Can Approved Housing Bodies rebuild Ireland?

Kathleen McKillion, CT Senior Associate Consultant, examines the picture for Approved Housing Bodies in meeting affordable housing requirements in the Republic of Ireland.

Homelessness was a central issue at the 2016 election. Housing will again be the number one factor on which the next election (due 2021) will be fought. With 85,799 qualifies households on waiting lists, the housing crisis is real and Approved Housing Bodies (AHBs) have a key role to play.

The Government’s action plan for housing and homelessness, Rebuilding Ireland gives AHBs a leading role in the delivery of 50,000 new social homes. 33,000 are intended to be new builds (with 20,000 coming from AHBs), and the rest acquisitions and leased properties. It’s a big ask in the context of high construction costs, skills shortages, infrastructure issues and creaking utility supplies.

So how is the housing sector doing?

In 2017, AHBs provided 2,300 new homes, with delivery of 3,800 expected in 2018, rising to 9,000 homes in 2021. This is a huge challenge for a sector with around 33,000 homes in total.

Here are some suggestions on how to continue to respond.

1. Deliver at scale

Collectively the AHB sector is expected to increase its housing stock by around 60% over a five year period. The sector is unbalanced though, as around 450 AHBs have fewer than 50 homes each. While some will be able to deliver growth, in many cases finding the necessary capacity, resources and skills to increase at scale may prove impossible.

At the other end of the scale though, among the 67 AHBs with over 50 homes, and in particular the Tier 3 AHBs (over 300 homes each), a number are planning growth of up to 100%. This will also bring major challenges: an AHB that doubles in size over just a few years will need to become a different kind of organisation. And delivery will have to be carried out in collaboration with local authority (LA) partners and developers on sites that facilitate large mixed tenure and integrated developments.

Size of AHB*        Number of AHBs**

Tier 1 <50 :           186

Tier 2 50–300:    49

Tier 3 300+:         18

*Units or developments plans for fewer than X
** Number of AHBs that have signed up to the Voluntary Regulatory Code
Source: Housing Agency Regulation Office

2. Partnership with local authorities for sustainable communities

Aligning with priorities of local authority partners is essential to target the provision of new homes and determine where these are best located and what the housing mix needs to be. This will include houses and apartments of different sizes to reflect the national housing list and growing demand for single persons’ accommodation, including homeless and older people. Engaging with elected councillors on local issues with local communities will be critical.

3. Mixed housing/funding

The range of demand requires a mix of provision: general needs social housing for families; homes for older people; housing for people with disabilities; homes for formerly homeless people; private renting; and owner-occupied developments. Larger AHBs are already preparing to get into private market renting through a ‘cost/affordable rental’ model. Some are turning to new sources of private and equity funding for this, reducing their reliance on state funding.

4. Opportunities

It is important now to plan accessible homes that will allow people to age at home, provide housing that remains affordable (through reform of rents) and bring entrepreneurial social enterprise into communities through social and commercial infrastructure.

5. Challenges

A crucial and immediate challenge is the recent reclassification of the largest AHBs as public sector. This calls into question how the new supply programme can be funded, given that borrowing will be on balance sheet. A further challenge is the form that statutory regulation will take. On both these grounds, the danger is that State control inhibits housing association activity and ambition.

Kathleen has been working with Campbell Tickell in Ireland  for the past year. She has been engaged in a variety of projects for the Government’s Housing Agency and its Regulation Office, Local Authorities and Approved Housing Bodies.

For more information or to discuss this article, contact: kathleen.mckillion@campbelltickell.com

This article appears in: CT Brief – Issue 38