I am pleased to welcome a delegation from the Irish Council for Social Housing comprising: Dr. Donal McManus, CEO; Mr. Justin O'Brien, president; and Ms Caren Gallagher, joint project director of policy. The council has made a submission, which I presume most members have read. I invite Mr. O'Brien to make an opening statement relating to the submission.
Irish Council for Social Housing
Mr. Justin O'Brien
I thank the Chairman and members for the opportunity to present on behalf of the Irish Council for Social Housing. We welcome this opportunity. The Chairman introduced my colleagues, Dr. McManus and Ms Gallagher.
The Irish Council for Social Housing is the national federation of approved housing bodies. We have 270 members which are spread throughout the country. We provide over 30,000 homes and related supports in about 500 communities in urban and rural areas. We provide a range of housing from what is termed general needs to what would be considered specialist needs, namely, that involving the elderly, the homeless and people with learning disabilities. We have grown over the past 20 years with the aid of Government funding. We are actively engaged as one of the pillars of the Social Housing Strategy 2020 and try to work with the Department and other bodies to ensure this is implemented. We are actively engaged with the Dublin Region Homeless Executive in terms of participation on the consultative forum and in the implementation and advisory group, which is trying to inform and advise on responses to homelessness in the city.
There is a need to reference where we are and where we were. In 2009, the approved housing sector produced over 2,000 new types of social housing homes nationally. This was in a context where about €400 million was made available for the sector around 2008. In 2013, that funding had been reduced to about €40 million so we have had to operate in a very constrained context over the past number of years. Capital funding spend for social housing in 2008 was about €1.4 billion. In 2014, it was reduced to about €270 million.
There has been a significant change for us to adjust to this different financial context. Up to 2011, we were reliant on 100% capital funding from the State to acquire or design and build. Since then, we have had to engage in different types of business and gear up for it through engaging with the private sector, developers, financiers, receivers and NAMA to enable the provision of new types of housing units. The sector has delivered nearly 2,000 NAMA-controlled units via leasing options, acquisition and the fitting out of distressed assets.
The funding context in which we operated previously was a 100% grant regime. The regime is now fundamentally altered to a maximum of 30% construction or acquisition costs funding from the State with the rest borrowed from the Housing Finance Agency or from banks to enable acquisition, design and build. We are into a different business model of development. It is a significant change for us but we are not afraid of it. However, in similar northern European countries, such as Holland, Britain, Germany and France, the transition from 100% capital funding to primarily private funding happened over a ten to 20-year period. We have been expected to adjust to this in a five-year timeframe. That is the context with which we are currently grappling.
Up to 9% of the housing stock in Ireland is social housing. We consider that far too small. The National Economic and Social Council, NESC, has commented on this in different reports over the years and has recommended 200,000 social housing units should be available to meet social housing need. We endorse that, believing social housing should account for 17% of national housing provision. It will obviously vary from region to region, area to area, based on social housing need. In its recent reports, NESC stated one third of people in need of housing will be unable to afford it from their own resources. Most people aspire to home ownership, but the reality is that there is discordance between the aspiration to and the affordability of home ownership. That is where social housing becomes a central platform and an important one. Our fundamental message is that its provision needs to be increased.
One of the policy options in Social Housing Strategy 2020, with which we are linked, is the development of the affordable or cost-rental housing model. We believe this would meet the needs of people who are starting off, such as teachers or nurses who are on lowish incomes, but cannot get a mortgage. We support that type of provision where they would be able to rent at a reduced market rate and would live in mixed tenure schemes of social and affordable housing. We see that as being important for the way ahead.
In the area of homelessness, the maintenance of adequate rent allowance for people is critical. An inadequate allowance is the main driver of people becoming homeless in the Dublin area because of the unaffordability factor. The housing assistance payment, HAP, a key point of the social housing strategy, will not be cost neutral. It needs to be aligned with market rents and there needs to be security of tenure for people in that option. One can see from the homeless figures that those families presenting have mainly come about because of the lack of affordability. It is a key element of consideration for the future.
We provide high levels of housing support and are mainstream housing providers. Our dedicated purpose is to provide housing, which we believe we do reasonably well. We have to grapple with a more complex operating environment with regulation, funding and finance, however. Some of the developments we have tried to undertake over the past several years, particularly with some of the NAMA schemes, have been stymied by planning, technical and financial issues. They are not the impediments but the issues we have to deal with to get developments across the line.
In 2015, the sector provided 1,300 new units of accommodation via acquisitions and design and build. It is not always recognised publicly that we have reached that level of new provision. It is important that we rise to the challenge of delivery and enhance that.
Our paper represents some of the issues we think could make that easier for us.
One of the key issues, referenced clearly in the submission we made, is the assembly of suitable sites for housing. There was a low-cost subsidised sites programme administered by local authorities in the 1980s and 1990s. That was absolutely beneficial to the establishment of the sector, providing economy of scale and stability. That is critical. We also want to engage with the Part V provision, and we alluded to that in our submission, stating it should be 20% rather than 10%. That would provide good value for money.
An important point to consider in the submission is that when the Celtic tiger's housing market was booming in 2005, land costs were in some schemes totalling 40% of the cost. That is untenable and we have made recommendations about sites and unused State land being made available for the sector. That is critical. We also reference the Judge Kenny report from the early 1970s about land value. The Oireachtas committee considered that 20 years ago, indicating that it was not unconstitutional and should be implemented. It is back to the Department or the Minister to endorse that.
Housing associations have changed very much from what we were ten years ago. We have to deal with loan finance and housing management and we work in partnership with local authorities, developers and the Housing Finance Agency. There are 13 members accredited with the Housing Finance Agency and able to borrow money. That enables an additional provision and better value for money for government grants and loan finance that we borrow and repay via State funding. That enables development. We are also trying to look to the future and have alternatives to the Housing Finance Agency. We are trying to create a special purpose vehicle committee that would enable investors to come in and fund the sector for the provision of new housing. The larger member associations are very actively working at that to see if we can possibly avail of credit union money to enable the kind of investment that is required for us to access funding for the delivery of new housing.
