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www.cih.org The independent voice of housing and the home of professional standards Land law and housing rights in east Jerusalem PAGE 05 Feature: Social Housing at the Crossroads and Construction 2020 PAGE 17 What you need to know about the new building regulations PAGE 30 A journal for Irish Housing Professionals HOUSING IRELAND AUTUMN 2014. ISSUE 07

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Page 1: HOUSING IRELAND - Chartered Institute of Housing of Ireland... · Housing Ireland | Autumn 2014 Housing Ireland | Autumn 2014 THE LAND STRUGGLE IN ISRAEL AND EAST JERUSALEM Economics

www.cih.org The independent voice of housing and the home of professional standards

Land law and housing rights in east JerusalemPAGE 05

Feature: Social Housing at the Crossroads and Construction 2020PAGE 17

What you need to know about the new building regulationsPAGE 30

A journal for Irish Housing Professionals

HOUSING IRELAND

AUTUMN 2014. ISSUE 07

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Strategies often set out aspi-rational

goals, commit to detailed targets and chart clear pathways to the desired future. Such documents rarely survive contact with the real world. This is particularly true of hous-ing, a complex, dynamic and uncertain policy area. What is needed is a strategy, not a plan and still less a wish list

C O N T E N T S HOUSING IRELAND JOURNAL

» p.04

» p.22 » p.05 » p.10

» p.30

» p.28

» p.26

» p.12

4 Supply and demandEditorial

5 THE lAND STRUGGLE Lawyer and PhD candidate Hadeel Abu Hussein gives an overview of the land struggle in east Jerusalem

8 Managing vacant stockJames Pike discusses freeing up vacant and underused housing stock

12 The Welsh Bond An alternative finance option for housing associations is recapped by Coastal Housing CEO Debbie Green

14 What’s happening elsewhere? CIH’s policy teams talk to the UK housing headlines

17 FeatureSocial Housing at the Crossroads and Construction 2020 - Key actions of these two major reports are assessed by Eddie Lewis, Dr Rory O’Donnell, Simon Brooke and Dr Peter Stafford

30 nEW building regulationsRuairi Hayden outlines what you need to know about the new building regulations cONTACT If you are interested in contributing an article, please contact Editor Justin Cartwright at [email protected] or 0044 28 9077 8222 Advertise with us To advertise in Housing Ireland please contact Kerry Kelly at [email protected] or 0044 28 9077 8222 Disclaimer: The views expressed by contributors in Housing Ireland are not necessarily those of the Chartered Institute of Housing, the Editor or the editorial panel and should not be taken as representative of any of the above.

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T H E L A N D S T R U G G L E I N I S R A E L A N D E A S T J E R U S A L E M

Economics is about supply and demand. A housing bubble occurs when house prices detach from supply and demand fundamentals, fuelled by a liberal supply of credit. Without credit and unrealistic market expectations there is no bubble.

Nevertheless, post-crash fears pervade – the Government’s 2011 Housing Policy Statement affirms “if the Government’s approach to housing is successful in not repeat-ing the mistakes of the past through over-stimulation of the market, there should be no need for national pro-grammes of affordable housing pro-vision by the State”.

This aversion to even the sup-ply-side of affordable housing – coupled with the on-going move away from capital subsidies – means demand will continue to outstrip supply leading to rising house prices. This is and will be felt mostly in Dublin, misdiagnosed by some as another bubble and hence possibly reinforc-ing aversion to action under the incho-ate mantra that ‘intervention is bad’, although austerity budgets and a depressed construction industry are undoubtedly lofty obstacles.

Considering the supply and

demand fundamentals, we can and do estimate the overall potential demand for housing in the future. We do this by taking into account population growth, demographics changes and loss of dwellings through natural life-span fulfilment and demolition. The Housing Agency projects the annual level of housing needed as an average of 15,932 units across the country to 2018. We are building much less than this.

In this context two major reports have been issued since our last edition – the National Economic and Social Council (NESC) published Social Housing at the Crossroads and the Government launched Construction 2020 in a bid to revive the construc-tion sector and hence housing supply. With the latter comes a commitment to produce a social housing strategy in this quarter. In this issue we take a look at both of these reports and three key recommendations of Construction 2020.

Housing strategy on the mac-ro-scale is important, but it remains imperative for individual housing organisations to pursue innovative methods to increase supply, as this remains one avenue to more homes.

