Row of five houses, one bigger then the last with green arrow pointing up representing increasing house prices and new bill to tackle housing affordability

Changing Dynamics

According to CSO, Ireland’s population is expected to grow by up to 600,000 in the next decade. With these numbers and current supply in the housing market, for both home owners and renters, struggling to meet existing demand and affordability capabilities, direct public policy influence on supply is seemingly required.

On 20 January, the current Minister for Housing published the Affordable Housing Bill 2020 that aims to deliver affordability within the housing sector and to increase the supply of affordable homes. With much of the content dealing with amendments to the Housing (Miscellaneous Provisions) Act 2009, this new Bill includes policy changes in two key areas;

  • A new Affordable Purchase Shared Equity scheme which provides for the State to take an equity share in a property being purchased by an individual
  • Cost rental housing defined as a new form of tenure and places it on a statutory footing

Just as with other recent policy initiatives aimed at tackling housing affordability, this Bill has come under some scrutiny for its potential to miss the mark on the supply side and risk fuelling demand that could lead to house price inflation.

The ESRI has openly criticised the proposed shared equity scheme for the likely effect it may have on driving house prices ever higher. Its experts suggest such schemes generally act to stimulate demand while doing nothing to address the underlying supply issues.

In 2019, The Vienna Housing Model exhibition showcased the benefits of its long-established cost-rental model as a potential answer to Ireland’s supply and affordability issues in the rental market. Cost rental has been a key contributor to the steady and reliable supply of affordable accommodation in the Austrian capital for decades and is hailed as the “most efficient method of ensuring an adequate supply of affordable, secure and inclusive quality public housing”. A cornerstone of the Vienna Model is that it also makes public housing available to high income earners as well as low, helping to avoid the segregation of those in social housing from the higher earners typically in private accommodation.

Cost rental is not a new concept in Ireland but there have been many calls for it to be scaled up if it is to have any impact on the provision of stable affordable housing to a broad range of people on moderate incomes. Cost rental as a recognised tenure has provided for the Housing Agency to administer cost rental equity loans (CREL) backed by central government capital investment as per its Budget 2021.

With the use of public sector land and favourable government backed funding rates, three existing AHBs - Clúid Housing, Tuath Housing and Respond - have received recent approval to deliver the first round (390 units) of cost rental units.

It is proposed that cost rental tenancies, under the legislation, would be subject to the provisions of the Residential Tenancies Acts, (with some exceptions) to provide for greater security of tenure. The detail, however, around this and other regulatory conditions of the proposed scheme remain unclear at this stage.

Regulation of the standard of rented accommodation remains a critical element across all tenancy and tenure types. It is important that the regulatory framework being developed around the introduction of the new cost rental tenure reflects the need to comply with the existing minimum standards Housing (Standards for Rented Houses) Regulations 2019. These regulations outline requirements across several areas including structural condition, ventilation, fire safety, among others.

To ensure a level playing field in terms of accommodation standards with the introduction of the cost rental tenure, it is important to ensure that it encompasses existing regulatory standards, to the benefit of all stakeholders. Inspex provides independent inspection and verification services to its clients’ with impartiality when capturing, analysing, and determining the condition of rental dwellings and in particular confirming minimum accommodation standards are met under relevant housing legislation.