Social Housing Expenditure CMG Government Construction Projects & Capital Spend Conference 2016 Social Housing Expenditure John O’Connor Chief Executive 11 May, 2016

Agenda Social Housing Strategy Capital Expenditure Current Expenditure Roles of local authorities and approved housing bodies

Dept. Housing, Planning & Local Government Approved Housing Bodies Organisations Dept. Housing, Planning & Local Government Approved Housing Bodies Housing Finance Agency Housing Agency Local Authorities

Social Housing Strategy 2020

Social Housing Strategy 2020 Overview The strategy is broken into 3 pillars: Pillar 1 – Provision of new social housing Pillar 2 – Providing housing supports Through the private rented sector Pillar 3 – Reform: creating flexible & responsive social housing supports

Social Housing Strategy 2020 Overview The strategy will: a) Provide 35,000 new social housing units over 6 years. b) Support up to 75,000 households through enhanced private sector. c) Reform social housing supports to create a more flexible and responsive system.

Social Housing Strategy 2020 Overview Continued Delivery in broken into two phases Phase 1 (2015 – 2017) 18,000 additional houses 32,000 HAP and RAS Phase 2 (2018 – 2020) 17,000 additional houses 42,000 HAP and RAS HAP - Housing Assistance Payment RAS - Rental Accommodation Scheme

Pillar 1 – Provision of New Social Housing Targets the delivery of 35,000 new social housing units Two primary delivery channels: a) Local Authorities b) Approved Housing Bodies

Pillar 1 – Provision of New Social Housing Continued Delivery in 2 phases: Phase 1 – Building on Budget 2015: 18,000 additional social housing units by 2017 Phase 2 – 2018 – 2020: 17,000 additional social housing units by 2020

Expenditure

Exchequer Housing Expenditure 2016 Capital Expenditure €405 m Current Expenditure €528 m Total €933 m Plus approx. €250 expenditure on rent supplement

Pillar 1 – Provision of New Social Housing Supply of Social Housing (2015 – 2020) Delivery 2015 2016-2017 2018-2020 Units Current 3,000 8,400 12,000 Capital 2,386 5,097 4,690 Period Total 5,386 13,497 16,690 Cumulative Total 18,883 35,573

Pillar 1 – Provision of New Social Housing Housing Units to be Delivered: Capital and Current 2015 – 2020

Pillar 2 – Providing Housing Supports Through the Private Rental Sector Provides social housing supports for low-income households through the private rental sector Pillar 2 has 2 building blocks: a) The new Housing Assistance Payment (HAP) b) Innovative measures in the rental sector

Pillar 2 – Providing Housing Supports Through the Private Rental Sector Continued Additional HAP and RAS Units (2015 – 2020) Delivery 2015 2016 2017 2018 2019 2020 Units HAP 8,400 10,000 RAS 2,040 1,000 500 Period Total 10,400 11,000 15,500 16,500 Cumulative Total 21,400 32,400 43,400 58,900 75,440

HAP, RAS and Rent Supplement Currently €450m per annum is spend on these housing and income supports HAP (housing assistance payment) will become the major element of this over the coming years

Social Housing Supply AHB Local Authority Acquisition Acquisition Grant Funded (CAS) SOCIAL HOUSING SHCEP - CALF & Private Finance Construction Construction Part V SHCEP (Leasing) SHCEP (leasing & rent) RAS SHCEP is the Social Housing Current Expenditure Programme (previously SHLI or Social Leasing) HAP

A Changing Approach

Rental Current expenditure A changing approach The bulk of new social housing provision over the coming years will be Rental Current expenditure

Social Leasing What is Social Leasing? Social Leasing is a new way to provide social housing. Two provision arrangements: Social Leasing Long Term Direct Provision by Approved Housing Bodies Buy or Build Lease Long Term Private Leasing

Delivery by Approved Housing Bodies Approved Housing Bodies may: Lease properties from a private owner or developer. Buy or build properties using private finance.

Payment and Availability Agreement Local Authorities will pay AHB for the properties, on a quarterly basis for a period of 20-30 years. In return, the AHB will make those properties available as social housing.

Financial Arrangements Approved Housing Body enters into a Payment and Availability Agreement with Local Authority Receives 92% of market rent on quarterly basis The Department may provide a repayable capital advance of up to 30% of the cost AHB borrows the balance of the finance required AHB receives a rent payment from the social housing tenant (a low rent)

Private Leasing Companies, landlords and individuals may lease or rent properties to local authorities or approved housing bodies Long-term Leasing (10 to 20 years) Enters into payment and availability agreement and receives 80% of market rent Rental Arrangement Enters into a contract and receives 92% of market rent (and retains responsibility for management and maintenance)

Information Brochure Available on : www.housing.ie

The Changed Approach Provision of social housing on long-term rental / leasing arrangements Needs organisations taking a long-term view Needs private finance and investment Needs higher standards of construction Needs organisations that are in the business of long-term management

Who will it be? Approved Housing Bodies Professional landlords Companies interested in long-term development and management Investment & Private Finance All need to be able to attract investment funds and private finance

Key Points Government Capital Expenditure is limited Current expenditure utilisation is critical Local authorities having a strategic role while continuing to deliver housing Increasing role in provision by approved housing bodies Private finance and investment needed

Thank You Tel: 01 656 4100 E-mail: john.oconnor@housing.ie