housing ireland issue 07

8/11/2019 Housing Ireland Issue 07

1/19www.cih.org The independent voice of housing and the home of professional standards

Land law and housing

rights in east JerusalemPAGE 05

Feature: Social Housingat the Crossroads andConstruction 2020PAGE 17

What you need to knowabout the new buildingregulationsPAGE 30

A journal for Irish Housing Professionals

HOUSING

IRELANDAUTUMN 2014. ISSUE 07


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H o u s i n g I r e l a n d | A u t u m n 2 0 1 4 H o u s i n g I r e l a n d | A u t u m n 2 0 1 4

Strategies

often set

out aspi-

rational

goals, commit to detailed

targets and chart clear

pathways to the desired

future. Such documents

rarely survive contact

with the real world. This is

particularly true of hous-

ing, a complex, dynamicand uncertain policy

area. What is needed

is a strategy, not a plan

and still less a wish list

C O N T E N T S HOUSING IRELAND JOURNAL

p.04

p.22 p.05 p.10

p.30

p.28

p.26

p.12

4 Supply and demand

Editorial

5 THE lAND STRUGGLE

Lawyer and PhD candidate Hadeel Abu Hussein gives an overviewof the land struggle in east Jerusalem

8 Managing vacant stock

James Pike discusses freeing up vacant and underused housingstock

12 The Welsh Bond

An alternative nance option for housing associations is recapped

by Coastal Housing CEO Debbie Green

14 Whats happening elsewhere?

CIHs policy teams talk to the UK housing headlines

17 Feature

Social Housing at the Crossroads and Construction 2020 - Keyactions of these two major reports are assessed by Eddie Lewis,Dr Rory ODonnell, Simon Brooke and Dr Peter Stafford

30 nEW building regulations

Ruairi Hayden outlines what you need to know about the newbuilding regulations

cONTACTIfyou are interested in contributing an article, pleasecontact Editor Justin Cartwright [email protected] 0044 28 9077 8222

Advertise with usTo advertise in Housing Ireland please contact Kerry Kelly at [email protected] or 0044 28 9077 8222

Disclaimer: The views expressed by contributors in Housing Ireland arenot necessarily those of the Chartered Institute of Housing, the Editor orthe editorial panel and should not be taken as representative of any of theabove.
mailto:justin.cartwright%40cih.org?subject=mailto:justin.cartwright%40cih.org?subject=


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54 E D I T O R I A L


T H E L A N D S T R U G G L E I NI S R A E L A N D E A S T J E R U S A L E M

Economics is about supply anddemand. A housing bubble occurs

when house prices detach from supplyand demand fundamentals, fuelled bya liberal supply of credit. Without creditand unrealistic market expectationsthere is no bubble.

Nevertheless, post-crash fearspervade the Governments 2011Housing Policy Statement affirmsif the Governments approach tohousing is successful in not repeat-ing the mistakes of the past throughover-stimulation of the market, thereshould be no need for national pro-grammes of affordable housing pro-vision by the State.

This aversion to even the sup-ply-side of affordable housing coupled with the on-going moveaway from capital subsidies meansdemand will continue to outstripsupply leading to rising house prices.This is and will be felt mostly in Dublin,

misdiagnosed by some as anotherbubble and hence possibly reinforc-ing aversion to action under the incho-ate mantra that intervention is bad,although austerity budgets and adepressed construction industry areundoubtedly lofty obstacles.

Considering the supply and

demand fundamentals, we can and doestimate the overall potential demandfor housing in the future. We do thisby taking into account populationgrowth, demographics changes andloss of dwellings through natural life-span fullment and demolition. The

Housing Agency projects the annuallevel of housing needed as an averageof 15,932 units across the country to2018. We are building much less thanthis.

In this context two major reportshave been issued since our last edition the National Economic and SocialCouncil (NESC) published SocialHousing at the Crossroads and theGovernment launched Construction2020 in a bid to revive the construc-tion sector and hence housing supply.With the latter comes a commitmentto produce a social housing strategyin this quarter. In this issue we take alook at both of these reports and three

key recommendations of Construction2020.Housing strategy on the mac-

ro-scale is important, but it remainsimperative for individual housingorganisations to pursue innovativemethods to increase supply, as thisremains one avenue to more homes.

We hear from the CEO of 5,500 unitCoastal Housing in South West Waleson her experience of drawing on bondnance, in anticipation of alternative

nance availability here in the future.

We also address freeing up vacantand underused housing stock. Finally

we cover recent changes to bui ldingregulations including architecture.

Our international piece is onhousing in divided communities covering the experience in EastJerusalem and is written by HadeelAbu Hussein, PhD candidate in inter-national human rights law at the IrishCentre for Human Rights, NUI Galway.

S U P P LY A N DD E M A N D JUSTIN CARTWRIGHT

T H E L A N DS T R U G G L E HADEEL ABU HUSSEIN

Land conflict is at the core of theIsraeli-Palestinian conict; this conict

dates back to 1948 when the state ofIsrael was established as result of the

war, which broke out in Palestine in1948.1This was the ofcial start of theconict between Palestinians (Arabs)

and Israelis (Jews). This war wascaused by the partition of Palestine asa result of a United Nations resolution

on 29 November 1947.2

This broughtmajor demographic change; beforethe war the Jews, around 400,000,owned 7% of the territory and the ArabPalestinians, numbering 1,150,000,owned 93% of the territory. ThePalestinians therefore became aminority after the deportation of some750,000 Palestinians, who becamerefugees in neighbouring countries,the destruction of more than 400villages and the immigration ofhundreds of thousands of Jews fromacross the world into Israel.3

With the Six-Day War in 1967, Israelwon an importan t land war. Israeliforces took control of the Gaza Stripand the Sinai Peninsula from Egypt,the West Bank and East Jerusalemfrom Jordan and the Golan Heightsfrom Syria.

The annexation of East Jerusalemcreated a unique status of its land

and its people. The people of EastJerusalem refused Israeli sovereigntyand claimed its occupation by Israelillegal. Therefore, according to Israelilaws, they are permanent residents,instead of citizens.

This article tries to explore severaldimensions of the land struggleinside Israel and East Jerusalem,not the Israeli occupied territories4,

by describing the situation ofthe Palestinians who remainedand became citizens of Israel

and permanent residents of EastJerusalem. It attempts to providea brief overview of their struggle toaccess land in Israel.

Land is an essential resource and thedistribution of land was not a randomact, having the potential to inuence

powerful groups within Israeli society;

the distribution can affect social statusand economic position as well aspolitical power.

Access to land and housing rights wasa fundamental issue when the newlyestablished state of Israel createdthe land regime. For this reason,the governments land policies wereshaped to promote control of thedominant group, the Jews in the case ofIsrael, while restricting access to landfor the minority, with the implication ofmaking them a disempowered group.

The new Israeli state put muchemphasis on the laws enablingacquisition and conscation of vast

areas, leaving about 94% of thecountrys land as registered Jewishcontrolled property. Consequently,transfer of land previously heldby Arabs to Jewish groups tookplace, hence individuals as propertyowners reshaped the future and theIsraeli parliament introduced laws toexpropriate refugee territory. Theseincluded: the Absentee Property Law(1950) and the law on acquisition of

1 Described by the Palestinians as Al-nakba the catastrophe and by the Israelis as the war of independence.2Morris, Benny, Righteous Victims, A History of The Zionist Arab Conict 1881-2001, (Vintage Books 199, 2001); Michael R. Fischbach, Records of Dispossession, (Columbia, 2003). Edited byElia Zurei, David Lyon and Yasmeen Abu- Laban, Surveillance and control in Israel/ Palestine, Population, Territory, and Power (Routledge, 2011).3Morris, Benny(1987), The Birth of Palestinian Refugee problem, 1947-1949, (Cambridge University Press, Cambridge); Golan, Arnon (2001), Wartime Spatial changes: Former Arab territorieswithin the State of Israel 1948-1950, ben-Gurion University press, Beer sheva (Hebrew).4West Bank and Gaza.

Justin CartwrightEditor

EDITORIAL PANEL:

Kerry Anthony - De Paul Ireland,

Simon Brooke - Clid Housing

Association, Lisa Clifford -

Department of the Environment,

Community and Local Government,

Caren Gallagher - Irish Council

for Social Housing, David Silke -

Housing Agency, Dr Lorcan Sirr -

Dublin Institute of Technology"


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T H E L A N D S T R U G G L E I NI S R A E L A N D E A S T J E R U S A L E M

real estate (approval of actions andcompensation) (1953). Some of theArab Palestinian minority that todaytotals around 20% of the population ofIsrael became present absentees a legal category for Palestinians who

were driven from their homes duringand after the war but who remained

within the state of Israel and theirhomes were conscated. Besides the

public land ownership system, most ofthe territory is owned by the nationalIsraeli fund5, with clauses forbiddingthe future sale of these lands to non-Jewish citizens6.

