to account. Tenants do so by advising, monitoring and scrutinising our performance and behaviour, identifying areas for improvement and helping to improve the services they receive. 64
Our vision, objectives and approach Our vision is to make a real difference by providing quality homes and services We believe it is a necessity that tenants have a real opportunity to scrutinise our performance, influence our service delivery and affect service improvements. To do this, we are making sure tenants have the skills and capacity to ensure effective engagement and scrutiny and providing tenants with a real chance to shape the tailoring of services to reflect their priorities. Our Strategy sets out how we will communicate and develop meaningful engagement with our tenants. It has been designed to be inclusive and empowering, recognising tenants as the key stakeholders of our business. We have now openly committed to providing a comprehensive range of channels for our tenants to drive Circle to do better. Dedicating the necessary finance and other resources to fully implement, monitor, and evaluate this strategy was imperative and something our Board recognised and supported. We’ve made a commitment to our tenants that all our staff will understand this Strategy and have the necessary guidance and tools to implement it. Together we are developing ways in which we can measure the impact of implementation and delivery of this Strategy. To enable engagement, our staff and initial Tenant Steering Group spent hours, days and months in training, meetings and consulting with other supporting
organisations to ensure that we empower our tenants and break down barriers to their involvement in Circle. Tenant communication and engagement is about how our tenants can voice what we as an organisation do, but we understand that in asking tenants to do that we’re asking a lot of them. There’s been an awakening within Circle and in our staff and teams. We now have a clear and better understanding that our tenants have busy lives and that their time is equally important. As a result of this, we’ve really delved into how we encourage greater levels of participation that suit our tenants’ lifestyles. In taking their advice we’ve developed a choice in how tenants can take part; various types and levels of engagement are available through our Tenant Engagement Structure.
Our tenant engagement journey The draft statutory and voluntary regulations provide some direction as to what is required of approved housing bodies (AHBs), but we’ve learned that
tenant participation has been most effective where social landlords have gone beyond the requirements of the regulator. The results and recommendations from our 2019 Tenant Experience Survey provided significant grounding for the Strategy and that direct feedback from tenants was the driving force needed.
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In March 2020, we engaged the services of Supporting Communities to support the development and implementation or a revised 2021 Tenant Engagement Structure and Strategy. Unfortunately, the impact of Covid-19 resulted in delays to delivering the first phase of the project plan. It was always Circle’s and Supporting Communities intention and preference to deliver training and support to tenants and staff face to face. However, the ongoing restrictions led to Circle and Supporting Communities having to revise the scheduled action plan to incorporate delivery via Zoom. Despite the challenges presented by Covid-19, phase one of the action plan was delivered in full and included: • Tenant participation workshops and action planning sessions for staff; • Tenant participation workshops and action planning sessions for tenants, and the establishment of a Tenant Steering Group; • Workshops and action planning sessions to support development of the Steering Group for staff and/or Board members; and • Development of the Terms of Reference for the Tenant Steering Group approved by tenants. The original Steering Group designed the new tenant approved logo which is now used on all tenant related documents, policies, handbooks, and communications. It revitalised the tenant newsletter and edited and proofed the new tenant handbook.
Our TAG was established in April 2021, with Steering Group members continuing to be involved. The group received training on Circles structure and governance, as well as how Circle is
The impact In the words of our Customer Services and Repairs Manager, Colm Barnes: “By the end of the first TAG group meeting, I understood the idea of tenant engagement better. With each session, the idea grew on me. The introduction of April and Gerry (Circle tenants) was again a strange concept. We never said it, but there was that invisible boundary between ‘us and them’. “As the meetings went on, I was able to talk more openly with Gerry and April. Listening to their input gave me a sense
of relief and belief in the TAG. They both acknowledged what individual staff members working within Circle did in our daily roles. To hear the sentence, ‘how can we help?’ was an eye-opener for me. If this was the tenant engagement concept, that won me hands down! “You ask the question about how tenant engagement will benefit me as the Customer Service and Repairs Manager. I don’t fully know yet, but I hope the journey I have experienced so far will continue and that it will be a similar one for all our tenants and all of Circle’s staff. Based on my TAG experience, I know we can learn a lot from each other, pull on our strengths together when needed, and be open with each other when support and understanding are required. That can only be a good thing.”
