A step backwards for social housing tenants?

Donal Guerin is a housing officer in Cork City Council. He is the chair of the Cork City section of the Cork Branch of IMPACT. In this blog post Donal outlines his concerns in relation to the Government’s Social Housing strategy, which was launched in November 2014.

The Government’s Social Housing strategy represents, I believe, another significant step in toward the privatisation of the delivery of public services in Ireland.

My concern is that, for the first time, social housing tenants will be living without a secure tenure. In addition, the increased reliance on Approved Housing Bodies (AHBs) could deprive tenants of the democratic oversight associated with local authorities and replace public sector jobs with relatively poorly paid and insecure employment for their employees.

The reliance on private finance will mean that that social housing rents must now factor in the ‘rate of return’ for private financiers. The intention to rely on market solutions is shown in the following elements of the strategy:

  • The plan to meet the housing needs of 75,000 households through the private rental market by 2020
  • The establishment of a Housing Public Private Partnership to secure €300 million in private investment to deliver social housing
  • The allocation of €400 million of public investment in a new housing finance entity to ‘leverage substantial private investment’
  • An enhanced role for Approved Housing Bodies (AHBs) in the provision of a new supply of 35,000 social housing units. It is clear from the strategy that AHBs will be prioritised over local authorities as the preferred providers of social housing.

 At the heart of this paradigm shift is the removal of social housing provision from local authorities and its transfer to the private rental market and non-statutory housing bodies. This shift will have profound implications for households currently seeking social housing. The main implication for these households will be the removal of the opportunity to secure a lifelong tenancy from a local authority. Defenders of the strategy will refer to commitments to provide 18,000 additional housing units by the end of 2017 and 17,000 additional units by the end of 2020. These commitments are dwarfed by the commitments to provide more than twice this number of units in the private rented sector.

Social housing applicants can now expect to be offered accommodation in the private rented sector as a long term alternative to direct provision by a local authority. The time-limited nature of a lease is the great drawback of a private rented lease compared to a traditional local authority tenancy. It has been the custom in local authorities that an accommodation offer may well be for life. In many cases the tenants spouse, partner, children and other relatives may inherit the tenancy. This will no longer be the case.

Plans are also underway to outsource the processing of payments to landlords to commercial providers. This will further reduce the accountability of the system to democratic control as well as raising huge questions about data protection for tenants.

The reliance on the private rented sector will represent another transfer of public wealth to private providers without any long term public gain – in the form of a social housing asset  – being secured for future generations. The long term loss of security of tenure, for social housing households in the private rented sector, is not addressed in the strategy.

Local government has a long history in the delivery of social housing. Any diminution in the role of local authorities in the delivery of social housing will mean the loss of this expertise. The delivery of social housing by local government has ensured that there is democratic accountability at the heart of the process for the allocation and management of social housing.

If local government is sidelined, this vital element will disappear. The withdrawal of local government from the delivery of social housing reduces the potential to provide social housing that covers the wide variety of needs throughout the lifecycle. Local authorities look after their tenants throughout the life cycle. Arguably, smaller social housing organisations and private landlords are not in a position to do this.

The withdrawal of local government from the delivery of social housing also represents a further hollowing out of public services in Ireland. Are we to replace public sector jobs with poorly paid contract staff that will have minimal terms and conditions? 

The Social Housing strategy commits itself to an increased reliance on private funding to generate social housing units. The funds will be used to provide social housing units that will be managed by housing associations. The reliance on private funding for the provision of social housing through the establishment of a ‘financial vehicle’, set-up to attract investment from the private sector, inserts a fundamental insecurity into the relationship between social housing tenants and their landlord. The need to guarantee an acceptable level of return for private investors may well lead to higher rents for tenants and may jeopardise the security normally associated with social housing.

Current policies will not meet the needs of the many households who have a housing need in Ireland today. The reliance on the private rented sector as the new panacea for the delivery of social housing units will not provide households with secure and affordable homes. The investment in private rented accommodation will deprive households of the possibility of a lifelong tenancy and the investment will not generate housing stock that can be re-let to other households with a housing need.

The strategic approach should strengthen the rights of private rented tenants through market interventions, such as rent control, increasing the level of rent supplement, and investing in a major social programme of social housing that meets the full life cycle needs of households on low incomes. Local authorities should take the lead in the delivery and management of this housing stock.

Donal Guerin

Cork City branch, IMPACT

February 2015