JOINT COMMITTEE ON THE ENVIRONMENT, TRANSPORT, CULTURE AND THE GAELTACHT debate -
Wednesday, 25 Apr 2012

Housing Finance Agency: Discussion

Chairman

I welcome Dr. Michelle Norris, chairman designate of the Housing Finance Agency to the committee.

I draw attention to the position on privilege. By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence they give to the committee. However, if directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against a person or an entity, by name or in such a way as to make him, her or it identifiable. I take this opportunity to advise witnesses that the opening statements which they submitted to the committee will be published on the committee’s website following this meeting.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, by name or in such a way as to make him or her identifiable.

There was an item on appointments to State boards on "Morning Ireland" this morning so it is appropriate that this meeting is taking place; it sends out a signal that appointments to boards are scrutinised. It is also appropriate, given in the current housing situation, for Dr. Norris to appear before us. I am interested in hearing her views on the broader housing market and strategy, and the role her agency has to play in helping to resolve some of the aspects of the situation in Ireland.

The agency has contributed significantly by helping many people over the years with voluntary housing agencies and local authorities. I would like to hear Dr. Norris's comments on these matters this morning.

Dr. Michelle Norris

I circulated a statement to the committee earlier this week, along with my curriculum vitae and this morning I propose to go through the statement in summary rather than in detail.

I am pleased to have the opportunity to address the committee on the functions of the Housing Finance Agency and on my vision for the agency during my term as chairman. I also wish to outline the experience and qualifications I bring to the role.

The agency's function is to advance loan finance to local authorities and voluntary housing agencies that can then be used for any purpose authorised by the Housing Act. The vast majority of loan finance is advanced for two purposes: the provision of social rented housing and supports to allow lower income households to access home ownership, via local authority mortgage loans, for instance. Our mission is to source and structure the loan finance in the most cost efficient manner possible. We do not formulate housing policy; we try to access the finance needed to implement housing policy in the most effective manner. The agency is an unusual public body in that we do not receive any Exchequer grant or subvention. We are funded by a small additional charge on the loans we advance to local authorities. Our role is to act as a centralised borrower that advances loan finance when approached to do so by the appropriate bodies; we do not actively seek loans.

The agency was established in 1982, taking over functions from a series of pre-cursor agencies, many of which went back as far as the 1930s. The board of the agency is appointed by the Minister for Environment, Community and Local Government with the consent of the Minister for Public Expenditure and Reform. The term of membership of the agency's board is generally five years. The board has 12 members normally, and currently there are eight directors, including representatives of the private sector, the local authority sector, two academics and people with experience of the voluntary housing sector.

When the agency was set up in 1982, it was done specifically to fund a scheme of income-related mortgage loans at that time. That scheme, which ran from 1982-86, enabled 16,000 households to access home ownership. Since the early 1980s, our remit has been widened and deepened progressively. From 1986, the agency took over responsibility for funding all local authority house purchase loans. From the early 1990s, we also provided finance to local authorities to enable them to operate the shared ownership scheme, another support for low income homeowners, and the capital loan and subsidy scheme, which until recently was the main scheme of State support for the provision of social housing by voluntary housing associations. Until recently, all of our loan finance has been advanced to local authorities, who lent it on to voluntary housing associations if they were using it to develop social housing. From 2002, we were given the powers to lend directly to voluntary housing associations. For various reasons, housing associations have not taken up that opportunity but in the last year we have started making arrangements to advance loan finance to voluntary housing associations.

About a third of our loans are mortgage-related business, such as local authority housing loans and affordable housing programmes. Two thirds are non-mortgage business, such as loans for the provision of social rented housing. We also have the powers under the Housing (Miscellaneous Provisions) Act 2002 to lend for finance projects in water services, waste and environmental areas and we have a small amount of loan finance outstanding in this area.

On the finance we offer to local authorities and voluntary housing associations, the current variable interest rate for those borrowing is 2.75%, and we offer a five year fixed rate loan of 4.40%. Our approach is to make finance available at the most attractive interest rates possible. The rates are very attractive compared to the interest rates borrowers can secure from commercial lenders, in so far as they can access such finance.

