Tuesday, 27 February 2018

Questions (32)

Eoin Ó Broin


32. Deputy Eoin Ó Broin asked the Minister for Housing, Planning and Local Government the status of the commitment made on page 53 of Rebuilding Ireland to create a special purpose vehicle, involving investors including the credit union movement, to fund the delivery of social and affordable homes by the approved body sector. [9768/18]

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Oral answers (6 contributions) (Question to Housing)

The Minister is living in a parallel universe if he thinks Rebuilding Ireland is yielding results. In the months since that strategy was launched, the total number of adults and children in emergency accommodation has increased by a shocking 40%. The only result it is yielding is more children spending longer periods of their lives in emergency accommodation.

My question is directly related to it in terms of the supply of social housing. Will the Minister of State give us an update on what he is doing to assist the credit unions and approved housing bodies to draw down the funding now available as a result of the Central Bank's rulings at the end of last year on investing the savings of credit unions in social housing, particularly for the families about whom we are talking?

I remind the Deputy that Rebuilding Ireland is a five-year document. We all want it to work in week one, but it will probably take four or five years to deliver on its promise. I think it is on track to do so and the report launched by the Minister, Deputy Eoghan Murphy, in January showed all of the headings under which it was delivering housing. Overall, it is way ahead of target and while we all accept that it is not enough to deal with the homelessness problem, as a document, it is delivering and we will push it forward even more. An additional 7,000 social houses not in use at the start of last year are now in use and this year there will be an additional 8,000 such houses. They will be new houses under all of the different schemes and add to the houses we are renting under the HAP and other rental schemes. Solutions will have been found for over 26,000 people, which is some progress, and we will not stop until we have dealt with the problem. That is why nearly €2 billion has been set aside to fund Rebuilding Ireland this year, with an increased budget in the years ahead. We are showing the results and, eventually, the trends will go in the right way. All of the housing we are delivering will provide enough homes. Over 4,000 people left homelessness last year. We have to acknowledge the work done by many people, from the local authorities to other partners who are delivering.

The Government's Rebuilding Ireland - Action Plan for Housing and Homelessness emphasised the need to look at new ways of funding social housing delivery, in particular the need to provide structural, funding and policy supports to increase the delivery of social housing by approved housing bodies, AHBs.  In that context, it committed to providing support for the AHB sector to develop innovative financial models to enable approved housing bodies to further enhance their contribution in the delivery of additional social housing.

In May 2017 my Department announced that funding of €49,000 would be provided for the Irish Council for Social Housing to support an initiative through which it would develop proposals for special purpose vehicles.  The purpose of the initiative was to provide a mechanism that would enable the sector to attract investment in social housing projects from potential investors, including the credit union movement. The Irish Council for Social Housing has completed two of the three phases of the project and anticipates that the work should be completed later this year.

That is precisely why we have so many living in emergency accommodation. In 2014 the credit unions stated they wanted to invest in social housing. In 2016 their representatives appeared before the Oireachtas housing and homelessness committee to plead with us to put pressure on the Government to assist in that regard. In 2017 the Central Bank finally got around to approving credit union investment in social housing and all the Department has done is give a relatively small amount of money to the Irish Council for Social Housing to conduct a study of how to set up a special purpose vehicle. There are experts on how to do this in the Departments of Finance and Public Expenditure and Reform, while the Minister's own Department has experience of it. Are we going to have to wait another year before a special purpose vehicle is set up by the approved housing bodies? Are we going to have to wait another year before the credit unions have their own fund with which to invest? Would that mean funding would not be available until 2019 for credit unions to start building houses, which would mean that the houses would not have tenants in them until 2020 or 2021? What has the Minister been doing for the past year in implementing this specific recommendation, other than giving one third of the cost of a PricewaterhouseCoopers study of this matter, which the Irish Council for Social Housing has been conducting? Now that the Central Bank has finally agreed to allow credit unions to invest, will the Minister get everyone around the table, namely, the Irish League of Credit Unions, the Credit Union Development Association, the approved housing bodies, the Department of Finance and the NTMA, to agree how this can be done in order that the €500 million which the Irish League of Credit Unions wants to invest can be invested this year, rather than at some distant point in the future?

I had not finished my answer. We meet credit unions and both the Minister and I are conscious of their ability to invest. We always say access to cash is not restricting the provision of housing, but we welcome the involvement of credit unions through investment and providing loans. Six approved housing bodies applied to draw down funding and a sum of €104,000 was drawn down to expand four schemes. The Irish Council for Social Housing was establishing a sector-led financial vehicle to allow approved housing bodies to expand and draw down money through special purpose vehicles. Cluid is developing a set of procedures, guidelines and templates for mergers and acquisitions, while Oaklee has engaged with financial advisers to secure off-balance sheet funding. Túath has engaged with external experts to undertake research, while two schemes are waiting for inclusion in the affordable rental scheme. There are different approved housing bodies drawing down funding in different ways to invent new models to attract money. Credit unions met the Oireachtas committee on housing and homelessness. They also met us on a few occasions. I was involved with the credit union movement even before taking up this brief on the subject of allowing its members to invest in housing provision and provide loans for approved housing bodies. We are all on the same page in wanting this to happen. Many of the decisions to be made are outside the scope of the Department of Housing, Planning and Local Government and proper to the Central Bank and the Department of Finance, but we have worked with them too. Credit unions have set out the proposed means by which funding could be provided for approved housing bodies for the development of social housing. My Department and the Department of Finance met credit union representative bodies on a number of occasions to examine the sector. Both Departments also met the Central Bank to provide information of a technical nature on social housing funding arrangements. Thankfully, it resulted in the changes announced in January this year.

That is all very interesting, but I already knew the information on approved housing bodies and credit unions and it was not the question I asked. It was what the Minister was actually doing. Now that approval has been given by the Central Bank, will the Minister of State and the Department bring all of the players around the table to ensure, in as speedy a fashion as possible, that the funds into which the credit unions need to put their money and the funds the approved housing bodies need to draw down can be established? Can the Minister of State give us any indication of the timeline involved? Will it be up and running this year, next year or the year after? According to the figures, the incidence of adult homelessness is up by 27% in the past 12 months; the incidence of child homelessness is up by 36% and the incidence of family homelessness it is up by 29%. It seems that whoever wrote the Minister's press release cannot even count, as they suggested there had been a 16% increase. There is no urgency on the part of the Government. There is €500 million that could be spent, in addition to the Government's financial commitments, but all the Minister of State is telling us is what we already know from other bodies, rather than what he and his Department are doing. Will he, please, inject some urgency in order that we do not have to sit here for another year, with another 40% increase in the incidence of homelessness?

The changes have been made by the Central Bank and kicked in in January, but it will only be on 1 March, at the end of this week, that the mechanism to allow the credit union movement to invest in housing projects will apply. My officials are meeting both credit union bodies today and we are moving as quickly as we can. We have engaged a lot with the credit union movement because we believe in what it wants to do, but taxpayers' money of €2 billion has also been set aside this year. We have the money we need. The issue is how quickly can we build houses and make them available. We are looking to bring back into use private vacant properties if we can acquire them at the right price and restore them. We are changing the rules and mechanisms for planning and delivery times for new builds which include rapid construction. We are doing all we can to speed up the delivery of housing because we have the money we need. The new regulations will allow credit unions to invest and we welcome their involvement. The Department has engaged fully. We will work to make it happen as quickly as possible. To this end, further meetings are planned in the weeks ahead.