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Housing for All: Progress report

Housing for All: ‘Strong pipeline’ for 2022

Early indicators “suggest a strong pipeline of housing for 2022”, although the construction industry’s capacity to exceed the 20 per cent increase needed to meet Housing for All targets for 2022 remains to be seen.

As the first step in achieving Housing for All’s headline target of an average of 33,000 homes per year in the period 2022-2030, 24,600 homes are expected to be delivered in 2022, which would require an increase of 20.16 per cent from 2021, when 20,433 new homes were completed. Such an increase is historically precedented, with yearly increases as high as 45.51 per cent recorded in the 2010s, although questions remain surrounding the construction industry’s capacity to increase further.

2021’s overall figures show a decrease of 41 houses from the year previous and a decrease of 574 from 2019, the last recorded year unaffected by Covid-19 lockdowns. The report also reveals that seven actions due for implementation in Q4 2021 were carried into Q1 2022 to make a total of 20 actions due for the quarter, 12 (60 per cent) of which were successfully implemented. Overall successful implementation for the plan thus far stands at 70 per cent.

New dwelling completions

The completion of 24,600 in 2022 new dwellings is committed to as the beginning of the delivery of 312,750 homes from 2022-2030. To achieve the necessary 20.16 per cent increase, a total of an extra 4,127 homes must be completed. In the decade 2011-2021, total increases in dwelling completions were recorded six times, the largest of which were recorded consecutively in 2017, 2018, and 2019, showing that the Irish construction industry had been on track for the type of delivery envisioned within the plan. In 2017, a 45.51 per cent increase from 9,842 completions to 14,321 was recorded; this momentum was then carried into 2018, when a 24.98 per cent increase was recorded for a total of 17,899 completions; 2019 then saw an increase of 17.59 per cent and the breaching of the 20,000 mark for completions, with 21,047 new dwellings completed. This means that while the increases in construction numbers needed to reach the targets set out in Housing for All will be difficult to achieve, such an uptick would not be unprecedented. The hope for both government and the construction industry that the decreases recorded since then are simply a case of the long-term effect of the Covid pandemic and its lockdowns rather than the sign of an industry that has reached its capacity ceiling.

The progress report on the implementation of Housing for All for Q1 2022 issued by the Government shows there to have been commencement notices received for 4,200 new homes in the first two months of 2022; with 42,991 homes granted planning permission and 30,724 new houses commencing construction in

Actual housing completions (2011-2021) and targeted housing completions (2022-2030)

Cost rental units delivered

45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0

Source: CSO and Housing for All.

2021, this represents a “strong housing pipeline” for the Government that indicates the realisation of 2022’s targets is possible. Over 60 per cent of the permissions granted in 2021 were for apartments, “which demonstrates an emerging pattern of development which responds to our objective of achieving sustainable, compact growth”.

Central Statistics Office (CSO) research shows there to have been 5,669 new dwellings completed in Q1 2022, a decrease on Q4 2021 (6,975) but an increase on Q1 2021 and substantially bigger than any Q1 in the 2010s. Of the 5,669, 1,742 (30.73 per cent) were apartments, meaning that apartment completions have yet to catch up with the rate of apartment planning permission consents (over 60 per cent). Were completion numbers to keep pace with Q1, the 2022 target of 24,600 completions would be missed by roughly 2,000 homes. However, since 2015 dwelling completion numbers have typically seen a marked increase from the first half of the year to the second half; for example, 4,243 new dwellings were completed in Q1 2019, with 6,368 completed in Q4 of the same year.

Actions

Of the 213 total actions contained within Housing for All, 135 have “now either been completed or are being delivered on an ongoing basis”, including measures to support the capacity of the public and private construction sectors “and to address critical enabling factors, such as the availability of land, access to the required levels of development financing, the timely provision of utilities including water, electricity and broadband and the fundamental reform of the planning process”.

Highlights within these 135 actions as highlighted by the Government include: the opening of the Local Authority Home Loan, with €250 million made available for 2022; the receipt of applications for home to be provided under the Local Authority Affordable Purchase Scheme, under which homes in south Dublin are priced at €245,600, a 20 per cent reduction on market rates; the scaling up of cost rental delivery, with tenants moving into 50 cost rental homes in Dún Laoghaire-Rathdown; the submission of an application for roughly 1,800 homes by the Land Development Agency; the publication of the Town Centre First policy; the finalisation of the Croí Cónaithe Fund; the publication of the National Housing Strategy for Disabled People; the progression of Project Tosaigh; the foundation of the Housing First National office to enable the delivery of 1,319 housing first tenancies by 2026; the delivery of €12 million in funding for the Repair and Lease scheme targeting 120 homes in 2022; and the launch of the National Home Energy Upgrade Scheme.

