Wednesday, 18 December 2019

Questions (457)

Willie O'Dea

Question:

457. Deputy Willie O'Dea asked the Minister for Housing, Planning and Local Government if he has approved the business case to fund local authorities to rent from cuckoo funds; the projections he has made for HAP spending; his views on whether this represents value for money as a permanent policy; if a cost-benefit analysis of this and other solutions has been undertaken; and if he will make a statement on the matter. [53460/19]

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Written answers (Question to Housing)

Over the course of the 6-year Rebuilding Ireland Action Plan, the Government is committed to meeting the housing needs of over 138,000 households. This will be achieved through blended delivery, involving increasing the social housing stock by 50,000 homes, through build, acquisition and leasing programmes, and supporting some 88,000 further households through the Housing Assistance Payment and the Rental Accommodation Scheme.

A range of housing options are necessary to ensure a supply of accommodation to meet different types of social housing need. Harnessing the off-balance sheet potential of private investment in social housing is an important contributor to meeting this objective and the social housing targets set out in Rebuilding Ireland over the period to 2021 reflect the ambition in that regard. Of the 50,000 social housing homes to be delivered under Rebuilding Ireland, 10,000 will be leased by local authorities and Approved Housing Bodies (AHBs) under leasing arrangements from a range of different sources and funded under the Department’s Social Housing Current Expenditure Programme (SHCEP). The leasing programme secures properties from a wide range of lessors and through the various leasing schemes.

High quality secure properties, which represent value for money and are available on a long-term basis, are being targeted by local authorities around the country to accommodate people on local authority waiting lists. The Government has increased significantly the delivery expected from local authorities through their social housing build programme, but it remains the case that more homes can be provided through leasing than could reasonably be expected to be delivered under construction and acquisition programmes alone. In addition, the cost of delivering social housing units under the traditional construction and acquisition model is not adequately captured by the up-front capital expenditure as each unit will carry a stream of ongoing costs over the long-term including management, maintenance and remediation. Furthermore, during the term of the lease, the responsibility for structural matters remains with the property owner and not the local authority. At the end of the lease term, the dwelling can require major renovation or upgrading resulting in a substantial capital cost, which under leasing is borne by the owner rather than the local authority.

The Government is committed to increasing the supply of social housing and a primary focus continues to be the construction of new social housing homes. However, it is important that local authorities have the capacity to respond to local residential property markets and that they have the tools to provide a range of accommodation types in all of the areas where social housing need arises.

HAP, a social housing support being provided by local authorities, is one such tool. HAP will replace Rent Supplement for those with a long-term housing need who qualify for social housing support. The introduction of HAP means that local authorities can now provide housing assistance for households with a long-term housing need, including many long-term Rent Supplement recipients. At the end of Q3 2019, nearly 67,000 HAP tenancies had been set-up since the scheme commenced, of which there were more than 50,000 households actively in receipt of HAP support and over 29,000 separate landlords and agents providing accommodation to households supported by the scheme. However, the introduction of HAP has not resulted in increased usage of the private rented sector by the State – at end 2018, there were almost 6,000 fewer tenancies supported through Rent Supplement, Rental Accommodation Scheme or HAP than at end 2014, when the HAP scheme commenced.

HAP is funded through a combination of Exchequer monies and tenant differential rents collected in respect of HAP tenancies. Budget 2019 increased the Exchequer funding for the HAP scheme to €422 million. This is allowing for the continued support of existing HAP households and also enable the additional 16,760 households targeted under Rebuilding Ireland to be supported by HAP in 2019, as well as supporting the roll-out of the Homeless HAP Place Finder Support Service across the country. With 68,693 households on our waiting lists, the combination of 50,000 social housing homes and 88,000 HAP and RAS supports, which will be funded by the Government out to 2021, means that both long term and flexible options will be available to those on our social housing waiting lists.

Details on the Exchequer funding for HAP are set out in the table.

Year

2017

2018

2019

Outturn

€152.69m

€276.6m

€422m (allocated)

Budget 2020 increased the Exchequer funding for the HAP scheme to €502.7 million. This will enable a further 15,750 households to be supported, as well as continuing support for the over 52,000 existing HAP tenancies which will be in place at end 2019. The 2021 budgetary provision for housing programmes will be determined in the context of the relevant estimates process.

During the period 2016-2018, the housing needs of some 91,000 households were supported under current programmes, including the HAP and RAS schemes. This figure includes continuing to provide support to those already in homes supported under the programmes concerned, and also the additional tenancies established during that period. If the funding provided for these 91,000 households had been transferred to capital expenditure, to support building or buying homes, it would have secured some 5,500 homes, leaving no resources available to support the other 85,500 households. Looking at it another way, it would take almost €20 billion to provide a new build local authority home for those 91,000 households.

I am confident that the actions, targets and resources available under Rebuilding Ireland provide a strong platform for meeting the range of housing needs that exist nationally.