CIH Housing Ireland - Autumn 2015

HOUS ING

I R E LAND A journal for Irish Housing Professionals

AUTUMN 2015. ISSUE 09

AIDAN CULHANE ON THE NEED FOR AFFORDABLE HOUSING

Supported by

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EMER O’SIOCHRU ON COMMUNITY LAND TRUSTS PAGE 26

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The independent voice of housing and the home of professional standards

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A preference for home ownership in many countries, driven by various factors including history, religion, policy and financial incentives, has led to the development of housing systems with only two tenures.

Dr Lorcan Sirr

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CONTENTS HOUSING IRELAND JOURNAL 4 HOUSING CHOICES Editorial

6 PANACEA OR PANDORA’S BOX Tom Dunne discusses whether new Part V rules are the right approach for the housing market

8 TEMPORAL OWNERSHIP Lorcan Sirr writes on temporal ownership as a secure alternative to renting

12 WHAT’S HAPPENING?

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CIH’s policy teams talk to the UK housing headlines

15 ENDURING MORTGAGE ARREARS Paul Joyce analyses the effectiveness of the Central Bank’s code of conduct on mortgage arrears

20 NEED FOR AFFORDABLE HOUSING Aidan Culhane says there is a need for a new intermediate tenure of affordable rental housing

22 FROM BERLIN TO BELFAST Dougal Sheridan presents alternative approaches to housing provision in ‘Translating housing’

26 COMMUNITY LAND TRUSTS Emer O’Siochru examines the role of community land trusts in curtailing boom and bust

28 PRESENCE ON THE GROUND Based at the Housing Agency in Dublin, CIH welcomes Tricia O’Keefe to the team

cONTACT

If you are interested in contributing an article, please contact editor Justin Cartwright at justin.cartwright@cih.org or 048 9077 8222

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Advertise with us

To advertise in Housing Ireland please contact Alison Cromie at alison.cromie@cih.org or 048 9077 8222 Disclaimer: The views expressed by contributors in Housing Ireland are not necessarily those of the Chartered Institute of Housing, the editor or the editorial panel and should not be taken as representative of any of the above.

Housing Ireland | Spring 2015

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EDITORIAL

HOUSIN G CHOICES JUSTIN CARTWRIGHT There are no developed economies where the supply of housing is left entirely to the market or where the public or voluntary sectors seek to meet the full demand for housing. The balance between public, voluntary and private provision is one of the defining characteristics of any housing system.

Clapham, Kemp and Smith (1990) also observed that “housing is an unusual aspect of welfare in being both a right and a commodity. Some people see it as a right that the state should enforce, like compulsory education, so housing is part of welfare. Others see it as a commodity to be bought and sold in the market, and the state’s role should only be to regulate transactions and mortgages. In fact, of course, it is both.”

These two paragraphs characterise one of the bigger problems in housing policy. There is naturally a spectrum of housing need; neither social housing nor home ownership may be suitable options for a household at a given time, and some other tenure is needed. This might be private renting with or without state support, affordable housing, shared equity, co-operative housing, temporal ownership or any other tenure that policy-makers can concoct and implement to meet people’s diverse needs.

And yet some housing systems continue to prioritise one or perhaps two tenures, while the rest are residualised; they are left to atrophy into undersupply, undesirability, unaffordability, segregation and/or a place where physical/management standards have room for improvement.

Essentially, the spectrum of housing need is not met with a spectrum of housing choices; the balance between public, voluntary and private provision of housing that is both a right and a commodity is often not struck.

EDITORIAL PANEL: Simon Brooke, Clúid 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

This is the principal theme of this edition. We analyse some wideranging housing choices available (temporal ownership, affordable housing, co-operative housing, community land trusts) and in doing so consider their suitability for the Irish market. Authors also give their thoughts on how current policies (Part V, Construction 2020) measure against the housing industry’s desire for more mixed-tenure, quality, secure and affordable accommodation.

We examine broader affordability issues in mortgage arrears, and welcome our new Dublin-based professional development coordinator Tricia O’Keefe to the CIH team as we continue to expand our support for housing professionals across Ireland.

Justin Cartwright Editor

EUROPE’S HOUSING FUTURE

Since we last went to print, the Housing Agency released its first national statement of housing supply and demand 2014 and outlook for 2015-17. The statement is the first of a series and forms part of a wide suite of initiatives addressing housing supply since the publication of Construction 2020. Important findings included: DEMAND FOR HOUSING WILL CONTINUE TO INCREASE Projections carried out for the Housing Agency indicate the population increasing by over 170,000 between 2011 and 2018 and the average household size decreasing from an average of 3.04 persons in 2002 to 2.67 in 2018. Both the rising population and falling household size will increase demand for housing units.

SUPPLY OF NEW HOUSING STILL NEEDS TO INCREASE TO MEET DEMAND The latest DECLG data states that 11,016 units were completed in 2014. While this is an increase of 2,715 on the previous year, it was also an undersupply – 73 per cent of the required housing in 2014 was provided. The supply and demand mismatch remains a key challenge.

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HOUSE PRICES HAVE INCREASED, PARTICULARLY IN THE DUBLIN AREA The median price paid for a residential property nationally was €152,500 in 2014, up from €140,000 in 2013 (an increase of 8.9 per cent). The median price in the Dublin region was €260,000 in 2014, up from €220,264 in 2013 (an increase of 18 per cent).

RENTAL PRICES HAVE ALSO INCREASED, PARTICULARLY FOR APARTMENTS IN DUBLIN Private rented sector rents increased over the year to Q1 2015, particularly for apartments in Dublin. The PRTB rent index shows a 6.9 per cent increase nationally; broken down this equates to a 9.6 per cent increase in Dublin (11 per cent for apartments) and 5.3 per cent outside Dublin.

AFFORDABILITY IS AN ISSUE FOR HOUSEHOLDS IN THE GREATER DUBLIN AREA FOR RENTERS AND SINGLE PERSON HOUSEHOLDS Nationally, and on an average basis, housing is affordable for two-earner couples on average incomes. However, for those living in the Eastern region, particularly Dublin, and for single person households, affordability remains an issue.

Housing Ireland | Autumn 2015

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PANACEA OR PANDORA’S BOX TOM DUNNE

Part V of the Planning and Development Act 2000 introduced the mechanism through which local authorities could obtain up to 20 per cent of land zoned for housing development for the delivery of social and affordable housing, at existing use value. Previously local authorities had to pay full development value when acquiring sites, adding considerably to the cost of doing so. However Part V has never worked as well as intended, partly due to an amendment that allowed local authorities to comply with Part V by accepting cash in lieu of land for social housing.

The Urban Regeneration and Housing Act 2015 amends Part V to ensure the on-site provision of social housing, and reduces the 20 per cent to 10 per cent by removing the obligation to provide for affordable housing (this scheme which provided low-cost housing built for purchase was abolished in 2011). But with a severe shortage of social housing and the lack of supply of houses to the market generally, is

this the right approach? Given current market conditions is it the case that Part V is in fact contributing to the undersupply of housing and increasing the demand for social housing?

The principle underlying Part V is that a combination of planning permission, infrastructure and services increases the value in development land over its existing use value, such as that arising from agricultural use. In the absence of Part V and other measures such as development contributions, the benefit of this increase in value would go to the owner rather than the community which through the local authority provides the services, the infrastructure and grants the permission. The intention behind Part V is that part of the value captured in this way could be used by the local authority to help provide social housing.

