Level of debt taken on by Approved Housing Bodies too high, Oireachtas will hear
Organisations are unable to take on more borrowing to fund their role in meeting accommodation targets. Photograph: iStock
The level of debt being taken on by Approved Housing Bodies (AHBs) is too high, with organisations unable to take on more borrowing to fund their role in meeting accommodation targets, an Oireachtas committee will be told today.
The housing alliance – the umbrella group representing AHBs – will give evidence on targets to the housing committee today.
The sector is being asked to deliver 21,500 homes by the end of the decade, an average of nearly 4,300 per annum – with Housing Alliance members planning to deliver 4,350 units this year.
It will tell the committee that Irish AHBs are funded by borrowings, rather than grants, to an unusual extent when compared to their counterparts in other countries. “These high gearing levels are the primary limiting factor for future housing development by larger AHBs,” the group will tell the committee. “Members are reaching a point where they will be unable to add further debt to their books to develop new homes.”
The group will also flag concerns over access to serviced land at a low cost, which it says is “critical to delivering affordable housing”, leading to a “critical” need for strategic land management. It looks towards the Land Development Agency in this regard, the committee will hear, with “a risk that competition for land could exacerbate the growing housing affordability challenge”.
Skilled labour
It says its members have significant development capacity if they can access land at an affordable cost. It will warn, however, that “an obvious challenge” is ensuring the supply of skilled labour amid competing demands for limited resources also needed to retrofit the existing housing stock, and remedy construction deficits. Meanwhile, Brexit and the war in Ukraine have impacted supply chains.
Planning delays for social housing, rooted in a “nimbyism” that itself is driven by a “misperception about social housing and the people who live in it” is also an issue, the group will say. “Political leadership at local and national level is important, we believe, in addressing these concerns.”
The housing alliance will ask that rather than being funded by state backed loans, funding should instead be partially administered on a grant basis. It will recommend that strategic land management be undertaken to “ensure access to development land for all providers of social and affordable housing, including not-for-profit providers”.
“What we need to release that potential is a stable and sustainable system of funding that addresses the level of debt members now carry, and access to land on which to develop housing at an affordable cost,” the organisation will tell the committee.
Source The Irish Times
