Building for the Future
A Voluntary Regulation Code
Approved Housing Bodies in Ireland
for
Draft consultation document
8 August 2012
1
Contents
page
Minister’s Foreword
3
1. Background to the Consultation
4-5
2. Key features of the Code
6 - 12
3. How to have your say
13
Supporting Documentation
(Report & Accounts, The Board, Audit Committee, sample
Tenant Services commitment checklist)
14 - 18
Housing Policy Statement
20 - 25
2
Foreword
As Minister for Housing, I am very conscious of the fine work done by approved
housing bodies and of the key role that they will have in terms of social housing
delivery in the years ahead. In excess of €2 billion has been invested by the State in
the sector since the 1980s and it is imperative that we protect that investment while
creating the conditions within which the sector can grow in the years ahead.
While the sector itself has taken steps to improve governance and embed sound
management principles, I am aware that we must have in place a robust and
transparent regulatory regime that will provide independent validation of the sector’s
performance to internal and external stakeholders.
In the short term, as we work towards a statutory regulatory environment, I expect that
this Voluntary Code will enable my Department, in conjunction with the sector and with
other stakeholders, to put in place a system that best meets the needs of tenants,
Boards, investors and of the wider public interest. This Code will be a shared learning
opportunity and I expect that most housing associations will sign up to it.
In the longer-term, the credibility of the statutory regulatory system will be measured by
how it identifies and deals with risk, what “step-in” powers are there and how
stakeholders, such as tenants and potential investors, regard the efficacy of the
system. A good regulatory framework will encourage long-term strategic thinking and
facilitate collaboration, alliances and mergers within the sector as well as focusing on
good performance and excellent outcomes for tenants. This Code is the critical first
step on this journey.
I look forward to continued engagement with the sector on this process and I urge your
active participation with the Code and feedback to my Department on key issues
arising.
Jan O’Sullivan T.D.,
Minister for Housing and Planning.
August 2012.
3
1. Background to the consultation document
Purpose of this document
Approved Housing Bodies (AHBs) have a strong track record in the provision of social
housing with over 25,000 units provided to date.
The national Housing Policy1,
published in June 2011, places AHBs at the heart of the Government’s vision for
housing provision. Better regulation of the sector is a key element of this new role,
necessary to access non-Exchequer funding and also to ensure that AHBs are
providing the best service possible to those they serve.
The Department has been considering possible approaches to regulating the sector
and has decided that a voluntary regulatory code is the best way forward at this time,
as a stepping stone to a legally binding statutory regulatory framework. The
parameters of this voluntary code for AHBs have been drafted and are set out in this
document for consultation with stakeholders.
Once this consultation period has been concluded, at the end of September 2012, the
voluntary code will be formally launched the Department will work with the sector to
maximise sign-up. It is proposed that those AHBs who sign up to the voluntary code
will do so by submitting a signed Charter of Commitment (page 9) to the Department.
Those AHBs signing up to the code will be listed on the Department’s website.
Appended to the code, for information purposes only, is a range of supporting material
that may be of assistance to AHBs in considering how best to structure their
organisations.
Why regulate AHBs?
Regulation, if done well, is a positive thing for AHBs, their tenants, potential investors
and other stakeholders. It is intended that the framework will:
 Provide assurance to tenants, Boards, Government and potential investors
that the AHB sector is stable and well-regulated
 Safeguard public investment in the sector
 Encourage private investment in the sector