We provide many schemes in rural areas; it is not just an urban problem. In County Clare there are many schemes for the elderly pioneered by people in local communities. It is a very vital contribution to Irish life. What is really needed in maintaining those elderly schemes is some sort of assisted independent living funding. When older people become less able they need more assisted support. They do not need to go to nursing homes but there must be a source of funding coming to the housing body so they can live independently. We have called for that for 20 years and got nowhere with it. We can make the case again but it is a very important contribution to community life, particularly in rural areas. To my mind, it is something that is often unrecognised as an example of what capital funding from the State has enabled over the past 20 years.
We welcome the idea of the cross-party committee. It is important in bringing the different stakeholders together and perhaps it could be ongoing and active, reviewing the delivery by different stakeholders, developers, ourselves as approved housing bodies and local authorities. We made particular recommendations in our report that the committee might wish to clarify or seek further information on, and we will happily engage on that.
The full report will go on the website after the meeting, and I acknowledge the recommendations and so forth that were made in it. A number of Deputies have questions and comments.
I thank the delegation for attending. In our village a development of 16 houses was built 15 years ago and we have taken in people who were homeless and taken people out of nursing homes. We have housed people who were in very poor rural housing. It has been a very successful scheme. We were, perhaps, lucky at the time in that 5% of the funding of the scheme came from the community, with 95% of the scheme's funding coming through what is now the Department of the Environment, Community and Local Government. Does that system still work or is that funding still available? We have had people coming to us from other villages looking at our scheme and wondering if they could replicate it in their own villages.
Dr. Donal McManus
The schemes Deputy Harty mentioned were in place throughout the country and through them about 8,000 homes were built for older people at that time. The scheme is still there. It is called the capital assistance scheme. It does not have the scale of money it had ten or 15 years ago. It has around €70 million now, compared to about €150 million 15 years ago. Houses can be either 90% State-funded and 5% self-funded, or 100% funded if all applicants are taken from the waiting list. That is the quid pro quo. It is still there. Obviously for many schemes the draw on €70 million throughout the country would be very heavy, so it would have an impact on any big schemes, but the scheme is there and it has worked very well. It has probably been one of the most successful schemes from the Government's point of view over the last 30 years because of its simplicity, but it does not have the required scale of capital funding. In that context, some associations are moving towards what Mr. O'Brien mentioned, the mixed funding regime, in which one gets a 30% capital contribution from the State and then borrows 70%. It is only where the association has equity in cash that it will do that. Smaller local associations that may not have access to cash or be able to borrow may not go down that route, but in urban areas some of the larger associations are looking at that for older people. The scheme is still there, but not on the same scale that it was 15 or 20 years ago.
In the scheme we had, 75% of the people came from the housing list and we had a discretionary allocation of 25%. If 100% of people were coming off the housing list, we could have had 90% of that scheme funded. Is that right?
Dr. Donal McManus
The association could have 100% of it funded.
What is the mechanism for applying for that?
Dr. Donal McManus
It is through the local authority again. In Deputy Harty's case, the association would contact Clare County Council to see whether there was a demand. Obviously everyone would be drawn from the waiting list in, say, west Clare. The local authority would have to be assured that there was a demand, and then, once the local authority was happy with that, it would prioritise the list of schemes in Clare and submit it to the Department for consideration. One has to go through the local authority to approve the scheme. If it is approved, the Department will indicate when money can be drawn down as a priority.
I have another supplementary question. Is it the case that one must establish a need and then apply to the county council, which will prioritise the scheme?
Dr. Donal McManus
Recently - probably back at that time - there was more an open call, but now there is an annual call under the capital assistance scheme. It usually happens in springtime. All associations are called to bring forward schemes for assessment by the local authority to be prioritised. It happens on an annual basis. In the past, it was open all the time and one could apply throughout the year. Again, one has to go back through the local authority system for that and prove need. The key issue now is to make an impact on the local authority waiting list in the area, whether it is Clare, Cork or wherever.
I am going to sound negative, although I hate sounding negative and I do not mean it personally. I do not get the role of housing bodies. I am not saying this in a smart way, but it could seem to some people - I am probably one of them - that many of the functions the housing bodies have taken on were traditionally those of the local authorities and that much of what the housing bodies have done is to replicate the old model, but at significantly higher expense and in a duplicated manner. I know there are some very small housing associations, but if there are 270 organisations providing 30,000 houses, that is an average of 110 units for each housing association. We had a discussion earlier about economies of scale, and this is one. How many staff, including administrative staff, are there in those associations? How many of them have chief executives or directors of finance? How many have separate offices and so on? I am not saying this in a nasty way. I think these are very valid questions because years ago we did not have housing associations, except maybe for specialist accommodation for people with disabilities or whatever, where one could see a certain role. Generally the local authorities did this. It smacks to me of middlemen. I know there is an issue with the fiscal space and there is a function for housing bodies as a mar dhea version of borrowing money. I am not saying I agree with that, but there is a certain logic in it. However, beyond that I honestly do not know why local authorities are not performing this function. The provision of social housing was their job and we need a reorientation in regard to that. I am not saying the housing bodies do not do necessary work, but the issue is how it is being done.
A not-very-funny joke did the rounds approximately ten years ago which suggested that there were fewer homeless people than there were individuals on quite large salaries working for the organisations that deal with homelessness in Dublin. I know that is not the case now but there is an argument to be made in that regard and I would like to see the data relating to the matter. Some of the broader points made by Dr. McManus are obviously correct and were also made by the Housing Agency, which takes a strategic view. I do not mean this in a derogatory way but I do not see how it fits. It is an issue that needs to be-----
We will afford Dr. McManus the opportunity to explain the specific role of the housing associations and to outline what they do that is different to what is done by local authorities, where they fit-----
Would it not be more efficient for a local authority, as a collective body that has an organised structure already in place, to do this work?