Notably, 66 years after theestablishment of Israel, no new cityhas been founded for Arab citizensdespite natural population growth. Theplanning regime and administrationpolicy has also restricted the requireddevelopment of the Arab Palestinianvillages and cities. Most of the landavailable is often already overcrowded

with houses, and building or renovationpermits are limited because of lackof planning in these areas and thelimited infrastructure for water andelectricity. The situation in EastJerusalem is worse as, currently,only 13% of land is available forPalestinians to build on and muchis similarly used and overcrowded

with full houses and unsafe build ingstructures. Comparing the conditionsin Jewish neighbourhoods with Arabones can reect the discrimination that

exists and demonstrates the limitedinfrastructure, poor narrow roadsand few public services. Additionally,the planning regime practises forcedeviction and demolition of houses,

which increas es the crisis and theviolation of basic human rights.Consequently, the Arab Palestinianminority is suffering from a criticalhousing crisis.

The situation is challenging as landlaw in Israel is, on different occasions,used as an instrument of control and asurface upon which a political strugglehas been waged, particularly in EastJerusalem.

Various mechanisms of dispossessionhave been used to maintain state

control over land and limit access toland for the Arab population of Israel.For instance, land expropriation bylocal authorities through two principalstatutes, the Land (Acquisition forPublic Purposes) Ordinance of 1943and the Planning and Building Law of1965. These two statutes allow landacquisition for public purposes, whichis a very broad concept. This leavesthe Minster of Finance as the onlyauthority to dene the public purpose

for whatever lands the state intendsto expropriate.

A second mechanism applied by thestate is demolishing houses throughboth judicial and administrative orders.On one hand, the administrativeorders are issued according to equalprinciples in the city. On the other hand,the Magistrates Court, Local AffairsCourt or Supreme Court, following acondemnation and criminal process,issues judicial demolition orders.However, the majority of demolitionsare consequences of administrativedemolition orders, such as those inunrecognized Bedouin villages inNaqab7.

A third mechanism is forced evictionand families in East Jerusalem andthe Bedouin in Naqab currently facethis most often.

To bring the situation from theoreticalillustration level to a more practicallevel, one example from thecontemporary case of the SheikhJarrah neighbourhood in EastJerusalem is presented here todescribe the cruel effects of forced

eviction and how this violates thehousing rights of the families living inthis neighbourhood.

Sheikh Jarrah, a Palestinianneighbourhood located to the north ofthe Old City in East Jerusalem besideMount Scopus, has become the siteof a prolonged legal battle whoseimplications include the possibleeviction of more than 25 families. FourPalestinian families have already beenevicted from homes in which theirfamilies have lived for more than 50years and others await various court

dates that will dene their destinies.

50 Palestinian families came to thearea in 1956, based on an internationalagreement between UNRWA and theJordanian authorities, who establishedthe Sheikh Jarrah neighbourhood.The agreement stipulated that afterthe families gave up their UN rationcards as refugees and were expelledfrom their original homes in 1948,they would become legally entitled tothe apartments in the Sheikh Jarrahneighbourhood after three years.

Following the 1967 war, Israel annexedEast Jerusalem; afterwards, the Israeli

Jewish committee claimed ownershipof the Sheikh Jarrah neighbourhood,

which they claim they bought in 1875.The committee registered ownershipof the land in their names in 1972and submitted a request to thecourt demanding the eviction of thePalestinian families. Based on thesedocuments, an agreement was signedbetween the families lawyer and thecommittees lawyer, in which the lawyeracknowledged that the land belongedto the Jewish committees. The lawyerdid not complete a proper check on theownership documents. Consequently,the court acknowledged the familiesas protected tenants, required to payrent to the settler committees.

As the families did not pay therequired rent to the committees,the groups began submitting legalactions demanding their evictionand the families authorised a newPalestinian lawyer to defend them.After examining the relevant les, the

new lawyer discovered that the Jewishcommittees had no real ownership ofthe land and that the registration intheir name made in 1972 was basedon forged documents. Furthermore,several of these documents relatedto other locations outside Jerusalem.The Palestinian families broughtdocuments from the Ottoman archivein Ankara referring to the land inSheikh Jarrah. According to recordsof the Shiraa8Court in Jerusalem, theproperty has belonged to the Hijazifamily for more than 200 years9.

The families submitted a petition tothe Ministry of Justice to register theirinterests based on the local taboo10to cancel or revoke the registrationof the land in the name of the Jewishcommittees. The Ministry of Justicerejected the request and the families

went to the Hi gh Cou rt to force th eMinistry to begin the settlementprocess and decide who owns theland in Sheikh Jarrah.

The High Court rejected this requestbased on the agreement reached by theformer lawyer of the families in whichthey unknowingly acknowledged thatthe land belonged to the committee.The court stated inability to alienatethe agreement that had been signedby representatives of both parties; and

that the documents provided relatedto the property located in pre-annexJordan considered to be outside

jurisdictio n of the cou rt and beyondcourt intervention, as it is a politicalmatter.

To date, eight Arab families havebeen evicted from Sheikh Jarrah andseveral others live with the risk; cases

are currently proceeding throughthe Israeli courts. The committeestransferred their ownership rights toa company called Nahalat ShimonInternational in 2003. The newcompany submitted a request to theJerusalem municipality to approve anew urban plan allowing the companyto demolish the neighbourhood andbuild housing units and commercialshops for the new settlers.

According to the Israeli government,the situation in Sheikh Jarrah is strictlya legal matter for the Israeli domesticcourts; a dispute of local property

ownership between Jewish and Arabresidents.

However, the UN observes theseevictions are a clear violation ofinternational law, describing theannexation of East Jerusalem byIsrael illegal and arguing that Israelcannot impose domestic laws ortransfer its population into the area;

additionally, different kinds of violationsof international humanitarian law haveresulted from the forced evictions forthe residents, affecting their rights tolife, family lives, property rights andhousing rights.

The struggle faced by the evacuatedfamilies is unimaginable as the lossof their housing rights has indirectlydestroyed their lives; they live in the

streets, watching strangers occupyingtheir homes.

The solution, and the effectiveness oftools the legal system can provide, isnot easy in the existing circumstances,as the question of inequality beforeIsraeli laws grows. The land law regimeincludes discrimination, distributingland rights among citizens; overhauling

this system and addressing the lackof future urban planning for the ArabPalestinian minority is not part of theagenda, meaning that with limitedremaining tools the state considersnding solutions to the housing crisis

in the Arab villages and towns and inEast Jerusalem even harder. However,the legal path through the courts withprofessional lawyers is necessary andcan bring some justice; it is at least

a legitimised tool that must be usedwisely for trying to identify loopholesin the land regulations and in doing so,opposing a system that has facilitatedinjustices over the years as a result ofgovernmental policies and practices,neglecting the obvious needs of anArab society and its limitations inaccessing land and property. Urbanplans, for example, could provide thespace that Arab villages and townsneed to extend.

No magical solution exists to the harshcircumstances, given the complicatedstruggle over land, but the legal toolsrepresent one of the most legitimate

ways to stop the hous ing righ tsviolations and grant rights to accessland and live normal family lives withdignity.

5Keren Kayemet Le-Israel.6Yifat Holzman-Gazut, Land Expropriation in Israel, Law, Culture and Society (Ashgate, 2007); Franz Oppenheimer and Jacob Ottinger, Land Tenure in Palestine, 12-13 (1917).7South district of Israel

8Court that applies Islamic law.9Court Case 166/89, district court of Jerusalem [Hebrew].10Land registration ofce

Hadeel Abu HusseinPhD candidate in international

human rights law Irish Centrefor Human Rights, NUI Galway

LL.M & LL.B: Faculty of

Law at Tel Aviv University


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98 M A K I N G T H E B E S T U S E O F S T O C K


M A N A G I N GV A C A N T S T O C K

JAMES PIKE available to households from thewaiting list, when a number of peoplereturn to the upgraded or regenerateddevelopment.

Regeneration

A considerable proportion of oursocial housing stock is in needof regeneration; its either in bad

condition or does not come near tomeeting current standards.

There are current projects to upgradeand convert existing buildings, someof them being undertaken by AHBsusing the governments CapitalAdvance Leasing Facility (CALF) andprivate funding, but this is often muchmore expensive than new build andthe densities achieved are much lowerthan could be achieved by new build.The achievement of higher densitiesalso presents the opportunity to createmixed communities and reduce theghetto effect in many of our largerpublic housing schemes.

A factor which greatly impedesregeneration is the current scenariothat allows tenants to purchase theirdwellings. This is very apparent inLimerick, where a large part of thestock is in private ownership andhas to be purchased by the localauthority before they can commenceregeneration.