At the time of enactment of the Planning and Development Act 2000 which introduced Part V, social housing; i.e.

housing provided at below market rent to people on incomes too low to allow them to access housing in private markets, amounted to approximately 10 per cent of all households. A further 10 per cent of housing, it was thought, would be required for those who could pay for their own accommodation but could not afford to buy given prevailing house prices in some locations, particularly close to the larger urban areas. The affordable housing scheme targeted this group. By means of Part V social and affordable housing provision could be partfunded by capturing a proportion of the value created by zoning and planning permission. This works provided this value is there, which may not be the case in all market conditions.

The justification for this lies in an understanding that land prices are derived from house prices. Developers producing housing are price takers and can only charge what the market is willing to pay for their product.

The development equation works on the basis that the current, market derived house price provides the starting point, from which developers subtract development and building costs, finance costs and their profit to leave a residual value, which is the price they will be prepared to pay for development land. Thus if house prices are high the developer will be prepared to pay a high price for land, provided it is serviced and has planning permission.

PA N A C E A O R PA N D O R A’ S B OX

Permission for development is confined to zoned land that is serviced and has the necessary infrastructure.

The increase in the value of this that derives from zoning and planning permission would go entirely as a windfall to the landowner if not captured through a mechanism such as Part V. In buoyant property markets, particularly after a period of sustained house price increases, development land values can be extremely high, the value available to be captured can be substantial and Part V will work. It is important to remember that market conditions can fluctuate widely, so there may be periods when economic development is not viable.

By the end of the last century, following a series of property booms and large profits from land speculation, political pressure grew to capture some of these windfall gains. The introduction of Part V was a response to that, and had the additional benefit that social housing would be dispersed rather than concentrated in large estates.

In practice developers, reflecting the signals they were getting from house purchasers in the market, sought to reduce this inclusionary zoning and were successful in getting modifications to the law which reduced the intended impact of the Part V provision. Nonetheless the principle that at least some of the funding for local authority housing provision would come from the capture of profits to developers survived and is now in place. But precisely at a time when the need for social housing could be expected to increase this source of funding dried up as very little housing development has been taking place.

With building costs determined by labour markets and the cost of materials, both of which are independent of the property market, the development equation may not work at current market prices.

Development may have to wait until prices increase to a level that allows for all costs to be covered including

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those associated with Part V. As we can see in the market right now, costs associated with Part V are contributing to the under-supply of housing which is driving up prices and rents. This creates a greater demand for social housing.

The very measure intended to increase the supply of social housing has had the perverse effect of decreasing the supply of houses to the market, which in turn has driven up the demand for social housing. A rethink is needed.

Part V only works when economic development is viable.

Tom Dunne Head of the School of Surveying and Construction Management at Dublin Institute of Technology

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TEMPORAL OW NERSHIP

Dr Lorcan Sirr Lecturer in housing at Dublin Institute of Technology and visiting professor of housing in the Faculty of Legal Sciences, Universitat Rovira i Virgili, Tarragona, Spain

DR LORCAN SIRR A preference for home ownership in many countries, driven by various factors including history, religion, policy and financial incentives, has led to the development of housing systems with only two tenures. But in relegating the position of other tenures to secondclass status, governments are hindering the creation of fully functioning housing markets.

Evidence from elsewhere clearly demonstrates not just the social need for a thriving multi-tenure market, but increasingly an economic need as countries require enhanced labour mobility and workers need affordable and secure accommodation.

The Housing Europe Report of 20151 suggests that there is a sort of ‘housing trap’ in many EU countries, including Ireland, for people who try to enter the housing market: •

the rental sector is expensive

•

home ownership is not an option due to the even higher cost

•

social homes are just not enough with waiting lists growing in a number of countries.

Secure occupancy is an oftenoverlooked but important function of social well-being and of any tenancy.

“Control over a space is important to

people’s understandings of what it means to be at home, because this control over a space also means the ability to exercise a degree of autonomy over their lives.”2 In Spain, since January we have been working on legislation to introduce a tenure known as ‘temporal ownership’.

This is where a property is transferred from one owner to another for a specified period of time after which it passes back to the original owner.

The principle of temporal ownership is that a person is granted ownership of a property for a specified period of time in consideration of an upfront sum of money, in lieu of regular rent payments.

In theory, the sum can be any amount agreed by the seller and the potential temporal owner, however valuation practice would hold that this upfront payment should equate to the present value of the sum of the future rents for the property over that period.

How temporal ownership works

1 Housing Europe (2015) The State of Housing in the EU, Housing Europe: Brussels 2 Parsell, C (2012) ‘Home is where the house is: The meaning of home for people sleeping rough’, Housing Studies, 27(2), pp. 159–173.

TEMPORAL OWNERSHIP Table 1: Comparison of temporal ownership monthly repayment with monthly rent

Temporal ownership is granted via a contract, backed by legislation (as leases are supported by landlord and tenant law). Upon expiry of the period of temporal ownership (reversion), the property returns to the original owner, but during the period of temporal ownership, all the rights, duties and obligations of ownership belong to the purchaser.

The main principle of temporal ownership is the addition of affordability to those accessing housing. Temporal ownership can act as a standalone tenure for those who want or need temporary accommodation but with added secure occupancy (for example, workers who come to a country to work for a specified contract period), or it can act as a stage in the transition from living with parents to full home ownership.

Let’s take a Dublin property with a typical monthly value of €1,358 per month (average rent in mid-2015), and comparable market evidence (i.e. sales of other similar properties) showing yields of around five per cent. If this property is transferred via temporal ownership for ten years, the new purchaser would pay the sum of €119,938 (yield adjusted to six per cent) in lieu of monthly rent in order to acquire the property for that period.

Table 1 shows the costs and savings compared to the average monthly Dublin average rent of €1,358.

Tables 2 and 3 compare temporal ownership (TO) and traditional property purchase (PP) using

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per cent deposit for either tenure is less than for home ownership) and the monthly repayments required, as shown by calculations of economic effort. Affordability means more people are able to access suitable residences, and hence fewer people will find a lack of affordable accommodation forcing them to turn to the state for assistance.

This in turn promotes affordability for local and national authorities, which aside from the reduced burden of requests for housing assistance, can also use temporal ownership in particular to help them house others.

contemporaneous Irish market information (as of mid-2015) on monthly rental values and purchase prices (average Dublin rents at €1,358 per month, and average Dublin house price at €300,000), and the monthly economic effort required by each. The mortgage repayment period has been set at thirty years. Two interest rates are used: four per cent reflects best possible variable mortgage interest rates; six per cent has been used to reflect the potential added perceived risk attaching to loan products of less than freehold tenure. Here, scenarios have been calculated at ten and twenty years. Additional duties, taxes, insurances and charges have been excluded from calculations.

Table 2 highlights the easier access offered by temporal ownership when compared to purchasing a property.

Both the deposit required and the monthly loan repayments add affordability to the concept of temporal ownership. In each instance, prior to any tax or insurance requirements, the loan repayments are less than the equivalent rental costs. The economic effort required in each instance is also less than for ownership.

Temporal ownership also helps reduce inappropriate or vacant properties, brings stability to the property market, and means banks are lending less and in more affordable amounts.

Ultimately, the concept of temporal ownership is to create a new affordable tenure, as an alternative to the inefficient dual tenure market, where it is often the case that neither home ownership or renting are viable options for many, particularly in the context of increasingly constrained economic circumstances. Last July the legislation we have been working on was passed by the Catalan parliament and is now in operation.

Back in Ireland, it is now timely to think about new tenure choices in the Irish market and social context to assist in accessing affordable housing coupled with security and stability.