Dr. Donal McManus
I am happy to address Deputy Daly's comments. In essence, the housing associations were here before the formation of the State. The Iveagh Trust in Dublin was one of the earliest initiatives in voluntary housing for working class people in Dublin. It provided social housing prior to the local authority doing so. The latter played a strong role from the 1920s onwards. Housing associations, not just in Ireland but throughout the European Union, predate public authorities which are very generic and do many things, including housing, planning, finance and so forth. Housing associations in Ireland and many other countries are dedicated to housing management and provision. That is their sole focus.
The added value provided by housing associations is that they have a long-term commitment to the provision of rental housing in the areas in which they operate, as well as to the provision of supports. Local authorities do not have a focus on providing supports. What is needed is both housing and support services, whether for homeless people, the elderly or people with disabilities. Initially housing associations after the 1920s would have been in a niche area, providing for special needs groups. Such groups were well catered for in this way because the local authorities at that time would not have had the strands of expertise to provide for such client groups. In this context, one is not just talking about bricks and mortar. One is also talking about support services.
On the question of the scale of housing associations, there are three classifications, namely, tiers 1, 2 and 3. The majority of the 30,000 homes are managed by approximately 15 larger housing associations in the so-called tier 3 group. There are approximately 180 smaller housing associations in the tier 1 group. They do not have any staff. Most of those associations are voluntary and started from the ground up. They may have obtained sites from local parish councils, received funding through the capital assistance scheme, which was mentioned by Deputy Harty, and provided housing. They would not have staff in place although they would have boards. One of the biggest challenges we have been dealing with in recent years is in trying to consolidate some of those associations. Some of the older board members have moved on and we are trying to get a structure in place to help to consolidate the sector. That has happened to some degree in that there have been a number of mergers of smaller voluntary housing associations. Many of them do not have any staff at all. They may have caretakers but there are no chief executive officers, directors of finance and so forth. Such staff operate in the tier 3 housing associations. I can obtain the figures from the regulation office on how many people are employed in the tier three associations. That is where the bulk of the staff in the sector are employed, as finance directors, chief executive officers and so forth. The small voluntary organisations would not have the rental income-----
In terms of the larger housing associations which do have significant rental income, how many are we talking about? How many offices, staff, chief executive officers and so forth?
Dr. Donal McManus
Most of the 15 tier 3 associations would have chief executive officers or directors. The largest body has approximately 5,000 properties. The two largest have almost 10,000 properties in total and they would have a significant number of staff. They would have housing staff and support staff for tenants. They would also provide education programmes. Housing associations do not just provide housing and housing support; they also provide social programmes. I will supply the Deputy with the details on the numbers of staff employed. The larger tier 3 associations with significant stock would employ staff. The larger an association becomes, the more staff it will have to employ to deal with various issues.
Some of the mid-sized housing associations with between 300 and 400 units have come together and amalgamated. The key issue is that if one is trying to raise private finance, one needs scale. The financial bodies will look for scale and competency.
Will Dr. McManus be able to get that information, on the costs associated with staff, premises and so forth?
Dr. Donal McManus
Yes, I can get that information.
I apologise for being late. I am impressed with what I have heard so far and I like what Dr. McManus is saying. Dr. McManus spoke about housing for older people and pointed out that as people age they need more supports. I do not know he is aware of the Great Northern Haven in County Louth which is a fantastic centre.
I suggest to the Chairman that we might visit it. The centre has about 12 apartments where people live as they get older. The centre has technological assistance in terms of sensors whereby if the residents get up late at night, a light comes on automatically in the bathroom, or if water spills over in the bath or in the kitchen, an alarm goes off. The residents are interrogated medically in terms of "Did you take your pills today, Mary?", or "Let us check your blood pressure", and so on. That is the type of wonderful work that is needed in the future. I like that; I think it is good. I also like the fact that the community can add and build on. If there are people in the community who are dedicated to a voluntary body or an ideal, they can do much more than a local authority.
I understand where Ms Gallagher is coming from and I do not disagree with her. I see an improved role for voluntary associations because they can open doors for people that local authorities would never be able to open. In terms of the national deficit in social housing and the limitations on local authorities and the bureaucracy, for want of a better word, what more can the organisation do to add value or get more housing built?
Some years ago I was in Ringsend where I met two ladies close to the toll bridge. Approximately 100 apartments were built there for less than €200,000, while in the same area, commercial developers were building for double that amount. We are talking about getting commercial developers back into the business. They are not coming back at the moment, but if we could get voluntary organisations working, we should support them as they can build at a far cheaper cost. They will have much more support from statutory agencies. What new initiative could be supported? If my question is too long-winded perhaps the witnesses would forward a submission to the committee. The bridgehead the witnesses can bring to this is hugely important and could get through much red tape.
Ms Caren Gallagher
On the issue of housing for the elderly, the scheme the Deputy mentioned in Barrack Street, the Great Northern Haven, is just one example of the type of scheme that is unique in terms of the technology installed. That is one of many schemes throughout towns, villages and parishes that are run by voluntary boards and linked in with the wider community services. As Mr. O'Brien said earlier, those people who were housed were either off the waiting list or included in the 25% mentioned by Deputy Harty. That gave some housing associations the scope to house some people within the scheme who may not have qualified for social housing in the traditional sense. A person may have had an asset such as land but may have lived in very poor conditions. That is the scope that has enabled these schemes to work.
In terms of beyond the bricks and mortar, what has happened in the past is that the community supports to the tenants in those schemes are provided either by volunteers or the wider community and the housing association has primarily absorbed that cost. As people in the scheme are ageing and may have gone in aged 65, the additional care and support they require is becoming a bigger issue. They may not need medical or nursing care but a housing related support, as mentioned by Mr. O'Brien, in terms of the assisted independent living scheme for which we are calling. That type of support will allow those people to age in place in their communities and avoid residential or nursing care until the time comes when it is essential to access that.
