Housing charity promotes creative solutions to avoid deepening of housing crisis
A radical new way of financing social housing has been proposed to the Government by the Irish Council for Social Housing (ICSH). The initiative would see housing charities borrowing privately to fund social housing for the first time in a major way.
The proposal was made today (Friday) by the ICSH – the national social housing federation – to the Minister for Housing and Local Services, Mr Michael Finneran T.D, at the ICSH Finance Seminar, sponsored by Barclays Corporate in Kilkenny. Over 120 delegates attended the ICSH Seminar representing housing associations, local authorities, government departments and private financial institutions.
The ICSH is proposing a restructuring of social housing funding towards a mixed funding model with housing associations privately borrowing the up-front costs of providing homes for part of the investment programme.
In the context of massive cutbacks in social housing spending alongside the growing demand for such accommodation, this innovative method of financing will enable the Housing Association sector to provide much needed housing without impacting significantly on the Exchequer and therefore the tax payer.
Mr Donal McManus, ICSH Executive Director, stated: “This is a huge reform of public policy but is necessary in the current crisis. Housing associations are experiencing greater demand than ever for their services whilst dealing with massive cutbacks in funding. The ICSH strongly urge Government to support innovative proposals from the voluntary housing sector that will ensure continued delivery of housing for those most in need”.
The ICSH believes that by supporting this ambitious new financial model, the Government could ensure the provision of 1,400 units of accommodation for €14m per annum. The proposal involves:
- Housing Associations borrow money from financial institutions to purchase homes on the market
- The Government will provide an equity stake up-front and enter into a long-term lease agreement with the Housing Association for the units
- This lease payment will help the Housing Association repay the mortgage and rent collected from tenants will be used for management and maintenance of the stock
- Finance borrowed from private institutions by housing associations is not deemed to be exchequer spending for the purpose of Government borrowing and so this is not a constraint on the Government.
Speaking at the event, Niall Quinn, Head of Structured Finance at Barclays said, “There is a real opportunity for the Government to make a step change in policy about financing social housing. A consolidated approach whereby housing associations would privately borrow the up-front costs of providing homes for part of the investment programme will allow for much needed housing without impacting significantly on the Exchequer. This approach has worked well in Northern Ireland and across the UK. We would encourage Minister Finneran and his officials to adopt this proposal, which will ultimately deliver social housing requirements.”
Mr McManus continued: “By supporting this unique offer, the Government will provide a real social and economic return to the State by providing employment, utilising vacant homes and taking people of growing housing waiting lists”.
He added: “the voluntary housing sector is well placed to put limited funding to maximum use and will continue to ensure that we get the most value we can for our investment in social housing. It is imperative for Government to facilitate a range of mechanisms to enable Housing Associations to deliver much needed social housing and tackle the ever increasing numbers on the housing waiting list”.
At the Barclays Corporate-sponsored seminar Minister Finneran also launched the ICSH Collaboration Toolkit for Housing Associations. The Toolkit will allow voluntary housing associations to achieve greater efficiencies and service delivery by working more closely together.
“The aim of the Collaboration Toolkit is to promote value for money and partnerships within the voluntary housing sector” stated Mr McManus. “We are continually being told to ‘do more with less’ and our view is that we can achieve more working together.”
Currently ICSH has over 300 members who collectively manage over 25,000 units of accommodation across the country and this Toolkit will assist Associations to work together thereby reducing any duplications or overlap in services.
Ends
For further information contact Donal McManus or Caren Gallagher on 01 6618334.
Issued on behalf of ICSH by Tony O’Brien Communications – 0872438 584
Note to Editors
- The Irish Council for Social Housing is the National Federation of social housing organisations with over 300 housing associations affiliated nationwide.
- The Irish Council for Social Housing is a member of the Community and Voluntary Pillar of Social Partnership.
- Voluntary housing associations currently manage 25,000 homes in every local authority area in the country serving the needs of 500 local communities.
- In addition Voluntary housing associations house approximately 2500 new households each in need of housing on local authority waiting lists which include families, older people, people with disabilities and the homeless.
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