4

Scheme Location AHB Local authority Funding allocated Units Weighted average rent Average market rent Discount

Barnhall Meadows Leixlip Clúid Kildare CREL 40 €1,364 €2,140 36%

Taylor Hill Balbriggan Clúid Fingal CREL 25

Eniskerry Road Stepaside Tuath and Respond Dún LaoghaireRathdown SSF 50 €1,056 €1,850 35.80%

€1,200 €1,960 38%

Including in the delivery target of 24,600 homes in 2022 is the delivery of 9,000 social homes – currently on track to be some 1,300 short according to Housing Alliance chair John Hannigan – “the bulk of which will be newly built”. 2021 saw the delivery of a total of 9,183 new social homes through new builds, acquisitions, and leasing programmes, which led to a reduction in the number of households on local authority waiting lists for the fifth consecutive year, with the overall number now 35 per cent lower than 2016 levels.

All 31 local authorities have submitted their housing delivery action plans to the Minister for Housing, Local Government and Heritage, covering the period 2022-2026. The plans contain within them information on land holdings and land required to meet social housing demand in the local authority areas.

Affordable housing will be delivered through two approaches under Housing for All: 36,000 homes under affordable purchase and 18,000 under cost rental. Applications have opened for homes under the Local Authority Affordable Purchase Scheme, with 16 three-bedroom homes in Kilcarbery Grange in south Dublin priced from €245,600; Cork City Council will soon make Boherboy homes available from €218,000. Fingal County Council will also make affordable purchase homes available this year, with two-bedroom apartments beginning at €166,000. A national First Home Shared Equity Scheme, launched in Q2 2022, is aimed at supporting first-time buyers, helping an estimated 8,000 households in the period to 2026.

New dwelling completions by property type and average size, 2011-Q1 2022

80%

70%

60%

50%

40%

30%

20%

10%

0%

Source: CSO 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Q1 2022 Average dwelling size (sqm) Single Scheme Apartment 250

200

150

100

50

0

The rollout of the cost rental model, targeted at households with less than €53,000 net income, has also commenced, with funding support having delivered almost 900 cost rental homes as of the publication of the progress report; 65 of these were completed in 2021 through the Cost Rental Equity Loan (CREL) scheme, which covers up to 30 per cent of capital costs in each development.

The first cost rental homes were delivered in Balbriggan in August 2021, followed by 40 in Leixlip in October of the same year. Q1 2022 saw the delivery of 50 purpose-built cost rental homes on the Eniskerry Road in Dún Laoghaire-Rathdown. Tenants have been selected for 44 cost rental homes in Dublin’s Citywest, and projections for Q2 show the expected delivery of 147 cost rental homes in Clondalkin, Leixlip, Newcastle (County Dublin), and Newbridge.

Delivery upon the targets in all sectors will be largely dependent on the construction sector, which is currently constrained by material price inflation and capacity. The residential construction sector did show a 2.8 per cent quarterly production increase in Q1 2022, providing some cause for optimism, although the level of residential production is still 28.1 per cent below the pre-Covid level of Q1 2020, meaning that substantial levels of production increases will be needed in order for targets to be met.

Housing for All: Delivering social and cost rental targets

The Housing Alliance is a collaboration between some of Ireland’s largest AHBs to provide more and better homes. Our members delivered the State’s first cost rental homes and provide almost 30,000 homes to social tenants; 40 per cent of the national social housing pipeline is currently provided by Housing Alliance members.

Housing for All includes welcome measures intended to bring a more structured and evidence-based approach to housing policy: Ireland needs to be proactive rather than reactive in addressing housing challenges.

Key here is a commitment to “ensure that the ambition of Housing for All is translated into clear, target driven Local Authority Delivery Action Plans”. Government has issued targets to each local authority and charged the AHB sector with delivering 45 per cent of the national social housing supply to 2026. Each local authority has to develop a five-year plan setting out the what, where and who of housing provision. Crucially, the plans are to identify both existing land holdings, as well as additional land needed to deliver on the targets. Local authorities submitted their first draft housing delivery action plans in December 2021 and plan to issue final plans by the end of June 2022.