This is one of the niche areas in terms of what makes the sector unique - the specialism around housing for older people, people with disabilities and provision for people who are homeless, and the additional supports around that.
Unless one is involved in this sector, one probably does not know about it. How can we encourage more people or start-ups to become involved in what Ms Gallagher is talking about? What needs to be added to the mix?
Mr. Justin O'Brien
A key aspect of our submission is the availability of land to the sector. It is currently a very difficult market in which to acquire property, particularly in the Dublin area. It may not be as true outside Dublin. Public land must be made available to us in order for us to design and build houses. That is critical. The funding mechanisms are evolving and we are getting more attuned with them. There are more people in the sector borrowing from the Housing Finance Agency to undertake acquisitions and design and build. There is projected growth in that area.
One of the things we would suggest - this occurred when former Deputy Bobby Molloy was the Minister of State with responsibility for housing many years ago - is a centralised unit within the Department of the Environment, Community and Local Government to deal specifically with the housing sector. We have said this to the Department. At the moment we deal with seven principal officers. If our activity was co-ordinated under one principal officer that would enable the processing of applications, delivery and funding and make housing delivery more possible.
To make a difference.
Mr. Justin O'Brien
With regard to Deputy Daly's comments, there will be a process of amalgamation among smaller or larger housing associations in the next number of years, some of which will be determined on a financial basis. Our key performance indicators are very much advanced with regard to those used generally by the local authority sector. We are dedicated housing providers. We provide housing. Some of our performance measurement is very positive and we believe we can give added value and complement what local authorities do.
And not in competition.
Mr. Justin O'Brien
We do not want to compete. Previously there was always a kind of competition for funding between the local authorities and the approved housing sector. We see ourselves working in partnership with them, not against each other, to enable delivery together. That has to be the way to enhance delivery.
On that point, in his opening statement, Mr. O'Brien referred specifically to the agency having design and build capacity, and he clearly identified land availability as an issue.
Mr. Justin O'Brien
Yes.
There are land banks available across the local authorities in Dublin. What is the interaction with the local authorities to access those lands? The agency has clearly identified the availability of land as an obstacle in the delivery of housing. Yet local authorities have land, some of which they own and some they do not. Perhaps Mr. O'Brien could clarify the agency's engagement with local authorities on the issue of land availability.
Mr. Justin O'Brien
Yes. Dr. McManus might like to share this response. One of the things the Housing Agency was meant to do was try to provide an inventory of public lands. That is part of the social housing strategy to 2020. It was for the development of land in Dublin, which is recognised as being critical. The owners of lands were to be identified and the aim was to examine what their use could be. That process has not been completed, as I understand it. We think that is important.
In fairness to the local authorities - Dr. McManus can outline this - and with regard to approved housing bodies going to local authorities, there could be possible issues around procurement, so a framework process would need to be put in place whereby there is reasonable equity and assessment of people's capacity to deliver. A protocol on that has now been set up, which Dr. McManus will outline.
Dr. Donal McManus
There is a communication protocol between local authorities and approved housing bodies and the different types of housing development they undertake, whether it is new build on local authority sites, developer-led initiatives, Part V building or building on a housing association's own land. With regard to local-authority-owned land, some local authorities have their own programmes that they want to develop at the same time, so there may be less land available. Another context is that some local authorities have historical debt on their land and some of the land may have been put into the land aggregation scheme. There may be costs incurred in that regard. The housing associations have in the past tended to have bilateral discussions with local authorities to see if housing would be suitable in an area.
Now it goes through a more structured protocol. If a site is available, the local authority will contact a number of associations and see what is the best fit for that site. Also, it is more transparent in terms of who gets the site. In the past, the low-cost site was a real trigger that local authorities had. It was a real trigger for our sector and for people building their own homes. Thousands of sites were provided for our sector and it worked well. The scheme diminished in recent years and we are trying to get something like it activated. The mapping exercise the Housing Agency-----
I will stop Dr. McManus there. The council is trying to get something like that activated. Where is it in the process at present?
Dr. Donal McManus
At present, it is not in the process. It used to turn up in the statistics. Every year, every quarter, the Department used to produce statistics on how many low-cost sites were provided to individuals and approved housing bodies, AHBs. They do not turn up any more so the scheme seems to be inactive at this stage. We are trying to get something similar to it activated. First, we want to have the sites that were mapped by the Housing Agency moved on in terms of their status. Are they eligible for housing? What is the timescale? Is there any debt on the site? It is basically moving on from inventory to detail about what is available for AHBs to develop. The Housing Agency and the local authorities will have to negotiate with that in terms of what is the next phase for AHBs.
Obviously, sites are key. We have got a lot of sites in recent years from the development sector, whether they were from receivers or private developers. That was a supply chain, but it has run out and some of the things have been sold on to third party investors. That niche which we had for the past four years was very much concerned with working with private developers and the private sector. As Deputy Ryan said, what is being brought to the table? Some of those schemes were low cost schemes between NAMA and private developers. However, the land issue is a key factor. To move to supply, the sector's ambitions for the larger bodies is approximately 5,000 homes over the next two to three years. They think they have the capacity to provide even more and to manage but they would like to know or get visibility on sites ahead so they can plan with the boards to find out what finances they need for, say, the next five to seven years.
If there is to be an increase in the amount of public housing that is to be built, which I hope there will be, the question is who is best placed to do it. I completely understand why the question of housing agencies working in niche areas - to use that expression - such as those relating to elderly people and disabled people cropped up. These were people who understood the needs of the particular sector. However, what is happening lately is that housing agencies are being given the lion's share of public housing building. I have questions about this and I think that is what was being referred to. It seems to me that it is obviously related to the financial issue because of this off-balance sheet aspect - the EU fiscal rules - but I am questioning whether it is ideological as well.