The interest rate for non-mortgage business, such as loans procured to finance the construction of social housing, was 2.34% in 2011. For most of its history, the agency has financed its operations by borrowing on domestic and international capital markets. All of our housing loans are State guaranteed, which has historically allowed us to access loans from international capital markets at attractive rates. The borrowing difficulties faced by the sovereign State from 2010 impacted on the access of the agency to its traditional sources of finance. An alternative source of funding became available in 2011, the multilateral EU-IMF programme of financial support for Ireland, that we source through the NTMA programme. A total amount of €4.03 billion can be drawn down under this programme by the end of the year. The agency also provides a facility to local authorities to enable them to invest any surplus cash they have for short-term periods with us, which we also use to finance our lending.

Let me give members an idea of the size and structure of the agency. The agency normally has 12 directors but we are awaiting the appointment of a number of directors by the Minister. We have a staff of 14, however a number are job-sharing, with a total of 11 whole time equivalent posts. The annual administration budget for the agency at the end of December 2011 was 0.035% of the total outstanding loan book. Our administration costs are modest.

I have circulated my curriculum vitae to members, but I will give a brief outline of my role. I am a senior lecturer in social policy in the school of applied social science in UCD. For the greater part of my career, I have worked as an academic or a researcher in the housing field. I have led more than 20 large research projects, mainly on social housing, the financing of social housing and also on the regeneration of social housing and of inner urban areas. I am a member of a number of international networks of academics working on social housing issues around Europe. I have a wide knowledge of the social housing sector and also the financing of the sector, which I hope will be a significant help to my role in the chair. I responded to an advertisement placed on the then Department of the Environment, Heritage and Local Government's website and applied for a position on the board of the Housing Finance Agency. The social housing sector is facing severe difficulties in getting finance. I am very committed to the sector and see great value in it. I hope my experience would be useful in developing the agency and helping to put in place sustainable funding for the social housing sector.

I have three goals for my term as chair. First, I wish to build on the success achieved in providing low cost funding for social housing and support the provision of home ownership for low income households. The provision of this very important service enables the implementation of Government policy. I will pre-empt, monitor and if necessary manage the risks associated with providing this funding. A key challenge for the agency's board in the years ahead will be securing suitable funding to allow us meet the changing needs of our customers. During the period of this board, the State is expected to return to the international markets for its borrowing requirements so the agency will seek also to return to international markets to generate money to finance its programmes.

Many of our customers must face the challenge of financing their mortgages. This will create challenges for the local authorities that have drawn down funding from the agency to finance local authority housing loans. There is no doubt that we will need to offer flexible loan structures to local authorities to allow them to manage their loan portfolios. We need to maintain and improve, where possible, the credit risk management structure we have in place to assist us in lending directly to voluntary housing associations. Traditionally we have loaned to local authorities, that have loaned on to housing associations or individual borrowers. The understanding was that the risk to the agency was minimal because the State would effectively underwrite any borrowings by local authorities from the agency. Now we give loans directly to housing associations, which creates a different level of risk for the agency. We are putting in place systems to actively monitor this risk.

I will outline my wider vision for the sector. In recent years there has been significant reform in funding arrangements for supports for low income home owners and for social housing provision. In particular the take up of local authority housing loans has decreased as house prices have dropped. I envisage the agency's involvement in funding these programmes is likely to decline in the coming years. At the same time, Government capital funding for the construction and purchase of mainstream social housing by local authorities and housing associations has also declined radically, particularly in the context of the fiscal crisis. Capital grants for the purchase or construction of social housing have been cut and have been replaced by on-going revenue funding arrangements, such as the rental accommodation scheme, leasing and availability payments to local authorities and housing associations. In the case of voluntary housing associations, these will be supported by borrowing from the agency. Social housing providers are facing a very radical change in their funding arrangements which creates significant challenges for the sector. In my view these reforms of the funding arrangements for social housing will bring the funding system into line with that of the vast majority of other developed countries, which have a mix of revenue funding and borrowing from intermediary agencies, such as the Housing Finance Agency. Most of the European countries that have cost effective, effectively managed social housing sectors have similar funding arrangements. Obviously the change in the funding context creates challenges but it also creates opportunities.

