SHARON COSGROVE, CEO, Oaklee Housing, believes Housing for All has a lot to offer for social housing development, but there are several important issues – including skills shortages and planning – to be addressed if the plan is to succeed. Mimi Murray reports.
Housing for All, the government’s housing delivery plan up to 2030, is a multi-annual, multi-billion euro plan aimed at improving Ireland’s housing system and delivering more homes of all types for people with different housing needs.
Part of the plan is to provide more than 10,000 social homes each year, with an annual average of 9,500 new-build social housing homes up to 2026.
Oaklee Housing is an approved housing body (AHB) that has been in existence for 20 years. Over that time, it has developed and delivered housing across 18 local authority areas throughout the country, initially starting in the border counties. Its geographic footprint now reaches from the north-east into the midlands and along the south coast, with a substantial presence in Dublin. Developments mainly include family housing, with a few schemes that see Oaklee work with care providers or specialist support providers. Oaklee is one AHB that will be expected to deliver a good chunk of what is in the Housing for All plan.
Sharon Cosgrove, CEO, Oaklee Housing, has been with the charity since 2016. In that time, she has seen it grow substantially year on year. Five years ago, the stock level under its management stood at 600 homes; that figure now stands at about 2,100 units.
“It has grown at a rate of about 200 units a year up to last year. In the past year, we have been delivering some of our own housing stock, and also we are part of the consortium on the first PPP social housing bundle, ‘Social Housing PPP Bundle 1’. We have since taken into management the 543 homes that were delivered in the consortium. John Sisk & Son delivered this development, and we’re the tenancy management company for it,” she says.
Oaklee Housing operations
To develop and finance its housing delivery, Oaklee has an in-house development team that project manages/coordinates the development programme, and they contract builders and developers to deliver housing on some design and build and turnkey properties.
“From 2015 on, we also purchased some unfinished stock and bought portfolios of vacant apartments, so we have a mix of housing and scheme types under management. After the last crash, there was very little grant funding other than for special needs categories, so we borrow from banks, including the Housing Finance Agency, which was established to help the sector access private finance. We borrow about 70% of the cost of everything that we buy or build under mortgage over 25 years. The other 30% comes from the local authority and the Department of Housing, repayable at the end of the term. Rental income and an availability payment from local authorities ensure that we can meet mortgage payments,” Sharon Cosgrove explains.
Housing for All ambitions
“Everybody talks about the plan being very ambitious – 33,000 housing units per year – and in that the first year of the plan 10,000 units for social housing, the majority of which have to be new build,” Cosgrove continues. “With this plan, there’s much more emphasis on new supply and new construction. It’s a massive challenge when you look at what that means in terms of labour. AHB’s have to deliver something like 40% of the targets for social housing across the country, with 50% expected in Dublin and Cork. Each local authority around the country has to develop a housing delivery action plan, looking at how they will deliver the numbers for their county. In Dublin and Cork, local authorities will deliver 50% and AHBs the remaining. I expect that the plans will be published for people to see, monitor and measure our performance. Local delivery plans are a new thing as a result of Housing for All, but it should be a good approach because it makes everything transparent and puts the responsibility very clearly with local authorities and AHBs.”
Access to land
Sharon Cosgrove explains that one of the major challenges facing the delivery of Housing for All is access to land, with planning delays and judicial reviews holding up building, saying there is the intention to reform the planning system to try to deal with this.
“The speed of delivery is affected, and with delays, prices are going up. We’re competing in a busy market, trying to buy and contract with developers, as are local authorities who have been given these massive targets. The Land Development Agency has a massive allocation of finance under Housing for All. As well as that, we have people trying to buy their first homes, so it’s going to be tough,” Cosgrove comments.
What needs to happen next?
Discussing funding, Sharon Cosgrove explains that this year the Budget had all of the funds Housing for All needs to deliver on the plan, but this needs to happen every year over its 10-year lifetime.
“We generally get funding on an annual basis and a scheme by scheme basis. To see a multi-annual budget would be very helpful. The speeding up of the planning system would be positive, as indicated in the Housing for All plan. Decision making needs to be more efficient, and projects need to be approved and on site quickly because of how competitive the market is. But labour and staffing will remain a problem. There’s a limited number of qualified people, and attracting and retaining talent is going to be a challenge,” she says.
Affordability
“The difference between the Housing for All plan and the last plan is that there’s more emphasis on affordability now,” Cosgrove notes. “There’s affordable for sale and cost rental, which is new for us as a sector. That affordability piece is coming through in those two initiatives. Leasing is being phased out. The other thing that is strong in the plan is investment from the private sector – PPP looks like it will be huge in this plan. In 2024, there will be another two bundles delivered, and in the two years subsequent to that, four bundles in each year. Eight bundles with about 500 units per bundle in PPP is a massive programme. It brings private finance into the delivery of social housing and flags a significant role for AHBs who are interested in managing the tenancies in those. That’s also a huge pipeline of PPP for the construction sector.
“When we embarked on PPP, it changed our operating model, and we have to think about it as a different part of the business. With traditional social housing by an AHB, we manage and maintain the stock, manage the rent, and keep it in order to fund our business. With the PPP model, it’s a more commercial contract with very high standards, targets, penalties and deductions if we don’t perform. We get a payment for delivering the service, we collect the rent, but the rent goes to the state. It’s been an enormous learning curve in terms of good practice and partnerships. It’s an interesting and effective model that delivers quickly,” she says.
Current Oaklee Housing projects
Oaklee Housing currently has a small level of construction activity – two projects on site in Tullamore where it bid for land and bought from the local authority. One is a general needs development, and the other is for older people. Last year, it completed a scheme in Ballybough, Dublin, another in Kilkenny and Clones, Monaghan. Oaklee purchased turnkey developments in Portarlington and Moate. It also put out a design and build tender for the south-east.
“Continuing to deliver is what’s next for us; under the last plan, we were delivering 150 homes a year. We hope to ramp up a bit with Housing for All targets. They are going to be new builds, so slightly different to turnkeys or acquisitions. We’d also be very keen to bid for more of the PPPs,” she adds.
Sustainability
“There is a substantial piece of the Housing for All plan focused on town centres and derelict units as well as investing in town and villages,” Sharon Cosgrove adds. “This will be interesting to see from a sustainability point of view. Retrofitting older stock is a challenge for AHBs and other organisations that own their stock – how is it going to be financed is the key question. The government is indicating that there will be some financial support for retrofitting, but it isn’t exclusively talking about AHB stock as yet. However, there is funding there for retrofitting local authority housing stock. With the 2030 ambitions, we will have to put hard targets in place for retrofitting our housing stock. We have an energy and sustainability strategy, but we need to figure out how we finance that. Do we have to borrow, or are there going to be grants made available? This is going to be a huge piece of work for Oaklee Housing and all other AHBs,” she concludes.