On the problems with housing agencies versus local authorities, as someone who was on a council for a period, one of the things I found dealing with the housing agencies, which were increasingly being given housing estates in the area, is that councillors are not in a position to represent any of the people living in those estates like they are with the council. That is a real disadvantage for those people in those houses because they have no one to bat on their behalf. At least with councils, we can go in and argue about rent, arrears, anti-social behaviour or whatever. There are a few things. I mentioned three of them, one being pyrite, about which a housing agency in my own area, Respond!, has not done anything. If that was the council, I would be best placed to go in and make representations but I have not got anywhere. Another thing is the replacement of windows. There are housing estates in Mulhuddart which are controlled by NABCO and others. They have not done window replacement and the tenants are living in freezing cold houses. At least with the councils there is a process and a certain democracy as well.
I have a problem with the fact that it seems councils are being obliged to hand over their land to housing associations. That is what is happening. Again, to mention my constituency of Dublin West, we have a massive housing crisis and a massive homelessness crisis but, according to the Laying the Foundations document, only 22 houses will be built and that will be done by the housing agency Clúid. They will be just for generalised population.
Why is a housing agency being given all these estates when no specialised group is going to be in them? Let us be clear: housing associations are not batting on behalf of a sector that needs proper care, for example, the way ALONE used to argue for the elderly.
You have asked the question. We will give the representatives of the council an opportunity to respond.
Dr. Donal McManus
I will share the reply with Mr. O'Brien. The first part was a question on the either-or aspect. Deputy Coppinger clearly referred to either local authorities or approved housing bodies. I do not see it as a question of either-or. Obviously, the bulk of the capital funding goes to local authorities. We can see this in terms of the output, construction and acquisition. At the moment, local authorities have the bulk of the capital rather than AHBs. We have only 30% of the capital funding. The capital assistance scheme is €70 million for the country and 30% of capital is available under the capital advance leasing facility, amounting to €30 million or €40 million. In other words, the bulk is still within local authorities at the moment rather than AHBs. Initially, we played a complementary role. Moreover, we provide more family-type housing and we take people off the waiting list. Obviously, all elected members know people on the waiting lists. Whether it happens through local authorities or approved housing bodies I imagine members want people off the waiting lists. That is one thing AHBs believe they can alter. In some cases they may have to acquire the properties or talk to receivers to buy properties in different estates. Anyway, they take people off the waiting list. Their key motivation is to house people. In some cases they need sites. In recent years more of the sites have been provided by the private sector whereas in the past it may have been religious bodies or local community organisations that provided the sites. That would have been the path for land. Anyway, I do not see it as either-or. We have a housing crisis at the moment and we have to put all hands to the pump, whether local authorities or AHB. We have no wish to be competing when it comes to taking people off the waiting list.
There are two regulators at the moment. There is a regulator for landlord tenant relationships with the Private Residential Tenancies Board. We have moved on with the PRTB. Tenants have a remedy and can go to the PRTB in the end if there are any issues. That is one positive thing for the landlord-tenant relationship. There is regulation of organisations as well. A new regulatory structure was put in place in recent years and it will probably be statutory from next year. That will provide a public level of accountability and hopefully there will be an independent regulator for the sector. There will be regulation for the organisations and regulation for the landlord-tenant relationship. That is important to build up confidence among everyone in the sector, including elected members and others.
Mr. Justin O'Brien
I will complement some of what Dr. McManus has said. We are meeting the same housing need. All the people we house come from the local authority waiting lists. They give the names to us and then we interview and agree the selection with them. Therefore, we are meeting a public need for housing.
We are a dedicated housing body. There are important regulations, particularly for larger tier 3 associations. As part of regulatory compliance we have to produce a 30-year asset management plan and get it verified and approved by our boards. The purpose is to ensure we know the money we need to set aside for the replacement of component parts of housing, such as windows, roofs, etc. That is what we have to do as part of business modelling. In that sense we are probably more disciplined than local authorities. The truth is that local authority rent goes into the central coffers of local authorities. It does not always go back into housing. We use all the money we get on rent to maintain and manage the properties. The indications are that the key performance indicators we have are generally better than local authorities, but people operate in different contexts.
In that sense I take on board the issue Deputy Coppinger raised. I cannot speak for the bodies she referred to. I can only speak for my association, Circle Voluntary Housing Association. If a public representative contacts me with an issue for a constituent, I will respond to it. It is simply part of what I have to do. I respect the right of a public representative to do so and I would try to respond and give an explanation in respect of housing need or where a person is. If there is a complaint about maintenance, I would try to explain how we are trying to deal with it. That does arise. I am simply saying that this is not to delegitimise the rights of public representatives to advocate on behalf of the people we house or the people they represent. That is not the position. That is the context in which we have to operate.
Further to what Dr. McManus has said, it is not a question of either-or. We may have the capacity to get funding from one source and the local authorities have to rely entirely on public funding. We are trying to work together and broaden the funding regime to deliver the necessary social housing. If the capital advance leasing facility and the payment availability works, then for every 30% the Department puts in we will have to raise the other 70%.
That is a better value equation for the State in terms of new provision. If there are limits on the Government balance sheet for the capital spend, that is a serious factor facing the country and it affects us as approved housing bodies as well. That is why the capital programme was decimated between 2008 and 2015. It began to increase slightly only in 2015. It was decimated for local authorities and for us.
We will follow up on some points in Deputy Coppinger’s questions when we deal with the finance section.
I want to ask about the co-operation between the local authorities and the voluntary housing sector. I know that the voluntary housing sector gets its list from the housing list but if someone needs a transfer, on overcrowding or medical grounds, there is no inter-transferability, for want of a better word. I do not know whether that is a national issue or whether each local authority decides.
