Housing our Communities: A Sustainable Foundation for the Future

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1 Housing our Communities: A Sustainable Foundation for the Future 1

2 One Cork s Proposals Although the housing crisis continues to be one of the most significant challenges to face Ireland, successive governments have failed to fully address the issues at the heart of it We will only see real and substantial progress in meeting the housing needs of our many vulnerable low income and middle income families if central and local Government steps up and starts to directly provide public housing. ONE Cork is a group of 20 trade unions operating in Cork city and county and we are calling on the Government to adopt key changes to existing Housing policy so that we can radically increase the supply and quicken the pace of delivery of housing. With approximately 15,000 on the social housing waiting list in Cork and thousands more in great difficulty seeking affordable private rental accommodation, we believe urgent action needs to be taken to accelerate the bringing into use of voids and the introduction of rent certainty and security of tenure for private renters. However, all this will be futile in the absence of a serious increase in housing supply. Traditional reliance on the private and not for profit sector to meet social and affordable housing needs over the past 20 years has failed. Now is the time to do things differently. We call on the Minister for Housing and the Government to seriously consider our proposal. A recognition that Local Authorities must play a much greater and leading role in the delivery of housing. This contrasts with the arms length approach set out in the Government s Action Plan for Housing and Homelessness which sees the private and AHB sector as the main agents of delivery of social housing need. An immediate step must be the establishment of standalone Municipal Housing Authority across the two Cork local authorities, through which a building programme can be developed, funded and maintained. This agency would pool existing architectural, finance and procurement expertise within the participating local authorities. The new authority would have direct responsibility for the public housing portfolio which would include construction of new builds and ongoing maintenance of the mixed income rental properties. It would overcome many existing roadblocks faced by local authorities in being able to recycle rental revenues back into maintenance and additional housing construction, access borrowings directly from the Housing Finance Agency and subject to Eurostat, accounting rules it is possible that municipal authority expenditure would not be classified as general government expenditure. One Cork November 2016 At the heart of this concept is the development of mixed income public housing. We recognise that long term supply social housing supply problems can only be resolved if it is developed in tandem with affordable and market rate housing. In contrast to recent years, it is now possible to fund these initiatives at a time when the long term cost of Irish borrowing is at historically low levels, substantial resources are available from the European Investment Bank and others to borrow for public housing and the public finances are in a much improved position. Pro-active management of land supply for housing in this country is the other major missing link in Government policy. Municipal Housing authorities would be able to supply housing cheaper and faster if Government tackles problems such as land hoarding and speculative accumulation through tax, legislative and other instruments. 2 3

3 Context In Cork alone, the Simon Community has stated that there has been a four-fold increase in the number of people sleeping rough since Cork City council has allocated 4.1% or 6.1 million to the administration of Homeless services, from a total budget of million, along with 9.5m spent on rental/leasing of private housing. In addition, there are 9,000 people on the social housing list in Cork city, and combined with County figures brings the total to approximately 15,000, a figures which includes children. Many families are being housed in unsuitable temporary accommodation, such as one-bedroom hotels, which is having significant adverse impacts on the health and wellbeing of those families, due to space and access limitations. The response so far has been for the Local Authorities to build a paltry 117 social housing units to date in 20161, a further indication that social housing policies built on the premise of private sector delivery, has failed and continues to fail to house those people who are most vulnerable to poverty and social exclusion in Ireland. Since the foundation of the State there have been periods of successful social housing projects, built directly by Local Authorities, which worked and improved the lives of working class families across the country. At the end of the 1980s a new policy direction was taken moving towards private model in the form of approved housing bodies. Evidence suggests that these bodies cannot sufficiently meet current social housing needs. (See chart below from Simon Community Housing & Homelessness Fact File 2016) Therefore it is imperative that a new model is developed, taking into account past experiences of successful interventions and ensuring it can meet the needs of everyone, but particularly, those who are most vulnerable and in danger of becoming socially excluded. Establishing a Municipal Housing Authority A municipal housing authority would harness the skills, expertise and qualifications necessary into one body, ensuring quality standards and an adequate supply of good quality social housing is provided. It would co-ordinate internal and external financing and construction expertise which will help to overcome the existing obstacles currently being experienced in this area by local authorities. The Authority would manage the public housing programme and portfolio, which includes building social housing and providing a range of public housing to include properties for rent to low-income households. It would overcome many existing roadblocks faced by local authorities in being able to recycle rental revenues back into maintenance and additional housing construction, access borrowings directly from the Housing Finance Agency and subject to Eurostat, accounting rules it is possible that municipal authority expenditure would not be classified as general government expenditure. Ultimately, the primary purpose of the Municipal Housing Authority must be to move beyond the sole provision of social housing and to provide for the development of mixed income public housing. We need to change the model away from the current all or nothing approach which means that those just above the social housing thresholds get no help with their housing costs. Development of mixed income housing by Municipal Housing agencies would offer a new type of rental option to households, both in terms of cost and duration of tenure. The private rented sector has usually been a transitional option for people before buying a home, or moving to social housing. The model envisages a new type of longer term tenure for households to rent over long periods of time. Our proposal for access to affordable rental housing in the Municipal Housing Agency schemes is that net income eligibility for affordable rents would be set some 15% above the existing net income social housing threshold. This would ensure that those on just over 1.5 times average gross earnings or close to 54,000 would qualify for affordable housing Local Authority Housing Approved Housing Body 1 Dept of HCLG (2016). LA housing construction statistics