This planned approach is valuable, but faces some significant implementation challenges.

One challenge is the land on which to build homes. Housing for All commits government to supporting local authorities to “acquire additional land to deliver a housing programme”. Once the housing delivery action plans are published, we may learn more about how this outcome will be realised.

A second challenge relates to financing. Securing multiannual funding for the housing programme was a significant accomplishment. However, Brexit, Covid-19, and the war in Ukraine are all driving inflation at a rate not seen for some time. Interest rates have increased, and are likely to continue to rise. This means every home costs more to provide now than it did when Housing for All was launched. Providers need to borrow more money at higher interest rates to deliver the same number of homes: the same funding produces fewer homes now than a year ago. A targeted delivery grant could maximise the number of homes which AHBs can provide.

The Housing Alliance has a strong track record of delivering homes, at scale and at pace. We believe that by working constructively in partnership with government and local authorities, practical solutions to the challenges Ireland faces can be found to deliver the housing we need.

Social housing construction status report Q4 2021

T: 087 175 1057 E: info@housingalliance.ie W: www.housingalliance.ie

Celebrating 10 years of The Housing Agency

Bob Jordan

Later in 2022, The Housing Agency will be celebrating its 10-year anniversary. As with all anniversaries, it is a welcome opportunity for the organisation to look back at where we began, our achievements, but crucially, to look forward to where we hope we will be in the next 10 years, and how we will get there, writes CEO Bob Jordan.

How much can really change in 10 years? When reading a history book, decades tend to fly by in a haze of global events and a period of 10 years can seem brief. In its first 10 years, however, The Housing Agency has witnessed the intense social, economic, and cultural changes experienced by the people of Ireland.

This time 10 years ago, Ireland’s housing issues were starkly different to today’s. During the recession, our work focused on unfinished estates, vacant homes and helping people deal with mortgage arrears.

While the focus of our day-to-day work has changed over the last 10 years, our overall vision has remained the same: we want to make sure that high quality and affordable homes are available to people to either rent or buy, in sustainable communities in the areas in which they want to live. Progress in achieving this vision can often seem slow. Housing issues are complex, and it can take a long time for policy decisions to come into practice.

However, progress is being made, and it is important to take stock of some of our achievements and the progress we have made collectively with our stakeholders in housing over the past 10 years.

Achievements over the past 10 years

Brought to life in 2021, cost rental is a new form of tenure in Ireland where tenants pay below open-market rents that are solely based on covering the cost of delivering, managing, and maintaining the homes. Ireland’s cost rental model has its roots in the early years of The Housing Agency and is an example of how a complex policy can come to fruition with evidence-based research, collaboration, and determination. For example, The Housing Agency with Dublin City Council brought the Vienna Model exhibition to Ireland in 2019 to showcase the benefits of cost rental in another European city to Irish policy makers and the public. The first cost rental homes in Ireland were made available in 2021, with a healthy pipeline of more homes becoming available this year and into the future.

A second major achievement has been the successful introduction of the voluntary regulation of approved housing bodies (AHBs), supported by an interim Regulatory Committee within The Housing Agency, a precursor to statutory regulation carried out by the Approved Housing Bodies Regulatory Authority. The importance of The Housing Agency as the interim regulator for AHBs for nine years, helping to prepare AHBs for this substantial change, is now being seen. A strong AHB sector is a key element to increasing the supply of social and affordable housing.

The Approved Housing Body Services Unit was established within The Housing Agency to provide assistance to the Department, AHBs, and local authorities to support AHB-led delivery. This unit carries out the financial appraisals of applications for funding by AHBs and provides the Department with recommendations on the levels of secondary loan (CALF) and Payment and Availability Agreements required for each proposal.

While cost rental was based on international best practice, the Mortgage to Rent scheme is an example of “outside the box” thinking that responded to an urgent need. Set up in 2012, the scheme’s goal was to prevent more people falling into homelessness as a result of mortgage arrears. This required a pragmatic, agile solution: allowing homeowners in mortgage difficulty to switch from owning their

home to renting it as social housing tenants. Mortgage to Rent is an example of joined-up thinking involving several stakeholders to protect those at risk of losing their homes. To-date over 1,700 households have avoided homelessness through this scheme.