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A call was made for tenants to become involved in the Tenant Advisory Group (TAG). Supporting Communities and members of the Steering Group, along with staff, management, leadership team and Board members, attended information sessions to drive support and membership. All departments, whether front facing or not, took part.
financed and regulated. Good governance, components of effective meetings and the role of the chairperson were covered, supporting the TAG to realise its purpose and function. A twoway process for communicating between our board and the TAG has been in place since then, and this has been championed by the TAG, our Chair and CEO.
T: 01 407 2110 E: lclarke@circlevha.ie W: www.circlevha.ie
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Promoting sustainable communities
Approved Housing Bodies Regulatory Authority releases Statement of Strategy The Approved Housing Bodies Regulatory Authority (AHBRA) released its Statement of Strategy 2021–2024 in late October, laying out its intentions to deliver on its mandate in the newly regulated field. The Housing (Regulation of Approved Housing Bodies) Act 2019 provides for the full statutory regulation of the AHB sector, which had previously been voluntarily regulated. It “seeks to support stronger governance, financial management and reporting, property and asset management, and tenancy management by AHBs, with a focus on safeguarding investment being made in the delivery of social housing by AHBs”. Key to this oversight and regulation is the establishment of the AHBRA. The Statement of Strategy is the first by the AHBRA and it sets out how it plans to establish a regulatory framework “that will deliver effective oversight of all AHBs”. The sector had previously been regulated by the Voluntary Regulatory Code (VRC) for seven years. In the last of its annual reports, the VRC reported that there were 285 AHBs in ownership of over 43,000 homes who had signed up to voluntary regulation. The sector is “comprised of many parish-based AHBs managing a small number of homes, AHBs whose primary focus is care and support, and a small number of large and growth AHBs”. The latter group, the large and growth AHBs, accounts for over 80 per cent of the housing in the AHB sector, with assets of over €4 billion and rental income of over €88 million annually.
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“Statutory regulation will be positive for AHBs, tenants, potential investors and other stakeholders. It will enable the protection of housing assets, safeguard public investment, encourage private investment and promote long-term strategic thinking.” AHBRA Chair Eddie Lewis and CEO Susanna Lyons
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The key functions of the AHBRA as set out in the Act are to: Establish and maintain a register of AHBs;
•
Register persons as AHBs;
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Prepare draft standards for approval by the Minister for Housing, publishing the approved standards, and monitor and assess compliance with those standards by AHBs;
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Carry out investigations in accordance with the Act;
•
Protect tenants and AHBs and cancel the registration of AHBs if necessary;
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Encourage and facilitate the better governance, administration and management of AHBs;
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Promote awareness and understanding, and make information about the legislation available to the public;
•
Collate information concerning the performance and functioning of AHBs; and
•
Publish such information as appropriate.
In the Statement of Strategy, the AHBRA pledges to establish and implement a regulator framework that includes “the registration of AHBs, the setting of standards, monitoring and assessing compliance with standards, and, as required, undertake investigations”. It says it will implement risk-based regulation, with a focus on “those AHBs which are identified as higher risk and/or cannot demonstrate or evidence compliance”. The authority pledges to introduce and embed a system for reporting, data collation and analysis over the course of the strategy. The AHBRA states that the provision of “quality information” will be key to its governance and strategic statement, with its reporting of its findings through an annual report, financial statement and annual business plans to lay out its “key findings, regulatory outcomes and our objectives in a transparent manner”.
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•
The five key strategic objectives the AHBRA will aim to achieve: i.
Reliable and efficient AHB regulation framework
ii. Proportionate standards and compliance frameworks iii. Transparent and consistent risk-based regulation iv. Consistent and effective communication with stakeholders v. An agile, flexible, and accountable organisation
Speaking upon the publication of the strategy, Minister for Housing, Local Government and Heritage Darragh O’Brien TD said: “AHBRA will be an important element in support of our ambitious housing agenda, overseeing the effective governance, financial management and performance of all AHBs.” Having won its long battle to be taken off the Government’s balance sheet, the AHB sector is now entering a new era of statutory regulation which will see it play a key part in the delivery of the Government’s Housing for All strategy. The role it will play in the delivery of 6,000 affordable homes to be made available for purchase or rent every year through AHBs, local government and the Land Development Agency is the headline from that strategy in the sector, but its delivery of social housing and Traveller-specific accommodation as outlined in the plan, along with its role in pilot schemes to house the homeless, will see the newly-regulated sector increase its alreadylarge presence on the Irish housing scene.
