Dáil Éireann Debate, Wednesday - 9 September 2020
127. Deputy Eoin Ó Broin asked the Minister for Housing, Local Government and Heritage the status of the establishment of an approved housing body SPV for the purposes of drawing down funding from bodies such as credit unions for the purposes of the delivery of social housing. [22821/20]
Amharc ar fhreagra128. Deputy Eoin Ó Broin asked the Minister for Housing, Local Government and Heritage if he will discuss with the Minister for Finance and the Central Bank the matter of allowing credit unions to invest in the delivery of affordable housing. [22822/20]
Amharc ar fhreagraI propose to take Questions Nos. 127 and 128 together.
Following engagement with the Credit Union sector on proposals for credit unions to provide funding for the provision of social housing, the Central Bank undertook a review of the relevant investment framework in 2017.
On foot of this review, revised Regulations commenced on 1 March 2018. The revised Regulations included the addition of investments in Tier 3 Approved Housing Bodies, as a permitted investment class for credit unions. Accordingly, since 1 March 2018, credit unions are permitted to provide funding, through a regulated investment vehicle, to Tier 3 AHBs for the provision of social housing.
In parallel, my Department referred the Credit Union representative bodies to the Irish Council for Social Housing (ICSH) with a view to both sectors sharing, as far as practical, the benefits of their respective work in this area, including the work undertaken by the ICSH on the development of special purpose vehicles for social housing financing purposes. The work of the ICSH was supported by grant funding from my Department.
The ICSH, along with six Tier 3 AHBs, have worked with specialist financial advisors to establish a funding mechanism or vehicle which would identify suitable sources of non-state finance to fund the delivery of social housing by AHBs, based on best value for money. Market testing undertaken revealed good interest in lending to the AHB sector from various lenders including banks, institutional investors and the Credit Union sector. So far, one AHB has set up an SPV and several AHBs have sourced finance from private institutions. As such, the work in this area is ongoing and has led to individual AHBs establishing SPVs for financing social housing.
Separately, I was pleased to welcome a recent announcement by Initiative Ireland and CUDA, the Credit Union Development Agency, of their plan to launch a new social and affordable housing fund supported by the Credit Unions of Ireland. The new fund will enable Credit Unions to avail of the regulatory changes which enable them to lend to AHBs through a regulated fund. Indeed I met with Initiative Ireland and CUDA about this particular initiative on the occasion of the announcement.
The Credit Union sector is one potential funder whose terms are assessed as part of the process of market testing to establish best value for money and optimum terms and conditions from lenders. While my Department will continue to be available to provide any clarifications that may be required in relation to the delivery of social and affordable housing, it falls to the relevant parties, i.e. the AHBs, on the one hand, and potential investors on the other, as in the cases outlined above, to agree a workable and mutually acceptable approach in order to bring potential investment possibilities to a successful conclusion.