Encourage long-term strategic thinking and facilitate collaboration, alliances
and mergers within the sector
Help AHBs to manage risk and to focus on achieving best outcomes for
tenants
Experience elsewhere has shown that well-designed regulation can foster
stakeholders’ confidence in the sector and create an environment that encourages
growth and innovation. At a practical level, good regulation can lead to lower lending
1
Included in the appendices accompanying this document.
4
costs for the sector when lenders are reassured as to the long-term stability and growth
potential of the sector.
Why a voluntary code at this stage?
It has been decided to introduce a voluntary code for AHBs at this stage to help inform
the development and implementation of the statutory regulations which are to follow.
Having reviewed approaches to regulation of AHBs in other countries, it has been
concluded that the Irish sector is significantly different from that of other countries and,
given the importance of getting regulation right, a collaborative and evolving approach
would be best in the long run.
The voluntary code is, therefore, a learning opportunity. The voluntary code will set out
a range of key regulatory principles that we believe will form the basis for much of the
longer-term legal framework. We want to work in collaboration with the AHB sector
and others to develop a regulatory model that’s tailor-made for the Irish market and
best assists it to develop. Individual AHBs are encouraged to engage with this
document and to provide the Department with as much feedback as possible before 21
September 2012. To assist in this regard, a series of consultation questions is listed
throughout this document.
How has the draft voluntary code been developed?
This code was drafted following consultations with the sector, including participation at
ICSH regional meetings and individual submissions. It builds on a range of existing
guidance templates, including the Department’s own Memorandum VHU: 2/02 “Capital
Funding Schemes for the Provision of Rental Accommodation by Approved Housing
Bodies”2, the ICSH’s “Working for Good Governance”, 20083, and the recently
launched “The Governance Code: A Code of Practice for Good Governance of
Community, Voluntary and Charitable Organisations in Ireland”, February, 20124.
While this document is not a governance code for approved housing bodies, we
recognise that sound governance principles will assist individual AHBs to comply with
the regulatory requirements set out in this code. In this regard, the principles and
recommendations of the ICSH Guide “Working for Good Governance” are very helpful.
Also helpful is The Governance Code referred to above, which outlines a code of
practice for good governance in community, voluntary and charitable organisations in
Ireland as a complementary approach to embedding good practice in organisations.
2. Key features of the Voluntary Code for AHBs
The voluntary code is underpinned by three guiding principles, viz:
Available on the Department’s website, www.environ.ie
http://www.icsh.ie/eng/publications/icsh_publications/working_for_good_governance
4 http://governancecode.ie/
2
3
5



Proportionality – a one size fits all approach to regulation is not suitable for the
AHB sector as there is a wide diversity of organisations in terms of aims, scope,
ambitions, stock, staffing and resources. It is proposed that depending on the
size, scale and development plans of the individual AHB more regulation may
apply. This is explained in more detail below.
Accountability – AHBs should be accountable for the services they provide,
both to their tenants and to funders.
Transparency - the process of sign up to the voluntary code should be clear and
consistent. For AHBs with good corporate governance already in place, the
code should not require substantial additional work.
Consultation Questions
1. Do you agree that these principles should underpin the regulatory framework?
2. Should additional principles underpin the framework?
How will Proportionality work?
Those signing up to the voluntary code will be required to provide documentary
evidence of their compliance with the code’s requirements. What is required to be
compliant will depend on the size and activity of the organisation.
It is proposed that there will be 3 tiers, or organisational classifications, as outlined
below:
Tier
Description
Tier 1 Small AHBs –
less than 50 units, few
or no employees, no
development plans
These AHBs have developed and completed projects,
have units under management but generally do not have
further development plans. Most AHBs in this category
are entirely run by volunteers. Annual turnover may vary
considerably between AHBs in this category and many
organisations may receive grants from statutory bodies
and/or trusts and foundations as well as doing their own
fundraising.
Those AHBs have portfolios of less than 300 units and
have plans to develop new housing as part of their
strategy in future in addition to the existing housing they
manage. These organisations may employ staff or may be
run purely by volunteers. The most senior member of the
organization may have a job title such as manager or
director.
Tier 2 Mid-size AHBs –
up to 300 units, or
having employees, or
scope to develop or
expand in the future
6
Tier 3 Large AHBs –
more than 300 units,
fulltime staff, ongoing
expansion or
development plans
These AHBs have more than 300 units each and have
plans to develop new housing using loan finance.
Typically these AHBs have a fulltime staff and operate in a
number of different areas. They will also have established
Boards that focus on governance / oversight issues rather
than the day to day management of the AHB.
Consultation Questions
3. Do you agree with this classification?
4. Are additional classifications required? For example, do AHBs with significant
care elements in their housing provision or AHBs that have entered into
collaborate approaches with other AHBs fit into this scheme?
What will be required from AHBs?
All AHBs that sign up to the voluntary code will be required to:
 Submit a signed copy of the Charter of Commitments (page 9) to the
Department
 Submit an Annual Report & Accounts, and a copy of their filing to the CRO or to
the Registrar of Friendly Societies, to the Department
 Submit data on performance and service levels, as requested, to the
Department5
 Agree to be subject to an audit by the Department and / or its agents, if so
requested
 Attend an annual review meeting with the Department and the Housing Agency,
if so requested.
While all AHBs signing up to the code will commit to the actions above, it is likely that
the latter two items will apply mainly to Tier 3 bodies.
5
Such data requests, possibly modelled on the HAPM scheme developed by ICSH, will be
refined during the lifetime of the code.
7
Charter of Commitments
Tier
Tier 1
Tier 2
Commitments

Have in place a properly functioning Board with
o clear roles and responsibilities
o at least 5 members, none serving more than 2 consecutive 5year terms
o holds a general meeting at least once per year
o no employee acting as Chairperson

Comply with existing companies law, charities requirements,
conditions of approved status

Have a tax clearance certificate and a sinking fund

All Tier 1 requirements

Establish an Audit committee, with at least two independent
non-executive directors and one member should have financial
experience
Include in the annual report details of fixed assets, liabilities,
reserves, loans outstanding, capital repayments and evidence
of a risk register.

