Local authorities ill-equipped to build their way out of housing crisis

National construction policy needed instead of ineffective system of allocating housing

 

The Government’s plan for dealing with the crisis in housing and homelessness, Rebuilding Ireland, involved spending €6.6 billion over the last four years.

The plan relies heavily on Ireland’s 31 local authorities for implementation.

The plan presents each council with overall “social housing delivery targets”. Within this, there are separate targets for subcategories such as building and the Housing Assistance Payments (HAP) and Rental Accommodation Scheme (RAS) schemes.

Under HAP, local authorities pay rent directly to private landlords on behalf of tenants and then charge tenants a lower rent based on their income and ability to pay.

In 2018, there were 71,858 households on the waiting list for social housing. Of these, 47 per cent were single person households, 25 per cent were waiting more than seven years for social housing and 60 per cent in the private rented sector.

Leasing, acquisitions, HAP and RAS do not add to the housing stock

There are two distinct aspects to housing policy. First, there is the provision of housing and, second, there is the method by which accommodation is allocated to people on the housing list.

With regard to provision, the Government has committed to delivering 50,000 new social housing units by 2021. This will be achieved through new builds, leases and acquisition schemes.

The problem is that the delivery of new builds is a substantial, time consuming undertaking. Unsurprisingly, the majority of local authorities are taking the relatively easy option of subsidising rents in the private rental market (under HAP and RAS) rather than actually building new housing units.

In the first six months of 2019, 24 out of 31 councils had delivered less than 20 per cent of their build target as set out in the plan. By contrast, councils had collectively achieved 55 per cent of the HAP target.

Cork county, Fingal, Kildare, Meath, south Dublin and Wexford councils are top of the table in providing new builds. Clare, Dublin city, Galway, Kilkenny, Laois, Leitrim and Sligo councils are bottom with zero new house builds.

Acquisitions and leasing

For example, Limerick City and County Council has an overall social housing target of 780 housing units for 2019. In the first six months of the year, the local authority had provided 385 units or 49.3 per cent of its target. However, 94 per cent of this six-month total – 362 units – was provided on the HAP scheme, RAS, acquisitions and leasing. Limerick City and County Council has provided only six new builds so far in 2019.

While the council is keeping a lid on the homeless crisis in the midwest, there are two problems with this line of action.

First, leasing, acquisitions, HAP and RAS do not add to the housing stock. There are currently 2,562 applicants on Limerick council’s waiting list. There are more on a “transfer list”. These are people on the HAP scheme waiting to access social housing. Six new builds will have little impact on these lists.

Second, HAP and RAS increase demand in the private rental market and drive up rents. For people who do not qualify for HAP, the result is reduced supply and higher rents.

The process varies between local authorities, there is a lack of transparency and consistency

For all local authorities in 2018, building amounted to 4,811 and, of this, 2,022 were local authority new builds. In contrast, new acquisitions, leasing, HAP and RAS amounted to 22,292. It is evident that if the housing crisis is to be resolved, the emphasis will have to shift decisively towards construction.

In Budget 2020, capital funding of over €1.1 billion was allocated to support the delivery of over 11,000 new social homes in 2020 and a further 12,000 units in 2021.

But funding is not the constraint. Building new social housing is the challenge.

Consider now how housing is allocated. A recent Joint Committee on Housing, Planning and Local Government conducted an examination of local authority waiting lists.

The committee’s report makes clear that the system of allocating housing is ineffective. The process varies between local authorities, there is a lack of transparency and consistency, and no unified electronic data-sharing system across all local authorities.

Income thresholds

There are differences in income thresholds used to assess applicants, how homelessness is defined, and how authorities treat emergency cases, successor tenancies, involuntary sharing and single-person households.

Some councils use a numbering system, based on an applicant’s time on the waiting list. Other local authorities, including Limerick council, use a separate points system to determine an applicant’s place on the housing list.

The points system means that as new applicants are added to the housing list the position of households already on the housing list can change.

The committee recommended the establishment of a national prioritisation policy. That is, the 31 local authorities adhere to a set of common rules and definitions in assigning accommodation.

But why not extend this recommendation to the establishment of a national build policy?

That is, transfer the house planning process to a single authority or a few regional authorities. The number of authorities could be cut from 31 to, say, four or even one? These new housing authority would employ specialised staff with a mandate to prioritise new builds rather than subsidising rents.

Currently, there must be significant duplication in housing administration structures across the 31 councils. A single or regional authority should achieve significant, cost-saving economies of scale while providing a coherent response to the country’s housing and homeless crisis.

Dr Anthony Leddin is former head of the department of economics at University of Limerick

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