We hear from the CEO of 5,500 unit Coastal Housing in South West Wales on her experience of drawing on bond finance, in anticipation of alternative finance availability here in the future. We also address freeing up vacant and underused housing stock. Finally we cover recent changes to building regulations including architecture.

Our international piece is on housing in divided communities – covering the experience in East Jerusalem – and is written by Hadeel Abu Hussein, PhD candidate in inter-national human rights law at the Irish Centre for Human Rights, NUI Galway.

S U P P LY A N D D E M A N D JUSTIN CARTWRIGHT

T H E L A N D S T R U G G L E HADEEL ABU HUSSEIN

Land conflict is at the core of the Israeli-Palestinian conflict; this conflict dates back to 1948 when the state of Israel was established as result of the war, which broke out in Palestine in 1948.1 This was the official start of the conflict between Palestinians (Arabs) and Israelis (Jews). This war was caused by the partition of Palestine as a result of a United Nations resolution on 29 November 1947.2 This brought major demographic change; before the war the Jews, around 400,000, owned 7% of the territory and the Arab Palestinians, numbering 1,150,000, owned 93% of the territory. The Palestinians therefore became a minority after the deportation of some 750,000 Palestinians, who became refugees in neighbouring countries, the destruction of more than 400 villages and the immigration of hundreds of thousands of Jews from across the world into Israel.3

With the Six-Day War in 1967, Israel won an important land war. Israeli forces took control of the Gaza Strip and the Sinai Peninsula from Egypt, the West Bank and East Jerusalem from Jordan and the Golan Heights from Syria.

The annexation of East Jerusalem created a unique status of its land and its people. The people of East Jerusalem refused Israeli sovereignty and claimed its occupation by Israel illegal. Therefore, according to Israeli laws, they are permanent residents, instead of citizens.

This article tries to explore several dimensions of the land struggle inside Israel and East Jerusalem, not the Israeli occupied territories4,

by describing the situation of the Palestinians who remained and became citizens of Israel

and permanent residents of East Jerusalem. It attempts to provide a brief overview of their struggle to access land in Israel.

Land is an essential resource and the distribution of land was not a random act, having the potential to influence powerful groups within Israeli society; the distribution can affect social status and economic position as well as political power.

Access to land and housing rights was a fundamental issue when the newly established state of Israel created the land regime. For this reason, the government’s land policies were shaped to promote control of the dominant group, the Jews in the case of Israel, while restricting access to land for the minority, with the implication of making them a disempowered group.

The new Israeli state put much emphasis on the laws enabling acquisition and confiscation of vast areas, leaving about 94% of the country’s land as registered Jewish controlled property. Consequently, transfer of land previously held by Arabs to Jewish groups took place, hence individuals as property owners reshaped the future and the Israeli parliament introduced laws to expropriate refugee territory. These included: the Absentee Property Law (1950) and the law on acquisition of

1 Described by the Palestinians as “Al-nakba – the catastrophe” and by the Israelis as the “war of independence”. 2 Morris, Benny, Righteous Victims, A History of The Zionist – Arab Conflict 1881-2001, (Vintage Books 199, 2001); Michael R. Fischbach, Records of Dispossession, (Columbia, 2003). Edited by Elia Zurei, David Lyon and Yasmeen Abu- Laban, Surveillance and control in Israel/ Palestine, Population, Territory, and Power (Routledge, 2011). 3 Morris, Benny(1987), The Birth of Palestinian Refugee problem, 1947-1949, (Cambridge University Press, Cambridge); Golan, Arnon (2001), Wartime Spatial changes: Former Arab territories within the State of Israel 1948-1950, ben-Gurion University press, Be’er sheva (Hebrew). 4 West Bank and Gaza.

Justin CartwrightEditor

EDITORIAL PANEL: Kerry Anthony - De Paul Ireland, Simon Brooke - Clúid Housing Association, Lisa Clifford - Department of the Environment, Community and Local Government, Caren Gallagher - Irish Council for Social Housing, David Silke - Housing Agency, Dr Lorcan Sirr - Dublin Institute of Technology"

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real estate (approval of actions and compensation) (1953). Some of the Arab Palestinian minority that today totals around 20% of the population of Israel became ‘present absentees’ – a legal category for Palestinians who were driven from their homes during and after the war but who remained within the state of Israel – and their homes were confiscated. Besides the public land ownership system, most of the territory is owned by the national Israeli fund5, with clauses forbidding the future sale of these lands to non-Jewish citizens6.