This would be particularly difcult if

apartments are bought in housingschemes. It has proved highlyproblematic to get agreement ofall the owners in private apartmentdevelopments from the 1960s and

70s, even when the sums add up. Thisstock is in serious need of rebuilding.In Dublin, regeneration is being mainlyconcentrated on the older four-storeyunits, but the later 1950s to 1970sstock of deck access blocks is alsonearing obsolescence and presentsopportunities for densication.

Site value tax

A measure that would help returnexisting stock to use is a Site ValueTax (SVT). The current property tax willactually discourage the improvementor greater use of existing buildings,as this would increase the value andtherefore the tax liability. SVT wouldbe based on the land value of theproperty, which is related to its locationand the services available. There

would therefore be pres sure on theowners to maximise the value of thebuildings to cover the tax. In many ofour towns and cities the upper oors of

our buildings are vacant or underused,and many of them could be brought

back into residential use. The Livingover the Shop scheme achieved verylittle, except in Cork where a numberof successful prototypes were built.These would be models for buildingowners, who would be forced bySVT to examine the potential of theirproperty. SVT could be introducedinitially to replace commercial rates.A Draft Policy on the Heritage Valueof Small to Medium Sized Townsprepared by the Heritage Council,recommends the reintroduction ofLiving over the Shop.

A portion of these properties wouldbe used for social housing, and it

might be a good idea to provide taxincentives to owners to encouragethem to engage with their council toassess whether their property wouldbe suitable and would generate aviable return.

AS SOCIAL HOUSING PROVID-ERS GRAPPLE TO BUILD MOREHOMES, THEY SHOULD ALSOLOOK DOWN THE AVENUESOF STOCK MANAGEMENTAND LAND USE IN ORDERTO INCREASE SUPPLY SAYSJAMES PIKE, CHAIRMAN OFOMAHONY PIKE ARCHITECTS.

A primary aim of all local authoritiesand housing associations should beto maximise the occupancy of theproperties under their ownershipor control. When it is agreed thata tenant will terminate his or hertenancy, an immediate assessment

of the premises should be made toestablish the necessary maintenanceand repairs to allow a new tenant totake possession. Each local authorityshould have a panel of contractorsavailable so that it can appoint oneto start work as early as possible.Housing associations could also work

with this p anel or set up their own i fthey have signicant stock in the area.

Regular assessment of the long termstock condition is also necessary,identifying the need for major repairsand the improvements required to bringthe stock up to the current standard.The maintenance and improvement

of public areas and grounds isalso critical, as is regular contact

with the mana geme nt comp any.

Its then important that the newtenants are agreed and readyfor occupation immediately whenthe unit becomes available.

Vacant stock should be reoccupiedwithi n a maxim um of six weeks .Where stock is assessed as needingmajor refurbishment, some fundingis available from the Departmentof the Environment, Communityand Local Government (DECLG).European Investment Bank fundingfor retrotting could also be used for

part of this process.

Property portfolios

NAMA is already undertaking apositive initiative to complete andutilise vacant stock using its NARPS

(National Asset Residential PropertyServices) scheme to set up 20year leases with Approved HousingBodies (AHBs). NAMA funds thedeveloper to complete the schemesand lease the vacant stock, and incertain cases sell it to the AHBs.

There are still portfolios of propertiesunder the control of NAMA orreceivers, a portion of which areunoccupied and suitable for socialhousing. The stock could be valuablefor decanting existing tenants fromdevelopments needing upgrade orregeneration. These will become

James PikeChairman - OMahony

Pike Architects

Effective void

management can

you help us?

CIH plans to produce aguide on effective voidmanagement in theRepublic of Ireland and

were looking for examplesof organisations goodpractice in this area. It wouldbe great to hear from youif you think you have aneffective approach or if youknow of an organisationthat has. Please email

[email protected]


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CIH Housing Awards 2015

at Belfast City Hall

Join housing professionals from across Ireland tocelebrate excellence in housing.

Apply

CIH Housing Awards provide an opportunity torecognise the fantastic work being done by staff,volunteers and project teams across the industry.Nominate your colleagues now atwww.cih.org/ni/awards

SponsorDo you want to be associated with achievementof excellence in housing? Sponsor one of ourHousing Awards and you will be prominentlyproled alongside the best in the industry. Contact

us for details.

AttendThe fabulous setting of Belfast City Hall offers atouch of glamour for this formal, black tie event.Book a table for staff and corporate guests and

you will enjoy a great evening of networking andentertainment. Now open for bookings.

For further information on the CIH Housing Awards2015 visitwww.cih.org/ni/awardscontact us by phone on +44 (0)28 9077 8222or by email at [email protected]

HEADLINE SPONSOR


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T H E W E L S H B O N D

The newscheme,knownas the

Welsh Bond is sup-porting the buildingof over 1,000 afford-able homes over atwo year period with

130 million of in-vestment from thecapital markets and19 participating regis-tered social landlords(RSLs) across Wales..

THEW E L S H B O N D

DEBBIE GREEN

Procuring the nance

Key to the success of the project wasa partnership approach. A steeringgroup led by the Welsh government

was for med tha t als o inc lud edrepresentatives from CommunityHousing Cymru and nance directors

from the sector. The group wasresponsible for jointly procuring thefunding and six funders representingthe capital markets and pensionfunds were approached. M&G, partof the Prudential Group, invest inand manage a wide range of assetsincluding equities, xed income and

property; they were chosen as the

main preferred provider based ona number of criteria, in particularthe cost of the funds; the amount of

security required by the lender; and

lenders covenants.

Despite being a leading investmentmanager in the UK and overseas,M&G had not previously made anyinvestment in Wales. Being keento win this deal they reduced theirpricing during the negotiations. Theother provider selected was AffordableHousing Finance, a subsidiary of theHousing Finance Corporation.

Drawing down the nance

Because the f inance productwas procur ed using a consor tiumapproach, Devonshires Solicitors wereemployed jointly by all the participatingRSLs as their legal advisors for thebond drawdown process. The mainchallenge with drawing down the M&Gproduct was that the rates were onlyguaranteed for a limited period, so thatparticipating RSLs had to put securityin place and draw down funds in arelatively short timescale. Thereforeassociations needed to have securitythat is relatively clean so easy tocharge, adequate staff resourceand dedicated staff time so that this

process could take place quickly. Theadvantage of the consortium approach

was that those associ ations morefamiliar with the process could lendtheir expertise to those associationsmaybe accessing the capital marketsfor the rst time.

The funders also do their own duediligence exercise looking at individualassociations. The process involvedmeeting the chief executive and othersenior staff and board members andtaking the opportunity to reassurethemselves with regard to: Governance Structure Business plan Strategic risk management The impact of welfare reform and

mitigation The associations development

programme Quality of stock and asset

management Existing debt portfolio and

covenants

Advantages and disadvantages

of this innovation

This scheme was a great successin terms of bringing forward housing

supply and using a modest amount ofWelsh government revenue fundingper annum to lever in substantialamounts of investment from thecapital markets. From the individualRSLs perspective this schemeprovided some of them with theirrst opportunity to access the capital

markets.

However the scheme brought twoissues into sharp relief how do wecontinue to innovate and take newopportunities, whilst ensuring thesector does not overstretch itself; and

how much risk can the sector take on,and what will the future look like in an

increasingly challenging environment?

The Welsh sectors borrowingcapacity and access to unencumberedsecurity is not inexhaustible. With thesector meeting and exceeding Welshgovernments delivery expectationssince the nancial crash, the sector

now has gearing of 58% on average(54% traditional organisations, 89%large-scale voluntary transfer [LSVT]organisations), up 13% in four years.

These questions are not likely to goaway any time soon and nor will theWelsh governments commitmentto innovate to increase supply. Atthe end of June this year the Welshnance minister recently announced

funding for a second phase of thescheme to deliver another 2,000 units,double the size of the rst, under the

title Housing Finance Grant 2. Thesocial housing sector in Wales has todate demonstrated its commitment toincreasing housing supply; the sector

will now have to give serious thoughtas to how it can continue to sweat itsassets without adversely impactingservice delivery or long term nancial

viability. Maybe its time to raise thequestion again of consolidation in the

Welsh housing sector?

AN ALTERNATIVE FINANCEOPTION FOR HOUSINGASSOCIATIONS IS RECAPPEDBY DEBBIE GREEN, CHIEFEXECUTIVE OF SOUTH WALESBASED COASTAL HOUSING.

In 2008 the then deputy minister forhousing in Wales commissioned areview to look at the issues aroundthe delivery of affordable housing inWales. One of the recommendationsof that review was that the governmentshould help to attract a new longterm nance product from the capital

markets to Wales.