In my constituency, if, for example, Respond! has a bungalow that would be suitable for somebody in a local authority house, there does not seem to be any room for a transfer. I agree with some of Deputy Coppinger’s points about it being more difficult to deal with some of the housing agencies than with the local authority. I know of a situation where people are expected to pay for central heating to be put into their homes. That would be very different in local authority homes. I know Mr. O’Brien cannot comment on individual cases but it is worth bearing in mind that a better approach to dealing with tenants and their public representatives is needed. While there seems to be good co-operation at the start when the housing body takes names from the housing list, it would make sense to have more inter-transferability in some situations.
Mr. Justin O'Brien
It can happen that a family increases and says it is overcrowded. The context is that but for the AHB and the local authority, there is not much available stock for transfer. It is a problem. Some of that is capacity. Sometimes what tenants do, and public representatives advise them to do it, when they want to go from one location to another, to downsize or upsize, is arrange a mutual transfer with the sanction of the AHB and the local authority. We have done that numerous times. Each person would interview the potential new tenant and agree, work out that there are no rent arrears or that an anti-social tenant is not being transferred from one place to another. There is a process. The biggest problem for us all, even within our own stock, is that if families increase in size, the capacity to transfer them from a small to a large unit is limited. In most local authorities and AHBs, the turnover of tenancies is very limited. Therefore, the capacity is limited to enable the situation the Deputy outlines.
Can I clarify that it is not policy not to transfer between local authority and AHB because that has been my experience? It does happen.
Mr. Justin O'Brien
It happens in two ways, for example, where tenants try to make the arrangements and that is done with the approval of the respective bodies. Sometimes the local authority might say the person is housed and ask why he or she should be put back on the list. There will be a conversation with the local authority about size or other factors, such as medical or anti-social behaviour issues and we ask the authority to help us out. We have that kind of exchange.
Ms Caren Gallagher
I wish to make a broader point about us as a federation and our members and to raise awareness about the role, functions, accountability and governance of the sector.
We have been reaching out to all the strategic policy committees, SPCs, on housing and opening ourselves up to any questions or issues that are arising for particular local authorities. We have written to the chair of every housing SPC. We are trying to emphasise the added value the housing associations can bring. We are also emphasising the partnership approach with local authorities, as well as addressing some of the issues that elected members are facing. We also hope to clarify some of the questions about the sector and, in particular, Deputy Funchion's issue about policy for local authority tenants and tenants of housing associations. Part of this is also to increase awareness about the operation of the sector in terms of how it works in conjunction with local authorities.
That is a good idea.
Most of my questions have already been asked by other Deputies. In paragraph 2.4 of the council's submission, concerning cutting through red tape and so on, a special purpose vehicle is mentioned. Could the witnesses explain what they envisage that doing? I am aware of a project in Limerick whereby Clúid was able to provide sheltered housing. Unfortunately, those houses are now demolished. It could be done in such a way that housing is freed up or reallocated on a different programme or whatever. Would the witnesses envisage something like that?
Dr. Donal McManus
There are a couple of issues. I will start with the special purpose vehicle. We have been involved in trying to get a financial vehicle set up for the last three or four months. There is a need to bring more finance into the sector that is off the balance sheet of the State and off the balance sheet of the housing associations, as we are carrying debts on our balance sheets. There is a Welsh model which we were looking at very closely initially. Five associations set it up, drew in a lot of money from financial bodies and acquired properties on the private market. We are looking at a financial vehicle that draws money in from the investment sector - such as pension funds or credit unions, which lend out to housing associations at very favourable rates. That was the overall context.
Obviously, with any financial model we can have plenty of finance but no product. That is what we are facing. There is loads of finance floating around but there is no product in the private sector. This is a more structured vehicle. We are looking at the possibility of joint ventures with the private development sector. If it has product, then we can use that finance to acquire the units.
We had discussions with Limerick City and County Council about regeneration involving a number of associations. We have been down there for a couple of years to see what role we can play in Limerick in spreading regeneration. Again, that could be a use for the loan finance mixed funding regime. It has been considered in the context of recent issues, as the Deputy mentioned, as well as in the wider context of drawing finance into the sector.
At the end of the day there is a huge ask on all of us, with 35,000 homes to be produced by 2020. The local authorities can play a role, as can we. We have to use these different vehicles to draw money in. Although the new vehicles can be complex, people are working their damnedest to get these solutions in place for the likes of Limerick and others, in terms of both regeneration and new building and acquisition.
We do need product and we depend on the private sector being active. There is no point in the private sector being inactive. We are all intertwined in terms of failures in the housing sector. I hope that, in its deliberations, the committee will reflect on the fact that the private sector does affect us in terms of new supply.
Returning to Deputy Quinlivan's question, we are sad at the moment because we came very close to having a model together. We do not want to over-egg it or do it prematurely. We want it tied down and to get the people and the associations committed. We can then show people it is not just talk but is actually something we have achieved. Hopefully in the next couple of months we will have something concrete. We are still working to try to assist the regeneration programme in Limerick.
Most of my questions have been asked by others but I want to follow up on one point. Would I be right in saying that there has been a proliferation of approved housing bodies since the crash in 2008? It might be sad for the witnesses that this proliferation has coincided with what is probably the worst handling of housing supply in the history of the State. Listening to the witnesses' defence of the questions put, for want of a better word, I get the impression that if local authorities were given sufficient access to funding and were better resourced and staffed, there would be no need for the housing bodies.
Dr. Donal McManus
I thank the Deputy.
I am only asking.
Dr. Donal McManus
To answer his first question on proliferation, there has been major consolidation since 2008. Prior to that many associations received capital grants or loans to provide housing, but after the financial crash in 2008 that no longer happened. Very few bodies have been established in the past five, six or seven years. Some housing associations merged and other local voluntary bodies came together.
As a result of the downturn, there are fewer associations providing newer housing. There are probably about 15 or 20 under the mixed funding private finance model and another 20 or 30 in the CAS scheme. It is ironic that there has been much more consolidation. Given that there are now multiple layers of regulation, I suspect there will be more consolidation rather than proliferation in the coming years.