Notably, 66 years after the establishment of Israel, no new city has been founded for Arab citizens despite natural population growth. The planning regime and administration policy has also restricted the required development of the Arab Palestinian villages and cities. Most of the land available is often already overcrowded with houses, and building or renovation permits are limited because of lack of planning in these areas and the limited infrastructure for water and electricity. The situation in East Jerusalem is worse as, currently, only 13% of land is available for Palestinians to build on and much is similarly used and overcrowded with full houses and unsafe building structures. Comparing the conditions in Jewish neighbourhoods with Arab ones can reflect the discrimination that exists and demonstrates the limited infrastructure, poor narrow roads and few public services. Additionally, the planning regime practises forced eviction and demolition of houses, which increases the crisis and the violation of basic human rights. Consequently, the Arab Palestinian minority is suffering from a critical housing crisis.

The situation is challenging as land law in Israel is, on different occasions, used as an instrument of control and a surface upon which a political struggle has been waged, particularly in East Jerusalem.

Various mechanisms of dispossession have been used to maintain state

control over land and limit access to land for the Arab population of Israel. For instance, land expropriation by local authorities through two principal statutes, the Land (Acquisition for Public Purposes) Ordinance of 1943 and the Planning and Building Law of 1965. These two statutes allow land acquisition for public purposes, which is a very broad concept. This leaves the Minster of Finance as the only authority to define the public purpose for whatever lands the state intends to expropriate.

A second mechanism applied by the state is demolishing houses through both judicial and administrative orders. On one hand, the administrative orders are issued according to equal principles in the city. On the other hand, the Magistrates Court, Local Affairs Court or Supreme Court, following a condemnation and criminal process, issues judicial demolition orders. However, the majority of demolitions are consequences of administrative demolition orders, such as those in unrecognized Bedouin villages in Naqab7.

A third mechanism is forced eviction and families in East Jerusalem and the Bedouin in Naqab currently face this most often.

To bring the situation from theoretical illustration level to a more practical level, one example from the contemporary case of the “Sheikh Jarrah” neighbourhood in East Jerusalem is presented here to describe the cruel effects of forced eviction and how this violates the housing rights of the families living in this neighbourhood.

Sheikh Jarrah, a Palestinian neighbourhood located to the north of the Old City in East Jerusalem beside Mount Scopus, has become the site of a prolonged legal battle whose implications include the possible eviction of more than 25 families. Four Palestinian families have already been evicted from homes in which their families have lived for more than 50 years and others await various court

dates that will define their destinies.

50 Palestinian families came to the area in 1956, based on an international agreement between UNRWA and the Jordanian authorities, who established the Sheikh Jarrah neighbourhood. The agreement stipulated that after the families gave up their UN ration cards as refugees and were expelled from their original homes in 1948, they would become legally entitled to the apartments in the Sheikh Jarrah neighbourhood after three years.

Following the 1967 war, Israel annexed East Jerusalem; afterwards, the Israeli Jewish committee claimed ownership of the Sheikh Jarrah neighbourhood, which they claim they bought in 1875. The committee registered ownership of the land in their names in 1972 and submitted a request to the court demanding the eviction of the Palestinian families. Based on these documents, an agreement was signed between the families’ lawyer and the committee’s lawyer, in which the lawyer acknowledged that the land belonged to the Jewish committees. The lawyer did not complete a proper check on the ownership documents. Consequently, the court acknowledged the families as “protected tenants”, required to pay rent to the settler committees.

As the families did not pay the required rent to the committees, the groups began submitting legal actions demanding their eviction and the families authorised a new Palestinian lawyer to defend them. After examining the relevant files, the new lawyer discovered that the Jewish committees had no real ownership of the land and that the registration in their name made in 1972 was based on forged documents. Furthermore, several of these documents related to other locations outside Jerusalem. The Palestinian families brought documents from the Ottoman archive in Ankara referring to the land in Sheikh Jarrah. According to records of the Shiraa’8 Court in Jerusalem, the property has belonged to the Hijazi family for more than 200 years9.

The families submitted a petition to the Ministry of Justice to register their interests based on the local taboo10 to cancel or revoke the registration of the land in the name of the Jewish committees. The Ministry of Justice rejected the request and the families went to the High Court to force the Ministry to begin the settlement process and decide who owns the land in Sheikh Jarrah.