Tier 3

All Tier 1 and 2 requirements


External audit process in place
Maintain an active strategic plan



3-year financial plan in place
Have an agreed range of Tenant Services indicators in place
Have an agreed set of performance management indicators in
place

Submit a completed annual return, as specified by the
Department
Consultation Questions
5. Do you think that these requirements are proportionate?
6. Do you think they are the right requirements? If not, why not?
7. Are there any additional requirements that you would like to suggest or think
would be more appropriate?
8
Charter of Commitment for Approved Housing Bodies
Name of Organisation_____________________________________
Address
____________________________________________
____________________________________________
____________________________________________
Type of Organisation (tick as appropriate):
Tier 1Small AHB – less than 50 units, few or no employees, and
no development plans
Tier 2 Mid-size AHB – up to 300 units or having employees,
scope to develop or expand in the future
Tier 3 Large AHB – more than 300 units, fulltime staff, ongoing
expansion or development plans
We confirm that we will comply with the requirements set out in the Charter of
Commitments, appropriate to our organisation type, and with the wide code.
We are committed to reviewing our organisational practice against the code on an
annual basis.
______________________________
Chairperson of Board
Date:
____________________________
Secretary of the Board
Date
Please return your signed Charter to
Housing Regulation & Statistics Section.
Department of the Environment, Community and Local Government,
Newtown Road, Wexford
9
How will the Voluntary Code be managed?
For AHBs that sign up to the Code it is proposed that the Department and the Housing
Agency will pilot an active regulatory oversight system pending agreement on the best
long-term regulatory structure. Initially, this voluntary regulatory effort will be focused
on Tier 3 (Large) AHBs – although we would welcome any AHB that wishes to
participate. As processes are refined, and resources defined, oversight can be
extended to other AHBs on a case-by-case and risk-driven basis.
It is proposed that those AHBs signing up to the code will be listed on the Department’s
website. On foot of being audited and / or interviewed by the Department and its agents
a regulatory assessment report will be supplied by the Department to the AHB and, if
requested by the AHB, to third parties such as financial institutions. It is expected that a
positive assessment report will be of assistance to an AHB in its dealings with external
stakeholders.
The role of Local Authorities in the eventual statutory regulatory framework remains to
be defined. The authorities already have a sizable regulatory presence when one
takes their roles as mortgage controller, housing lists manager and standards inspector
into account. The lifetime of this code will allow us to define the long-term role of Local
Authorities in the regulatory context. However, in the interim, structures could be
developed to facilitate regular liaison between AHBs and Local Authorities (both
elected representatives and officials) on a city, county or regional basis.
Consultation Questions
8. Does the outlined approach to regulation under the code seem reasonable? If
not, how should it be changed?
9. To what extent should the outcomes of AHB assessments under the code be
publicised?
10. What role should Local Authorities have in the longer-term statutory regulatory
framework?
11. In the short term, how best can interaction between AHBs and the Local
Authority system be structured?
Will there be a charge for registration?
It is not proposed that there will be a charge for those who sign up to the voluntary
code. The operation of the voluntary code will give us a better idea of the potential
cost of regulation, in terms of the staff and operational costs, and how best to fund a
statutory model. Those signing up to the code will, of course, have a direct input to
decision-making on such issues.
10
Once we have a better idea of the potential costs of regulation, we will consult with the
sector, with the Department of Public Expenditure and Reform, the Local Authorities
and other relevant stakeholders. A range of possible funding options are possible –
from full Exchequer funding of the system to an entirely sector-funded model
Consultation Question
12. While a decision of how the statutory funding scheme is yet to be decided, do
you have any views at this stage regarding how the regulatory system should
be funded? Please provide reasons for your answer.
What are the consequences of non-registration?
In the longer term, adherence to the regulatory framework will be mandatory and this
will be set out in legislation. While engagement with this code is voluntary for existing
AHBs any fresh applications for AHB status will only be considered in the context of
signing up to the code.
Equally, as the Department considers future decisions regarding any available
Exchequer support to the sector, priority will be given to those AHBs that have
demonstrated a commitment to good governance and sound management. Engaging
fully with this code will be a tangible demonstration of that commitment.
At a very practical level, signing up to this code will afford AHBs the opportunity to
influence the final shape of a legal regulatory framework. Experiences gained in
implementing the code will form the evidence base for the statutory framework, so this
is a key opportunity for AHBs to get involved in a process that will have a profound
effect on their future. It will also be a useful demonstration of an AHB’s bona fides to
potential external partners.
Consultation Question
13. Are there other measures that could boost engagement with this code?
What regulatory powers will there be under this code?
While the statutory regulatory framework will spell out specific interventionist regulatory
powers the current code, being voluntary, is not as forceful. The key powers under the
code will be