Chairman

I thank Dr. Norris for her presentation and I now invite members to ask questions.

Deputy Dessie Ellis

I thank Dr. Norris for her presentation. I see from her curriculum vitae the breadth of her experience and could not argue on the points she makes

Funding for social housing has been cut dramatically. We see that social housing is being delivered through voluntary housing groups. Dr. Norris mentioned that with the capital funding cut for housing, the agency is funding voluntary housing groups, which is typical of the delivery of social housing in Europe. It seems a substantial part of the remit of the Housing Finance Agency is to help the voluntary housing groups, which are responsible for most of the delivery.

The Housing Finance Agency has a surplus of approximately €31 million. Is that money invested in housing? Is it utilised in any way? I presume it is not carried over. Is it put back in?

Dr. Norris mentioned that the agency borrows on the markets, etc. Can she elaborate on some of the agency's sources of funding? It is interesting to see where it is getting its funding. I read some of the points made in her submission about the main challenges facing the agency as it deals with the housing crisis. The agency's role seems to have expanded. It is helping local authorities in other areas. Can Dr. Norris elaborate on the main challenges that are ahead of the agency?

Chairman

The Deputy has asked five or six questions.

Deputy Dessie Ellis

I have a good few matters I would like to raise. I would like to get a flavour of what is entailed in the regeneration programmes that are financed by the agency. Does the agency help Ballymun Regeneration Limited? Is there a way of doing that? Does the agency finance anything that is within NAMA? I would like to get an idea of how that would work.

Dr. Michelle Norris

The agency has no direct relationship with NAMA. Some of the properties held by NAMA have been identified as suitable for social housing. If local authorities or housing associations approach us for funding to buy properties from NAMA for use as social housing, we are available to provide funding to them. We do not actively solicit loans for that purpose. The agency approves loans case by case. In the last year, we have been involved in funding the acquisition of some NAMA properties in Sandyford by Clúid Housing Association. The association intends to re-let the properties in question as social housing. I can give a similar answer to the Deputy's question about regeneration programmes. While we do not actively solicit loans for such programmes, there is nothing to stop the agencies involved in the programmes in Limerick, Ballymun or anywhere else from approaching us to seek loan finance for housing.

Every local authority faces an issue when it seeks loan finance from the Housing Finance Agency. This relates to the Deputy's question about the role of the local authority sector in social housing. Any loan finance that local authorities draw down from the agency or from commercial lenders is considered to be part of the national State debt. The amount of loan finance the Housing Finance Agency can offer to a local authority is not huge in the context of the national debt, but it has to be taken into account. My personal interpretation is that this is one of the reasons the Government has sought to use loan finance to fund the voluntary housing sector. We make loans available to the voluntary housing sector, which uses revenue funding schemes like leasing and availability payments to pay down the loans. The local authorities use schemes like leasing and availability payments to lease the housing in the long term. One of the reasons for that is the fact that the borrowings which accrue are added to the national debt.

Deputy Ellis was right when he said the norm in many European countries is for more housing to be provided by housing associations and the voluntary sector than by local authorities. For historic reasons, most social housing in Ireland and the UK has been provided directly for local authorities. We have kept our system, which was set up under the UK legislation. In most other European countries, housing is provided the by non-profit sector or, in some cases, by arms length agencies that are controlled by local government but are not part of local government. Some of the historic reasons for our model of housing provision relate to the charities, trade unions and political parties that were active in building our social housing sector at the outset. In recent decades, that system has solidified for practical reasons relating to loan finance and where the loans lie. The Government is increasingly anxious for local authorities not to build up large debts that are considered as part of the national debt.