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Could soaring materials costs scupper the viability of housing housing report
stockpiling all spelling trouble for an already pressurised market. The Irish Timber Frame Manufacturers’ Association first reported an unprecedented increase in timber prices in 2020, with the trend continuing in 2021. The Irish Home Builders Association is reporting that the cost of plywood has increased by up to 11 per cent since the start of 2021. They have reported that demand for sheet material in the US has caused a shortage worldwide. Members of the Construction Ireland Federation (CIF) are reporting price increases of between 10 per cent and 30 per cent for steel, though the major issue appears to be sourcing sufficient supplies.
The construction industry returned to a very different landscape following its re-opening in May this year after the Covid-19-related lockdowns. As well as changes to on-site work practices, the Covid-19 pandemic has led to worldwide supply shortages resulting in an increase of as much as 30 per cent in the cost of some raw materials, writes Angelyn Rowan, partner in the construction, projects and PPP team at leading commercial law firm Philip Lee.
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Add Brexit supply-chain issues to the equation and you have an industry facing significant challenges and inevitable cost increases affecting the viability of residential schemes as margins become even tighter. It is anticipated that the impact of some of these issues will begin to dissipate in 2022, but only time will tell. In the meantime, materials costs fluctuations and supply shortages continue to affect on-going projects, causing delays and driving cost increases, and will undoubtedly be a key consideration in future projects. 68
Current supply shortages The construction industry is currently facing a supply crisis causing the costs of widely used materials, such as plastic and resins, to soar since early 2020. Building restrictions and increased disposable income during the Covid-19 lockdowns have resulted in strong product demand. Other factors, such as Brexit, are affecting transport and logistics, exacerbating supply issues. Timber is also in great demand, with Covid-19, a licencing backlog slowing the felling of Irish trees and Brexit
Approximately 60 per cent of the world’s aluminium originates in China. However, in recent years China has shut down many aluminium production facilities in an effort to reduce CO2 emissions, thereby greatly reducing production output. As a result, China is importing more aluminium from Europe, intensifying supply shortages and price increases. This has resulted in many Irish and foreign manufacturers reportedly having to close or limit their order books, blaming the ongoing shortages of raw materials and the exceptional demand.
Contractual approach to risk allocation for material costs fluctuations Standard form construction contracts commonly contain clauses allowing for an adjustment to the ‘contract price’ to reflect any changes in the cost of materials (and labour) during the contract period. These clauses seek to compensate contractors for increases to their costs, which are caused by matters beyond their control. The traditional approach usually involves determining the increase in cost of materials using a base cost from published materials or a basic list of market prices included in the
The RIAI Building Contract makes provision for increased material and labour costs, with its Clause 36 allowing for an increase to the contract sum if these costs arise after the contract’s designated date. However, this provision is almost always amended, so that it is the contractor that bears the risk of any increases to material and labour costs throughout the duration of a project. Under the Public Works Contract, where typically the PV1 clause is adopted, a contractor accepts the risk of increases to materials/labour costs. However, in the event of hyperinflation increases or where the increases have occurred outside the time period specified by the contract (i.e., beyond the 30-month limit) or the increases have occurred due to changes in law, the contractor has the potential to claim some portion of the costs.
We set out below a comparison table of the risk allocation for materials costs increases under the forms of construction contracts that are commonly used in Ireland.
appropriate risk allocation in future projects. It may be the case that the parties to a contract will seek to negotiate bespoke provisions to rebalance what they may perceive as an
Are extensions of time available where materials supply is delayed?
unfair risk allocation.
In terms of extensions of time, the default provisions in the RIAI Building Contract (Clause 30) allow for a contractor to seek an extension of time where it has been unable, for reasons beyond its control, to secure labour or materials that are essential for the proper execution of the works. This clause is commonly deleted, however, as an employer’s position is often that the contractor is best placed to manage this risk.
insisting that their design team
Delays brought about by the materials supply issues do not constitute grounds for a delay event under the Public Works Contract.
and discussions involving the
The JCT Contract (2016 Edition) makes no provision for an extension of time on the grounds that a contractor cannot secure materials.