In creating a new tenure, temporal ownership brings with it several advantages from the policy level to the personal. One of the biggest drivers of the creation of new tenures is the development of an affordable (and hence more accessible) accommodation. Temporal ownership adds affordability on the demand side by reducing both the costs of entry to the tenure (the amount of the 20

Housing Ireland | Autumn 2015

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Table 2: Comparison of temporal ownership (TO) monthly repayment and property purchase (PP) monthly repayment, based on investor’s yield (i.e. perception of risk) of six per cent, and loan interest rates of four per cent and six per cent.

Table 3: Comparison of monthly economic effort required for single and double income households.

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M E M BE R BENEFITS As 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.

Regardless of what organisation we are members of, at times we ask ourselves: is it good value for money, what benefits do I get, are they enough, are there added benefits the organisations can give me?

That's why if you're a CIH member and you stay in Ireland, you do get more for your money! Over the years we've tried to give members more benefits. Right now the additional benefits of being in Ireland include:

• Housing Ireland – the triannual magazine • One-off publications including good practice guides • Member events • You also get a discount to the CIH Annual Conference & Exhibition.

Call us on +44 24 7685 1700 to join today.

Membership starts from €105.84 per year.

Housing Ireland | Autumn 2015

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WHAT’S HAPPENING? AROUND THE UK ENGLAND Following the general election, the new programme for government will include: • a Housing Bill which will: • extend the right to buy to housing association tenants • require local authorities to sell their most valuable properties as they become vacant • provide the statutory framework for the provision of new ‘starter homes’, which will be made available exclusively to first time buyers under the age of 40 at 20 per cent below the normal market price • a Welfare Reform and Work Bill which will deliver £12bn of further savings from the welfare budget, including by: • removing housing benefit from some 18-21 year olds • freezing working age benefits for a further two years, from 2016/17 lowering the overall benefit cap from £26,000 per household to £20,000 (or £23,000 in London) • reducing social and affordable rents by one per cent per year for the next four years • extending ‘pay to stay’ so that social tenants earning more than £30,000 per year (or £40,000 in London) will be required to pay a full market rent • rolling out nationally a new requirement that private landlords check the immigration status of their tenants, which is currently being piloted in the West Midlands.

CIH members can find out more about these measures and our initial response to them by downloading our recent briefings: WHAT YOU NEED TO KNOW ABOUT THE HOUSING AND PLANNING BILL: http://bit.ly/1IdaAHM

CIH SUBMISSION TO THE PUBLIC BILL COMMITTEE ON THE HOUSING AND PLANNING BILL: http://bit.ly/1XbtR8S CIH is working jointly with Poplar HARCA on proposals to bring about a ‘regeneration revival’. Approaches to regeneration have changed significantly since 2008.

Following the economic downturn, many tried and tested practices became financially unviable and much regeneration activity ceased. However there is a clear consensus within the housing sector that there is now a need for a renewed focus on regeneration, and that such a focus could help the government to achieve some of its wider objectives (such as increasing housing supply, generating employment opportunities and reducing welfare dependency). An interim report setting out our initial proposals is now available to download from our website.

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

SCOTLAND Creating a fairer Scotland: Building on the discussions that formed the basis of the Smith Commission and the draft Scotland Bill which is currently making its way through the House of Commons, the Scottish Government has launched a series of consultation events to encourage engagement in the process of devolving powers to Scotland. While the details of the legislation are thrashed out in Parliament, the Creating a Fairer Scotland project aims to tackle the questions of what we want Scotland to look like by 2030 and how we can make use of existing powers and new legislation to achieve this goal.

BILL: http://bit.ly/1gzS4BZ PROJECT: http://fairer.scot/ Land reform: June saw the passing of the Community Empowerment (Scotland) Bill and the introduction of the draft Land Reform (Scotland) Bill – both having a part to

W H AT ’ S H A P P E N I N G

play in the Scottish Government’s fairness and equality agenda. The Community Empowerment Bill seeks to make it easier for community groups to become involved in local decision-making and to take over land and assets.

The Land Reform Bill brings forward proposals to widen ownership of land across Scotland including powers to force the sale of land where owners are seen to be blocking economic development.

BILLS: http://bit.ly/1TtMDkw & http://bit.ly/1KZwwM7 Delivering homes and services: The Joint Housing Delivery Plan developed by the Scottish Government in partnership with stakeholders across the housing sector, including CIH Scotland, sets out a range of actions to support the delivery of good quality, affordable homes and support services over the next five years.

PLAN: http://bit.ly/1Ic0qZv A new tenancy for the private rented sector: The Scottish Government is developing a new tenancy for the private rented which will replace the current tenancy regime in Scotland. Following two rounds of consultation, the government has indicated that the ‘no fault clause’ which previously allowed landlords to take possession of their property at the end of the tenancy period will be removed. This will mean that a private rented sector tenancy could only be ended by the tenant giving notice or if the landlord could prove grounds for eviction.

WALES Housing (Wales) Act: The Bill was passed in September, introducing the very first Housing (Wales) Act, with cross-sector change to housing law. The Act will introduce a national mandatory registration and licensing scheme for all private rented homes; reform the housing revenue account subsidy and introduce a new statutory homelessness prevention service requirement on local authorities as well as allowing them to use suitable accommodation in the private sector to discharge duty.

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An update on the new legislation for private landlords and agents was published in April 2015: http://bit.ly/1WiHZtU Right to buy white paper: In January 2015 the Welsh Government published a white paper to consult on the future of right to buy and right to acquire. The paper puts forward two proposals for public consultation, with the intention of protecting social housing stock levels by changing existing legislation to reduce the level of right to buy discounts and develop new legislation to end the right to buy and right to acquire.

CONSULTATION: http://bit.ly/1Frctyg Renting Homes (Wales) Bill: Introduced by Lesley Griffiths, Minister for Communities and Tackling Poverty, in February 2015 the Bill (proposing whole-scale tenancy reform) is currently at stage two of the legislative process and is scheduled to receive Royal Assent in early 2016.

BILL: http://bit.ly/1IGAzJU Local government reform plans published: Two maps outlining proposals to cut the number of Welsh local authorities from 22 to eight or nine were published in June 2015. Both of the proposed maps result in mergers where some authorities that have retained stock will merge with those who undertook large scale voluntary transfer of housing. A Mergers and Reform Bill is due to be published in the autumn.

CIH COMMENT: http://bit.ly/1QG95uK

A new code of guidance for local authorities on the allocation of accommodation and homelessness 2015 was recently published: http://bit.ly/1J3Y8Og

Housing Ireland | Autumn 2015

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NORTHERN IRELAND A number of proposals under the Department for Social Development’s Social Housing Reform Programme (SHRP) are being put out to public consultation this year.

These include: • a tenant participation strategy that aims to enable tenants to play an active role in shaping the social housing services they receive CONSULTATION: http://bit.ly/1Gi95g0 CIH RESPONSE: http://bit.ly/1y0JxzJ • proposals for a new regulatory framework for social housing providers, including a new consumer standard and a revised risk-based approach to regulation CONSULTATION: http://bit.ly/1NnFcuv CIH RESPONSE: http://bit.ly/1HQ2TGn • a social housing rent policy that will define a benchmark rent (£90.27 per week for 2014/15) as an indication of an affordable, appropriate rent – Northern Ireland Housing Executive (NIHE) rents would gradually rise to reflect the benchmark rent. The consultation launch of this policy has been delayed while the department considers the implications of the one per cent social rents cut in England.

CIH COMMENT: http://bit.ly/1CgJJrp • Also expected under SHRP are proposals on future structures for the delivery of social housing. Structural reform was recommended by a PwC report in 2011 which included suggestions to separate NIHE’s strategic and landlord roles into a new strategic housing authority and a new social enterprise landlord respectively. However, there is some stakeholder opposition to transferring stock out of NIHE.