the awarding, or not, of a positive regulatory assessment report to an AHB, and

the subsequent listing or delisting of AHBs as being compliant with the code.
11
The Department will work with the sector to address any specific issues (whether
operational, financial or governance) arising out of this voluntary regulation approach.
Lessons learned from this approach will inform the eventual statutory regulatory
framework.
Consultation Question
14. Are there other regulatory measures that would be appropriate to this code?
15. What key regulatory powers would you like see under a longer-term statutory
framework?
Training and support requirements
We would like to get your views and comments on the types of supports or training the
AHBs may need to help it sign up to and comply with the voluntary code. This might be
support in relation to the development or enhancement of their corporate governance
or financial management, strategic planning or customer service development, for
example.
Consultation Questions
16. What type of training or supports do you think AHBs will require in order to
comply with the voluntary code?
17. How best might this training and support be provided?
12
3. How to have your say : Responding to this consultation
document
This document sets out the key features of the voluntary code. After each element is
outlined, you will see some questions to help you structure your response. It is not
necessary for you to answer each question, if it does not relate to you, or you do not
have a particular opinion.
In responding to the consultation question, or making a wider submission, we would
ask that you to let us know who you are and what your involvement in the sector is to
put your submission in context.
The closing date for receipt of submissions is 21 September 2012.
should be sent, via either email or hard copy, to:
Submissions
Housing Regulation & Statistics Section,
Department of the Environment, Community and Local Government,
Newtown Road,
Wexford
Email: ahb@environ.ie
Please note that all comments, observations and submissions will be subject to the
Freedom of information Acts 1997-2003. Consequently, when submitting material,
parties should identify any information which they do not wish to have released
together with an accompanying explanation.
Next Steps in the Process
After the closing date for submissions, we will analyse all formal responses and publish
a report of that analysis. We will then finalise the code and the voluntary regulation
process, taking account of the feedback from submissions. The code will be formally
launched as soon as possible thereafter and AHBs will be invited to sign up to it. The
Department will monitor the take-up of the code and will make any necessary
amendments arising out of the regulatory interaction with AHBs, while simultaneously
working on the development of the statutory regulatory framework, which we plan to
have in place by 2014.
ENDS.
13
APPENDIX: Supporting Documentation
Annual Report and Accounts
The level of detail required in the Annual Report and Accounts will depend on the size
of the AHB. All Annual Report and Accounts should contain the following as standard:
 A narrative description of key activities / developments in year in question
 An account of the housing units under management
 An income & expenditure account and a balance sheet, to include details of
Directors’ and staff remuneration
 A listing of the Board members and staff (if any)
 Confirmation of compliance with Companies Act and/or Charitable Status
requirements
 Tax clearance certificate
 Statement on sinking fund
Larger AHBs – those fitting into Tier 2 and 3 - should also include in their Annual
Report:




Details of fixed assets, liabilities, reserves
Details of loans outstanding, capital repayments
Evidence of risk register
Details of Audit Committee activity in the year, as adopted by the Board.
Those in Tier 3 should, in addition, include in their Annual Report and Accounts:
 Copy of current Strategic Plan (to cover a period of between 3 – 5 years)
 Financial data from last three years’ accounts to include:
 fixed assets,
 current assets,
 current liabilities,
 total current liabilities,
 net current assets,
 total assets less current liabilities
 long term liabilities
14
The Board - Overview
The Board is collectively responsible for the activities of the organisation and should
work as a team in making the most important decisions affecting the AHB’s success. It
should provide strategic guidance and monitor progress towards agreed goals. Board
members should be well informed of the organisation’s activities, and should act in its
best interest at all times.
The Board should be clear about what its role and function is. It should meet regularly
and all members should be afforded the opportunity to contribute to deliberations. The
Board is responsible for compliance with all statutory obligations. It should insure a
proper system of financial control is in place and set performance measures in place to
measure the effectiveness of major expenditure.
The Board should have a formal schedule of matters specifically reserved to it for
decision, such as:




significant acquisition or disposal of assets
major investments and capital projects
approval of terms of major contracts
approval of annual budgets and corporate plans


