Budget housing numbers are impressive – if capacity is there to build them

The Government’s commitment to invest substantially in social housing over the coming years was broadly welcomed yesterday, but the devil will be in the detail and we won’t have full sight of that for a couple of weeks.

In the Dáil, Minister for Public Expenditure and Reform Brendan Howlin announced a €2.2 billion investment in social housing out to 2018 to provide 10,000 units for those currently on local authority waiting lists.

A couple of hours later, at a press briefing in Government Buildings, his Labour Party colleague, Minister for the Environment, Community and Local Government Alan Kelly, said a broader strategy out to 2020 would be announced in the next fortnight.

The “majority” of the additional social housing provision would be provided in the Dublin region, Kelly added, but he preferred to focus on what will be delivered in 2015.

This is where it gets confusing. While Howlin talked about building 10,000 units out to 2018, Kelly said up to 16,000 units could come on stream next year. How does that break down?

The housing capital spend in 2015 will amount to €453 million, which it is hoped will create up to 4,500 construction jobs.

Some 946 units are expected to either be built or acquired by local authorities in 2015. This compares with just 200 this year.

Specific needs

Another 1,000 vacant or boarded-up units are to be refurbished. About 400 new housing units will be provided for people with specific needs and up to 150 for people with disabilities requiring institutional care.

In addition, Mr Kelly’s figure includes 3,000 units that will be leased and 2,000 via the rental accommodation scheme.

Separately, funding for the housing assistance payment is being increased to €23.2 million next year to assist up to 8,000 families to secure “suitable accommodation”.

The housing association Clúid yesterday summed up the scale of the challenge facing the Government, pointing out that 90,000 families are on waiting lists across the country, with one-third of those living in “seriously substandard housing”.

While the numbers circulated by the Government were impressive, questions must be asked as to whether the capacity is there for the local authorities to deliver on this plan.

Kelly talked tough on this aspect, saying he would be a “very angry Minister if it doesn’t happen”.

However, this is no guarantee that either the local authorities or the construction industry will have the capacity to deliver the units in the timeframe set out by the Government.

This is Ireland, after all.

Sites have to be identified (some heat-mapping has taken place), housing units have to be planned and designed, funding has to be approved for each scheme, and developments will have to be tendered to builders and other groups.

Reality

Planning laws to be drawn up later this year will oblige builders to set aside up to 10 per cent of any new private developments for social housing. This is helpful in speeding up delivery, but the reality is this initiative will take a long time to deliver.

The Government has also indicated that public-private partnerships (PPPs) would be used to fund €300 million of the capital investment in the next three years, while a “minimum” of €400 million could be sourced from an “off-balance-sheet financial vehicle”, which will probably include a loan from the European Investment Bank.

Again, details on these aspects have yet to be fully ironed out, but we can only hope the PPP aspect proves more fruitful for local authorities this time around given how a number of high-profile schemes collapsed when the economy crashed in late 2008.

The importance of this social housing initiative is illustrated by the fact that Kelly’s department has been given an extra €180 million for capital programmes this year.

As the old adage goes: if you build it, they will come. In the context of its social housing plan, the Government, particularly the Labour Party, must be hoping for a case of if we build it, they will vote for us.