The Anti-social Behaviour (ASB) Bill mentioned in the Housing Ireland issue six summary has been dropped following stakeholder opposition. A Housing Amendment Bill has instead been introduced which would allow information sharing between external bodies and housing associations (HAs) for the purpose of helping HAs address instances of ASB among tenants.

CIH BLOG: http://bit.ly/1KkdUAp CIH NI’s 2015 conference – new tools for new challenges – was held at the Crumlin Road Gaol in Belfast.

It focused on the work that housing organisations do to enhance the lives of tenants and communities. Delegates attended masterclasses in areas that included housing plus and digital inclusion – CIH NI has made practice notes available from these sessions for CIH members to download.

HOUSING PLUS PRACTICE: http://bit.ly/1T18oKi DIGITAL INCLUSION PRACTICE: http://bit. ly/1BWBsJ7

ENDURING MORTGAGE ARREARS

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ENDURING MORTGAGE ARREARS PAUL JOYCE The most recent Central Bank figures on mortgage arrears continue to make for stark reading. The number of accounts in arrears for over 90 days has further decreased, down to 74,395 at the end of March 2015. But the gravity of the situation of those in arrears is becoming more acute – almost 38,000 of these accounts have now been in arrears for over two years, and a further 17,500 for over a year.

Recent figures on repossession are of similar concern. Over 14,000 new repossession cases were brought in the 15 months to the end of March 2015 and almost 1,700 family homes were actually repossessed on foot of a court order or through voluntary surrender or abandonment over the same period.

It is abundantly clear that the two mechanisms put in place by the state to attempt to resolve the mortgage arrears situation have by and large proved to be inadequate. The first of these – the Central Bank’s code of conduct on mortgage arrears 2013 (CCMA) – continues to frustrate debtor advocates with anecdotal evidence of ‘box ticking’ by some lenders rather than a meaningful attempt to put long-term resolutions in place. Even the Central Bank itself has become frustrated, indicating in its recently announced ‘Themed Inspection’ that it had “identified some specific practices during the course of the inspections which are contrary to the letter and spirit of the CCMA”.

What does a lender have to do to be punished for breaching the code? The bank has given the seven lenders inspected until the end of November to get their house in order. In addition, a recent decision of the Supreme Court – summarised below – has dealt a mortal blow to any borrower hoping to argue non-compliance with the CCMA as a defence in any repossession case in the courts.

The second debt resolution measure – the Personal Insolvency Act 2012 – has simply not produced anything near the numbers of arrangements required. In the 18 months that it has been operating, only 328 personal insolvency arrangements (PIA), covering both secured and unsecured debt, have been accepted by creditors. Access to the services of personal insolvency practitioners (PIP) continues to be a problem for those whose income situation is severely impaired.

At the time of writing, legislative amendments to the act are imminent these will empower the courts to review and potentially overturn unreasonable refusals by creditors of PIA proposals.

Although this is a welcome start to weakening the perceived ‘creditor veto’, there is a serious risk that a significant number of insolvent debtors will not be able to avail of this lifeline, due to lack of resources.

It is also likely that these changes will see court officials encouraging defendant borrowers in repossession cases to seek adjournments to consult with insolvency practitioners. Again, however, resource problems will be a factor here. The creation of a creditor or publicly-funded subsidised public insolvency practitioner service could make a decisive difference.

It might be suggested that the recent judgment of the Supreme Court in the cases of Irish Life and Permanent

Housing Ireland | Autumn 2015

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PLC and Dunne and Irish Life and Permanent PLC and Dunphy [2015] IESC 46 puts the state’s attempts to resolve the mortgage arrears crisis through the medium of the CCMA in perspective. Delivering a unanimous five-judge decision on 15 May 2015, Mr Justice Clarke found that a court can only have regard for just one provision of the code when hearing a repossession case, namely a lender’s obligation not to bring legal proceedings within the moratorium period allowed to a borrower in arrears. Significantly, the lender’s obligation to make every effort to agree an alternative payment arrangement with a borrower before bringing a repossession case is not a matter a court will consider; nor can a court investigate, in terms of granting or refusing to grant an order, how reasonable the lender’s decisions were under the code.

In these cases, the court was considering the 2010 edition of the code which came into operation on 1 January 2011. Rule 47 of that edition stated that where a borrower was cooperating with a lender, that lender had to wait at least 12 months from the date at which the mortgage arrears resolution process applied before bringing legal proceedings for repossession of a family home.

Crucially, the rule went on to provide that ”any time period during which the borrower is complying with the terms of alternative repayment arrangement agreed with the lender” does not count for the purposes of the 12 month period.

In this respect, the court was considering a relatively substantial protection for borrowers and, ultimately, isolating it from the all

other protections of the code to name it as the only legally binding obligation that a borrower was entitled to rely upon when faced with repossession action in the courts. The court was, however, conscious that the code has subsequently been revised as it specifically states that “like consideration would apply to any similar provisions in the current or any future revisions of the code”.

“

..If it is to be regarded, as a matter of policy, that the law governing the circumstances in which financial institutions may be entitled to possession is too heavily weighted in favour of those financial institutions then it is, in accordance with the separation of powers, a matter for the Oireachtas to recalibrate those laws. No such formal caliIn fact, a later version of the code bration has yet taken place.” has been in force since July 2013, replacing the 2010 one. This edition substantially watered down both the length and the usefulness of the moratorium. Rules 45 and 47 provide that a lender may bring legal proceedings three months from the date of the relevant correspondence or eight months from the time arrears first arose, whichever is later, if the lender decides not to offer an alternative repayment arrangement to the borrower or where the borrower rejects an alternative repayment arrangement. Almost invariably, with the vast majority of cases in arrears for some time, three months is the limit that applies. Given how short this window is, it is highly likely that the moratorium period will expire in most cases anyway before the lender gets to issuing proceedings.

Such important technicalities aside, the judgment pointedly observes that it is not the court’s job to make law, when the state itself has not seen fit to do so, in observing that:

Until then, it suggests that:

“

In the absence of there being some legal basis on which it can be said that the right to possession has not been established or does not arise, then the only role which the court may have is, occasionally, to adjourn a case to afford an opportunity for some accommodation to be reached.”

In truth, the code has long been an accident waiting to happen. It is evidence of a conscious decision by both government and regulators over time not to challenge the primacy of financial institutions by initiating primary legislation that might protect borrowers in arrears from potentially arbitrary and unfair treatment at the hands of lenders.

Paul Joyce Senior policy analyst at Free Legal Advice Centres Ltd. (FLAC)

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cih.org/housingacademy housingacademy@cih.org +44 24 7685 1789 Housing Ireland | Autumn 2015

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2020 ONE YEAR ON DR PETER STAFFORD Last summer, the government launched its Construction 2020 strategy. While the title of the strategy related to construction, its main purpose was to identify and overcome obstacles to the delivery of new housing. It was broadly welcomed by agencies and bodies working in the property and construction sectors.

After years of stagnation and government neglect, and with the average tenure of ministers for planning being a matter of months, at last it looked as if the housing sector had a strategy for growth.

Construction 2020, which adopted an earlier Forfás report on the need to encourage the output of the construction industry to European norms, committed the whole of government to four aspirations over six years to 2020: first, to create a strong and sustainable construction sector to serve economic growth; second, to create new jobs and get 60,000 construction workers back to work; third, to create a sustainable planning system, and fourth, to dampen down the often cyclical nature of property development.

Often in government, the publication of a report is seen as the culmination of a process rather than the beginning.

The report, once published amidst

fanfare, languishes in a ministerial desk drawer.

One year on from the publication of Construction 2020, it is worth taking it out of the drawer and assessing whether it has achieved the goals it set government for the first year, and whether that initial welcome last summer was warranted.

