State plans to build 18,000 social houses by 2018

Investment package of €2.2bn includes private sector funding

The Minister for Public Expenditure and Reform Brendan Howlin announced yesterday that the Government would contribute €1.5 billion in exchequer funding by 2017.

The Government plans to build 10,000 social housing units by 2018 as part of a €2.2 billion capital investment package that could include private sector funding.

This would be the first major investment in housing by the State since the first austerity budget in 2009.

Minister for Public Expenditure and Reform Brendan Howlin announced the Government would contribute €1.5 billion in exchequer funding by 2017.

In addition, public private partnerships (PPPs) would be used to invest €300 million to fund 1,500 units by 2017, while an “off-balance sheet financial vehicle” would provide at least €400 million from 2015 onwards to approved housing bodies.


“The Government is determined to meet the scale of social housing need with a level of investment commensurate with the challenge,” Mr Howlin said in his Budget speech.

The Minister said more than €800 million would be spent next year on its housing programme, with €453 million on capital expenditure. This is expected to create up to 4,500 new construction jobs.

While the Government provided a number of details about its investment plans today, a broader social housing strategy covering the period up to 2020 will be announced in the next two weeks.

Minister for the Environment, Community and Local Government Alan Kelly said the number of units to be either built directly or acquired by local authorities next year would quadruple to 946.

Another 1,000 vacant units will be refurbished. Some 400 new units will be provided for people with specific needs and up to 150 new homes will be provided for people with disabilities requiring institutional care.

Mr Kelly said it was a “mistake” by previous administrations that “local authorities effectively got out of direct house building.

“We need to return to that model in order to address the rising housing need”.

Mr Howlin said the PPPs proposed would not be the “land swap deals between local authorities and developers, which so obviously failed several years ago”.

It would involve adapting the “successful model” that has delivered 23 schools in recent years. he added.

The off balance-sheet vehicle would be used to “channel investment funds” to the voluntary housing sector and would operate on an “independent, commercial basis”.

It would be open to both private investors and could involve a loan from the European Investment Bank.

Mr Howlin said some of the proceeds of the sale of the Bord Gáis energy business would be used for the house building.

The Government is also planing to introduce the Housing Assistance Payment to support the needs of 8,000 households. An additional 3,000 households are to be accommodated by local authorities through the leasing of properties in 2015.

In addition, the Labour Party Minister announced €10 million for accommodation and related services for homeless persons, increasing the annual spending on tackling homelessness to €55.5 million in 2015.

There was a broad welcome for the Government’s social housing plan.

Simon Brooke, head of policy at housing association Clúid, said: "We are absolutely delighted with this increase. It will enable housing associations to provide over 2,000 new homes over the next three years."

Pat Doyle, chief executive of the Peter McVerry Trust, said the measures would have a "significant impact".

"We believe the announcement, including the €2.2 billion over the course of the next three years for social housing, provides the financial and political commitment that had been absent from social housing provision in Ireland for many years," he added.

John Fitzgerald, research professor with the ESRI, which last week urged the Government to invest in social housing to help stimulate economic activity, said the investment being proposed represented a "significant sum and we wouldn't quibble with it".

However, the Simon Communities cast some doubt on the Government's plan. "While there is an increase in the budget for social housing investment this will yield 7,500 new homes next year, which is only 8.3 percent of the 90,000 households currently on the social housing waiting list," said national spokeswoman Niamh Randall.

She said the timeframe laid out by the Government was “too long for people trapped in emergency accommodation” or “sleeping on our streets”.

Ciarán Hancock

Ciarán Hancock

Ciarán Hancock is Business Editor of The Irish Times