production of annual report and accounts
appointment, remuneration and assessment of the performance of, and
succession planning of, the Chief Executive; and

significant amendments to the pensions benefits of the Chief Executive and
staff.
The Board - General Principles
Governing Body/Management Board
Each AHB must have a properly functioning governing body, or management board of
directors or trustees, which is directly responsible for the commissioning of housing
projects and services, the ownership, management and maintenance of dwellings let
and compliance with all relevant statutory regulations. The board should meet at least 4
times a year.
Membership of management board
The governing body or management board of directors or trustees of an AHB shall
consist of at least five individuals each of whom should be resident within the
jurisdiction of the state. The chairperson and secretary, or persons fulfilling these
functions, shall be resident within the jurisdiction of the state. The chairperson shall not
be an employee of the AHB. Board membership terms should be clearly defined and
should not exceed 5 years and a Board member should not serve more than 2
15
consecutive terms where possible. A clear quorum for valid Board meetings should be
set down.
Gender Balance
The Board should, in so far as is practicable, aspire to an equitable balance between
the numbers of women and men that are members of the Board. In this respect AHBs
should aim to have at least 40% female representation.
Statement of Interest
No individual may be elected or appointed as director or trustee or senior employee of
an AHB, or retain such a position, where he or she has any material interest of
significance in relation to the income or any other benefit derived from any commercial
contract or other arrangements for the construction of houses for the approved housing
body or in the supply of goods and services to the AHB.
Management Board Responsibilities
The Directors as a Board should collectively be responsible and accountable for
ensuring and monitoring that the organisation is performing well, is solvent, and
complies with all its obligations.
The Board – Skills and Experience
The Directors should collectively provide a mix of skills, experience, qualities and
knowledge appropriate to the organisation and its tenant’s needs, and so that the AHB
can respond to the challenges and opportunities it faces. Depending on the
organisation’s size and the nature of its activities, the collective experience of Directors
should, as appropriate, cover the following areas:


the provision of effective strategic leadership;
direct knowledge of the organisation’s beneficiaries, and of their needs and
aspirations, whether gained through life, work experience or advice sought from
appropriate bodies of care for example in the area of special needs where
appropriate;

governance, general finance, business and management;

human resources and diversity;


succession planning /board renewal
the operating environment and risks that exist for the organisation; and