The High Court rejected this request based on the agreement reached by the former lawyer of the families in which they unknowingly acknowledged that the land belonged to the committee. The court stated ‘inability to alienate’ the agreement that had been signed by representatives of both parties; and that the documents provided related to the property located in pre-annex Jordan – considered to be outside jurisdiction of the court and beyond court intervention, as it is a political matter.

To date, eight Arab families have been evicted from Sheikh Jarrah and several others live with the risk; cases are currently proceeding through the Israeli courts. The committees transferred their ownership rights to a company called “Nahalat Shimon International” in 2003. The new company submitted a request to the Jerusalem municipality to approve a new urban plan allowing the company to demolish the neighbourhood and build housing units and commercial shops for the new settlers.

According to the Israeli government, the situation in Sheikh Jarrah is strictly a legal matter for the Israeli domestic courts; a dispute of local property ownership between Jewish and Arab residents.

However, the UN observes these evictions are a clear violation of international law, describing the annexation of East Jerusalem by Israel illegal and arguing that Israel cannot impose domestic laws or transfer its population into the area; additionally, different kinds of violations of international humanitarian law have resulted from the forced evictions for the residents, affecting their rights to life, family lives, property rights and housing rights.

The struggle faced by the evacuated families is unimaginable as the loss of their housing rights has indirectly destroyed their lives; they live in the streets, watching strangers occupying their homes.

The solution, and the effectiveness of tools the legal system can provide, is not easy in the existing circumstances, as the question of inequality before Israeli laws grows. The land law regime includes discrimination, distributing land rights among citizens; overhauling this system and addressing the lack of future urban planning for the Arab Palestinian minority is not part of the agenda, meaning that with limited remaining tools the state considers finding solutions to the housing crisis

in the Arab villages and towns and in East Jerusalem even harder. However, the legal path through the courts with professional lawyers is necessary and can bring some justice; it is at least a legitimised tool that must be used wisely for trying to identify loopholes in the land regulations and in doing so, opposing a system that has facilitated injustices over the years as a result of governmental policies and practices, neglecting the obvious needs of an Arab society and its limitations in accessing land and property. Urban plans, for example, could provide the space that Arab villages and towns need to extend.

No magical solution exists to the harsh circumstances, given the complicated struggle over land, but the legal tools represent one of the most legitimate ways to stop the housing rights violations and grant rights to access land and live normal family lives with dignity.

5 “Keren Kayemet Le-Israel”.6 Yifat Holzman-Gazut, Land Expropriation in Israel, Law, Culture and Society (Ashgate, 2007); Franz Oppenheimer and Jacob Ottinger, Land Tenure in Palestine, 12-13 (1917). 7 South district of Israel

8 Court that applies Islamic law.9 Court Case 166/89, district court of Jerusalem [Hebrew].10 Land registration office

Hadeel Abu HusseinPhD candidate in international

human rights law – Irish Centre for Human Rights, NUI Galway

LL.M & LL.B: Faculty of Law at Tel Aviv University

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98 M A K I N G T H E B E S T U S E O F S T O C K

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M A N A G I N G VA C A N T S T O C K JAMES PIKE available to households from the

waiting list, when a number of people return to the upgraded or regenerated development.

Regeneration A considerable proportion of our social housing stock is in need of regeneration; it’s either in bad condition or does not come near to meeting current standards.

There are current projects to upgrade and convert existing buildings, some of them being undertaken by AHBs using the government’s Capital Advance Leasing Facility (CALF) and private funding, but this is often much more expensive than new build and the densities achieved are much lower than could be achieved by new build. The achievement of higher densities also presents the opportunity to create mixed communities and reduce the ghetto effect in many of our larger public housing schemes.

A factor which greatly impedes regeneration is the current scenario that allows tenants to purchase their dwellings. This is very apparent in Limerick, where a large part of the stock is in private ownership and has to be purchased by the local authority before they can commence regeneration.

This would be particularly difficult if apartments are bought in housing schemes. It has proved highly problematic to get agreement of all the owners in private apartment developments from the 1960s and

70s, even when the sums add up. This stock is in serious need of rebuilding.In Dublin, regeneration is being mainly concentrated on the older four-storey units, but the later 1950s to 1970s stock of deck access blocks is also nearing obsolescence and presents opportunities for densification.