Mr. Justin O'Brien
My association was set up in 2003 and owns and manages 1,000 units. If we established it now we would not get start-up funding and would need serious financial clout to enable us to develop. It is very difficult for a new association without backing to develop. The truth is that very few new associations are looking for membership of the Irish Council for Social Housing because the context of delivery is very difficult. Some 15 years ago a housing association could get a 100% capital grant and grow, but that is no longer the case. It is the complete opposite.
The Deputy asked what our purpose is, if local authorities are doing everything right. We need to have an honest conversation. I am not trying to dismiss local authorities. They have delivered social housing over the lifetime of the State. A considerable amount of social housing has been sold via the process to enable people to buy their homes. Political choices were made. We see ourselves as complementing the provision of social housing in the country. That is our main purpose. We are a single-purpose organisation dedicated to social housing and need to enhance our ability to do that.
There are often changes of personnel in local authorities when people move from one section to another. As I said, we believe that with the funding available we can add value and grow what is in place. It is not a case of one body being against another. Most northern European countries, including Holland, Germany, France and the United Kingdom, have different approaches, but they have fairly vibrant social housing sectors alongside public housing bodies which are meeting social housing need.
Like Deputy Daly, I do not want to be pejorative and it is not my wish to be in any way offensive, but we are discussing the kernel of the housing situation in terms of the public sector in this country. For a long time I have been an opponent of the replacement of the public sector building programme, as suggested by Deputies Daly and Coppinger, with housing provided through voluntary agencies. They are ideally placed to deal with sheltered housing and special needs. Local authorities are not in the same league and could never do such work. There are reasons for that.
In terms of the delivery of the main thrust of the requirements of local authority type housing throughout the country, it is the wrong vehicle. If we continue along this road, in five years' time the Chairman will be sitting in the same spot discussing the same issue. The member states of the European Union agreed to have a particular vehicle to deliver housing in order to ensure an off-balance sheet situation. It does not work.
A 100% capital grant, plus a maintenance grant, all of which, I presume, was available to local authorities, were given to housing bodies.
There is a replacement by the voluntary housing agencies of what the local authorities were doing. The biggest housing agency owns about 5,500 houses at present. It is the biggest landlord in the country. The point I want to make in particular is that the local authority housing officers will tell one straight out that they are competing with the voluntary agencies for the same funding coming from the same source. I cannot understand for one moment how the capital going from central government to the voluntary agency is agreed, is quite all right and in accord with all rules and regulations but the capital funding going to the local authorities to do the same thing is not. There is no reason for that. It is a technicality that was introduced for a particular purpose. To my mind it was a total and abject failure. My reason is that in this country there was a baseless theory, which still exists, that we should get away from owning houses, that Irish people were preoccupied with ownership and so on and that we should become like the Europeans who lease or rent their houses. We are not the same and we do not have the same traditions as people in all areas across Europe where they have different traditions. It works very well for them but it does not work here. Irish people want to have the potential of owning their own house for two reasons. They want to be able to improve it, expand it and call it their castle and part of their investment in life. They cannot do that with the voluntary agencies - it is as simple as that.
I want to emphasise that it is for this purpose that I am sitting here. I have dealt with this before and I know that we will be here in five years. This is no disrespect to the housing agencies at all but they are not the appropriate vehicle to deliver the volume of housing necessary in this country or any country with a similar requirement at this or any other time. For special needs and sheltered housing, there is no doubt in the world that they are by far and away the best providers. There is McAuley Place and various other places like it all over the country, which are excellent. The local authorities cannot compete with that. If we do not address this issue and deal with, we will not solve this problem.
I am sorry for interrupting the Deputy. There were two elements there. The Deputy mentioned financing a number of times. They are questions we will follow up with the other Departments. The other comments Deputy Durkan made about whether the housing bodies are the appropriate vehicle are part of the deliberations we will make as a committee. What I was trying to get at specifically was if the Deputy has a direct question that he wants to ask the witnesses when they are here.
There are no other direct questions.
Thank you.
How much more direct does the Chairman want to make it?
I took it more as a statement than as a question. I want to clarify that this Chairman will not be sitting here in five years because after 17 June 2016 this committee will have completed its work. Let us remain focused on the job in hand. Does anybody want to comment?
Mr. Justin O'Brien
I appreciate the comment that Deputy Durkan made and which has been made by other members of the committee. It is a perception or a view that has been expressed and we have to listen to it as a sector. I would say, as Dr. Donal McManus said earlier, that we currently provide over 30,000 units of accommodation. The perception is that we are mainly gifted to provide special needs housing for the elderly, the homeless or people with learning disability but the vast majority of our provision is family housing. That is the truth of it - it is about 70% of what we do, so we are delivering.
There are issues and it is not that we are trying to take away from local authorities - we are trying to add value. We think we have a specialism, our key performance indicators are good and our work complements the local authorities. It is also the case when one goes through the finances that the bulk of funding that has been given for the capital programmes over the last ten years has mainly gone to local authorities and not to approved housing bodies. That is the truth of it. We have to compete with it - there is truth in that too but we are also trying to secure money from other sources off the Government balance sheet to enable delivery to meet public housing need. That model has worked effectively in other north European countries.
It has not actually. Can I give an example?
Very briefly.
This is a classic example. I was involved in a voluntary housing body that was set up specifically to provide 100 houses or whatever the case may be.
We had to buy the sites from the local authority for €20,000 each. The voluntary agencies got the sites for free. That is competition. We were doing the same job, but we were doing it for the people to acquire their own homes.
The local authority gets a sum in respect of maintenance or whatever the case may be, but so do the housing bodies. I do not want to be in any way pejorative about this. It is a fact of life that the two are competing and the model has failed. However, more importantly, the capital allowance scheme provides for 100% capital funding - 100% for the site, 100% for the loan to build the houses and a grant thereafter for the maintenance of the houses. I could go on, but I will not, as the Chairman will be glad to know.