Employers may seek to future-proof new projects and mitigate these risks by members take account of materials availability risk when designing works
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contractor’s tender. The duration of the project is a significant factor in the risk allocation between the employer and the contractor, with the employer being less likely to agree to a risk sharing approach on projects of a shorter duration or in the first few years of a project, where a contractor is arguably best placed to manage the risk. Contractors have called into question this approach in light of the recent price hikes, where the unprecedented events of the last 18 months have placed considerable risk and financial burden on contractors, potentially affecting the sustainability of a project.
and specifying products. Given the events of the past 12-18 months and the extent of the increased material costs being faced by those in the industry, one can expect that these matters will continue to feature in contract claims in the foreseeable future negotiation of construction contracts over the coming years. Prepared with the assistance of Michael Cahill, Senior Associate at Philip Lee For more information in relation to this article please contact Angelyn Rowan
Conclusion The reality of supply shortages and escalating costs highlights the importance of contractors and employers knowing their contractual entitlements and considering the
RIAI
PWC-CF1
Material and labour cost increases and shortages
Clause 36 allows for an increase in the Contract Sum if this increases after the Designated Date (as defined). This provision is almost always amended, so that the Contractor bears the risk of its costs increasing by a fluctuation in the cost of materials and/or labour. Clause 30 allows for the Contractor to claim for an extension of time where the Contractor has been unable for reasons beyond its control to secure labour or material that are essential for the proper execution of the Works.
The Contractor bears the risks of (i) increases in the cost of labour and materials (the inflation risk) other than exceptional material increases (hyperinflation) and those outside the fixed-price period; (ii) increases in cost due to change in law (very limited) other than in certain specified areas; and (iii) increases in cost due to exchange rate variations. There is a choice of Price Variation Clauses that can be chosen by the Employer: • PV1 – the fixed-price period is 30 months from the Contract Date • PV2 – the fixed-price period is 36 months (includes 6-month tender assessment period) from the Designated Date (10 days before the latest date for receipt of tenders) or the Recovery Date (the revised Designated Date to take account of any delay to the commencement or the works caused by the Contractor).
E: arowan@philiplee.ie W: www.philiplee.ie
FIDIC Gold & Red Gold Book: Clause 14.1 provides that the Contract Price is the amount submitted by the Contractor and due to be paid to the Contractor, together with any adjustments allowed for under Clause 13 (Variations and Adjustments). Clause 13.7 provides that the “Contract Price and programme for design, execution and operation of the Works shall be adjusted to take into account any increase or decrease in cost resulting from any changes in technology, new materials or products which the Contractor is obliged to adopt, either: (a) where a proposal from the Contractor under Sub-Clause 12.2 (Value Engineering) is accepted by the Employer’s Representative; (b) where the Employer’s Representative instructs the Contractor to use new technology or new materials or products; or (c) there is a statutory requirement for the Contractor to use new technology or new materials or products.” Red Book: Similar principles to those set out in the Gold Book.
JCT The JCT Standard Building Contract uses the concept of the ‘base date’, which is a date stated in the ‘contract particulars’ section of the standard form. The base date should be a date that enables sufficient time for prices, etc. current at that date to be included in the tender, so that any adjustments for fluctuations are calculated from that point in time. JCT does not anticipate a completely fixed price contract, so the JCT Standard Building Contract includes three options for calculating price adjustments. Option A is contained in Schedule 7 of the contract conditions. Options B and C are no longer included in JCT contract documents but continue to be available on the JCT website. The standard position is commonly amended to shift the allocation of risk.
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T: +353 (0)1 237 3700
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‘Complete overhaul’ of planning laws needed housing report
difficult to navigate, contributing to significant delays and additional costs in the delivery of housing”. “The planning legislation review sanctioned by the Government today is of an unprecedented scale, using experts in planning law under the supervision of the Attorney General, to improve our planning laws,” the statement explained.