Site value taxA measure that would help return existing stock to use is a Site Value Tax (SVT). The current property tax will actually discourage the improvement or greater use of existing buildings, as this would increase the value and therefore the tax liability. SVT would be based on the land value of the property, which is related to its location and the services available. There would therefore be pressure on the owners to maximise the value of the buildings to cover the tax. In many of our towns and cities the upper floors of our buildings are vacant or underused, and many of them could be brought back into residential use. The ‘Living over the Shop’ scheme achieved very little, except in Cork where a number of successful prototypes were built. These would be models for building owners, who would be forced by SVT to examine the potential of their property. SVT could be introduced initially to replace commercial rates. A “Draft Policy on the Heritage Value of Small to Medium Sized Towns” prepared by the Heritage Council, recommends the reintroduction of ‘Living over the Shop’.

A portion of these properties would be used for social housing, and it

might be a good idea to provide tax incentives to owners to encourage them to engage with their council to assess whether their property would be suitable and would generate a viable return.

AS SOCIAL HOUSING PROVID-ERS GRAPPLE TO BUILD MORE HOMES, THEY SHOULD ALSO LOOK DOWN THE AVENUES OF STOCK MANAGEMENT AND LAND USE IN ORDER TO INCREASE SUPPLY SAYS JAMES PIKE, CHAIRMAN OF O’MAHONY PIKE ARCHITECTS.

“A primary aim of all local authorities and housing associations should be to maximise the occupancy of the properties under their ownership or control. When it is agreed that a tenant will terminate his or her tenancy, an immediate assessment

of the premises should be made to establish the necessary maintenance and repairs to allow a new tenant to take possession. Each local authority should have a panel of contractors available so that it can appoint one to start work as early as possible. Housing associations could also work with this panel or set up their own if they have significant stock in the area. Regular assessment of the long term stock condition is also necessary, identifying the need for major repairs and the improvements required to bring the stock up to the current standard. The maintenance and improvement

of public areas and grounds is also critical, as is regular contact with the management company. It’s then important that the new tenants are agreed and ready for occupation immediately when the unit becomes avai lable. Vacant stock should be reoccupied within a maximum of six weeks. Where stock is assessed as needing major refurbishment, some funding is available from the Department of the Environment, Community and Local Government (DECLG). European Investment Bank funding for retrofitting could also be used for part of this process.

Property portfoliosNAMA is already undertaking a positive initiative to complete and utilise vacant stock using its NARPS (‘National Asset Residential Property Services’) scheme to set up 20 year leases with Approved Housing Bodies (AHBs). NAMA funds the developer to complete the schemes and lease the vacant stock, and in certain cases sell it to the AHBs.

There are still portfolios of properties under the control of NAMA or receivers, a portion of which are unoccupied and suitable for social housing. The stock could be valuable for decanting existing tenants from developments needing upgrade or regeneration. These will become

James PikeChairman - O’Mahony

Pike Architects

Effective void management – can you help us?

CIH plans to produce a guide on effective void management in the Republic of Ireland and we’re looking for examples of organisations’ good practice in this area. It would be great to hear from you if you think you have an effective approach or if you know of an organisation that has. Please email [email protected]

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CIH Housing Awards 2015 at Belfast City Hall

Join housing professionals from across Ireland to celebrate excellence in housing.

ApplyCIH Housing Awards provide an opportunity to recognise the fantastic work being done by staff, volunteers and project teams across the industry. Nominate your colleagues now at www.cih.org/ni/awards

SponsorDo you want to be associated with achievement of excellence in housing? Sponsor one of our Housing Awards and you will be prominently profiled alongside the best in the industry. Contact us for details.

AttendThe fabulous setting of Belfast City Hall offers a touch of glamour for this formal, black tie event. Book a table for staff and corporate guests and you will enjoy a great evening of networking and entertainment. Now open for bookings.

For further information on the CIH Housing Awards 2015 visit www.cih.org/ni/awards contact us by phone on +44 (0)28 9077 8222 or by email at [email protected]

HEADLINE SPONSOR

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T H E W E L S H B O N D

The new scheme, known as the

“Welsh Bond” is sup-porting the building of over 1,000 afford-able homes over a two year period with £130 million of in-vestment from the capital markets and 19 participating regis-tered social landlords (RSLs) across Wales..