This idea sat on the back burner fora while until, with declining capitalfunds and an urgent need to supplymore affordable housing units, theidea was revisited in 2012. Thenew scheme, known as the WelshBond is supporting the building ofover 1,000 affordable homes over atwo year period with 130 million ofinvestment from the capital marketsand 19 participating registered sociallandlords (RSLs) across Wales.

How does it work?

The new idea was to create a schemefunded by 4m from revenue budgetsannually over a thirty year period.The scheme would in effect pay the

equivalent of the social housing grantin instalments over that period, ratherthan up front, and would also fund theadditional interest costs incurred dueto the deferred payment. Because theparticipating associations would needto fund almost all of their schemesfrom borrowing at the outset, part ofthe grant scheme conditions werethat this borrowing had to come froma specied source jointly procured by

the sector. It was felt that by takingthis approach, new funders could beattracted to Wales and longer termfunding could be made available at acheaper rate than would otherwise beachievable.

Debbie GreenChief Executive of South Wales

based Coastal Housing


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W H A T S H A P P E N I N G

MORE THAN A ROOF

How incentives can improve standardsin the private rented sector

WHATSH A P P E N I N G ? AROUND THE UK

As we prepare for the 2015 Westminster elections,CIH is aiming to inuence policies for a housing system

that works for everyone through our Ticking the Boxfor Housing campaign. With rising spending on socialsecurity posing a challenge for both current and futuregovernments, we will launch our vision for an effective

welfare system in mid-September. Our recommendationsare likely to include: greatly increasing investmentin low-cost rented homes; linking policies for social

security and housing to help workers to escape welfare;

having grant rates and rent-setting mechanisms thatare sufciently exible to reect the countrys widely

differing housing markets; and rebalancing the relative

contributions made by welfare and wages so that welfareno longer subsidises low pay, as is currently the case.

WEBSITE:http://www.cih.org/tickingthebox

In England the private rented sector (PRS) nowhouses 18 per cent of all households and is the secondlargest tenure, after owner occupation. Private tenantsare an increasingly diverse group including a higherproportion of people across every income group and agrowing number of families with children. But the sectorposes some challenges in the form of variable propertyconditions and standards of management, affordability andthe short duration of tenancies granted. The current policy

framework is not effectively addressing this and so CIH andthe Resolution Foundation have collaborated to publishMore than a roof: how incentives can improve standardsin the private rented sector, making the case for incentivesto encourage landlords to professionalise and commit to ahigher set of standards over and above the legal minimum.Our recommendations to government include: reviewingthe existing legal minimum standards and how they areenforced; regulating letting agents; developing a nationally

agreed set of accreditation standards; and encouraging

landlords to sign up to these by offering conditionalincentives such as more generous tax allowances.

REPORT:http://bit.ly/1CIPGzG

The Housing (Scotland) Act 2014 passed on 1 Augustand will usher in a number of important changes forScottish social landlords. While the headline grabbingabolition of the Right to Buy will undoubtedly makea difference by putting the proverbial plug back in thebathtub of existing housing supply, it may yet prove to beother parts of the Act which make the more substantialimpact on housing practice longer term. The Act provides

landlords with greater exibility with regards to allocations

policy, but balances that with the introduction of a new dutyto consult with tenants, applicants and tenants groups onany proposed changes to allocations policies. Meanwhile,social landlords have been granted more power to tackleanti-social behaviour. They will now be able to convertantisocial tenants to Short Scottish Secure tenancies andthere will be a more streamlined evictions process forantisocial behaviour.

ACT:http://bit.ly/VPf2dJ

The independence referendum makes this is alandmark year for Scotland and for the UK as a whole.Political passions have been inamed on an unprecedented

scale as Scotlands citizens weigh up the pros and consof going it alone, or staying as part of the UK. To helpinform that debate from a housing perspective, CIHScotland has produced the below serie s of three papersby eminent Scottish academics and thought leaders ondifferent aspects of the policy environment which mighthave a direct impact on how housing would fare undereach scenario.

THE REFERENDUM AND PROSPECTS FOR PUBLIC

EXPENDITURE IN SCOTLAND:http://bit.ly/1ltynxx

HOUSING TAXATION REFORM AND THE SCOTTISH

CONSTITUTIONAL QUESTION:http://bit.ly/XOFJRw

DEVELOPING A SOCIAL SECURITY MODEL FOR

SCOTLAND:http://bit.ly/VPf8So

The UK government is trying to neutralise the impactof the bedroom tax on the independence referendumby handing powers to the Scottish government overDiscretionary Housing Payments (DHPs). The abilityto set the cap on DHPs will be transferred, so that theScottish government can effectively nullify the impactof the bedroom tax in Scotland by ensuring people onhousing benet who have been hit by the bedroom tax

receive a DHP to make good the shortfall in their rent.Although, Holyrood will not receive any extra resources

from London and will have to fund any changes from itsbudget.

The Housing (Wales) Bill will be passed inSeptember. The new Act will introduce a nationalmandatory registration and licensing scheme forall private rented homes; introduce a statutory

homelessness prevention service, by conferring dutieson local housing authorities to help people who arehomeless or threatened with homelessness, and allowsfor discharge of duty in the private rented sector; require

local housing authorities to carry out an assessment ofthe accommodation needs of Gypsies and Travellersresiding in or resorting to its area; introduces ne w social

housing standards; abolishes the Housing Revenue

Account (HRA) subsidy meaning local councils nowself-nance by retaining rental income and using the

revenue to fund their stock; allows fully mutual housing

associations to grant assured tenancies; and allows

increased council tax (up to 100%) to be charged bylocal authorities on long term empty dwellings. Also thePlanning Reform Bill, and Renting Homes (Wales) Billsare due to be introduced in 2014 and 2015 respectively,the latter of which proposes whole-scale tenancyreform; a draft illustrative model contract is currently out

to consultation until October 2014.

HOUSING (WALES) BILL:h ttp://bit.ly/1tz4ymp

MODEL CONTRACT:http://bit.ly/1lbgqts

The Gender-based Violence, Domestic Abuse andSexual Violence (Wales) Bill has also been publishedand focusses on three key areas of; improving

leadership and accountability; improving education

and awareness; and strengthening services in Wales.

Separately, a ministerial requirement for all Welshhousing organisations to have workplace policies fordomestic abuse in place was achieved in August 2014.

BILL:http://bit.ly/1p6EXom

REQUIREMENT:http://bit.ly/YyRzzm

CIH Cymru published the i2i 5 Year on report, an

update on the Welsh Government funded communitybenets project, that promotes targeted recruitmentand training (TR&T) as a core contract requirement,and supports the development of supply chains throughthe use of small and medium enterprise for housinginvestment programmes.

REPORT:http://bit.ly/1vK1blI

A consultation on a new code of governancefor registered social landlords in Wales is currentlyunderway by Community Housing Cymru to set out thestandards and practices that boards and their membersmust comply with to ensure good quality governance isthe norm.

CONSULTATION:http://bit.ly/1vK1mxu

ENGLAND

SCOTLAND

WALES
http://bit.ly/1CIPGzGhttp://bit.ly/1CIPGzG


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W H A T S H A P P E N I N G

The Review of Public Administration (RPA) thatincorporates the reduction in the number of NorthernIrelands district councils from 26 to 11 is coming to ahead. Representatives to the new super-councils wereelected in May and are currently sitting for a shadowyear until the new structures become fully opera-tional from 1 April 2015. Part of the reforms will see theDepartment of the Environments (DoE) major planningpowers transferred to the super-councils from that date,though the Bill facilitating this transfer was due to betabled before the summer recess but has been delayed.

MORE:http://bbc.in/1niqnu8

There are currently 20 separate planning policystatements in operation containing land-use policiesand other planning matters. Their primary function is tooutline the main considerations DoE takes into account

when assessing proposals for development, to directdevelopment plans and to inform planning appeals deci-sions. As part of the overall RPA, DoE is reviewing plan-ning policy and consolidating the 20 separate publica-tions into one document the strategic planning policystatement for Northern Ireland (SPPS). The draft docu-ment was published for public consultation that endedin April.

CIH RESPONSE:http://bit.ly/1rJo7Qs

In addition to the draft SPPS consultation, DoEand the Department for Social Development (DSD) hastwo concurrent consultations open until 23 Septemberthat will facilitate developer contributions for afford-able housing (equivalent to Part V of the Planning andDevelopment Act 2000) through the SPPS and as partof DSD policy committed as a key action under thecurrent Programme for Government. As the only regionacross the UK and Ireland without a mechanism foraffordable housing through planning obligations, and ata time when the market is improving but still depressed,the consultation has stimulated much discussion withinNorthern Irelands housing industry. The current pro-posal would require contributions in developments ofve units or over where a developer can make a prot

of 15%.