other specific knowledge required, such as fundraising, health, social services,
property or legal.
The Board should aim to have a diverse group of Directors, broadly representative of
the approved housing body’s stakeholders. In the case of approved housing bodies
providing housing and home care for people with mixed abilities and special needs the
16
Directors should ensure that they are fully briefed as to the needs of their individual
tenants.
The Audit Committee
The main role and responsibilities of the audit committee should be set out in the form
of written terms of reference and should include:
-
to monitor the integrity of the financial statements of the approved housing
body and any formal announcements relating to financial performance,
reviewing significant financial reporting judgements contained in them
-
to review the AHB’s internal financial controls and, unless expressly
addressed by a separate board risk committee composed of independent
directors, or by the board itself, to review control and risk management
systems
-
to monitor and review the effectiveness of the AHB’s internal audit function,
if such exists.
The terms of reference of the audit committee, including its role and the authority
delegated to it by the board, should be included in the annual report. In addition the
annual report should describe the work of the committee in discharging those
responsibilities.
The audit committee should include at least two independent non-executive directors
and at least one member of the Committee should have recent and relevant financial
expertise and should meet on a regular basis – at least four times per year.
The audit committee should maintain a risk register covering financial, organisational,
governance, reputational and such other risks as deemed relevant.
The audit committee should review arrangements by which staff of the approved
housing body may, in confidence, raise concerns about possible improprieties in
matters of financial reporting or other matters. The audit committee’s objective should
be to ensure that arrangements are in place for the proportionate and independent
investigation of such matters and for appropriate follow-up action.
The audit committee should monitor and review the effectiveness of the internal audit
activities where these exist. Where there is no internal audit function, the audit
committee should consider annually whether there is a need for an internal audit
function and make a recommendation to the board, and the reasons for the absence of
such a function should be explained in the relevant section of the annual report.
17
The audit committee should have primary responsibility for making a recommendation
on the appointment, reappointment and removal of an external auditor where
appropriate. If the board does not accept the audit committee’s recommendation, it
should include in the annual report, and in any papers recommending appointment or
re-appointment, a statement from the audit committee explaining the recommendation
and should set out reasons why the board has taken a different position.
Consultation Questions
18. While these items are for reference only in the context of the code, they may
be integrated into the longer-term statutory regulatory framework: as such, do
you have any specific comments on the proposed content?
19. What other similar supporting information might usefully be appended to the
code?
18
Sample Tenant Services Commitment Checklist
Tenant Service Commitment
Yes No
Comply or Explain
We have a written allocations policy, which explains
the eligibility criteria for becoming a tenant and how
to apply.
We have a tenant handbook. It sets out our policies
and procedures, our responsibilities as a landlord
and also tenant rights and responsibilities. All new
tenants are given a copy of the Handbook and we
make sure that its contents are explained to them.
We require new tenants to undertake a pre-tenancy
training course.
Our accommodation complies with the relevant
standards regulations.
We have a repairs policy. It sets out what repairs
and maintenance we are responsible for carrying
out and what tenants are responsible for
themselves. It also sets out our target response
times.
We are committed to regularly communicating with
our tenants; this could be through a Newsletter,
tenants meetings and replies to individual queries.
We are committed to consulting with our tenants
about things that impact directly on them, such as:
proposed rent changes, refurbishment plans,
changes to policies and procedures.
We have a rent arrears policy and procedure.
We actively encourage the participation of tenants
in the running of our organisation.
We have a complaints policy and procedure in
place to deal with tenant and 3rd party complaints.
We regularly measure tenant satisfaction.
We have set a target to re-let vacant properties
within a set timeframe.
We promote active tenant participation in the
community; for example, we facilitate the
establishment of tenant groups, provide community
facilities, where possible.
We work to provide good quality neighbourhoods
where people feel safe.
19
Housing Policy Statement, 16 June 2011
Overall policy objective/context
Our economic crisis has a variety of causes. However, over-stimulation of the housing
market is accepted as a key causal factor in the scale of the economic downturn.
In a climate of low interest rates and rising incomes, a series of disastrous pro-cyclical
policies led to a model that provided unprecedented growth, but it was a growth based
not on foreign demand for our goods and services – as should be the case in a small
open economy - or the productive use of investment capital to create sustainable
employment. It was based on a mirage and a false assumption that the normal rules of
supply and demand somehow did not apply in Ireland.
We now know that those rules do apply. We now know the consequences of
encouraging people to choose their housing options on the basis of investment and
yield rather than hearth and home.
The costs of these lessons are being felt by households across Ireland. Given the
centrality of the housing sector to both the good and the bad times we have seen over
the last two decades, a new vision for the sector is a fundamental part of our national
recovery.
Housing in Ireland has been characterised by a persistently hierarchical structure for
several decades. This paradigm of housing has private home ownership at the top, with
supported home-ownership (tenant purchase of local authority housing, affordable
housing) next, self-financed private rented accommodation further down, and State
supported rental accommodation at the bottom (rent supplement/social housing
tenancies).
This structure and the value judgement that underlies it – which implicitly holds that the
tenure which must ultimately be aspired to is homeownership – has had a considerable
role in leading the Irish housing sector, Irish economy, and the wider Irish society to
where they are today.
Our vision for the future of the housing sector in Ireland is based on choice, fairness,
equity across tenures and on delivering quality outcomes for the resources invested.
The overall strategic objective will be to enable all households access good quality