Construction 2020 contains 75 timespecific actions to be implemented by named government departments over the next six years. In assessing the focus of those actions, a simple analysis of the wording is revealing.

Vague words such as “stakeholder” and “engagement” both appear over 20 times in the document while “sustainable” is used 45 times in the report and “strategy” appears 37 times.

Notably, and perhaps worryingly for a report intended to help oversee a recovery in the construction and property sectors, the word “evidence” only appears four times in the report.

Construction 2020 creates forums and structured dialogue to help government engage and work with other partners in the property sector to implement reform. One frequent complaint about the report is that there is limited scope for real-time evidence about the performance of the market to be fed back into the political system.

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In an article for this Journal last year, I predicted that the most valuable reform contained in Construction 2020 would be the annual statement on housing supply and demand. I welcomed it because it is a good example of a targeted, specific reform to bring new information into the public debate, and it helps everyone involved in the delivery of housing to work from a common evidence-base.

In last year’s article, I said that that the result of poor data is “is confusion, contradictions and sheer guesswork.

More importantly, poor data slows down decision-making, undermines policy responses and distorts the market.”

While the production of the annual housing report is good, even a cursory glance at media commentary on the housing sector suggests we still have weak policy responses, a distorted market and slow decision-making. This suggests a need for wider and deeper engagement with those involved in the housing sector, informed by better data and more regular analyses of the real issues as they happen.

For an example of where insights are potentially missing from the public debate, the word “planner” does not appear in Construction 2020, nor does the word “architecture.” Architects get only two mentions (both in the context of regulation of the profession) and estate agents are also not mentioned at all. Jobs are mentioned 33 times but employers get only four mentions.

Without the evidence of architects, planners or employers, can the goals of achieving employment growth and sustainable housing output really be achieved?

Any strategic report is obsolete on the day it is produced. Issues change, old problems are solved and new ones come along. The success of any strategy is in the speed with which it can identify and respond to new challenges and thereby maintain its relevance. If a strategy becomes outdated or obsolete, it makes it easier to be quietly put in the ministerial drawer.

One of the successes of the old National Development Plan was that its output was monitored by an independent monitoring committee who would oversee and challenge those bodies responsible for the delivery of its operational programmes.

Those committees could often be slow and cumbersome, and often descended into talking shops, but nonetheless, the reporting oversight structure meant that the plan was reviewed on a consistent basis and there was an opportunity for new issues to be placed into the plan for resolution, and new priorities agreed.

More than many other sectors, the housing sector is made up of a long chain of actors – building material manufacturers and suppliers, professional service providers, designers, planners, and a range of contractors and sub-contractors. An obstacle at any point in that chain will jeopardise housing delivery, job creation and the other aspirations of Construction 2020. The challenge for the strategy should be to ensure that all actors who work throughout the housing supply chain can quickly highlight any obstacles they face and for the infrastructure of government to be responsive enough to help remedy them.

A failure to set and keep firm, deliverable actions, and an inability to hear messages from the sector will inevitably undermine the effectiveness of Construction 2020 and risk it going back into the ministerial drawer.

One year on, very few of the initial obstacles identified at the outset of the report have been resolved.

Planning reform (much of it originating before Construction 2020) is slowly being delivered, but development financing remains scarce and expensive; planning remains slow and bureaucratic and consumer finances remain stretched. Just as last year, the property sector needs a strategic approach to oversee its sustainable, long-term recovery.

Construction 2020 gives a framework for engagement which can be improved upon, and it is important for everyone that it remains relevant, necessary and responsive.

Dr Peter Stafford Director at Property Industry Ireland

Housing Ireland | Autumn 2015

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N E ED FOR A F F O RDABLE H O U SI NG

Aidan Culhane Housing consultant at WK Nowlan Property

AIDAN CULHANE With the current housing crisis dominating the news headlines, it’s easy to forget that we seem always to be in a housing crisis of one kind or another – and it’s almost always a consequence of the things we did to solve the last ‘crisis’. The one constant in all this is an inability to meet demand for social housing. The phrase is chosen carefully. It may not be that we have always failed to ensure an adequate supply of social housing, but it is certainly the case that there is never enough of it to meet demand. There are many reasons for this. Shifting demographic patterns and economic fluctuations account for part of it.

Generous differential rent regimes, lifetime and even heritable tenancies, and virtually no maintenance costs make the traditional social tenancy a very attractive housing choice. Many years of tenant purchase schemes that depleted the stock at prices below replacement cost, and uneven rhythms of supply that beat to the pulse of factors in the wider economy rather than to the actual needs of households mean that the numbers of social housing units available never meets demand.

However, many households on moderate incomes also struggle with housing costs, and do not qualify for social housing support, even with the relatively generous income thresholds that are in place. As the National Economic and Social Council pointed

out last year, “around one-quarter to one-third of the population will not find satisfactory housing through the market alone”. A household on the median disposable income in Dublin can afford a rent of just over €1,000 per month, making all but one-bed units unaffordable.

There is a need for a new intermediate tenure of affordable rental housing, especially in cities, where households on moderate incomes can find secure, long-term accommodation. A lack of affordable housing threatens the economic wellbeing not just of individual households, but also the economy as a whole. People who cannot afford housing in the market will obviously turn to the social housing sector for support, adding to overall demand and cost.

Social housing provision will always be a blend of direct state supply and voluntary provision with the private sector also playing a role. In the past, the private sector has been used as a kind of safety valve to meet excess need where no council/approved housing body housing was available or via Rental Accommodation Scheme/ leasing arrangements – and most commonly under the rent supplement regime. Government policy now in the social housing strategy is that 75,000 households will have their housing needs met under the new Housing Assistance Payment scheme which

DUBLIN HOMES NEEDED

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will be integrated into the social housing system. A further portion of the 35,000 new social housing units promised under the strategy will be leased, inevitably from the private sector too.

Where this supply is going to come from is less clear. The evidence generally is that the supply of private rental accommodation is dwindling, and that properties previously rented are being sold into owner occupation.

Moreover, the traditional ‘mom-andpop’ Irish landlord that has been the mainstay of the private rented sector for decades is not the ideal candidate to meet the needs of today’s rental market. If the objective is to make renting an attractive long-term option for households – be they private, affordable, or socially renting – we need a new type of professional landlord who is in the business for the long haul, and whose business model is based on the rental income and not the rising capital value of the properties.

We have seen some limited investment in private housing from Real Estate Investment Trusts and other large-scale investors, but nothing like enough. Moreover, investors generally are nervous of social housing investment, and can find far better returns in commercial property. But if we are to meet the requirements of policy, there needs to be concerted private sector activity to provide homes in this sector. The government is faced with a choice.

Either it can wait for development activity to resume in earnest and procure units in the market, or it can take action to secure a supply of units at non-market rates, developed specifically for this sector, for example at cost rents. There are a number of policy instruments available: the state could bring its land bank to bear, it could provide capital or soft loan type subsidies, or guarantees that would bring down the cost of providing the units and attract investment to the sector. Taxation measures are of limited use in attracting institutional investment. Waiting for the market is a risky enterprise. First, it is inevitable that rents/prices will rise, and the state

will be on the hook for whatever that price is. Second, given the pent-up demand, the state could end up competing with the very households who will end up in need of support if they cannot succeed in accessing the properties.

One of the most important objectives of the government social housing strategy is to develop a “national policy aimed at increasing investment, and supporting the supply of good quality, secure, and affordable accommodation”. In the hubbub about general housing shortages, this vital piece of the housing jigsaw has gone largely unnoticed and certainly has not attracted the attention it deserves.