CIH BLOG:http://bit.ly/1mH0bbP

CIH COMMENT:http://bit.ly/1uOjPIF

H O U S I N G A T T H EC R O S S R O A D S FEATURE

WHATS REQUIRED OFA SOCIAL HOUSING

STRATEGY?EDDIE LEWIS

Lecturer and

Commentator on

Housing Policy

Author of Competing

in an uncertain world:

institutional change

in the Irish state

17

IRISH SOCIAL HOUSING TOWARDS A MORE

SUSTAINABLE MODELDR RORY ODONNELL

Director - National

Economic and Social

Council (NESC)

PART V, MARK II?SIMON BROOKE Head of Policy - Clid

Housing Association

IMPACT OFCONSTRUCTION 2020

ON THE IRISH HOUSINGMARKET

DR PETER STAFFORD

Director - Property

Industry Ireland

NORTHERN IRELAND

TWO MAJOR REPORTS HAVE BEEN PUBLISHED IN RECENT MONTHS, CONSTRUCTION 2020 ANDSOCIAL HOUSING AT THE CROSSROADS. A MAJOR S OCIAL HOUSING STRATEGY IS PROMISED FORTHIS QUARTER. IN THIS ISSUES FEATURE, THE AUTHORS COMMENT ON KEY APPROACHES ANDRECOMMENDATIONS, AND ASK WHAT WE SHOULD EXPECT OF A HOUSING STRATEGY.
http://bit.ly/1rJo7Qshttp://bit.ly/1rJo7Qs


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W H A T S R E Q U I R E D O FA S O C I A L H O U S I N G S T R A T E G Y

S O C I A L H O U S I N GS T R A T E G Y

EDDIE LEWIS

In a recent article in CIHs

UK Housing Review 2014, Eddie

provided an account of how the

housing market in Ireland had been

laid waste following the nancial

collapse in 2008 and the recession

that followed. What was less clear,

he says, and what was left open at

the end was the future direction of

housing policy. This article will look

at some of the options available to

government as it prepares a social

housing strategy that must cometo grips with the legacies of the

housing crash.

Introduction

The housing market is graduallyrecovering from the nancial crash

and recession post-2008. Houseprices have stabilised and are movingupwards, perhaps too fast in someareas. The number of house sales isincreasing and there is evidence oflong-term private investment in theresidential rental market. Housing isaffordable, or at least more affordable

than at any time since the turn of thecentury (Economist: House-PriceIndex). The number of unfinishedestates and vacant dwellings aregradually working their way throughthe system1. Housing authorities,though hampered by a shortage ofaccommodation, continue to providesocial housing support for upwardsof 160,000 households2. But theaftershocks of the crisis are still withus and in many respects the housing

market is still dysfunctional.

So what are the current challenges?Rent levels are increasing in Dublinand certain other urban areas, whichcreates an immediate problemfor low-income families. Negativeequity in residential properties is stilldragging down the market and isseriously hampering the restorationof a healthy banking system. Andmost notably the supply of housing,after four years of limited investment

with output substantially below long-term requirements, has become a

serious political concern and hasled to demands for the restoration ofsubsidies to get the country buildingagain.

Turning to the social housing market,there has been a build up of issuesover many years. The figures forhouseholds on local authority waitinglists has steadily risen, many of thosein receipt of social housing supporthave been provided with a poorquality environment in which to bringup families and the level of investmentrequired to sustain the necessary levelof housing support is putting a seriousburden on the nances of the state.

So what should the response ofgovernment be? Two major reportshave been published in recent months,Construction 2020 (May 2014) andSocial Housing at the Crossroads(June, 2014) and a major social

housing strategy is promised for Qtr. 3.But before commenting on the differentapproaches and recommendations,rst we should ask what we should

expect of a housing strategy.

The importance of strategy

There is a tendency common to mostpublic policy strategy documentsto assume a greater control overfuture events than exists in reality.Strategies often set out aspirationalgoals, commit to detailed targets,make multiple recommendations andpurport to chart clear pathways to the

desired future. Sufce it to say such

documents rarely survive contact withthe real world. This is particularly trueof housing, a particularly complex,dynamic and uncertain policy area.What is needed is a strategy, nota plan and still less a wish list.

The difference between a strategy anda plan is well articulated by LawrenceFreedman, in his book, Strategy, AHistory:

(A strategy) differs from a plan,

which supposes a sequence of

events that allows one to move

with condence from one stateof affairs to another, and instead

describes a process of moving, in

an semi-orderly fashion, through

a series of states each one not

quite what was anticipated or

hoped for, requiring a reappraisal

and modication of the original

strategy, including ultimate

objectives (Freedman, xi).

This point is reinforced by RichardRumelt3who argues that a strategymust contain at least three coreelements: a diagnosis of the problemsto be addressed; a guiding policy

or approach; and a coherent and

coordinated programme of action.

The core of strategy is always

the same: discovering the

critical factors in a situation and

designing a way of coordinating

and focussing actions to dealwith these factors (Rumelt, p1)

Housing strategy therefore shouldbe less about xed targets, long term

objectives and mission statementsand more focussed on creatinga framework within which policydecisions can be made in response tocomplex and changing circumstances.The strategy must be based on ananalysis of the current situation, ofthe obstacles to change and of thechoices available to address them.

Finally, it should seek to identify alimited number of key levers that, ifintroduced, will produce a cascadeof actions that support the strategicdirection to be followed. Needless tosay, none of this is easy.

Determining the strategic

direction

Prior to the nancial collapse in 2008

the structure of the housing marketin Ireland was already undergoingsubstantive change. Home ownershiprates were declining, the privaterented market had almost doubledin size in less than two decades andthe boundaries between the smallsocial housing sector and the othersectors were gradually being erodedas rental assistance programmesmade greater use of privately owneddwellings. But as the nancial collapse

was to expose, the ho using marketwas simply not functioning to providea sustainable balance of supply anddemand.

The two reports produced so far thisyear highlight different aspects ofa possible government response.Construction 2020 is focussed onthe supply constraints in the market.It suggests a long-term need for anoutput of at least 25,000 dwellings peryear to meet demand. As far as socialhousing is concerned the report notesthe high level of need contained in theSummary Assessment of Need 2013and points to specic actions taken

by government to increase suppl y. Itsgeneral conclusion is, however, left

open.

We will identify the best way

to deliver social housing for

the years ahead through

the development of a

comprehensive strategy for

Social Housing, setting out a

vision for the sector (14)

NESC in their report Social Housing atthe Crossroads are less circumspect.The report proposes a radically newdeparture for social housing. Basedon Kemenys analysis of dualist and

unitary housing markets4, it arguesfor a complete overhaul of the wayin which social housing is funded.Among the recommendations are:

The movement to a cost rentalmodel (to replace differentialrents)

The ending of tenant purchase Stock transfer from housing

authorities to the voluntary sector A re-orientation of policy away

from support of mixed tenuredevelopments

Some measure of rent control inthe private rented sector

The introduction of some form ofhousing benet

What do the two reports tell us aboutpossible strategic directions for socialhousing policy? The key element inthe former (in so far as it relates tosocial housing) is the emphasis onaddressing supply constraints. It issilent on the functioning of the socialhousing market itself. That there isan acute housing supply problem inDublin affecting all segments of thehousing market at present is not indoubt but there remains a concern thatan over focus on supply will crowd outconsideration of more deep-seatedproblems.

The NESC report advocates thatthe state proceeds down a radicalnew pathway for social housing. Itenvisages public policy preparingthe ground for a gradual movementtowards a unitary rental market. This

is a courageous proposal with deniteattractions but one for which there arefew costings, huge implementationchallenges and a very long (evenmulti-generational) lead-in period. Thereport itself questions the institutionalcapabilities to deliver such anapproach. But is there any alternative?

Social housing has evolved over manyyears since the last major consolidationof policy produced by the Housing Act,1966. The many legislative and policychanges since then have resulted in asystem that is fragmented and losing

1Figures collected as part of the National Housing Survey (2013) of Unnished Estates show a decline since 2010

of 56% in the number of unnished estates and 72% in the number of vacant units.2This gures does not include the number of individuals and families in receipt of SWA rent supplement of mortgage assistance,gure estimated at around 80,000. Approved housing bodies provide for a further 27,000 households.