housing appropriate to household circumstances and in their particular community of
choice.
It will neither force nor entice people through fiscal or other stimuli to treat housing as a
commodity and a means of wealth creation. Clearly, home ownership will continue to
be a significant feature of housing in Ireland and is likely to continue to be the tenure of
choice for the majority of households. Policy makers must take account of our current
economic circumstances which effectively dictate that State provided housing supports
must be prioritised towards meeting the most acute housing needs. In so doing we will
allow for a future in which housing services are accessible by a wider cohort of people
based on a less stratified model of service provision.
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Housing market
Without taking corrective action to moderate the housing market in the recent past, the
previous policy response was to chase a fast moving target, adopting unrealistic output
targets and facilitating unsustainable levels of residential construction.
Now though, as a result of the wider economic downturn, affordability – the measure of
net income required to service a particular mortgage – has returned to levels last seen
in the early to mid 1990s before house prices were allowed to spiral out of control and
the real failure of the Irish housing market began. The right conditions now exist to
ensure that such a market failure of affordability in terms of an imbalance between
average prices and incomes does not occur again. The housing market is currently
depressed and its recovery will be part of wider recovery across the economy.
The Government will act across a range of regulatory and policy areas: banking
(specifically lending); taxation; housing; planning and land use, and social welfare) to
ensure that once recovery is under way, the housing market makes an appropriate
contribution to wider economic performance and is not – as it has been in the past –
regarded as a key driver of that performance.
Private rented sector
A balanced housing sector requires a strong, vibrant and well regulated private rented
sector. Important steps have been taken in this regard in recent years with the
establishment, via the Residential Tenancies Act, of the Private Residential Tenancies
Board (PRTB) and the creation of real security of tenure, as well as the introduction
and enforcement of higher minimum accommodation standards.
We are committed to building on this, and to making the rented sector a stable and
attractive housing option for all, delivering true choice across tenures. In the short term,
we intend to introduce legislative changes to optimise the efficiency with which the
PRTB does its work and to bring tenancies in the voluntary and cooperative sectors
within the PRTB’s remit. We will specifically address the illegal retention of deposits by
landlords and the overholding of property by non-rent-paying tenants in that context. In
the longer term, the provision of equitable regulatory treatment for all forms of nonownership housing, and how best to enhance the stability of the sector, must be
considered
Affordable housing
If a household is capable – through the resources it has available to it – of renting a
high quality home in a vibrant community but lacks the resources necessary to
purchase an equivalent home, that household does not need – particularly where
pressures on resources are extreme and the resources available must be focused on
responses to the most acute housing needs – assistance from the State.
As a means of bridging an affordability gap between the cost of home ownership and
household income, the concept of ‘affordable’ housing reinforces the high and often
disproportionate value placed on owner-occupation that has been so detrimental to
Ireland’s society and economy. Subvented affordable housing is a symptom of and not
a solution to housing market failure.
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If the Government’s approach to housing is successful in not repeating the mistakes of
the past through over-stimulation of the market, there should be no need for national
programmes of affordable housing provision by the State. The Government is therefore
standing down all existing affordable housing programmes to reflect current
affordability conditions.
These will be wound up as part of a review of Part V of the Planning and Development
Act 2000. The decision is not being taken to end Part V fully. There is a continued
rationale for capturing planning gain for residential development through resourcing of
social housing supports.
Social Housing – provision, quality and regulation
Provision of social housing
The main focus in terms of supports provided by Government will be on meeting the
most acute needs – the housing support needs of those unable to provide for their
accommodation from their own resources.
The financial parameters within which we will be operating for the coming years rule
out a return to very large capital-funded construction programmes by local authorities.
At the same time the need for social housing supports – including the numbers of
households in receipt of rent supplement for extended periods – is high and still rising.
We are committed to responding more quickly and on a larger scale to social housing
support needs through a variety of mechanisms including through increased provision
of social housing.
A restructuring of the social housing investment programme to allow for the delivery of
new social housing through more flexible funding models will provide key sources of
delivery in the period ahead. The social housing leasing initiative and, in particular, the
Rental Accommodation Scheme (RAS), will each play their parts as long-term social
housing supports.
The Government also recognises that rent supplement – intended as a short-term
income support – has become a de facto social housing support with many thousands
of households reliant on the supplement to support accommodation costs for longer
periods. This is not in the interests of the households receiving the support, local
authorities or the Exchequer. The Government will rectify this by transferring
responsibility for providing for the housing needs of long-term rent supplement
recipients to housing authorities on a phased basis. A working group representing the
relevant Departments and the local government sector has been tasked with
developing proposals, within the timeframe of the comprehensive review of public
expenditure now underway, to give effect to this commitment.
This represents a fundamental reconfiguration of the landscape of housing support in
Ireland.
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It will appropriately recognise different needs while allowing resources to be
more effectively targeted to those needs.
It will encourage job take-up by tenants who have been caught by poverty traps
until now.
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It will tackle illegal payments, tax evasion and non-compliance by some
landlords.
It will deliver greater value for money for the taxpayer for the resources
invested.
It will help to contribute towards the creation of a vibrant, higher quality, private
rented sector through improved standards.
