Social Impact: A Safe Place to Live
Written by Dan Healy, Partner, Irish Homes
Access to safe and secure housing is a major issue in Ireland right now and has been for the last 20 years. Long social housing waiting lists and the rise in homelessness in recent years highlight the scale of the housing crisis in modern Ireland.
“Housing for All”
In June, Darragh O’Brien was appointed the Minister for Housing, Local Government and Heritage and his political party Fianna Fail have set a target of delivering 50,000 Social and Affordable homes during the life of the current government. The coalition government’s current mission is “Housing for All”.
As part of its green agenda, the current Government has also committed to delivering energy efficient homes with higher BER ratings.
The Scale of the Crisis
In the Summary of Social Housing Assessments 2019 report issued in December 2019 it sets out that there were 68,693 qualified households on the Local Authority waiting lists.
27% of households on this list have been waiting 7 years or more to be housed which shows the extent of this issue and the low number of homes delivered in recent years. 43% of the households on the list are in Dublin, in line with the percentage of the Irish population who live in Dublin. However, there is a need for social homes in every county in Ireland.
Unfortunately, with Covid-19 causing a significant rise in unemployment levels the numbers on the housing waiting list in December 2020 will likely be higher than in 2019.
The government wishes to build more new homes. Since 2008, Ireland has decreased its number of new homes built annually from a high of over 90,000 per year to a target of 22,000 in 2020. Due to the impact of Covid-19 it is estimated that c. 15,000 new homes will be built in 2020. Hence, solving the housing crisis in the near term will require a range of solutions.
The Need for Public and Private Collaboration
The current Government wish to source homes from a number of avenues, including:
1) New Developments: a policy whereby 10% of new developments are given to Local Authorities and Approved Housing Bodies for social housing. Based on the expected new build figures, this is on target to deliver 1,500 – 2,500 homes per year.
2) Local Authorities building new homes on Irish Government owned land: while this is a good solution and in time could deliver many homes, it faces some real challenges.
- The last major building programme undertaken by Councils was in the 1970’s and 1980’s, thus the Councils lack the necessary building and engineering talent to delivery such a large programme in the short term.
- Also, due to the very low level of construction in the years 2008-2016 many people either left Ireland or left the building trade. A large trade apprenticeship program will be required to meet an upscaling of Council self-building.
3) Private Sector Leasing: a third option is for the private sector to upgrade properties in the current housing stock and deliver them to the Local Authorities on a long lease. This option will deliver homes faster than option one and two above which is a consideration in the context of the immediacy of the housing need.
- Families on the social housing lists get a modern energy-efficient home.
- The Councils rent a stable home for 25 years, starting at 80-85% of open market rent – a great reduction in cost – and reset upwards or downwards every three years according to inflation.
- The long-term Investor receives a stable annual return, implicitly backed by the Irish Government.
Given the scale of the current housing crisis, the government will be required to employ all of these solutions as part of their overall plan. Each will require some degree of public private partnership. In the case of long-term leasing, this partnership is over 25 years and so the quality of partners will be fundamental to local authorities achieving their housing objectives.
We believe that the integration of ESG into decision making frameworks, public and private, can ensure accountability when it comes to social housing investment.
- Environmental: All homes delivered to the Council are upgraded to modern energy efficiency standards, thereby reducing carbon emissions and also helping to reduce fuel poverty.
- Social: Housing families in long-term stable accommodation leads to better mental and physical health due to the reduction in stress and having proper facilities for cooking and cleaning. Having a secure and safe place to live fulfills a basic social need.
- Governance: Transparency is paramount for all stakeholders to ensure the investment of private capital into much needed social housing is done right.
For more information on what Irish Homes are doing to tackle this social challenge visit their website: www.IrishHomes.ie