3Rumult, R (2012), Good Strategy/Bad Strategy: The Difference and why it matters. Prole Books.4Kemeny, J, From public housing to the social market, Routledge, 1994


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coherence. That there is a need fora radical overhaul of the traditionalsocial housing model is hardly indispute and was signalled in the twoNESC Reports, Housing in Ireland:Performance and Policy (December2004) and The DevelopmentalWelfare State (2005). The directionof reform was set out in a series ofpolicy statements during the 2000s5.Key elements were: A broadening of the investment

base for social housing with lessreliance on capital intensive publicprogrammes

A new approach to the assessmentof need paving the way for theadoption of life-cycle principlesin the allocation of housing

The introduction of greaterelements of tenant choice

Important changes to the tenantpurchase process

The reorientat ion of rentsupplement as a housing support

A reorderi ng of the work ofhousing authorities away fromdirect service provision andtowards the planning, regulation

and management of the localhousing market

By the time of the nancial collapse the

reform programme was proceedingbut still far short of completion.

It is suggested here that this reformagenda can still provide a platform fora socially progressive housing policybased around the principles of equityand efciency.

Setting the parameters for a

social housing strategy

Housing policy over the years hassuffered from a failure to properlyintegrate it with broader economic

and social objectives. Past policyis littered with examples of housinginvestment programmes poorlyaligned to the macro-economicenvironment and house prices actingas a catalyst for spikes in consumerspending and asset price ination. In

terms of the welfare state, housingpolicy has frequently been framed

with little reference to broader socialpolicy objectives. The proposedhousing strategy therefore shouldnot treat housing in isolation but setitself to advance the broader socialand economic objectives of thestate.

In economic terms the strategy shouldset out a rationale for state interventionthat goes beyond a considerationof market failure and sees housingpolicy: Contributing to (or at least not

undermining) macro-economic

stability As a means of reducinginfrastructure costs, high housingcosts being treated as a potentialburden on the economy in thesame way as a poor publictransport system or a lack ofbroadband

In the context of its impact onemployment and the labourmarket

From a social perspective there isa need to afrm the importance of

securing shelter for those who require

it but also, beyond this, acknowledgingthat the state continues to have overallresponsibility for ensuring that thehousing needs of those unable toprovide accommodation from theirown resources are met. The stateshould be clear about the impact ofhousing costs on poverty and set ageneral threshold e.g. 35% of nethousehold income, as a basis forassessing housing poverty. Finally, thestrategy should set clear communityand personal goals based on theprinciples of sustainable communitieson the one hand and equality ofopportunity and the development ofhuman capabilities on the other.

The second important component ofany strategy should be a coherentand coordinated programme of action.This means recognising that thehousing system has to be consideredas a whole and policies need to bedelivered across a number of areas(see diagram).

The core elements of such aprogramme might be as follows:

Investment programme

The strategy should make the case fora long-term commitment of nance to

avoid the extremes of the investmentcycle that social housing has sufferedin the past. In order to achieve this,costs need to be spread over longerperiods i.e. expand further the use ofrevenue funding.

Regulation

A clear statement of purpose in termsof consumer protection, governanceand the use of public funds; the

nancial viability and accountability of

housing providers; and the opening up

of access to private investment. Thisneeds to be based on a statutory codethat covers both the private and publicrental sectors.

Social housing reform agenda

The key will be the objective andtimely assessment of housing needsthat will allow movement towards alife cycle or pathways approach tosocial housing provision. Linked to

this are changes in allocation policy,rents, tenancies, the housing of thehomeless, purchase and successionpolicies and housing management.

Housing market equilibrium

The strategy will need to set out aclear message about what measuresthe government will take to ensurethat the housing market operates

within clear parameters in terms ofsupply, demand and cost. In CentralBank parlance the government mustprovide some forward guidance to themarket.

Sustainable communities

The term sustainable communitiesneeds to be more clearly definedso that it can provide an operationalguide to policy makers aroundregeneration, mixed tenure / incomecommunities, living in the community(e.g. the movement of residents ofinstitutions into the community), andthe links between spatial planning andimprovements in social infrastructure.

The final part of creating a goodstrategy is to find the right leversthat will build a positive momentumtowards achieving the overall goalsof the strategy. Over many years thehousing policy has worked throughsmall incremental steps to addressspecic social problems. It is doubtful

if this approach will work in the future.In this NESC are right social housingis at the crossroads and requiresradical and hopefully life-savingsurgery.

5The key policy statements were Building Sustainable Communities (Dec, 2005) and Delivering Homes Sustaining Communities (Feb, 2007).Also important was The Way Home, A Strategy to address Adult Homelessness in Ireland 2008 2013 (Aug, 2008).

Eddie LewisLecturer and Commenta-

tor on Housing PolicyAuthor of Competing in anuncertain world: institutional

change in the Irish state


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I R I S H S O C I A L H O U S I N G -T O W A R DS A M O R E S U S T A I N A B L E M O D E L

T O W A R D S AS U S T A I N A B L E

M O D E LDR RORY ODONNELLThe Irish government is devel-

oping a comprehensive strategy

for social housing. The National

Economic and Social Council

(NESC) have recently completed

a report that is being used in the

formulation of that strategy1. It is

also continuing to work on other

aspects of housing policy, includ-

ing owner occupation, the private

rented sector and sustainable

urban development. This article

discusses the Councils work on

social housing.

Looking at the channels of

provision

In each of the three channels of

provision local authorities, housingassociations and private rental sector there are serious challenges.

In local authorities, there is almosttotal lack of new supply because ofborrowing constraints and becausecosts are not covered by low(differential) rent. Although housingassociations are seen in current policyas the main channel of future socialhousing provision, there has beenlimited uptake of the mechanismsintroduced to promote this. In any case,this approach as currently congured

exposes the state to rising rents inthe private rental sector. Increasingrecourse to this private sector is alsoproblematic, as seen by rapidly risingrents, exit of low-income tenants, risksof overcrowding and homelessness,state exposure to rising private rentsand limited availability of secure,affordable, long-term tenancies.

In response, Irish policy must focus onthree interdependent elements and itmust develop an institution which cancombine them, as depicted in gure

1. This is what is needed to move theIrish housing system in a desirableand sustainable long-term direction.

This work can and must be consistentwith the immedia te respons es thatare necessary to address the acutehousing pressures now in evidence.

New nancial mechanisms

Ireland is different from other Europeancountries in that the main providersof social housing (local authorities)are classified within the generalgovernment sector as defined byEurostat and used in applying thescal rules of the EU and euro area.

Consequently, borrowing to fund newlocal authority housing represents anaddition to the government decit and

debt.

Funding Irish social housing provisionon the scale needed will requirecreation of public housing institutionscapable of attracting nance without

adding to the national debt. Suchhousing providers would need anadequate rental-income streamto meet Eurostats test of being inthe market sector rather than thegovernment sector.

In addition, other countries use arange of measures to help socialhousing providers access financeon favourable terms, includinggovernment guarantees and taxprovisions. For example, The HousingFinance Corporation in the UK acts asa nancial aggregator funnelling the

cheapest possible credit to the varioushousing associations.

Cost rental

Cost rental provision with secureoccupancy for a signicant share ofthe population is the best availableresponse to the dynamics of rentalsystems and housing markets. Amovement in this direction will requirecomplementary adaptation of housingassistance payments on two fronts:limiting the states current exposure torising rents in the private-rental sector,and ensuring affordability for tenantscurrently paying differential rent.

Cost renting refers to a situation inwhich rents cover only the actual costs

incurred in providing and maintaininga dwelling. It differs from profitrenting, where a landlord charges themaximum obtainable rent, regardlessof the historic cost.

European countries with morestable, affordable and sociallyinclusive housing systems generallyprovide modest support for large-scale provision of secure rentalaccommodation, mostly by non-prot

bodies, in which rents reect costs, not

the maximum that market pressureswill sustain. They use modest levelsof capital subsidy, combined with costrental, rent regulation and housingbenet, to provide affordable long-

term rental accommodation for alarge share of their citizens. In somecases, the affordability of such rentalaccommodation reects both a degree

of subsidy and rent pooling across a

large mature stock, much of it builtat lower cost in earlier decades. Thelarger social housing sector, lessdistinct and segregated from privaterental, makes it possible to combinea mix of income groups while alsomaking adequate provision for thosemost in need.

In Ireland, social housing rents havetraditionally been set below cost anddo not support the nancing of new

social housing. When governmentcapital spending is cut, as happenedin the 1980s and again after 2008,

this leads to a very sharp fall in theprovision of new social housing. Cost-based rents would be too high fortypical social housing tenants. In otherEuropean countries, lower-incometenants in both the social and privaterental sectors can avail of housingbenets and hence are in a position to

pay rents that cover the cost of initialprovision and maintenance.

Direct public inuence

on supply

Experience shows that in housingthere are limits to reliance on passive,arms-length tax-based and otherincentives, however smartly designed,unaccompanied by suff icientregulation and/or direct public policyaction. If, as Government wishes,housing provision is no longer to bedeveloper-led, it will have to be ledby some other identiable actor or

actors. But in the current economicenvironment and institutional contextit has become even more difcult to

achieve plan-led development.