4 Improving the Use of Voids There are housing voids in every Local Authority, many with long turn-around period, which effectively further reduces availability of housing stock. There should be a concerted effort, through the efficient utilisation of direct labour, to significantly reduce the turn-around time and cost of bringing voids back into the system. Currently there are 350 voids in Cork City, which cannot be used to house families who have been made homeless. If turned around in a shorter time period, it would significantly reduce the expenditure on homeless services ( 6.1m) and the cost of private rental ( 9.5m). Cork County Council has the longest turn-around time of approximately 66 weeks between tenancies. This is an unacceptably long time frame which could be significantly reduced if the Municipal Housing Authority coordinated their work on a central basis, rather than tendering for several contractors and sub-contractors. These figures could further, be significantly improved by better utilising the skills of the workers employed by a municipal housing authority and removing the level of bureaucracy associated with the procurement process for outsourcing refurbishment contracts. Furthermore, local authorities having a more direct role and responsibility in this area would help to ensure a higher standard of work, thereby leading to more cost-efficient use, with potential savings, of tax-payers money. To ensure the success of the authority and the sustainability of a public housing scheme, maintenance functions should also reside within the local authorities. Land Banks & Derelict Sites As the cost of land can account for anything up to 50% of the cost of building, further savings could be made by utilising properties and land banks held by local authorities and NAMA. According to the Cork City Council derelict register (online), there are 55 derelict sites within a 2km radius of Cork city centre, and whilst the owners are required to pay a levy to the Council, the status of such sites should be determined to assess if they are suitable for purchase by Cork City Council. In terms of lands left idle by property developers, the use of Compulsory Purchase Orders are also an option not necessarily being effectively used by Local Authorities. Rental Sector The housing crisis is severely impacting on the private rental sector with more working people depending on state supports who never required such support in the past. Decades of undersupply of social housing, the effects of the housing crash and the difficulties in increasing housing supply reveals the challenges presented when relying solely on the private sector to address these problems. In the entire Munster area, including the cities of Cork, Waterford and Limerick, there are only 770 properties available to rent. There is a widespread view, present in government policy, that the social housing problem will be resolved by increasing private housing construction. However, home purchase and rental prices will not necessarily decline in the presence of greater supply as high land prices and the cost of borrowing will act to create a floor below which the price of housing will not fall. Therefore, a rent ceiling for low income earners should be established, based at no more than 25% of their income. Employment Significant increase in stock of public housing would require a commensurate increase in maintenance and construction staff within the Municipal Housing Authority. The existence of a public housing building scheme, with the resource and manpower to maintain it into the future, is a unique opportunity to provide skilled opportunities for workers and increase employment in this sector. The UCC model is an excellent example of good practice in this area and should be replicated throughout the county. Quality of life The right to housing is a basic human right, enshrined in the UN Declaration of Human Rights 1948, and monitored by the Council of Europe. With pressures from globalisation, privatisation and massive cuts to public services, including the cessation of public house building programmes in Ireland, we have not protected the most vulnerable in our society, instead they have been at the cutting edge of austerity policies. It is also acknowledged that income and its distribution has a clear impact on the quality of life enjoyed by citizens and the type of life an adequate level of income provides. Eurostat s Quality of Life indicators provides a more detailed picture of life based on household income and consumption which is complementary to the traditional GDP measure of economic and social development. Daft.ie shows that rent increased in Cork City by 15.4% in quarter compared to Q4 2014, with an average rent in Cork City of 979. Material conditions are one of the 8+1 dimensions established as an overarching framework for the measurement of wellbeing, which includes housing as a key element. Eurostat also agrees that housing conditions have an important impact on quality of life as low housing quality is associated with lower well-being and psychological stress such as structural problems, overcrowding and lack of amenities. 6 7

5 It is to the latter two aspects that we turn, with reference to Streimikiene in her 2015 document Quality of Life & Housing, who suggested that having sufficient space is essential to people s basic need for privacy and for making home a pleasant place to be. Too many tenants in a dwelling may also have a negative impact on children s health or school performance. This research also suggests that assessing the impact of housing on quality of life, should include not only quality of housing, but the environment in which the dwelling is located and accessibility to services and amenities. A municipal housing authority would be the ideal body in which to provide the full range of services required for a vibrant social housing programme. Conclusion This crisis in housing has been allowed to continue for far too long with little or no viable solutions implemented. The government programme will not address the fundamental issues facing low income households. The lack of decent housing is a cost to society which reaches far beyond the cost of bricks and mortar, and is detrimental to the health, education and overall wellbeing of our citizens, our communities and society. It is imperative that innovative approaches be adopted to ensure that a sustainable public housing programme is available for families now and into the future. A municipal housing authority is part of such an innovative approach. The principles on which such a programme could be built include accessibility, sustainability, affordability and building vibrant communities. Now is the right time to act and act fast. People are struggling to make ends meet and are losing the battle to remain in their homes on a daily basis. It is imperative that the government prioritises the resolution of this crisis now as we understand the detrimental impact housing insecurity and homelessness has on families and communities. We can no longer privatise this sector, we must take responsibility for all our families and communities and provide accessible homes. 8