A longstanding pillar of housing policy in Ireland has been the need for tenure mix. However, volume provision of social housing militates against this objective: we have been there before in the mass development of social housing.

while affordable tenants would pay rents at below-market or low-market rents: state support in bringing down the cost of the development makes this possible. Market tenants can also be accommodated, and crucially households can move through the system without moving home, thus creating a more integrated and inclusive housing model.

In short, private sector investment in low-income housing will not happen on its own; but there are ways to unlock huge amounts of funding, and one of the keys is recognising the need for affordable housing. The other elements are mixed tenure, and a committed partnership between the public, voluntary and private sectors.

The mechanisms to bring this about already exist, and require very minor adaptations. With all of the elements in place, it’s time to get it done.

Providing mixed tenure rental communities of social, affordable, and private tenants in sustainable developments can meet all of the objectives of government policy.

Moreover, it can break down the barriers to institutional and largescale investment in this type of housing. In this model, social housing tenants would pay social rents and would be supported by the state via the usual leasing/payment and availability agreement methods,

Housing Ireland | Autumn 2015

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FROM BERLIN TO BELFAST

Dougal Sheridan Principal of LiD Architecture and academic, researcher and consultant specialising in housing and urban design

DOUGAL SHERIDAN

Translating housing BerlinBelfast: innovative housing provision – precedents and proposals The ‘Translating housing: BerlinBelfast’ research project aimed to inform alternative approaches to housing provision in Irish/NI urban environments, in particular Belfast.

It presents research and analysis through a series of case studies of diverse and innovative approaches to housing typologies, financing, and development models, which have emerged uniquely in Berlin, in particular various forms of co-housing and considers if, how, and in what form these typologies could be interpreted in the context of Belfast particularly with relation to creating and maintaining inclusive sustainable and civil urban society and environments.

The case studies investigated are examples of the conception, design, and construction of housing being synonymous with the building of

cohesive residential communities as part of a larger civil society. This occurred not as an imposed process of social engineering but as an organic process of people making the city and in so doing taking responsibility for it.

The self-generated nature of these projects, although perhaps initially difficult to imagine in the Belfast context, makes them useful as a point of reference on a number of levels.

These include the spatial level of typology, flexibility, scale, and density; the organisation level of finance, procurement, and legal model; and the strategic level of regeneration urban policy.

The following recommendations also span this breadth of parameters as these questions can only be successfully understood as syntheses and like wise intervention should be approached in a holistic manner.

These include:

Medium-density housing typologies Medium-density housing typologies such as those arrived at through testing in the studies could provide a more suitable model for mixed residential households than the current polarisations of either the low-density terrace/semi detached or the high-density high-rise apartment block typologies. Such medium density typologies offer the potential to absorb a diversity of household types in contrast to the segregation of age-groups and household sizes that often occurs between the highdensity high-rise apartments and lowdensity house typologies.

Quality amenity and private outdoor space Quality amenity and private outdoor spaces that satisfy the expectations of house/terrace house typologies should be provided for all residential typologies and are achievable in medium-density schemes as was demonstrated by the proposals.

Such medium-density schemes can still achieve much of the spatial and financial efficiencies of higher density typologies.

Shared outdoor space and facilities Quality, well–designed, shared outdoor space and facilities, in addition to private outdoor space, are important, achievable, and one of the great advantages of such medium-density urban living. Such larger shared

F R O M B E R L I N TO B E L FA S T

outdoor spaces provide additional possibilities and flexibility for outdoor activities beyond what is possible in small private outdoor spaces. These exterior spaces in conjunction with other shared facilities e.g. guest room, multi-use common room, outdoor kitchen facilities should be included in such medium-density housing to ensure liveability and desirability.

Appropriate scale of development Adopting appropriate scale of development should be carefully considered. The Berlin case studies indicated a scale of development averaging 12 residential units per project which was successful on a number of related levels.

This was a scale that was small enough to function in terms of the financial organisation necessary of the self-initiated building-group and co-operative models. This also corresponds to a scale that works well informally on the level of shared spaces and facilities, while being a scale large enough for these shared spaces and facilities to be financially viable.

This is also a scale that allows inhabitants to identify with the building as their house and corresponds to a scale that can operate around a single shared circulation core. This means that inhabitants will most likely see and know everyone in the building.

This is a scale that is substantial enough to have a positive urban impact on a neighbourhood while being modest enough to avoid being perceived as a threat to existing residential communities. Also at this scale new residents will not feel alone in a new neighbourhood. As a collective, new residents might feel more confident moving into a part of town that an individual buyer might never consider.

Adapting to smaller networks To encourage a DIY scale of urbanism government departments would need to update its processes to deal with smaller networks rather than just large companies or institutions. This could include developing methods of promoting self-imitated projects not though financial aid but through administrative enablement and support.

Middle-income households in the city centre Middle-income households should be encouraged and supported to live in the city centre. It is important that the city centre does not become perceived as ‘ghetto’ for low-income households or particular residential groupings like students or foreign nationals. The ‘building group’ model could be adopted and encouraged to achieve this by the city authorities adopting some of the following recommendations to facilitate this process.

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Concept based sales processes The city authorities could adopt the konzeptgebundene verfahren – “concept driven sales process” which was utilised to successful support such projects in Berlin by the allocation of state owned real estate to projects which have a positive urban agenda. This would be an alternative to the current process of development brief tenders aimed at speculative developers, which will usually be awarded to the highest bidder to achieve ‘best value for money”’.

Instead a fixed attractive price could be set against which bids are made on the basis of social urban renewal criteria in order to achieve ‘best value for the city’ in a broader more sustainable sense. The developerorientated development brief model is susceptible to encouraging inappropriate scales and qualities of development in order to achieve the best return.

Develop alternative lending institutions Specialised lending institutions could be established, which support projects by lending at low interest rates if certain social or environmental criteria are met. Rather than shortterm grant programs to support such criteria, this more long-term approach allows the lenders to build expertise and knowledge in their area of lending speciality e.g. building energy efficiency. For example the lending band criteria established by the KFW bank in Germany, which lends

Housing Ireland | Autumn 2015

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to projects on the basis of buildings energy efficiency, is now recognised as the industry standard.

Long-term lease arrangements City authorities could use a strategy of long-term leasing of its property as a method of both supporting and influencing housing-led urban regeneration. Lease minimises costs for project initiators, allowing investment to be concentrated on the built fabric rather than land purchase costs. It would also allow the city development authorities as landowners to set conditions and criteria of lease and maintain control of development and in this way determine long-term urban development policy.

Figure 1 - Example of Berlin case study - Ritterstr 50. Graphic techniques were developed to map all the shared spaces and facilities, shared and private outdoor spaces, and the graphic representation of project data including programmatic mixture, costs, funding model etc.

Figure 4 - Diagrammatic plans displaying flexibility and future proofing strategy being developed for mixed tenure housing project in Belfast.

Figure 5 - Site plan of Belfast housing proposal

Figure 2 - Plan comparison of different floors of Ritterstr 50 case studies showing how careful design allowed flexibility allowing all unit arrangements to be individualised.

Figure 3 - Example of proposal developed for site in Belfast that was developed into a feasibility study.

The research project concluded in practice-led research involving the examination and comparison of specific models in Berlin with some potential public owned sites in Belfast.

This involved the development of concrete costed design proposals.

These feasibility studies were further extended to suggest organisational/ financial/procurement models that might be both innovative but appropriate to the particular proposals.

As an outcome of this research a housing proposal for central Belfast is in early stages of feasibility exploration in a collaborative process involving a housing association, DSD, NIHE, and researchers.