However, the State now hasconsiderable land resources thatcan be used for social housing.This consists of land owned by localauthorities and the Housing Agency,under the control of NAMA andowned by other public bodies. Directinuence on supply is critical to ensure

that available nance is actually taken

up in new projects that rent regulationworks with, rather tha n agai nst, themarket.New institutional arrangements

New institutional arrangements willbe required to move policy on eachof the three fronts. The creation ofa financial aggregator or specialpurpose vehicle to facilitate borrowing(off-balance sheet) and onwardlending to housing providers, willhelp address the issue of finance.However, such a vehicle will requirean engine capable of planning, driving,delivering, allocating, protecting andmaintaining the supply of affordablerental homes.

1NESC (2014) Social Housing at the Crossroads: Possibilities for Investment, Provision and Cost Rental, NESC: June 2014.

Figure 1. Elementsof a more unied,

cost-effective and

sustainable model


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Regardless of what organisation we aremembers of, at times we ask ourselves: is itgood value for money, what benefits do Iget, are they enough, are there addedbenefits the organisations can give me?

That's why if you're a CIH member and youstay in Ireland, you do get more for yourmoney! Over the years we've tried givemembers more benefits. Right now theadditional benefits of being in Irelandinclude:

Housing Ireland the triannualmagazine

One-off publications includinggood practice guides

Member events You also get a discount to the CIH

Annual Conference & Exhibition.

M E M B E R B E N E F I T SAs a member of CIH did you know that you get a whole range of benefits.These include access to local housing policy knowledge, up to date housing

news, and discounts on training and events in Ireland.

A key question that remains to beaddressed is what body or bodies

will be the engine, performing theseroles or co-ordinating their executionby others? This question is criticalbecause there are enduring doubtsabout whether several of the keyhousing functions can be adequatelyperformed by the existing actors:

Despite the important role ofIrelands housing associations,a role which is likely to increase,there are reasons to doubttheir ability to undertake thenecessary scale of borrowing anddevelopment

It is not clear what bodies havethe responsibility and capability toanalyse and plan the provision ofhousing, in line with the changingneeds of the society and theeconomy

Experience shows that existingrental, management and allocationpolicies make it extremely difcult

to fund the upkeep of socialhousing and preserve the socialhousing stock

It is not clear that the variousconstruction sector actors(contractors, builders anddevelopers) will be in a positionto provide housing and urbanneighbourhoods at the scale,quality and cost that is required

Nor is it certain that the Irishbanking system will be in aposition to fund either public orprivate housing in a satisfactory

way While there is, on paper, a strong

logic for large internationalinstitutional investors who arein search of stable long-termreturns to invest in rental housingprovision, it remains to beseen whether this materialises.

To these doubts must be addeduncertainty about whether any existingbody will be capable of achievingintegrated housing, mixing incomegroups, on a reasonable scale.

Consequently, further institutional andorganisational changes are required.Ireland needs to create institutions

capable of achieving a resumption ofprovision by the local authorities or anequivalent body, such as a nationalhousing trust. At the very least,this requires a combination of thecapabilities developed in the HousingAgency, NAMA, the local authoritiesand other bodies as is emerging incurrent policy initiatives.

Conclusion a once in a

generation opportunity

The conditions that made theelements of Irelands traditionalapproach i.e. fully funded localauthority provision, differential rentin a secure local authority tenancy

and tenant purchase effective andsustainable have largely disappeared.For several decades, there has beeninsufcient investment in new social

housing provision. As a result, policyrelies on a strong queuing system andgreatly increased, and unsatisfactory,reliance on the private rental sector.There is a danger of an unstable policycompromise involving a wish to retaindifferential rent and tenant purchase,combined with budgetary pressure tolimit spending on rent supplement andleasing.

NESCs recent work suggeststhe importance of developing theinstitutional means of enabling amore constructive compromisebetween economic reality and socialsolidarity. Given the states high levelof involvement in property, land, andnance and investment there is now

a once in a generation opportunity totake on this challenge.

Rory ODonnell,Director,

National Economicand Social Council


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P A R T V , M A R K I I

on the local authority housingwaiting list who will benet).

Clids experience is that where ahousing association was involvedat design stage, the outcome

was greatl y improv ed, so jointapproaches to local authoritiesby housing associations anddevelopers should be specically

encouraged in guidelines issuedby the Housing Minister. Housingassociations should be able toget in-principle funding approvalat a very early stage to ensure theprocess takes place speedily.

The default position of land trans-fer should remain. Experience todate has been that too many localauthorities availed of the cashoption; perhaps because it was

simpler, perhaps because theywere wo rried that wily develop-ers would outwit them in nego-tiations. So a nancial contribu-tion should only be allowed inexceptional circumstances, and

with express agreemen t of theHousing Minister.

A strict timetable for arriving atPart V agreements should beadhered to and monitored byHousing Minister.

Standard land and constructioncosts should apply. This wouldgreatly speed up the negotiationprocess.

Part V has the potential to make avery significant contribution to thefuture supply of social housing. The

Housing Agency estimates that 80,000new dwellings will be required over thenext 5 years. If 10% of these weresocial housing that would mean 8,000new social housing units perhapsa third of a reasonable target forsocial housing. So if the governmentis serious about social housing, PartV operated by local authorities andhousing associations must stay.

Simon BrookeHead of Policy

Clid Housing Association

PA R T V,M A R K I I

SIMON BROOKE

Planning obligations are a tool

for bringing a proposed develop-

ment in line with public policy objec-

tives. Requiring developers to con-

tribute towards affordable housing

within new schemes creates mixed

communities and increases supply

of this tenure.

For readers who may not be famil-iar with Part V of the Planning andDevelopment Acts 2000 and 2002(referred to by most people as PartFive), this legislation essentiallysays that up to 20% of the land ofnew housing developments can bereserved for social or affordablehousing provided by a local author-ity or housing association. (Affordablehousing, which was housing built bylocal authorities for sale at lower thanopen market value, was abolished in2011. So were now only talking aboutsocial housing.)

The local authority or housing associa-tion pays the developer a price for theland that is based on its value before it

was zoned for housing. In other words,a price is paid that is signicantly less

than current market value (althoughthe discount wouldnt be as greatnow as it was during the boom yearsbecause land prices have dropped).So essentially, Part V operates likea tax of up to 20% of the increasedvalue of the land that arises from beingzoned residential.

The governments Housing PolicyStatement published in June 2011

announced a review of Part V, and twoyears later in 2013 the then HousingMinister Jan OSullivan published areview carried out by DKM and BradyShipman. Views on this review weresought by September that year. All

went quiet until the governments strat-egy Construction 2020 (published inMay 2014) announced that the review

would be completed by Qtr. 2 2014.Were now well into Qtr. 3 as I writeand there is no sign of the review.

There have been reports of wran-gling within the coalition with someelements of Fine Gael showing mark-edly less enthusiasm for Part V thanLabour, but the overall messageappears to be that Part V will survivein some form.

This is good news because Part V hasthree critically important features:

It ensures the capturing of better-ment value that is consequent onplanning permission being granted(i.e. the increase in the value ofland that arises because the localauthority has zoned it residential).The betterment value is entirelyallocated to the provision of socialhousing, so the local communityis the direct beneciary.

It provides for a supply of socialhousing that is directly related tothe supply of private housing.

It contributes to the creationof mixed tenure communities.There is a considerable body ofevidence which says that mixed

tenure communities work muchbetter than large social housingestates. The promotion of mixedtenure communities is currentgovernment policy (HousingPolicy Statement 2011).

So Part V has a crucial role to play inthe future provision of social housing,and so it is vital that its principle isretained.

As affordable housing has been abol-ished, its likely that the total Part Vallocation will be reduced to 10% forsocial housing. Personally Id preferto see 20% for social housing that

would h ave the potential to make aserious dent in housing waiting lists but 10% could have a sizeable impact.(Incidentally, this would reduce thetax paid by the developer by 50%.)So, if the principle is retained, then wecan learn from past experience and

amend Part V to make it work betterfor everyone. This could include thefollowing:

Land transfers should continueto be possible to either the localauthority or a housing associa-tion. Housing associations haveaccess to nance that is currently

not available to local authorities sothey can provide very signicant

added value. Furthermore theremay be a host of other reasons

why it would suit a local authorityfor the housing to be provided bya housing association (dont forgetthat in either case it is households


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completion) such analysis is limitedin depth.

Construction 2020, produced byGovernment in mid-May in response tothe Forfs Report on the outlook fo r theconstruction sector, aims to increasethe ability of the state to increase theevidence-base of the property market.It seeks to bring data collection andanalysis together under a Taskforce

with the objective of brin ging trans-parency and improving the monitor-ing of activity in the housing market bypublishing an annual breakdownof projected supply against projecteddemand, and any actions required toaddress potential mismatches.