T H E W E L S H B O N D DEBBIE GREEN

Procuring the financeKey to the success of the project was a partnership approach. A steering group led by the Welsh government was formed that also included representatives from Community Housing Cymru and finance directors from the sector. The group was responsible for jointly procuring the funding and six funders representing the capital markets and pension funds were approached. M&G, part of the Prudential Group, invest in and manage a wide range of assets including equities, fixed income and property; they were chosen as the main preferred provider based on a number of criteria, in particular the cost of the funds; the amount of security required by the lender; and lenders’ covenants.

Despite being a leading investment manager in the UK and overseas, M&G had not previously made any investment in Wales. Being keen to win this deal they reduced their pricing during the negotiations. The other provider selected was Affordable Housing Finance, a subsidiary of the Housing Finance Corporation.

Drawing down the financeBecause the finance product was procured using a consortium approach, Devonshires Solicitors were employed jointly by all the participating RSLs as their legal advisors for the bond drawdown process. The main challenge with drawing down the M&G product was that the rates were only guaranteed for a limited period, so that participating RSLs had to put security in place and draw down funds in a relatively short timescale. Therefore associations needed to have security that is relatively ‘clean’ so easy to charge, adequate staff resource and dedicated staff time so that this

process could take place quickly. The advantage of the consortium approach was that those associations more familiar with the process could lend their expertise to those associations maybe accessing the capital markets for the first time.

The funders also do their own due diligence exercise looking at individual associations. The process involved meeting the chief executive and other senior staff and board members and taking the opportunity to reassure themselves with regard to:• Governance• Structure• Business plan• Strategic risk management• The impact of welfare reform and

mitigation• The association’s development

programme• Quality of stock and asset

management• Existing debt portfolio and

covenants

Advantages and disadvantages of this innovationThis scheme was a great success in terms of bringing forward housing supply and using a modest amount of Welsh government revenue funding per annum to lever in substantial amounts of investment from the capital markets. From the individual RSL’s perspective this scheme provided some of them with their first opportunity to access the capital markets.

However the scheme brought two issues into sharp relief – how do we continue to innovate and take new opportunities, whilst ensuring the sector does not overstretch itself; and how much risk can the sector take on, and what will the future look like in an

increasingly challenging environment?

The Welsh sector ’s borrowing capacity and access to unencumbered security is not inexhaustible. With the sector meeting and exceeding Welsh government’s delivery expectations since the financial crash, the sector now has gearing of 58% on average (54% traditional organisations, 89% large-scale voluntary transfer [LSVT] organisations), up 13% in four years.

These questions are not likely to go away any time soon and nor will the Welsh government’s commitment to innovate to increase supply. At the end of June this year the Welsh finance minister recently announced funding for a second phase of the scheme to deliver another 2,000 units, double the size of the first, under the title ‘Housing Finance Grant 2’. The social housing sector in Wales has to date demonstrated its commitment to increasing housing supply; the sector will now have to give serious thought as to how it can continue to sweat its assets without adversely impacting service delivery or long term financial viability. Maybe it’s time to raise the question again of consolidation in the Welsh housing sector?

AN ALTERNATIVE FINANCE OPTION FOR HOUSING ASSOCIATIONS IS RECAPPED BY DEBBIE GREEN, CHIEF EXECUTIVE OF SOUTH WALES BASED COASTAL HOUSING.

“In 2008 the then deputy minister for housing in Wales commissioned a review to look at the issues around the delivery of affordable housing in Wales. One of the recommendations of that review was that the government should help to attract a new long term finance product from the capital markets to Wales.

This idea sat on the back burner for a while until, with declining capital funds and an urgent need to supply more affordable housing units, the idea was revisited in 2012. The new scheme, known as the “Welsh Bond” is supporting the building of over 1,000 affordable homes over a two year period with £130 million of investment from the capital markets and 19 participating registered social landlords (RSLs) across Wales.

How does it work?The new idea was to create a scheme funded by £4m from revenue budgets annually over a thirty year period. The scheme would in effect pay the

equivalent of the social housing grant in instalments over that period, rather than up front, and would also fund the additional interest costs incurred due to the deferred payment. Because the participating associations would need to fund almost all of their schemes from borrowing at the outset, part of the grant scheme conditions were that this borrowing had to come from a specified source jointly procured by the sector. It was felt that by taking this approach, new funders could be attracted to Wales and longer term funding could be made available at a cheaper rate than would otherwise be achievable.