A further achievement is our assistance to households impacted by building defects. The Pyrite Resolution Scheme began in 2014, and today over 2,200 homes have been remediated. We will be applying our project management experience from this scheme in the implementation of the Defective Concrete Blocks Scheme, which is currently being finalised. In addition, the Agency has played an important role in assisting local authorities and AHBs in the delivery of new social housing, through on-theground project and procurement advice and management.

Working together for better housing

Over the last 10 years, some of the Agency’s most significant achievements have been made by working in collaboration with others to achieve common goals. The Agency has many stakeholders, with varying roles and responsibilities. For example, we have worked productively with local authorities on regeneration and refurbishment projects, acquisitions, practitioner advice and training; with AHBs on funding and acquisitions; and provided ongoing advice and implementation support to the Department of Housing, Local Government and Heritage. The research we have undertaken or supported has helped to provide necessary insights on housing issues. We are in the unique position of having a deep understanding of the many players within housing in Ireland.

The launch of agefriendlyhomes.ie comes after a period of engagement and collaboration with the Department of Housing, Local Government and Heritage, the Department of Health and Age Friendly Ireland and is a good example of our collaborative approach. It is a resource hub providing practical resources, guidance, and information on housing for an ageing population with the aim of supporting the housing needs of people as they age.

One of the early tasks of The Housing Agency was to implement the 2011 housing strategy for disabled people. By leading out on the development of the National Housing Strategy for Disabled People 2022 – 2027, The Housing Agency will champion independent living within the community. With the Department of Housing, Local Government and Heritage we recently announced the new Croí Cónaithe (Cities) scheme, which will help those wanting to buy apartments in our cities. This scheme will bridge the current “viability gap” where the cost of building apartments is higher than the market sale price. Curtailing urban sprawl, greater public transport connectivity and encouraging apartment living are steps in the right direction in tackling the climate crisis.

Earlier in 2022, the Agency established the Housing First National Office which will coordinate and drive a national cross-Government approach to eliminate homelessness for people with complex needs and a history of rough sleeping and long-term use of emergency homeless accommodation.

The Housing Agency is committed to supporting innovation and progress in the housing sector. In 2021, we partnered with the Irish Architectural Foundation on Housing Unlocked. This open call sought creative and practical ideas to improve Ireland’s housing sector, in the areas of density, construction technologies, social inclusion, and environmental issues among others. Architects were asked to team up with professionals from a variety of disciplines and members of the public. Eight proposals were chosen to receive funding of €7,500 to develop their proposals into an exhibition piece. The exhibition will open to the public this autumn.

Every decision being taken in housing must be viewed through the lens of the climate crisis and developing sustainable communities throughout Ireland is a key focus for The Housing Agency over the years to come. Energy efficiency, quality of materials, reviving villages, towns, and cities throughout Ireland are central to achieving this.

Bob Jordan and Nathalie Weadick, Director of the Irish Architectural Foundation at the launch of Housing Unlocked.

Delivering on Housing for All

Housing for All, the Government’s housing plan for Ireland, sets key objectives between now and 2030, with the overall aim that “everyone in the State should have access to a home to purchase or rent at an affordable price, built to a high standard and in the right place offering a high quality of life”.

The Housing Agency’s deep understanding of the housing sector in Ireland, the collective experience of our team which includes housing policy experts, researchers, architects, engineers, planners, and our involvement in advising on and implementing policy decisions over the past 10 years will be crucial in supporting the successful delivery of Housing for All.

Specifically, our strategy for the next three years is framed in the context of Housing for All, and will focus on:

• supporting stakeholders with evidence-informed insights and data to develop a sustainable housing system;

• enabling supply and demand solutions throughout the housing system; and

• ensuring the Agency and its stakeholders have the capacity and agility to respond effectively to challenges in the housing system.

The Housing Agency’s work over the past decade has taught us that we all share the same goal: making good quality and affordable homes available to people where they want to live. As we look forward to our next decade, this goal remains central to solving the issues facing housing in Ireland.

E: bob.jordan@housingagency.ie W: www.housingagency.ie

magazine Housing Ireland ‘Ongoing housing need’ much greater than government waiting list

The Parliamentary Budget Office (PBO) has called into question the sustainability of the model which has led to the State funding twofifths private rental tenancies, describing it as “questionable”.