The Taskforce, which will focus pri-marily on the deepest mismatch (inDublin) will include government, indus-try and other partners responsiblefor the provision of infrastructure. InSeptember last year, Property IndustryIreland which represents businesses

working in the property and construc-tion sector, produced a report enti-tled Towards a National PropertyStrategy. It called for, amongst otherthings, a centralised property data-collection unit within Governmentand a Clearing House policy devel-opment group to oversee the states

response to any emerging problemsin the market. Hopefully the Taskforceproposed by Government will be givensimilar policy-making and implemen-tation powers.

The Report commits government toconsider any infrastructural require-ments which are needed to accom-pany new residential development toensure that viable and appropriatedevelopments are brought to marketas efciently as possible.

This is undoubtedly good news, asmany otherwise viable housing proj-ects are currently delayed, waiting forpublic utilities and infrastructure to beput in place before construction canbegin. In complex large developments,project sequencing is vital, and beingable to identify infrastructural require-ments and provide them ahead ofneed is a key element of good projectplanning. This, hopefully, is recogni-tion by the state of its role in ensuringthat it is not a barrier to the supply ofnew, viable, building projects.

The annual Housing Supply andCoordination Report will make fasci-nating reading for those with an inter-est in the housing sector. It will removemuch of the guesswork on which the

Irish property market is founded andgive everyone in the sector an inde-pendent set of up-to-date indica-tors on which to make projections.More importantly, it will facilitate realengagement with the property indus-try to anticipate, and resolve ahead ofcrisis, any looming issues of over orunder-supply.

While data collection and dissemina-tion might seem to be one of the moretechnical aspects of Construction2020s seventy-five recommenda-tions, it is, in my opinion, one of themost important initiatives to bring sta-bility and functionality to Irelands vol-atile property market. Underpinningproperty activity with timely and well-scrutinised data will help us achieve allother goals for a dynamic, evidence-led and responsive housing sector.

I M P A C T O FC O N S T R U C T I O N

2 0 2 0 DR PETER STAFFORD

Despite the many crises the

sector has been through in recent

years, data on the Irish residential

property sector remains very poor.

Because of the disjointed way in

which state agencies gather and

publish statistics on house-build-

ing, it is almost impossible to

track individual new developmentsthrough the planning and construc-

tion process to completion. Once

built, our knowledge about the own-

ership status, age and occupancy

of individual houses is sketchy

at best. To give us an idea of the

state of health of the residential

property sector, we rely heavily on

fragmented and incomplete infor-

mation, and too often anecdote and

conjecture take the place of statis-

tics and datasets.

The result is confusion, contradic-tions and sheer guesswork. Moreimportantly, poor data slows down

decision-making, undermines policyresponses and distorts the market.The main problem in the housingsector is the speed of house-priceincreases, driven by improving con-sumer demand during a period of lowsupply. An important issue for policymakers and the industry is how we to

use data to underpin that assertionwhen there are so many gaps in prop-erty market statistics. The lack of i nde-pendent data on the market makes itvery difcult to agree an appropriate

level of new housing supply to calmprice increases without overshootingthe market.

At the time of writing, the national prop-erty database tells us, for example,that there were 8,877 housing transac-tions between January and May 2013and 11,687 during the same period of2014.

The Department of Environment

records 3,685 planning applicationsbetween January and May 2013and 4,396 during the same period of2014. We know from the Departmentof Environment that 2,816 houses

were completed between January andApril 2014, up from 2,390 in the sameperiod of 2013. CSO data shows that

between May 2012 and May 2013,house prices fell by 1.1% but duringthe period May 2013 to May 2014,they increased by 10.6%.

Putting all this data together, we canmake an informed view that, overthe remainder of 2014, the volumeof future completions will slowlyincrease but at a slower pace thanincreases in transactions and prices.However, while information is incom-plete (house-price data, for example,only includes the 60% of transac-tions which involve a mortgage, andthere is no ability to analyse the time-lag between planning permission and

Dr Peter Stafford,Director

Property Industry Ireland


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W H A T Y O U N E E D T O K N O W A B O U T . . .

N E W B U I L D I N GR E G U L A T I O N S RUAIR HAYDEN

Since the collapse of the prop-

erty market in 2007, the reputation

of the Irish construction indus-

try has been in sharp decline.

This is mainly due to poorly con-

structed homes, pyrite damage and

breaches in the fire regulations

which left homeowners in vulnera-

ble positions and many with large

bills for rectifying their propertiesof building defects. The most high-

prole of these cases was the order

of the High Court to evacuate Priory

Hall in North Dublin, as a result

of major defects in the re proof -

ing. The government came under

increasing pressure to ensure

that the problems experienced by

the residents of Priory Hall do not

visit any future property owners.

Background

The modern system of building controlin Ireland was introduced by theBuilding Control Act 1990. This Act andthe subsequent building regulations

were introd uced to promot e goodpractice in the design and constructionof buildings in the interest of the health,safety and welfare of people whouse buildings. There has however,always been a question mark overcompliance with these regulations.Up to now, the industry operated asystem of self-certification where

the person undertaking a developmentwas responsible for compliance withthe building regulations, but was notrequired to provide evidence of thiscompliance. The construction industrytends to be divided into two sectors,the house and apartment sector andthe commercial and industrial sector. Itis suggested that compliance with theregulations in the house and apartmentsector tended to be less than that ofthe commercial and industrial sector.This is also evident from the projectsthat have been highlighted to bedefective in the last few years.

The expected increase in construction

activity this year along with the currenthousing shortage will result in a greaternumber of projects commencing.These projects however are enteringa much more regulated landscape andit is imperative that the constructionprofessionals involved are fully awareof all the changes to the regulations.Some of these changes are:

Building Control (Amendment)Regulations 2014

Part L Conservation of Fuel andEnergy (Technical GuidanceDocuments)

Part M Access and Use Construction Products Directive

New regulations

On 1 March the new Building Control(Amendment) Regulations 2014 cameinto law. These regulations impact on allprofessionals, builders and specialistsubcontractors within the construction

and property industry. The regulationsapply to any buildings and works thatrequire a re safety certicate, new

dwellings or extensions with a oor

area greater than 40m. As a resultof the new regulations, the owner,designer and builder are responsiblefor ensuring that the projects theyare involved in have certication for

the design and construction. The keyrequirement of the Building Control(Amendment) Regulations 2014 isthe increased level of certication and

documentation. The building ownerneeds to ensure that the followingcerticates are completed:

Cert if icate of Compliance(Design), by the design certier

Certicate of Compliance (under-taking by person assigned toinspect and certify works), by theassigned certier

Certicate of Compliance (under-taking by builder)

Cert if icate of Compliance(Completion), by the assignedcertier and the builder

Notice of Assignment by theBuilding Owner of a CompetentPerson as assigned certier and

appointment of a competent builder

Design certier

Under the new Act, when submittingthe commencement notice atcommencement stage, it will bethe design certiers role to submit

the design certicate of compliance

along with any plans, specications

and any other design documentationdepending on the nature of the works.Along with this, the building owner

will also have to submit the noticeof assignment of person to inspectand certify the works, the assignedcertier, together with the assignment

of the builder. The prediction in mostcases is that the design certier and

the assigned certier will be the same

individual and this is conrmed to be

the case from the building registeron the localgov.ie website. Theseroles however, are separate andthe responsibilities of each role aredifferent. It is the design certiers

role to ensure that all the design iscompliant with the building regulations

and to provide sufcient information tothe assigned certier to enable them

to full their role.

Assigned certier

The assigned certifier should becompetent to inspect and certify the

works. The assigned certier is also

required to be one of the following:

Architects on register pursuant toPart 3 of the Building Control Act2007

Building surveyors on registerpursuant to Part 5 of the BuildingControl Act 2007

Char tered engineers on

register pursuant to Section 7 ofthe Institution of Civil Engineersof Ireland (Charter Amendment)Act 1969

The assigned certifier holds a keyrole under the new regulations andis responsible for completing theinspection plan prior to any workcommencing on site. The inspectionplan is a risk assessment of theparticular project pointing out allareas that may require inspection.It is unlikely that this would be fullycompleted at commencement stage onmore complex projects, but will haveto be updated throughout the projectto account for all inspections. Theassigned certier will be responsible

for completing inspections andcoordinating inspections by others,the latter being completed throughthe use of ancillary certifiers. Theancillary certiers will be responsible

for providing the assigned certifierwith certicates for works or design

they may have completed. On largerprojects it is envisaged that theancillary certicates will make up a

major part of the inspection plan.

On completion, the builder andassigned certifier certify that thebuilding is constructed in accordance

with the buil ding regul ation s. Thebuilding cannot be used or occupieduntil the certicate is accepted and the

building is entered on