The Deputy asked whether we have taken a step back in this respect. Over the years, I have done a large amount of research on local authority housing management. I have done a little less research on the voluntary sector. I have a reasonable knowledge of that sector, however. I have sat on the board of a housing association. I do not think any sector is more or less efficient than another sector. I see a lot of variation within each sector. I do not think one can say this is a step back or a step forward. I think it varies. The Government and agencies like the Housing Finance Agency have a role in trying to manage the system in the most efficient way. The key issue is that we continue to provide social housing over the long term in a way that is manageable, achievable and affordable. The manner in which it is provided is an important issue but it is of secondary importance. The most important thing is that it is provided.

The Deputy also asked about reserves. We maintain reserves to cover risky lending. The vast bulk of our lending is to local authorities. In such cases, there is an assumption that any problems in repaying a loan will be underpinned by the State. The Government decided that borrowers of a certain number of income related loans granted in the early 1980s would be allowed to redeem those loans without penalty. For various reasons, that creates a risk to the agency. Many of those loans are due to be redeemed in the next few years. We have built reserves to cover that risk in our case. I do not have the full details of the loan portfolio from the 1980s. If the Deputy wishes, I can submit a written description of it to the Chairman after this meeting.

Chairman

I am aware we have two witnesses this morning. There is a working group meeting at 12.30 p.m. We have two witnesses to see as well. I ask members to confine themselves to two or three questions. They have been given a direction with regard to a question list. I do not want one member to go through the whole list.

Deputy Kevin Humphreys

I would like to deal with two aspects of this matter, the first of which is mortgages and loans. The Housing Finance Agency provides funding for local authorities. I am interested in the loans local authorities gave out between 2002 and 2008. A number of people who were single then but now have young families are caught in one-bedroom apartments or unsuitable housing, or are in negative equity. They cannot access a further loan to enable them to move now they have married and have children. They are stuck. Has there been a conversation between local authorities and the agency about helping such people to move on? They could be allowed to carry their negative equity with them or their loans could be increased. Has that matter been discussed?

The Housing Finance Agency provides part of the funding for the leasing and rental element of it. Has a cost-benefit analysis been done by the Housing Finance Agency and local authorities on long-term leasing and outright purchase?

What is good about voluntary housing is the safeguards. Loans are provided in the voluntary housing sector for a 20 or 25-year period. Are there mechanisms built in to ensure that the housing will remain in the voluntary sector? The way the sector is set up means there may be trusts and governance issues. In other European countries a change has been noted in the sector and the housing units have been converted to market units rather than voluntary units. Are there safeguards against that here?

I also have a question with regard to the mix in voluntary housing. Dr. Norris has sat on the board of a voluntary housing agency. In some European models voluntary housing allows both voluntary and market units within a development, which makes the project more economically viable. How does Dr. Norris feel about that? I have strong opinions on that myself. The voluntary sector seems to be the only game in town because of how we can borrow money currently. Local authorities have been precluded from charging an economical rent and as a result we have seen housing estates and flat complexes become run down due to the lack of maintenance. How will the voluntary sector lenders work out an economical rent and who will pick up the slack where necessary? Will it be the Department of Social Protection? Are we going to put the same restraints on the voluntary sector as were put on local authorities? We are not always comparing like with like here and Dr. Norris touched on that. There are some good voluntary sector projects and some good local authority projects, but there has always been a gap where local authorities were caught with a differential rent that was not bringing in an economic return. There was no make-up in the funding to guarantee the quality of the units in which people were living. How will we deal with that in the voluntary sector?

Dr. Michelle Norris

With regard to people on local authority housing loans who are in negative equity, as I mentioned, we do not actively go out and solicit loans nor have local authorities approached us on that issue. However, we do engage in ongoing discussion and consultation with local authorities. Therefore, if they approached us on that issue, we would try to come up with an arrangement to address any issues highlighted. To date, they have not raised such issues.

On the question of the cost-benefit analysis of the different funding options, the Housing and Sustainable Communities Agency has carried out a cost-benefit analysis of the different funding options available for procuring social housing, including leasing, renting, buying outright or paying down a mortgage via a lease. I can make that available to committee members if they are interested. The finding of most research in this area is that costs depend on the type of household being housed. For a single person or a small household, for example, a lone parent with one child, it is often cheaper to lease or to use a facility such as the rental accommodation scheme. For a larger household, for example a couple and children, it is generally cheaper to provide social rented housing.