In analysis looking at trends in spending and outputs of social and state supported housing over the decade to 2020, the PBO pointed specifically at the practice of using finite financial resources to fund longterm needs, with short-term and potentially precarious housing measures, as questionable in terms of sustainability.

The report identifies “extreme volatility” in funding and outputs in recent decades, a move away from the historical model of significant capital build projects by the State to address requirements for housing, as cause for the present need to significantly increase the delivery of units over a short period of time.

Additionally, an “overreliance” on the private rental sector to alleviate the shortfall in publicly owned stock has stemmed from changing policy goals around the methods of delivery.

Combined, it means that despite an almost €30 billion spend between 2001-2020 on and capital build units, the present stock of social housing is “insufficient to fully meet the long-term or ongoing need to the population”.

The PBO estimates that around €29 billion of capital investment is required to meet the social housing needs of

around 62,000 who are recorded officially as having unmet social housing need and a further 60,000 Housing Assistance Payment (HAP) tenancies with an “ongoing need”. It also notes that more households are being pushed towards the need for housing support given rising rental costs and insufficient supply of new units.

“Given the timeframe for delivery on capital projects, and an individual’s immediate need for housing, a mix of capital and current funded delivery methods allows for greater flexibility in meeting a variety of requirements.

“Furthermore, regional differences in build and rental costs mean the longterm value of each delivery method is not constant across the nation. However, with the State now funding nearly four-in-10 private rental tenancies, the sustainability of the model employed is questionable, particularly the use of finite financial resources to fund long-term needs with short-term and potentially precarious housing measures.”

At the end of 2020, 38 per cent (excluding rental tenancies directly with a local authority) of rentals registered with the Residential Tenancies Board (RTB) were supported by State funding, with almost 70 per cent of Rebuilding Ireland’s cumulative delivery encompassing social housing ‘solutions’ via HAP and the Rental Accommodation Scheme (RAS), rather than through State building, acquisition, or leasing.

While State figures at the end of 2020 show 62,000 households with an unmet social housing need (roughly 112,000 people including children), the PBO highlights that a further 60,000 households (152,000 people) were in potentially precarious private rental HAP tenancies.

“Therefore, within these approximately 122,000 households, there are upwards of 260,000 people eligible for, but not yet in receipt of, long-term social housing,” the report states.

By including HAP tenancies, essentially doubling the Government’s estimate of the number of households in need of social housing, the PBO’s introduction of a new measurement of “ongoing need” attempts to avert the removal of HAP tenancies from the main social housing lists, highlighting that this practice can “mask long-term housing requirements and understate the level of outputs required in future”.

“In the absence of detailed analysis of social housing transfer lists to determine the number of households, the means (HAP etc.) and type (apartment etc.) of their current housing support, and their desired housing support (larger house etc.) the true scale of unmet social housing need in the State is unknown,” the report states.

“A more accurate measure of unmet social housing demand would encompass not just those whose needs are entirely unmet, but also those whose needs are not adequately met by the current form of social housing support they receive.”

Spending

The PBO report outlines that between 2001 and 2020, approximately €16 billion has been spent on capital funded housing, with a further €13 billion spent on current funded measures, including rent supplement. In nominal terms, voted spend on housing increased from €300 million in 2021 to €1.25 billion in 2020.

Indicating the need for local authorities to make available a suite of delivery measures which best address the particular market conditions in their regions when seeking to meet the needs of those requiring housing supports, the PBO highlights that where social housing needs are identified, capital investment offers better value for money in the longer term. Therefore, it recommends priority should be given to the supply of capital units in areas, or unit types, where this value can be achieved more promptly.

Basing estimates on 2020 build costs, the PBO says: “Taking account of the departmental housing build cost estimates in 2020 for various property types, the PBO estimates that the cost of delivery for all currently eligible households with an unmet need would be at least €14.3 billion.

“Similarly, an estimated cost of over €15 billion would be required to provide a unit of Housing for All HAP tenancies through capital means.”

Looking forward to the implications of housing supply issues, the PBO says the absence of sufficient supply of both social and private will increase pressure on the available rental stock, leading to the inflationary effect on rents for private renters and the Exchequer.

“Long-term, the scale of development required to deliver the desired level of housing units – along with the capacity of the construction sector to deliver these units promptly – is likely to pose a more significant challenge to meeting housing needs (both social and private) than the temporary disruption caused by public health measures in response to the pandemic,” the PBO concludes.

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