Debbie GreenChief Executive of South Wales

based Coastal Housing

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W H A T ’ S H A P P E N I N G

MORE THAN A ROOFHow incentives can improve standards in the private rented sectorAUGUST 2014

W H AT ’ S H A P P E N I N G ? AROUND THE UK

As we prepare for the 2015 Westminster elections, CIH is aiming to influence policies for a housing system that works for everyone through our ‘Ticking the Box for Housing’ campaign. With rising spending on social security posing a challenge for both current and future governments, we will launch our vision for an effective welfare system in mid-September. Our recommendations are likely to include: greatly increasing investment in low-cost rented homes; linking policies for social security and housing to help workers to escape welfare; having grant rates and rent-setting mechanisms that are sufficiently flexible to reflect the country’s widely differing housing markets; and rebalancing the relative contributions made by welfare and wages so that welfare no longer subsidises low pay, as is currently the case.

WEBSITE: http://www.cih.org/tickingthebox

In England the private rented sector (PRS) now houses 18 per cent of all households and is the second largest tenure, after owner occupation. Private tenants are an increasingly diverse group including a higher proportion of people across every income group and a growing number of families with children. But the sector poses some challenges in the form of variable property conditions and standards of management, affordability and the short duration of tenancies granted. The current policy framework is not effectively addressing this and so CIH and the Resolution Foundation have collaborated to publish More than a roof: how incentives can improve standards in the private rented sector, making the case for incentives to encourage landlords to professionalise and commit to a higher set of standards over and above the legal minimum. Our recommendations to government include: reviewing the existing legal minimum standards and how they are enforced; regulating letting agents; developing a nationally agreed set of accreditation standards; and encouraging landlords to sign up to these by offering conditional incentives such as more generous tax allowances.

REPORT: http://bit.ly/1CIPGzG

The Housing (Scotland) Act 2014 passed on 1 August and will usher in a number of important changes for Scottish social landlords. While the headline grabbing abolition of the Right to Buy will undoubtedly make a difference by putting the proverbial plug back in the bathtub of existing housing supply, it may yet prove to be other parts of the Act which make the more substantial impact on housing practice longer term. The Act provides

landlords with greater flexibility with regards to allocations policy, but balances that with the introduction of a new duty to consult with tenants, applicants and tenants groups on any proposed changes to allocations policies. Meanwhile, social landlords have been granted more power to tackle anti-social behaviour. They will now be able to convert antisocial tenants to Short Scottish Secure tenancies and there will be a more streamlined evictions process for antisocial behaviour.

ACT: http://bit.ly/VPf2dJ

The independence referendum makes this is a landmark year for Scotland and for the UK as a whole. Political passions have been inflamed on an unprecedented scale as Scotland’s citizens weigh up the pros and cons of going it alone, or staying as part of the UK. To help inform that debate from a housing perspective, CIH Scotland has produced the below series of three papers by eminent Scottish academics and thought leaders on different aspects of the policy environment which might have a direct impact on how housing would fare under each scenario.

THE REFERENDUM AND PROSPECTS FOR PUBLIC EXPENDITURE IN SCOTLAND: http://bit.ly/1ltynxx

HOUSING TAXATION REFORM AND THE SCOTTISH CONSTITUTIONAL QUESTION: http://bit.ly/XOFJRw

DEVELOPING A SOCIAL SECURITY MODEL FOR SCOTLAND: http://bit.ly/VPf8So

The UK government is trying to neutralise the impact of the ‘bedroom tax’ on the independence referendum by handing powers to the Scottish government over Discretionary Housing Payments (DHPs). The ability to set the cap on DHPs will be transferred, so that the Scottish government can effectively nullify the impact of the bedroom tax in Scotland by ensuring people on housing benefit who have been hit by the bedroom tax receive a DHP to make good the shortfall in their rent. Although, Holyrood will not receive any extra resources from London and will have to fund any changes from its budget.