The analysis also considered the option of using loan finance from the Housing Finance Agency to mortgage a property or paying down the mortgage using leasing and it compared a housing association and a local authority doing that. It found that a housing association is marginally cheaper. However, speaking as an academic rather than chair designate of the Housing Finance Agency, my view is that the calculations vary significantly depending on the assumptions built into them. If one reads the technical background to the report, it assumes for some of its calculations that the house would not be returned to the local authority. Nowadays, most local authority tenants can buy their house or flat at a significant discount and some people inherit tenancies. Therefore, the assumption was that a large proportion of properties would not be returned to the local authority after 30 years. If that assumption is removed, the results are quite different. The issues of successor tenancies and the like are issues that could be addressed by government if it wished to do so.

With regard to us lending to the housing association sector and to my views on the structure of the sector -----

Chairman

I must interject here. I know we are going to run over time and must ask members to focus their questions on the appointment of Dr. Norris as the chair of the agency. We can invite her back at another time with regard to the operational matters of the Housing Finance Agency. This morning's brief is to look at what Dr. Norris is thinking about coming into that position rather than the micro detail of the Housing Finance Agency. We must suspend the meeting now for a vote and will return in approximately ten minutes.

Sitting suspended at 11.17 a.m. and resumed at 11.33 a.m.

Chairman

I call on Dr. Norris to resume.

Dr. Michelle Norris

I will continue with Deputy Humphreys's questions. The final aspect was about lending to the housing association sector, concerns about income related rents charged and the sustainability of the finance for the paying down of the loans in future. In 2011, we received 11 applications for funding from the housing association sector. There are two stages to the application procedure with our agency. First, housing associations apply to us to get effectively approved status to borrow from us. Once they get that, they go out and find a scheme for which they want finance, and we approve those schemes individually. To date, we have only approved agencies to be qualified to borrow from the Housing Finance Agency. We received 11 applications from housing associations in 2011 for designated status to borrow from us, of which four were approved.

We apply very strict criteria for assessing whether housing associations are eligible to access loan finance from us. We took on a firm of consultants from the UK who carry out similar procedures for British housing associations that borrow directly from commercial banks. We apply 20 criteria when assessing the organisation. These criteria relate to the governance of the organisation, governance arrangements, operating profit, the current level of gearing, debt cover, existing borrowing, and the sustainability of the funding for the particular scheme from which it is drawing down finance.

The loans drawn down from the Housing Finance Agency by voluntary housing bodies are repaid using two sources of funds. The first consists of rents from tenants. Housing associations also charge an income related rent, the terms of which are set by the Department of the Environment, Community and Local Government. The second source comes from things like availability payments and leasing from the Department. When we assess applications from housing associations, we look in detail at the revenue stream available to them to pay back the loan. Our view in general is that the revenue stream available to the sector is sufficient to pay back the loans to us, between income related rents and the availability payments. The income related rents are relatively low but they are not the sole source of finance.

The regulation of the sector is obviously a matter for the Department of the Environment, Community and Local Government, rather than the agency. At the moment, housing associations have to apply to the Department for what is called "approved body status", prior to getting any type of public finance. The Department is currently looking at the general regulation of the sector, with a view to making it much more robust in future.

Chairman

I do not mean to rush you, but we need to conclude this meeting because we have a working group meeting at 12.30 p.m., and we have to get to another witness. I will be inviting you back, along with the rest of the team from the Housing Finance Agency, to reflect to the committee. However, right now I will direct members to questions regarding your appointment, as opposed to the day to day functions of the HFA. I call on Deputy Walsh.

Deputy Brian Walsh

Many of the questions have been asked for which the responses would be relevant to the appointment. I wish Dr. Norris every success in her role with the new board, and I thank her for coming along.

