Housing & Real Estate Feature Strongly in the Programme for Government

On 26 June 2020, the Fianna Fáil, Fine Gael and Green parties agreed a Programme for Government (the “Programme”) which formed the basis for Government formation on 27 June 2020. This insight seeks to highlight some of the key ambitions and the likely effects on housing, and the real estate market generally, arising from the stated mission and goals in the Programme. It is worth noting that interventions at Government level in other key areas, whether environmental, taxation or the banking and regulatory sectors, as envisaged by the Programme, are likely to also have a significant impact on the housing sector and the real estate market.

Housing

The mission in relation to housing is titled “Housing for All” and is broken down into various categories for particular focus as follows:-

• Homelessness

• Affordable Home Ownership

• Public and Social Housing

• Land Development Agency

• Rent Reform and Cost Rental

• Land Development Agency

• Planning Reform

• Housing Commission

According to the Programme, the overall objective expressed within it is to address challenges in the housing sector including viability, access to finance, land availability, the delivery of infrastructure, building quality, building standards and regulation and an adequate supply of skilled labour.

Homelessness

The Programme provides a number of actions and initiatives to deal with the ongoing issue of homelessness. This includes a focus on the construction and acquisition of one-bed properties, ensuring the Rent Supplement and Housing Assistance Payment (HAP) levels are adequate to support vulnerable households and a move away from dormitory-style accommodation.

The stated focus for one-bed property acquisition and a move away from general HAP payments towards a focus on the use of HAP only for vulnerable groups is likely to affect a whole range of parties from individuals accessing homeless accommodation, tenants availing of HAP, property owners, landlords and developers. The move away from HAP as a general source of housing provision requires an increase in housing provision through house builds and acquisition of properties, either through purchase of units or use of long term leasing schemes.

Affordable Home Ownership

The stated overriding principle for the Programme’s housing policy is to make homes more affordable. The Programme provides for an affordable home purchase scheme with the aim that this is progressed and achieved through introducing affordable housing requirements under Part V of the Planning and Development Acts 2000-2019. It also provides that it will make affordable housing schemes a requirement of the Land Development Agency. Additional measures to assist the affordability of housing will include the extension of the Serviced Sites Fund. Other schemes such as Help to Buy and the Rebuilding Ireland Home Loan are to be retained and expanded.

The retention and expansion of schemes such as Help to Buy and Rebuilding Ireland Home Loan are likely to be much welcomed. Given that changes to Part V are likely to affect development plans in a significant way, more detail of such changes will be needed before these take effect.

Public and Social Housing

The Programme provides a target to increase social housing stock by over 50,000 units over the next five years while ensuring an appropriate mix of design types including for older people and/ or people with disabilities.

This is to be achieved by alterations to limits placed on local authority projects from €2m to €6m, expanding the role of Vacant Homes Officers in local authorities and by working with Approved Housing Bodies to ensure access to finance. In addition, reforms to include allowing social housing tenants to move between local authorities, maintaining the right to purchase social housing, standardising social housing rents and establishing a website for nationwide social housing choice-based lettings will be implemented.

The Programme appears to endorse the existing model of ownership of social housing not just by local authorities but also by Approved Housing Bodies. With an ability for tenants to move between local authority areas, there may be an even greater emphasis on acquisition of properties in less urban local authority areas whether by purchase or acquisition through existing schemes such as long-term or enhanced leasing.

There is a clear statement of intent in respect of the delivery of social and affordable homes coupled with an intention to increase private housing stock. The overall aim and the use of initiatives targeted to provide the infrastructure to open up viable sites is likely to positively impact the market and will no doubt be welcomed in the construction industry. The placing of AHBs at the centre of the model for housing delivery is further endorsement of the role AHBs have and will play in housing in the State.

The Rental Market

There are changes set for the rental sector with a stated aim to improve the standards, security and affordability for renters.

It is proposed to develop a cost rental model based on the “Vienna Model” by examining the area of rental deposits, reducing reliance on HAP for new social housing solutions and improving the security of tenure for tenants by legislating for tenancies of indefinite duration. There is also an ambition to increase RTB inspections, enable the RTB to hear deposit related disputes and enhance the resources of the RTB generally.

The Programme provides that if public health advice requires it, Section 4 of the Emergency Measures in the Public Interest (Covid-19) Act 2020 shall be extended to prohibit any notices of termination being served for an additional period. This is in addition to the recent Order extending the emergency period to 20 July 2020.

The area with the potential for the greatest seismic shift in the residential tenancy sphere is a legislative regime providing for tenancies of indefinite duration. It is not clear whether the overall strategy is to transition to a regime of such tenancies or to bring in legislative change which would offer an avenue for longer duration tenancies. It may be that changes would facilitate such tenancies as a matter of contract between the parties rather than dictating them under Part IV of the Residential Tenancies Acts 2004-2019. Uncertainty could lead to an unintended effect on the letting market and any interventions here will need to be properly assessed before implementation.

Land Development Agency

The Programme provides that the Land Development Agency (LDA) shall be placed on a statutory footing in order to fulfil its stated objectives.

The Programme provides an overview of some of these objectives and its own ambitions for the LDA to include providing homes for affordable purchase, cost rental and social housing. It further provides that the LDA will be tasked with driving strategic land assembly, identifying State lands suitable for housing and ensuring that the stock of public housing is under the control of local authorities, AHBs or similar bodies.

The LDA has the potential to provide large-scale housing developments and earmark sites for future development of unused State land and is likely to be a key player that can positively impact the availability of housing over the period of the Programme. It has been signalled that the agency is hampered while it exists outside a statutory framework. The passing of legislation in line with the Programme will be vital to that agency fulfilling the significant tasks in the area of housing delivery assigned to it.

Commission on Housing

A Commission on Housing will be set up to examine issues such as tenure, standards, sustainability and quality of life issues. It remains to be seen what potential effects will result from such examination and proposals but it is unlikely to be a key driver of change in the short-term.

Other relevant reforms

Outside of the specific housing sector reforms highlighted above, there are a number of other measures appearing throughout the Programme which may impact the real estate sector including the Town Centres First Initiative, the adoption of a code of conduct for commercial tenancies and review of the mortgage market. Planning reform to include tighter timelines for building commencement and a review of Judicial Review have the potential to have significant benefits for housing provision and plans in this area will be keenly watched in the sector.

Constitutional reform

The Programme provides for a constitutional referendum to be held to amend the Constitution in respect of housing but there are no further details or timelines envisaged within it.