As part of its efforts to deliver the ambitious housing targets laid out in Housing for All, the Government has announced its intentions to review the planning process in Ireland, with Taoiseach Micheál Martin stating a “complete overhaul” was needed to deliver on the plan’s goals. Speaking upon the announcement of the review, to be headed by the Attorney General, Martin said: “When we published Housing for All earlier in the month, I reiterated my view that housing is the single most urgent and important social issue facing our country at this time and that I am determined that we as a Government get to grips with it. We also committed that the Housing for All plan would be underpinned by accountability and a strong delivery focus. “This large-scale planning reform programme, which will bring about fundamental improvements to our planning laws, reflects the approach we are taking overall, with challenging 70
deadlines and a truly cross-Government approach to delivery of Housing for All’s objectives and other major plans. Our planning laws need a complete overhaul to meet the ambition outlined in Housing for All. Streamlining and simplifying the planning laws will support the accelerated delivery of housing set out under the Housing for All plan.” The “comprehensive” review of Ireland’s planning legislation was announced in late September, weeks after the unveiling of the Government’s flagship housing plan. It is expected to be completed and published in September 2022. A Government statement on the review stated that the planning process has become “overly complicated and
Chief among the complaints of those who have found the planning process difficult to navigate have been the length of time an application takes and the ease with which people can bog down an application in the legal system through challenges. When the review was first mooted in June 2021, these were two of the main aspects of the current system that were mentioned with regard to a review taking place. Background work by officials was being conducted at the time and now a full review has been ordered and is underway. One proposed reform to the planning system that will not be going ahead is the proposed fast track for strategic housing development, whereby developers could apply directly to An Bord Pleanála and bypass the relevant local authority. Plans for this reform were abandoned after legal challenges halted the progress of the process. Plans for a previously discussed dedicated planning court will, however, likely play a role in the review of the current process. Another hint towards the direction the review may take comes in the form of a letter sent to the Oireachtas housing committee by Minister of State for Local Government and Planning Peter Burke TD that asked the committee to consider the outline of draft laws in order for the Department of Housing to advance its plans in the autumn. Burke wrote that the number of legal challenges against planning decisions had “knock-on implications for project delivery” and that “it is considered timely that the issue of judicial reform review in the area of planning be now reactivated, considered and further progressed”.
Promoting sustainable communities
Over half of unfinished developments resolved developments still to be dealt with.
housing report
From 2017-2020, Kerry was the council area to have removed the most unfinished developments from the database. Having entered the period with 18, the highest among all council areas, the council cleared all but two from the database, meaning that they cleared 90 per cent of developments in their area from the database. The council area with the most unfinished developments still in the database is Donegal, where just four developments (19.05 per cent) were removed from the database, leaving a total of 17 still on it. Of the 24 council areas with unfinished developments still on the database, all but Tipperary (10), Roscommon (14) and Donegal have recorded amounts in the single digits, with Longford, Wicklow, Monaghan and Dublin City all having just one development left to deal with.
Former ghost estate, Bridgetown, County Wexford.
The Government’s latest update on unfinished housing developments shows that over half of the developments unfinished in 2017 have now either been completed or had construction progress to a point where they are no longer considered unfinished. As of 2020, there are now 124 unfinished developments on the register. Although the Department of Housing, Local Government and Heritage has yet to publish its annual report on the process of finishing the unfinished housing developments that have pocked the Irish housing landscape since the economic crash of 2008, it has published the figures from 20172020, showing that 51.95 per cent of housing developments unfinished in 2017 have now been substantially completed or have progressed through the construction phase to the point of removal from the unfinished housing developments database. In raw numbers, this means that 133 unfinished housing developments were removed from the database from 2017-
2020, with a total of 124 now remaining in the database. Seven council areas (Westmeath, South Dublin City, Dún Laoghaire-Rathdown, Meath, Galway City, Kildare and Cork City) are now left with no unfinished housing developments; two of these (Westmeath and South Dublin City) had entered the period with none. Four council areas (Dublin City, Waterford, Limerick and Wexford) made no progress in removing unfinished developments from the database from 2017-2020, with a combined number of 19 unfinished developments remaining in the database across the four areas. Wexford was the worst affected of these areas, with nine unfinished
The latest batch of figures is the first report to cover more than one year of time in the completion of these unfinished developments, with previous reports covering 2015-2016 and 20162017. As such, it is understandable that the 51.95 per cent of projects removed from the database over the course of the latest figures is larger than the 39.2 per cent removed from 2016-2017 and the 37.1 per cent from 2015-2016. However, a more detailed look reveals that the average yearly rate of removals for 2017-2020 was just 17.3 per cent, a steep fall from the yearly rates recorded in the previous reports. A total of 248 and 165 developments were removed from the database in 2015-2016 and 2016-2017 respectively, again dwarfing the 133 removed from 2017-2020, a yearly average of just 44.3. Great progress has been made towards the eradication of these unfinished developments over the course of these reports, with 1,687 removed since 2013, but it would appear that as the numbers dwindle, so too does the rate of success, thus delaying the day when these remnants of the economic crash become mere memories rather than still-existing reminders. 71
Implementing Housing for All housing report
to the available supply of social housing through build, acquisition and leasing, with a focus on new build (9,000 homes) as well as a funding package for affordable purchase and cost rental homes. All of this adds up to a good foundation for delivery over the coming year and ahead. Our recent Biennial National Social Housing Conference, held on 22–24 September 2021, and sponsored by AIB, captured the attention of more than 500 attendees. Speakers elaborated on those issues at the very core of a successful housing programme, those which will support — and those that may put at risk — the delivery of affordable and sustainable housing under Housing for All (for speaker presentations, go to www.icsh.ie).