This article is drawn from the recommendations of the larger research project and publication conducted at the University of Ulster with the support and collaboration of DSD, NIHE, Northern Ireland Federation of Housing Associations, the Strategic Investment Board and Smartmove Housing. The full publication is available online at http:// bit.ly/1OQ9t4n. The publication was co-ordinated and edited by Dougal Sheridan. For further information and enquiries please contact Dougal at dougal@lid-architecture.net

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Figure 1

Figure 2

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Figure 3

BEDROOM

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General Needs Housing Areas 4 Person/2-Bedroom - 70/75m2 2 Person/1-Bedroom - 50/55m2

General Needs Housing 6-Person/3-Bedroom - 85/90m2 1-Person/1-Bedroom - 35/40m2

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Exisiting Building

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L i D - A r c h i t e c t u r e 278 Woodstock Rd., Belfast, BT6 9DN N. Ireland BUILDING B Hobrechtstraße

Block Plan Scheme 3

67,2 Aufgang 4. O.G.,12047 Berlin, Deutschland

Tel 07921709391 www.lid-architecture.net Crane

1no. 7-Person/4-Bedroom + 1no 3-Person/2-Bedroom + 1no.

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Connswater Housing Unit Flexibility Diagrams 1:200

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Shared Garden

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Plot for Proposed Car Showroom

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Concept Study for Titanic Quarter Housing

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© This drawing is subject to copyright. No part of this document may be reproduced, altered, or transmitted Children's in any form or by any means , for any purpose without the express permission of www.lid-architecture.net Playground

Pedestrian Entrance

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Harland and Wolff Heavy Industries Site

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L i D - A r c h i t e c t u r e 278 Woodstock Rd., Belfast, BT6 9DN N. Ireland Hobrechtstraße 67,2 Aufgang 4. O.G.,12047 Berlin, Deutschland Tel 07921709391

Skate Park

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Pedestrian Access To Sydenham Road

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info@lid-architecture.net

Concept Study for Titanic Quarter Housing

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© This drawing is subject to copyright. No part of this document may be reproduced, altered, or transmitted in any form or by any means , for any purpose without the express permission of www.lid-architecture.net

Housing Ireland | Autumn 2015

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COMMU NITY LAND TRUSTS

Emer O’Siochru Qualified architect and valuer (development and planning) and director of EOS Future Design

EMER O’SIOCHRU T he Ir i s h g ove r n me nt’s objectives for Irish housing in the Social Housing Strategy are worthy, that housing must be affordable, sustainable and promote inclusion. But when one thinks about it, only one objective is necessary; the others are redundant if it is met.

That objective is ‘sustainability’.

Sustainability includes economic and social objectives achieved within environmental resource and system limits. It goes beyond ‘affordability’ to mandate economic equality. In theory, a sole owner of all housing who charges a rent that the rest of society can manage to pay could satisfy ‘affordability’. A sustainable housing policy on the other hand, requires that wealth be more evenly distributed so that peace and prosperity, the necessary conditions for social and environmental sustainability, are created.

In the same way, the objective of ‘inclusion’ is meant to ensure that low income people have access to housing types and locations to permit them fully engage in society. It does not cover access to full engagement in society for different generational cohorts.

In other words, ’inclusion’ does not challenge the reduction in societal economic and social opportunities being offered to ‘generation rent’ compared to ‘boomers’. Only the objective of ‘sustainability’ fully

captures the existential challenge of our times - to bequeath life chances and living conditions as good as the older among us have enjoyed, to our living and as yet unborn descendants.

It is very unlikely the Irish people will embrace a housing policy that increases rental over high levels of home ownership given our past and recent history. Yet this outcome appears to be our current policy trajectory. Home ownership is fundamental to building distributed wealth as shown by Matt Rognlie’s recent critique of Piketty’s work that established home ownership as the main vector for wealth redistribution in the ‘progressive’ period from WW1 to the 1970s. A housing policy that does permit home ownership to working people with average incomes is simply not sustainable.

Land is at heart of our housing conundrum of rising rent and house prices, poor housing supply and constrained public and private borrowing ability. What is not widely understood is that while property tends to appreciate over time, buildings deteriorate and devalue unless they are refurbished on a periodic basis.

Only the land under the building appreciates because it naturally attracts the exogenous value created by the growth of population, the economy and credit. The relationship of credit to land value is a reflexive

algorithm whereby the rising price of land gives confidence to banks to lend against it as an asset, which enables more people to bid for it, which in turn increases its value to enable more lending, repeating until the market finally implodes under the weight of debt. The freehold cost of property, i.e the ‘market’ price, is very unreliable as an indicator of value. Rent levels in contrast, are a better but not infallible indicator.

There are three ways to curtail this self-reinforcing spiral leading to boom and bust. The first is an annual tax on land/site value or SVT; the second is restrictions on the supply of credit similar to that introduced by Irish Central Bank Governor Honahan; the third is putting development land in trust to neutralise the capital value/ debt spiral. Our government did not adopt a Site Value Tax in order, one has to assume, to preserve the value of development site land banks held by the pillar banks and NAMA. The second measure has been effective in reducing the purchasing power of first time buyers but not of cash rich home and foreign investors whose purchasing power is increased.

The remaining solution, the Community Land Trust (CLT), is still open to Ireland. CLTs have proven sustainability credentials in the both the US and UK over 40 years. It is currently the only practical mechanism

COMMUNITY LAND TRUSTS

that can deliver affordable, income and generational inclusive housing to buy and to rent in perpetuity. It does this through the simple device of separating the site/land from the building on which it sits, which is then held in trust to benefit the community. In practical terms, CLTs enable affordable home ownership by eliminating the upfront cost of the site and replacing it with a modest and predictable site rent.

The CLT model under consideration in Ireland is a platform structure whereby a dedicated CLT developer arranges acquisition of the land, prepares the urban and services design, valuation studies and building guidelines, and applies for planning permission (partly in outline, partly for full permission) for the proposed buildings. Following grant of planning permission, the CLT prepares the site and provides the infrastructure but that is the limit of its construction activity. It then grants building leases to third party developers from the private and social sectors for all housing types, and for commercial uses as appropriate to the site. The greater part of the housing will be for home ownership, through purchasing from a developer, self build, cooperative home ownership, and mutual home ownership rent to buy.

Public supports such as discounted land and property, infrastructure finance, capital grants and annual rent supports are directed to the CLT to reduce the cost and increase the value (in functional terms) of the site. These subventions are passed to the housing associations, cooperatives and other social housing bodies to benefit their tenants as needed and to support essential services and amenities such as child and elder care, sports faculties, community gardens and so on. Private home owners pay an annual site rent reflecting its locational value in the real economy – not inflated speculative values. All residents benefit from the on site services and amenities. Commercial property owners are charged the real locational

value of the site and to a certain extent cross subsidise residential amenities.

This development model replicates that of the Irish ‘improving landlords’ of the 17th to 19th century that has given us the structured variety of Georgian Dublin, as well as many fine towns and villages throughout Ireland. It also offered the first access to wealth in property to the Catholic native population that created the educated, aspirational cohort that won the ‘tenant right to buy’ under the 1903 Land Act. The ‘right to buy’ was extended to cottages built for the laboring poor in rural areas in the early 20th century. Urban local authority tenants of houses had to wait to the 1970s to secure their ‘right to buy’.

Local authority apartment tenants secured similar rights in recent years but the scheme has been put on hold.

The ‘right to buy’ is a two-sided coin.

It is a suburb redistributor of wealth within classes in the short term but on the other it depletes social resources for addressing acute housing need over the longer term. The current Irish homelessness and housing affordability crisis is in no small part caused by the loss of local authority housing stock. There is also evidence that the wealth distributive effect may not be permanent. Figures from the UK show that investors now own the majority of London ex-council homes – it would be interesting to have the data for Ireland.

