New Housing Strategy leaves vulnerable behind

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The Government has published its long-awaited housing strategy – Housing for All – with a budget of €20 billion over the next five years. Housing for All consists of four pathways:

• Supporting homeownership and increasing affordability;
• Eradicating homelessness, increasing social housing delivery and supporting social inclusion;
• Increasing new housing supply; and
• Addressing vacancy and efficient use of existing stock.

The Overall Targets set out in the Strategy provide for 90,000 social homes, 36,000 affordable homes, 18,000 cost rental homes and 156,000 private homes. This seems ambitious, however these targets set to 2030 – a ten year term – while the funding is guaranteed for half that time.

The targets are also based on a Housing Need and Demand Assessment (HNDA) of 32,700 new homes, without any reference to the backlog built over a more than a decade of under-provision.

Social Housing – lacks ambition

The Minister proudly proclaimed that Housing for All would secure the largest social housing build in the State, with 90,000 social homes delivered by 2030. But this target fails to acknowledge the fact that there are almost 122,000 households in need of social housing now, based on current social housing waiting lists and the number of social housing households in precarious HAP tenancies. It also doesn’t take into account an average of 27,500 new social housing applicant households each year entering the system. The Strategy’s target of 90,000 social homes is less than three-quarters of existing need, without factoring in any new applicants for social housing.

And then there’s the funding. Social Justice Ireland welcomes the increased capital funding of €20 billion over the next five years. This is a significant step-change from previous Governments and, if used appropriately, could support the provision of much-needed housing stock. But the disconnect between targets that extend to 2030 and guaranteed funding that ends in 2026 is concerning. What happens once the guaranteed funding runs out? The lack of planning to fund capital costs beyond 2026 renders the Housing for All targets after this point meaningless.

Affordable Housing – the Good, the Bad and the Bizarre

Housing for All also commits to the provision of greater numbers of affordable housing. This is where we see the good, the bad and the bizarre in this housing strategy.

An example of the good is the Local Authority Affordable Purchase Scheme. This is a form of shared ownership, which subsidises the cost of Local Authority housing for purchase (with an average price of €250,000) and allows the Local Authority to retain a maximum equity stake of 30 per cent. This scheme addresses affordability at both the supply side, by bringing down the purchase price, and the demand side, by providing equity support to buyers and, if implemented effectively, will provide truly affordable housing.

Then we have the bad. The First Home Scheme. This is a private-sector version of the Local Authority Affordable Purchase Scheme, but without any effort to address supply-side costs. Under this scheme, which was introduced by the Affordable Housing Act, 2021, the purchaser will raise the necessary deposit to buy a home on the private market and apply for a mortgage. The difference between the purchase price and what the purchaser can raise through the deposit and mortgage will be paid by the State, who will have a charge on the home. By artificially inflating the amount available to the purchaser to buy the property, the State is maintaining high house prices, rather than tackling the real issue of supply-side inflation. The Help to Buy Scheme, which is also set to continue under the Strategy, is a similar model and has been proven to increase housing costs.

And then the bizarre. While we welcome the scaling up of Cost Rental homes in principal, the provisions of the Affordable Housing Act 2021 allow investors to add a profit element, which is not part of the cost. There is also the issue of who is excluded. Under the legislation, tenants reliant on the HAP cannot access Cost Rental. Acknowledging that this is intended to provide affordable housing for households above the social housing income thresholds, without adequate social housing construction, the potential exists to create another tier of housing provision, stigmatising social housing and social housing tenants even further, while continuing the reliance on the market to provide social housing at private rent rates.

Addressing Homelessness – too little, way too late

The Strategy also commits to “working towards” ending homelessness by 2030, rather than actually ending it. This commitment lacks the ambition required to actually end homelessness within this timeframe (a timeframe which is far too long). There is also little ambition to prevent homelessness occurring. Government must commit to the eradication of homelessness and the implementation of Housing First principles for all, especially families.  

Possible Game Changers

To end on a slightly more positive note, there are also some interesting initiatives that, if implemented properly, could be game-changers for struggling households. The ‘Fresh start’ principle to allow people who are divorced or separated, and who have no financial interest in the former family home, to be eligible to apply for State housing schemes is one of those. But the devil is in the detail. The exact wording will need to be carefully drafted, as a transfer of the legal ownership of a property under an order for separation or divorce has no impact on the responsibility for the mortgage. It is therefore possible that a separated person, who is still a joint borrower on the mortgage, will remain barred from State supported schemes as having a “financial interest”.

Similarly the roll-out of choice-based lettings to allow social housing applicants to move between counties is a very good thing, particularly for people who wish to move near family and support networks and for victims of Domestic, Sexual and Gender-based Violence who may need extra distance from an abusive relationship.

There is much to welcome in the Strategy, however fundamental flaws in the targets for social housing and overall construction; a lack of real measures to prevent homelessness; and a continuation of subsidies such as Help to Buy and HAP raise questions as to who will really benefit. Our Review of the Housing for All Strategy is available now.