The
Social Housing Strategy 2020 includes a commitment to
commence work on a financial vehicle or other ways to raise funds for the social housing sector.
Work on the development of this new funding model is being progressed under the oversight of a group which has been put in place to develop the financial aspects of the Social Housing Strategy. This group - the Finance Work Stream - comprises a range of key stakeholders including my Department, the Housing Finance Agency, the National Development Finance Agency and the Departments of Finance and of Public Expenditure and Reform.
The objective of this work is to try to deliver an investment mechanism for social housing that does not negatively impact on the General Government Balance.
Arising from the opportunity offered by the Strategy, a range of developers, investors, financiers and others expressed interest in being involved in the provision of or investment in social housing. A protocol was put in place in March 2015 under the auspices of the Finance Work Stream to facilitate individuals and entities seeking to engage with the State to provide investment for the delivery of social housing.
During the course of its work, the Clearing House Group received 25 proposals for funding social and affordable housing, using both existing mechanisms and new approaches. The Group reported in November 2015, and arising from its work a number of measures are being developed with a view to better facilitating private investment into social housing. These include:
- amendments to existing arrangements under the Social Housing Current Expenditure Programme to facilitate investment by institutional investors; and
- an affordable rental scheme.
The Social Housing Current Expenditure Programme currently provides a means whereby properties can be built or bought by Approved Housing Bodies (AHBs) with the use of private funding and leased through AHB’s and Local Authorities, for the provision of social housing. This scheme is underpinned by a lease and other legal agreements which provide that rental payments are made by the State over an agreed long-term time period, typically 20 years, in return for which the housing unit is made available for social housing. Changes are now being proposed to this scheme to provide revised arrangements which serve to expand these mechanisms to facilitate larger institutional private investors to come into the social housing market.
On 2 February 2016, Government approved the over-arching principles which will underpin these revised arrangements and the arrangements being developed to give effect to an affordable rental scheme.
The Affordable Rental pilot scheme was announced as part of Budget 2016 which will utilise some of the €400m being made available from the proceeds of the sale of Bord Gáis Éireann. The scheme is currently being developed in my Department. €10m has been made available for the scheme in 2016. This is to be an on-going annual commitment to secure a long term increase in the supply of housing for affordable rental.