25 new homes under the cost rental scheme at Taylor Hill, Balbriggan from Clúid Housing
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The Housing for All plan is set to deliver for many households and to tackle the complex problems that have been accumulating in the Irish housing sector. The Irish Council for Social Housing (ICSH) welcomes it and, in particular, we are encouraged by the certainty of a long-term and multi-annual plan, writes Director of Policy Karen Murphy. A Government strategy of this size and scale will require the collaborative efforts of multiple agencies, and the approved housing body (AHB) sector will deploy its efforts towards achieving the commitments and targets in the plan.
delivery, having played a key role in increasing the level of new social housing in recent years, and it envisions a central role for the AHB sector, with a multi-annual focus set out in new Local Authority Delivery Action Plans.
The commitments made by the Government reflect the nature of the housing crisis. Housing for All addresses social housing, cost rental, affordable purchase and private housing, and it also commits to ending homelessness by 2030, an EU-wide joint declaration, and implementing specific policies to assist with special needs housing provision.
The recently published Capital Development Plan (2021–2030) and Budget 2022 have now placed the Government’s housing plan on a solid footing with a budgetary commitment of over €4 billion, including €2.6 billion capital exchequer funding, €1.5 billion Land Development Agency (LDA) and Housing Finance Agency (HFA) funding and current funding of €1.4 billion in 2022. 11,820 new homes will be added
The new plan identifies AHBs as significant partners in social housing 72
Successful implementation For a large-scale project with complex objectives, the key to successful implementation will be collaboration and clarity of purpose for all those tasked with the delivery of the plan. Here, the new local authority delivery action plans will build on the strong local authority and AHB partnership. But, as one of our conference speakers said, collaboration calls for all actors on stage, if we're going to deliver on targets. That means significant funding, labour force enhancements, Land Development Agency engagement and other state agencies with land. Across all parts of the housing system from the public and non-profit to the private sector, there is a need to provide a stable policy platform so that long term plans can be undertaken with confidence. The risk element in any construction programme can be managed so long as the supporting funding and planning regimes behind them are not subject to frequent change. At our conference, we heard private sector concerns about ‘chopping and changing' housing policy, and, in relation to Housing for All, fears of the ‘devil in the detail’. Housing professionals want
stability, robust legislation and faster decision-making.
Combatting homelessness One of the headline commitments in Housing for All is the Lisbon Commitment, which is the goal to work towards ending homelessness by 2030. This is certainly welcome and the adoption of a housing-led approach, including a continued expansion of the Housing First model, will be vital elements to the response. The importance of community inclusion and integration was a discussion point at our conference under a number of themes, with EU supports, such as the European Social Fund, flagged as an important funding source for ancillary social services that help support sustainable communities.
In response to calls by many to introduce a subsidised cost rental tenure, Housing for All commits to an average of 2,000 new cost rental homes every year with rents targeted at least 25 per cent below market level. AHBs have already begun providing cost rental housing, with tenants moving into their homes in 2021. The non-profit AHB model of provision works particularly well for cost rental, and can work as an important stabilising element to our housing system.