An accelerated rate of transfer of households from rent supplement to RAS and the
sourcing of increased rental stock will be key features of the new arrangements.
Delivery of permanent, new social housing
However, while RAS and leasing will play an important role, the Government is also
fully committed to developing other funding mechanisms that will increase the supply of
permanent new social housing. Such mechanisms will include options to purchase on
lease agreements, build-to-lease, and the sourcing of loan finance by approved
housing bodies for construction and acquisition.
There is obvious potential, across a range of housing programmes, for the
Government’s objective of sourcing and providing suitable residential units for use as
social housing, to be aligned with the commercial objectives of the National Asset
Management Agency (NAMA). The Government will vigorously pursue options for
securing a social dividend through the sourcing – both acquisition and leasing – of
suitable residential stock for social housing purposes, while providing a return in line
with NAMA’s mandate.
Regulation and the role of the voluntary and cooperative sector
In recognition of both the constrained funding levels available for local authority
construction programmes, as well as the capacity and track-record of the voluntary and
cooperative housing sector, approved housing bodies will be at the heart of the
Government’s vision for housing provision.
Approved housing bodies are uniquely placed to help overcome vertical segregation in
housing. The move from capital-funded programmes of construction and acquisition by
approved housing bodies to more revenue-funded options presents challenges for the
sector in light of the termination of the Capital Loan and Subsidy Scheme. However,
use of loan finance (from both commercial lending institutions and the Housing Finance
Agency) has the potential to develop a stronger, more sustainably funded voluntary
and co-operative housing sector, playing a much more active role in the supply of
social housing without reliance on capital funding from the Exchequer.
It also has the potential to further promote the evolution of mixed tenure communities
through the provision of housing for market sale and rent as well as social renting and
will offer a new path to ownership via sales to tenants under incremental purchase
arrangements.
Central and local government will work in partnership with the sector to ensure a
smooth transition towards this new role and to implement the recommendations set out
in the independent review on the future of the sector, and to ensure that the necessary
regulatory framework is in place. A paper setting out possible options for the future
regulation of the social housing sector generally, making use of the existing institutional
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landscape, is currently being prepared for consultation.
Quality – Improving the existing stock, renewing communities
There is a direct causal link between the mono-tenure approaches adopted in the past
and the extremes of deprivation found now in some social housing estates. The
problems afflicting parts of Dublin and Limerick cities and other large urban centres
have been significantly driven by a too narrow conception of housing support in the
past. Housing supports should be better aligned with broader supports for the physical,
social, and economic renewal and rebirth of these areas. Market conditions do not
support the PPP model at present and so there is a greater reliance than ever on the
Exchequer to support both large-scale regeneration projects and smaller estate-wide
remediation projects. Despite adverse economic conditions we will prioritise the
improvement of the quality of existing social housing stock through regeneration and
improvement works programmes, and the return of vacant stock to effective use within
the shortest timeframes possible. Not only will this help improve the quality of life for
households in the areas affected, it will also provide a means of supporting and
maintaining jobs through highly labour-intensive activity.
Special Needs and Homelessness
A society can be judged by how it treats its most vulnerable.
This is the case whatever the prevailing economic conditions. A good framework of
supports is in place to provide for the housing needs of vulnerable and disadvantaged
households. These include:
 supports available for older people and people with disabilities under the Capital
Assistance Scheme;
 the existing suite of housing adaptation grants
 a new housing strategy for people with disabilities;
 interventions intended to alleviate homelessness; and
 the provision of Traveller specific accommodation.
Delivering more and better outcomes for vulnerable, disadvantaged and special needs
households, while achieving maximum return for the resources invested in these areas
(for example through the introduction of the ‘housing first’ approach to homeless
services), will be a key priority for the Government. In relation specifically to
homelessness supports, the Government will continue to focus on tackling the root
causes maintaining an integrated and efficient approach to service delivery across the
relevant agencies.
Homeowners in difficulty
The Government is acutely conscious of the difficulties faced by households in arrears
on mortgage repayments and potentially at risk of losing their homes. A modern and
compassionate State must seek to assist such households in a measured and
proportionate way. It is a welcome fact also that the level of repossessions in Ireland
has been quite low. A combination of the culture of low rates of repossession and the
effectiveness of the existing supports has meant that the numbers of households losing
their homes has been quite small. However, notwithstanding the signs of renewed
stability in certain sectors of the economy, the position in the residential sector remains
volatile. The Programme for Government sets out a range of credible and meaningful
measures that will help households struggling to meet mortgage commitments.
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Local authorities have a very strong track record in dealing effectively but
compassionately with cases of mortgage arrears. To ensure that this remains the case,
and to ensure consistency of treatment for all borrowers in arrears, the Department of
the Environment, Community and Local Government will soon issue comprehensive
guidance on arrears management to reflect the changes introduced by the Financial
Regulator in the revised Code of Conduct for Mortgage Arrears which came into effect
on 1 January 2011. The Code of Conduct requires that each lending institution has in
place a Mortgage Arrears Resolution Process (MARP) as a framework for handling
cases of mortgage arrears. As part of the new guidance being prepared, a single
MARP is being developed for use by all authorities.
Anti-Social Behaviour
The Government will also work to bring forward measures following on from the
commitment outlined in the Programme for Government “Towards Recovery:
Programme for a National Government 2011 – 2016” to tackle issues relating to antisocial behaviour across all housing tenures.
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