I said the voluntary agencies are better equipped to deal with special needs and sheltered housing than anybody else, but they are not the proper vehicle to provide the volume of housing that is required through the local authority system. That is why in the 1980s we did not have a problem. It was as a result of the changeover that we now have the problem we have.
Before allowing Dr. McManus to reply, I wish to say we will pursue some of these issues with other Departments, but I want to hear what Dr. McManus has to say on it.
Dr. Donal McManus
I want to challenge Deputy Durkan's assertion that model has failed on that side. Many local authorities approach housing associations to manage their properties. If that is evidence of failure, I do not know where we are. They have asked housing associations to manage properties. In terms of measuring failure, I do not think it is. There is huge demand for housing association properties in many areas because they like the standard of management that is provided to tenants. That is not a failure. Local authorities have approached us to regenerate their own properties. To be truthful, there were failures in local authorities over the past 30 years. There have been various regeneration schemes in different local authority areas and the State has had to pick up the tab. The sector believes it could have a role in redressing that. I would challenge that it has been a failure. Perhaps for some people it has been a failure, but I would say that the tenants living there would not claim it was a failure and they are the people who matter.
There are nearly 8,000 people on the housing list in County Kildare, so I would not think it was a success.
The Deputy has had a fair hearing on this.
I am sorry, Chairman, but it is a burning issue with the people I represent. It is not my view; it is theirs.
The Deputy has made his point and I do not dismiss it. I am saying that we will have other meetings where the same issue will need to be teased out further.
I apologise for missing the start. I was at another meeting. I welcome the witnesses.
I will offer a bit of positivity. In my experience the housing agencies involved in projects in my county are considerably better equipped to carry out the management of the housing stock when it is in place. Accommodation that was built in approximately 2000 is as good and as well kept today as it was when it was built. I have proof of this, because I was involved in the construction. The local authorities have failed to maintain their housing stock as well as the housing agencies have. It seems to be down to resources.
The witness said that whatever rent roll the Irish Council for Social Housing gets is used for maintenance and future work, whereas when local authorities get in their rent roll they put it into the Central Fund and it is dissipated. We can build all the houses we are talking about, but if we do not maintain them, we will be back at it again. I see it in my own county. We built houses about 20 years ago and we will probably knock them down now to rebuild them. That is not how we want to operate in the future. We have to look at housing and estate management.
Obviously the Irish Council for Social Housing has a way of doing estate management that the local authorities do not. Would the council be willing to share that expertise with the local authorities in order that we can genuinely protect our housing stock?
That is the first question.
Second, one of the issues I have with the housing associations, which relates to the housing lists, is that an association gets a list of prospective tenants from a local authority and chooses from that. I think this is wrong. If the local authority has a housing list and the housing association has 20 units, the local authority should give the association 20 families to go into them and that should be it. The housing association should not have the veto on who is let into the houses. The position in this regard has to change.
Mr. Justin O'Brien
I thank Deputy Canney for his acknowledgement of where he thinks we have reasonable performance.
The witnesses needed something.
Mr. Justin O'Brien
That is affirming and I want to recognise that. I was trying to express that earlier in terms of saying we are primarily housing providers, so that is where the resources go. It is true that, in the context of local authorities, rents go into the central fund. There have been issues where some stock has not been well maintained over the years. On a very important point, however, under the regulation code we must have asset management in place that is verifiable and is signed off on by our board, and we have to adhere to that and make provision for it financially. Therefore, there are strictures on what we can and cannot do.
Sharing expertise is important and we would be very open to it. It is not that we are the best boys in town all the time and that we know everything. People work in different contexts and it would be very good to get that sharing of expertise. For people working in our sector, there is relatively more insecurity, particularly for housing bodies which are starting off - before they get reasonable economies of scale - as compared to local authorities. People have sometimes gone from the AHB sector into the local authority system and there is now a bit of transfer the other way, which is very good. It would be good to look at enhanced learning through the SPCs. It is a question of what works and what does not work in a local area, and how learning on this can be translated for the common purpose of shared intelligence. I believe that would be sensible for each SPC to undertake.
The context for nomination and selection is that we are getting the top people on the list from the local authority. Rather than doing what they do in the UK, where they simply take people, the housing body is trying to get a balance within its scheme. The waiting list is sometimes very blunt so what we always try to do is get a mix of ages of children and of adults, and of working and non-working people, so they are not all lumped together. There has been experience, particularly in Dublin and the urban areas, where some schemes were overloaded with the same category of person. This has had disastrous social consequences because the communities became unbalanced and were socially deprived and then became very difficult to manage. Some effort has been made in this regard. We are not trying to cherry-pick, to use a word that is often said about us. My approach is that we are trying to get a balanced community within the 20 units or 50 units - whatever the figure is - so there is some vibrancy within that community. I do not know if that gives Deputy Canney some clarification of the question he asked.
Yes. I thank Mr. O'Brien.
Earlier in the meeting, the witnesses agreed to supply information to the committee in regard to the query raised by Deputy Daly.
It was on tier 1 and tier 2 staffing, salaries, premises and so on.
The witnesses might do that by means of correspondence with the committee.
Ms Caren Gallagher
In response to Deputy Daly's question, one of the items we can provide is a publication by the regulation office. It provides a commentary on the sector from the first round of regulatory returns and included in that is a section which gives a breakdown of the staffing across each tier. We will come back to the committee on that aspect in detail.
Premises, salary and that type of information would be illustrative also. That is great.
I thank the witnesses for their contributions. They heard a significant range of questions and contributions from all sides. Their input was much appreciated. I am grateful for their attendance and co-operation. I thank Mr. O'Brien, Dr. McManus and Ms Gallagher.
The meeting is adjourned and we will next meet at 10.30 a.m. on Tuesday, 3 May. Members should enjoy the bank holiday Monday and they will be in here sharp on Tuesday morning.
The committee adjourned at 4.20 p.m. until 10.30 a.m. on Tuesday, 3 May 2016.