Did the surplus generated by the agency come from money drawn down from its sources of funds and retained rather than lent out? Or is it a profit that the agency generated on margin that it applied to the loans it sourced? If it is a profit, what margin is put on? Is it put on the borrowings that it sources when it relends them on to a local authority? Dr. Norris suggested in her presentation that she was more concerned about her exposure to housing agencies as opposed to local authorities. What is the agency's total level of exposure to both of those entities? What percentage of that exposure is to housing agencies?

From my own experience as a member of Galway City Council, I know that some developers would have acquired land at the height of the market. Would the agency have been involved in funding the purchase of land banks at the height of the market? Now there is an exposure involved, how does the agency intend to deal with that?

Finally, with the oversupply of housing in the market at the moment, the prospect of local authorities going out and building additional houses is not something we should endorse. Does Dr. Norris feel that the current oversupply is located in areas that will see a demand for local authority houses in the future?

Dr. Michelle Norris

I will deal with the questions in reverse order. With regard to the oversupply of housing, if memory serves, about 40% of the oversupply of ghost estates is in Dublin, in the commuter belt around Cork city and so on. A proportion of that should be suitable for social housing; I have no doubt about that. I have concerns about whether the ghost estates located in more peripheral rural areas would be suitable for social housing, for various practical reasons. There are many vacant individual one-off houses, the vast bulk of which are on the western seaboard, and I have doubts about whether they would be suitable for social housing currently. There are also a certain number of vacancies in urban areas or larger towns, some of which could be used for social housing. Many of the vacant dwellings in cities are apartments, and many of the people on the waiting list for social housing are single people or small families, so apartments could be a very suitable form of housing for them.

The second question was about land bank acquisition. It is true that the agency funded the acquisition of land during the last decade, on the understanding that this land would be used for the development of social housing and, in some cases, affordable housing. We did not go out and actively solicit loans; we responded to applications from local authorities, and we made assessments at the time of whether the costs of repaying the loans could be sustained by the local authorities concerned. Members may be aware that the Department of the Environment, Community and Local Government and the Housing and Sustainable Communities Agency have established the land aggregation scheme to enable local authorities to manage those loans. We will be involved in facilitating local authorities in restructuring those loans to enable them to cover the costs of the loans over the longer term through the scheme. I have not to date been involved in any administration of the scheme, but I would be happy to provide members with further written details.

The surplus is generated from a mix of our activities, and I do not have the details of which activities it came from, but I am happy to provide the Chairman with written details.

Chairman

The Housing Finance Agency will publish its report later this year, and those figures should be included in it. I propose that when the report is published we invite Dr. Norris back to discuss the broader issue of the agency's functions.

Dr. Michelle Norris

Yes. I would be happy to come back.

Deputy Catherine Murphy

There is a new, more open approach to recruiting people for positions such as the one Dr. Norris has been designated for. However, I understood the committee to have a stronger role in the interview process than has turned out to be the case. Am I correct in understanding that Dr. Norris has formally been appointed and taken up the position? I want to get a better understanding of the role the committee is supposed to have. That is not a comment about Dr. Norris; I would say the same to anyone who was in front of us. She might tell us when she was appointed, whether that has been confirmed, and so on. If that is the case, we must question our role.

I know from Dr. Norris's CV that she is currently lecturing. She has a very impressive academic CV that is pertinent to the position. Will she continue with her lecturing duties, and how will that match with her role as chairman? What timeframes will be involved? Although her CV is impressive from an academic point of view, she might give us an indication of her practical side, which acts as a counterbalance to the academic side.

Dr. Norris spoke about governance in the voluntary housing sector. Will she have a role in this? Her attitude is quite important in terms of policy with regard to the Housing Finance Agency. Where does she stand on this? I do not disagree with her. I do not mind who provides the houses, whether it is a housing association or a local authority. What I do mind is that the numbers are not sufficient and there is a long waiting list. There is a difference in that the housing associations do not have to adhere to the points system in the way local authorities do, and there is a element of cherry-picking. From a client point of view, how does Dr. Norris see that functioning for people who could be left behind because they do not contribute to the particular mix the housing association wants? The management of local authority estates becomes much more difficult due to such cherry-picking by housing associations. From a client point of view and with the aim of providing certainty for people, what is her position on the delivery of a mix of housing?