A further downside of the ‘tenant right to buy’ is that land has become highly fragmented in rural villages so that planning for the common good and coherent development is nigh impossible. Scattered rural housing and occasional cul-de-sac estates are now the dominant rural settlement pattern neither of which is environmentally or economically sustainable. The same is true for pre-War urban local authority estates that were built at low densities in locations now in high demand where fragmented ownership

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makes redevelopment very difficult.

Upgrading stock to higher energy standards, installing solar thermal or photovoltaic or bio energy combined heat and power (CHP) or better water conservation and waste recycling systems is impeded by the need to get 100 per cent agreement of every plot owner. Keeping the land in a unified ownership while allowing for third party ownership of the buildings provides most of the benefit of freehold ownership to the building owners – specifically a vehicle for saving and a rent-free old age – while conserving the conditions for collective action for common social and environmental goods.

Restoring sites under existing buildings to single CLT ownership is worthwhile even it does not contribute to site assembly. An argument can be made to incentivise freehold home owners and buy-to-let owners to sell the land portion of their property to a CLT- for cash to top up pensions, to reduce property tax or Capital Acquisition Tax liabilities for their children. A CLT might have a role in purchasing the site element of underwater mortgages of home owners to reduce the outstanding debt to a manageable level. Consideration of a Capital Gain Tax exemption for property investors who sell to a CLT could encourage the conversion of ‘pre 63’ rented properties, often listed buildings that can never meet modern building regulations, back to single homes.

This should only be offered in tandem with the development of purpose built rental accommodation for displaced tenants of the reconverted homes In short, the Community Land Trust is the master key that unlocks the door to genuinely sustainable housing for all sectors in Ireland.

Housing Ireland | Autumn 2015

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PRESENCE ON THE GROUND LOUISE FISHER Tricia, who was appointed earlier this year, is based at the Housing Agency in Dublin, and her appointment means that CIH has a presence on the ground in the Republic of Ireland.

Tricia said: “It’s a really exciting and challenging time for housing in Ireland and I think CIH recognised that we needed someone here because of all the challenges that the Irish housing sector is facing. There are huge issues such as rent and mortgage arrears, homelessness in Dublin, rising prices, increasing demand for social housing – we really are at a critical stage.

“And of course the government is aiming to invest €3.8 billion in social housing over the next five years and we want to make sure that housing professionals across the country have all the support, advice and tools they need to help deliver the strategy on the ground. It is going to be up to approved housing bodies and local authorities to deliver that strategy, so we want to help them create the capacity they need. Their capabilities in finance and governance are going to be very important.”

CIH’s work in Ireland is supported by the Housing Agency which has tasked the organisation with developing a network of expert housing professionals through CIH membership, education and training.

Housing Agency chief executive John O’Connor said: “It is important to have a professional institute for the housing sector. CIH has vast experience and knowledge built up over many years and is best placed to support the housing sector in Ireland at all levels.”

Executive. Tricia is currently putting together a programme of short training courses for the autumn, on topics including understanding hoarding and customer care skills for challenging customers, as well as a series of policy seminars for senior staff.

Tricia has an MA in Law and a background in academic administration. Her previous role was programme leader and education coordinator at Respond! College, which is part of Respond! Housing Association.

She said: “We know that members find the continuous professional development CIH provides very useful but we are also here to help them build the resilience they need to deal with difficult issues.”

She said: “Senior housing professionals have told me that there is no forum or network to discuss the issues they are facing, so that is what we are aiming to provide.”

CIH works with the Irish Council for Social Housing to deliver a Level 4 Certificate for the Housing Profession (equivalent to NFQ level 6) which is aimed at housing professionals who work at or aspire to management level. The current course started in September (see separate box) and Tricia said due to high demand CIH is considering running a second cohort. She added: “For 2016 we are also looking at rolling out a Level 3 qualification because we have had requests for it.”

CIH delivers bespoke in-house training for approved housing bodies, local authorities and organisations such as the Dublin Region Homeless

To find out more about CIH membership, training and qualifications in Ireland and to get in touch with Tricia visit our website cih.org/republicofireland

PRESENCE ON THE GROUND

CIH L evel 4 C e r tif ic ate f o r t he H ou s i n g pr o f e s s io n WHAT IS IT? This qualification will give you an understanding of the essential aspects of housing strategy, policy, law and finance as the context for providing housing management services.

WHO IS IT FOR? Managers and staff preparing to step up to management level in the housing industry. It will also suit learners who wish to build on prior qualifications in housing or related areas.

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BLENDED LEARNING: STUDY ONLINE AND ONSITE Blended learning combines the flexibility of independent study with the support of learning in a classroom environment. The programme is delivered through a combination of six on-site training days and independent e-learning.

The programme starts in September, with one full day session and one assignment to be completed approximately every two months. All training will take place at ICSH Dublin offices. Find out more

“

As somebody with a background in nursing and very little knowledge on housing, this course has really brought me up to speed.

Although it is challenging it is effective. Overall it has been an excellent experience and one of the best things I have done in a long time.”

Kathryn Anderson

G et t i n g t o kn o w Tr ic ia TELL US A BIT ABOUT YOURSELF...

My current status is ‘ex-mother’. My daughter has flown the nest all the way to New York and I’m learning to enjoy the freedom of not being ‘mammy’. I enjoy cooking and like to have people around for dinner. I’m into walking and joined my local hiking club as a way of getting fit (but secretly I prefer the coming back down more than the hiking up hills).

IMAGINE YOUR DREAM DINNER PARTY. WHO ARE YOUR THREE GUESTS? Graham Norton - because as soon as you think of him you KNOW he’d be the best dinner guest. So funny and warm. Aung San Suu Kyi - a hero and beacon for human rights and non violence. And then George Clooney...oh, just because!

WHAT PIECE OF TECHNOLOGY COULD YOU NOT LIVE WITHOUT?

The only people who could afford them were wealthy businessmen who would SHOUT VERY LOUDLY into them because the reception was so bad.

WHAT ATTRACTED YOU TO YOUR ROLE AT CIH? I had recently finished my master’s degree and was working for a housing association. I’m interested in housing from a rights based perspective. However, I also have a background in academic administration at third level, so the role combined the two.

WHAT’S THE LAST FILM YOU WENT TO SEE? Frozen. My excuse is that I was treating my great-niece, but she was only my alibi. It was great fun.

I couldn’t live without my iPhone. I can make a call, check my email, listen to music and read a newspaper on my phone! I’m old enough to still be amazed at how far technology has come. The first mobile phone I remember was the size of a two-litre milk carton.

Housing Ireland | Autumn 2015

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Did you know CIH helps hundreds of housing organisations like yours to achieve their objectives with a tailored package of services to meet your business needs?

Find out more by contacting our Dublin-based professional development co-ordinator to discuss your business requirements: Tricia O’Keefe 01 656 4160

Learn with us. Improve with us. Influence with us.

www.cih.org

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CIH chartered membership

THE HALLMARK OF YOUR SUCCESS IN HOUSING

Stepping up to chartered membership is an investment in you and your community – by taking your career to the next level you’re making a decision that contributes to the profession as a whole. That’s why everyone in housing should aspire to chartered membership.

Find your route www.cih.org/charteredmembership membership.services@cih.org +44 24 7685 1700

Housing Ireland | Autumn 2015

www.cih.org/republicofireland Chartered Institute of Housing 53 Mount Street Upper, Dublin 2, Ireland T 048 9077 8222 E roi@cih.org Registered as a Charity No: 244067/R The independent voice of housing and the home of professional standards