Social housing waiting lists indicate that new phase of construction is now needed

Opinion: Low-income households will lose out as the private rented sector becomes more competitive in the capital

Thu, Jan 9, 2014, 00:01

The social housing waiting list figures produced recently by the Housing Agency, showing almost 90,000 households in need, represent a 30 per cent increase since the start of the global financial crisis in 2007.

Since 2011, using updated methodology, housing need reduced by 9 per cent. However, if it had not been for vacancies that arose in the private landlord sector diluting the downturn, the demand for social housing might have been much higher, particularly in the capital and other cities and towns.

It is important that we realise that the option of relying on the private sector as a safety net to meet the needs of social housing applicants is going to be more limited in future. Daft.ie recently indicated that the number of private rental properties available in November 2013 had fallen to about 1,500; there were 6,700 such properties on the same day four years ago. The private rented sector, although it has increased in size, is very competitive, and it is low-income households which are most likely to lose out, especially in Dublin, where rent increases are becoming more common.


Investment decline
Recent years have seen a dramatic change in how social housing need is responded to, with massively reduced State investment. Consequently, there has been a wide range of initiatives developed by non-profit housing associations and local authorities, often an amalgam of leasing models, private financing and the use of empty properties to provide homes that could be occupied by families and vulnerable households.

There has been no lack of effort in seeking to deliver new and innovative solutions. However, the scale of output has been limited to date. In many cases the new responses have relied on private sector initiatives and interest from developers, landlords and financial institutions. This made it difficult to control the levels of new supply.

The best way to predict and control the supply of new social housing is to institute a programme of new building. This can be partly achieved by helping non-profit housing associations to bring new mixed-funding models into the mainstream by blending private finance with initial State capital and continued assistance with repayment of private loans.

This can result in every euro of State funding being stretched to leverage between €3 and €5 of private finance. There are obvious benefits for the exchequer and the national debt.

Using suitable vacant properties has and will play an important role, but these options have been drying up quickly, especially in Dublin.

Minister of Housing and Planning Jan O’Sullivan has pointed to a new construction programme, which is a welcome start. However, the Government must be persuaded of the potential benefits of social housing investment for employment and income tax revenue – without undesirable effects on house prices.

That the time it takes to assess social housing need has shortened from three years to two is welcome. A “real-time”assessment system would be the optimum, enabling us to avoid analysing data that is years out of date and thus respond more efficiently to a rapidly changing market.


Demographic shifts
The results of 2013 assessments point to changing demographic trends – smaller households, an increase in the number of social welfare recipients and more households living in the private rented sector.

The trend likely to emerge in Dublin is easy to forecast: extremely limited social housing supply and reduced vacancies in the private landlord sector, resulting in increased rents and affordability problems for tenants.

It is essential that the Government address this issue now in an expanded programme of social housing delivery. There is a real opportunity now for social housing to act as a catalyst in reactivating housing activity in areas of high demand.

Non-profit housing associations have the capacity to develop and manage an additional 5,000 homes at affordable rents. This would be a start, but a planned programme is needed to achieve it – and more.

Donal McManus is executive director of the Irish Council for Social Housing

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