I support the point that has been made by the Chairman. It is important that Dr. Norris come back before the committee so that we can talk about details. Housing is a major issue and we need to understand the function of the Housing Finance Agency in an environment that is contracting from an economic point of view. What can be done to raise funds, in practical terms, that would not add to the national debt? It may well be that is why housing associations and other options are being considered.

Dr. Michelle Norris

I am the chairman designate of the Housing Finance Agency, subject to the approval of the committee.

Chairman

I must correct that. That will not be the case. Dr. Norris may be chairman designate, but she cannot be appointed full chairman until she has gone through this procedure with the committee. To clarify this for Deputy Murphy, the records of this meeting and whatever recommendations this committee wishes to make can be made available to the Minister but, ultimately, the appointment rests with the Minister and his Department.

Dr. Michelle Norris

My apologies. I misinterpreted that.

Chairman

On that basis, Dr. Norris does not need to behave in front of us.

Dr. Michelle Norris

The agency has certain legal functions to fulfil in terms of publishing its annual report and the operation of its credit committee. As a result, prior to my transition from designate to approved status, a quorum of the board had to meet for the last couple of months. We have been doing that for three months in total. The agency had been without a board for quite a long period, so there was a build-up of urgent work that needed to be addressed.

As members can see from my CV, I am an academic, but I have an atypical background for an academic. I started off by working in the housing department of Cork City Council, consulting with tenants on regeneration schemes. I then moved back into an academic role at University College Cork, which I retained for a number of years. I then moved out of academia and worked for a small agency funded by the Department of the Environment, Heritage and Local Government and the local authorities, called the Centre for Housing Research, which has since been subsumed into the Housing and Sustainable Communities Agency. When I worked there, we provided policy analysis and advice on good practice to local authorities and we also did research on social housing provision and management. Much of the work we did was based on the re-analysis of management data collected for local authorities for housing management purposes. It included a re-analysis of information on differential rents, the loan service and so on. That provided me with an in-depth knowledge of how the service worked on a day-to-day basis. I then moved back to University College, Dublin where I have been for seven years.

Teaching is an important part of my job. I mainly teach housing policy to undergraduates, but I still conduct research in the field. Most of my research involves practical work with local authorities and, to a lesser extent, housing associations and tenants on social housing estates. We have just completed a study of seven social housing estates at which we look in depth every ten years. I am a regular visitor and know how people who avail of the service live.

The Housing Finance Agency does not have a direct role in the regulation of the housing association sector. That is a matter for the Minister for the Environment, Community and Local Government. We give regular feedback to the Department of the Environment, Community and Local Government on our experience of interacting with the housing association sector and the loan process. A representative of the Department is on the board of the agency.

With regard to concerns about the sector, from my work and research, the sector is extremely varied. About half of housing associations are small voluntary bodies with no paid staff. They are parish associations and such like. The other half of the stock is provided by large organisations which, in many cases, are bigger than local authorities, have large asset bases and all staff are paid. Some have a stock of up to 7,000 dwellings. Different levels of regulation are appropriate for the different parts of the sector. For larger associations, it is appropriate that the Government regulate in a robust fashion. Because they are large, they have been the subject of significant Government investment. For small voluntary bodies which provide important services, including sheltered housing for older people, for example, a different level of regulation is appropriate. One of the challenges we face in trying to develop the sector is that it so varied. We have a number of very large associations, as well as a large number of very small organisations.

Chairman

Thank you, Dr. Norris. Many members of the committee have a passionate interest in housing. When the Housing Finance Agency publishes its annual report, I ask her to forward a copy to each committee member. We will have a follow-up meeting as soon as possible after its publication.

On behalf of the joint committee, I congratulate Dr. Norris on her appointment. I wish her the best of luck in her role. Having heard her presentation and comprehensive replies to members, I am sure she will do a very good job.

That concludes our consideration of the topic for today. I propose that we inform the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, that we have concluded our discussion with Dr. Norris and forward a transcript of this session to him for his information. Is that agreed? Agreed. I thank Dr. Norris for assisting us in our deliberations.