The Irish Council for Social Housing (ICSH), the approved housing bodies (AHB) membership body, has said that Budget 2024 must allocate for continued investment in the AHB sector’s core capital funding programmes, and also address a number of key ongoing legacy issues, which include building defects and costs associated with ageing and out-of-mortgage housing stock.
ICSH CEO, Donal McManus, has said that after record delivery by AHBs in 2022 and a healthy output and pipeline of new homes for 2023, Budget 2024 must also resource our AHB members to continue delivering outstanding housing management and maintenance services to existing housing stock. “AHBs currently own and manage 54,000 homes and our sector has been adding close to 10% to its stock of permanent social housing annually for the past five years. However, the costs associated with ensuring the sustainability of our existing older housing stock have become a significant issue for our member AHBs and a financial drag on the sector . We currently have thousands of properties that are out-of-mortgage. The rents received from these properties are insufficient to cover the increasing costs associated with their management and maintenance”.
Finding Solutions for Legacy Issues
In its Pre-Budget 2024 submission, the ICSH shines a light on the shortfall in rent revenues used to meet ongoing management and maintenance costs of primarily older units that were funded via the now discontinued Capital Loan and Subsidy Scheme (CLSS) but also those funded through Capital Assistance Scheme (CAS) programmes. Currently there are a significant number of out of mortgage homes in the sector. As the properties come out of mortgage, the only income available is a differential rent (or CAS economic rent) and neither would ensure long-term viability for those properties or provide the AHB with the ability to continue to provide for an adequate sinking fund. The sector is keen to ensure that these properties can continue to be used for social and affordable housing. The ICSH Budget 2024 submission also calls for: the transfer into AHB ownership of the estimated 1,367 Unsold Affordable homes (USAs) currently leased to the sector; progress on remediation of defects in apartments and duplexes and defective concrete block; as well as grant aid support to AHBs of 90% of costs to make retrofits viable on a large scale.
Donal McManus concluded. “There are two key two strands to our housing budget 2024 ask for the AHB sector: protecting and expanding the current social and cost rental housing capital allocation and resourcing our member AHBs to maintain the existing social housing stock they have worked hard to deliver and maintain over the past 40 years.”
The ICSH is calling on the Government to implement the following measures in Budget 2024:
Increase AHB Funding
- Capital Advance Leasing Facility (CALF). The ICSH supports raising the CALF allocation to €400m to meet Housing for All targets.
- Capital Assistance Scheme (CAS). Prioritise CAS funding to support vulnerable groups with an increased allocation of €150m for 2024.
- Cost Rental Equity Loan (CREL). The ICSH advocates a significant increase in CREL to enhance the delivery of this essential housing tenure.
- Land Acquisition Fund. Allocate €140m to prioritise state land for social and cost rental housing development.
Finding Solutions for Legacy Issues
- CLSS/CAS Rent Income. Address the shortfall in rent revenues for older units funded through CLSS/CAS to ensure long-term sustainability.
- Unsold Affordable Homes (USAs). Place USAs into AHB ownership with dedicated funding, enhancing capacity for more housing development.
- Unencumbered Units/Out of Mortgage. Put properties on a stable financial footing through modified availability agreements to maintain their use for social housing, in perpetuity.
- Remediation of Defects. Address building defects in apartments and duplexes, ensuring funding availability for essential fire safety works.
- Defective Concrete Block. Establish a pilot scheme to remediate defective concrete block properties in AHB social housing stock.
- Retrofitting. Create a specific retrofitting budget to upgrade older AHB social housing stock, meeting climate action targets and reducing fuel poverty.
Sector Gearing
- Introduce Non-Debt Financing. Mitigate the impact of gearing by introducing non-debt financing of 25% to increase housing output.
AHB Collaboration Fund
- Allocate €320,000 for 2024. Support the AHB Collaboration Fund initiative to advance sector rationalisation, enhance delivery, and manage homes more effectively.
ENDS