“Our recent Biennial National Social Housing Conference, held on 22–24 September 2021, and sponsored by AIB, captured the attention of more than 500 attendees. Speakers elaborated on those issues at the very core of a successful housing programme, those which will support — and those that may put at risk — the delivery of affordable and sustainable housing under Housing for All.” Housing system lifecycle Demographic projections pose challenges for policy and how we organise our institutional responses socially and economically. The ICSH has long campaigned on the need for supported housing options for older people and disabled people, but gaps still remain in terms of an adequate supply of appropriately designed homes and supported housing complexes. Housing for All is informed by the 2019 Housing Options for our Ageing Population Policy Statement, which recommends that 30 per cent of all new dwellings are built to incorporate universal design principles; this is to be welcomed. Housing associations have demonstrated how better value for money can be achieved in preventing early admittance to hospital or residential care through supported housing. A framework for the delivery of appropriate housing for older persons and disabled people should be included as part of the housing delivery plans of each local authority.
Climate, sustainable development and retrofitting The implementation of the Climate Action Plan is dependent on all sectors of society playing their part. In the housing sector, there are targets for a large-scale deep retrofitting of stock to improve energy efficiency. Under Housing for All, there is a commitment to introduce a
targeted retrofit scheme for AHBs as part of the national response to climate change. The sector is keen to begin this work with the right funding package in place to support it.
Socially and economically inclusive housing system The ongoing crisis across all parts of our housing system is untenable. Our conference opened with speakers identifying deeply embedded structural obstacle as well as emerging risks. Housing professionals who spoke from both the public and private sector perspective agreed that supply without affordability is unsustainable. The longterm implications for our nation’s health, security and well-being must be prioritised in any plans to deal with this crisis. Housing for All will require both sustained resources and, critically, cooperation if it is to be effective.
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Cost rental tenure
50 purpose built cost rental homes at Enniskerry Road, Stepaside, Dublin. These cost rental homes will be managed by Respond and Tuath Housing
housing report
To achieve 33,000 new homes annually to 2030, additional capacity in the construction sector will need to be fostered and harnessed. Conference speakers spoke in detail on this, and the construction skills and materials shortage featured in a number of sessions: the annual rate of inflation for construction tender prices is now double pre-Covid levels. We heard from the USA and Singapore on prefabricated models of delivery with room-sized precast components, and modules leaving the factory 90 per cent complete. So, the timeline is faster, more cost-effective, with less building waste and a lower energy footprint. Commitments on training and expanding the construction workforce in Housing for All are welcome, but growth in the modular construction sector is also important. A recent report by Property Industry Ireland states that requiring a percentage of future social and affordable housing to be completed using offsite construction methods would encourage more businesses to invest in offsite manufacturing.
Under Housing for All and beyond, we believe we can at least double the number of homes under AHB management by 2030 to provide greater affordability across the housing system. Providing housing as a social good is fundamental to the work of our approved housing body members.
E: karen@icsh.ie W: www.icsh.ie 73
conference report
Public Services 2021 John McKeon, Department of Social Protection; Aoife Connaughton, Deloitte; Philip McGrath, Department of Public Expenditure and Reform and Shane Mohan, Deloitte.
Public Services 2021, sponsored by Deloitte, took place on Thursday 14th October as a hybrid event both at Dunboyne Castle Hotel, Co Meath and virtually. Delegates in attendance heard from a range of local and visiting speakers including Philip McGrath, Department of Public Expenditure and Reform; Aoife Connaughton, Deloitte; Paul Reid, HSE; Dr Shawna Coxon, An Garda Síochána and Dr Piret Tõnurist, OECD. Topics discussed included a final progress report of Our Public Service 2020; the delivery of healthcare in Ireland; integrating innovation into operational and strategic planning; exploiting the power of research to mitigate the social impacts of Covid-19 and large scale reform of policing in Ireland. If you would like to attend the 2022 conference, please contact info@eolasmagazine.ie
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Paul Reid, Health Service Executive virtually addressing delegates.
Philip McGrath, Department of Public Expenditure and Reform.
Public Services 2021 delegates.
Q&A panel discussion.
Louise McEntee, Deloitte and Audrey Leonard, Courts Service.
Shawna Coxon, Deputy Commissioner, An Garda Síochána delivering her presentation.