The Housing (Wales) Bill will be passed in September. The new Act will introduce a national mandatory registration and licensing scheme for all private rented homes; introduce a statutory homelessness prevention service, by conferring duties on local housing authorities to help people who are homeless or threatened with homelessness, and allows for discharge of duty in the private rented sector; require local housing authorities to carry out an assessment of the accommodation needs of Gypsies and Travellers residing in or resorting to its area; introduces new social housing standards; abolishes the Housing Revenue Account (HRA) subsidy meaning local councils now self-finance by retaining rental income and using the revenue to fund their stock; allows fully mutual housing associations to grant assured tenancies; and allows increased council tax (up to 100%) to be charged by local authorities on long term empty dwellings. Also the Planning Reform Bill, and Renting Homes (Wales) Bills are due to be introduced in 2014 and 2015 respectively, the latter of which proposes whole-scale tenancy reform; a draft illustrative model contract is currently out to consultation until October 2014.

HOUSING (WALES) BILL: http://bit.ly/1tz4ympMODEL CONTRACT: http://bit.ly/1lbgqts

The Gender-based Violence, Domestic Abuse and Sexual Violence (Wales) Bill has also been published and focusses on three key areas of; improving leadership and accountability; improving education and awareness; and strengthening services in Wales. Separately, a ministerial requirement for all Welsh housing organisations to have workplace policies for domestic abuse in place was achieved in August 2014.

BILL: http://bit.ly/1p6EXomREQUIREMENT: http://bit.ly/YyRzzm

CIH Cymru published the i2i ‘5 Year on’ report, an update on the Welsh Government funded community benefits project, that promotes targeted recruitment and training (TR&T) as a core contract requirement, and supports the development of supply chains through the use of small and medium enterprise for housing investment programmes.

REPORT: http://bit.ly/1vK1blI

A consultation on a new code of governance for registered social landlords in Wales is currently underway by Community Housing Cymru to set out the standards and practices that boards and their members must comply with to ‘ensure good quality governance is the norm’.

CONSULTATION: http://bit.ly/1vK1mxu

ENGLAND

SCOTLAND

WALES

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The Review of Public Administration (RPA) that incorporates the reduction in the number of Northern Ireland’s district councils from 26 to 11 is coming to a head. Representatives to the new super-councils were elected in May and are currently sitting for a ‘shadow year’ until the new structures become fully opera-tional from 1 April 2015. Part of the reforms will see the Department of the Environment’s (DoE) major planning powers transferred to the super-councils from that date, though the Bill facilitating this transfer was due to be tabled before the summer recess but has been delayed.

MORE: http://bbc.in/1niqnu8

There are currently 20 separate planning policy statements in operation containing land-use policies and other planning matters. Their primary function is to outline the main considerations DoE takes into account

when assessing proposals for development, to direct development plans and to inform planning appeals deci-sions. As part of the overall RPA, DoE is reviewing plan-ning policy and consolidating the 20 separate publica-tions into one document – the strategic planning policy statement for Northern Ireland (SPPS). The draft docu-ment was published for public consultation that ended in April.

CIH RESPONSE: http://bit.ly/1rJo7Qs

In addition to the draft SPPS consultation, DoE and the Department for Social Development (DSD) has two concurrent consultations open until 23 September that will facilitate developer contributions for afford-able housing (equivalent to Part V of the Planning and Development Act 2000) through the SPPS and as part of DSD policy – committed as a key action under the current Programme for Government. As the only region across the UK and Ireland without a mechanism for affordable housing through planning obligations, and at a time when the market is improving but still depressed, the consultation has stimulated much discussion within Northern Ireland’s housing industry. The current pro-posal would require contributions in developments of five units or over where a developer can make a profit of 15%.

CIH BLOG: http://bit.ly/1mH0bbPCIH COMMENT: http://bit.ly/1uOjPIF

H O U S I N G AT T H E C R O S S R O A D S FEATURE

WHAT’S REQUIRED OF A SOCIAL HOUSING

STRATEGY? EDDIE LEWIS

Lecturer and Commentator on Housing PolicyAuthor of “Competing in an uncertain world: institutional change in the Irish state”

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IRISH SOCIAL HOUSING — TOWARDS A MORE

SUSTAINABLE MODELDR RORY O’DONNELL

Director - National Economic and Social Council (NESC)

PART V, MARK II?SIMON BROOKE Head of Policy - Clúid

Housing Association

IMPACT OF CONSTRUCTION 2020

ON THE IRISH HOUSING MARKET

DR PETER STAFFORD

Director - Property Industry Ireland

NORTHERN IRELAND

TWO MAJOR REPORTS HAVE BEEN PUBLISHED IN RECENT MONTHS, ‘CONSTRUCTION 2020’ AND ‘SOCIAL HOUSING AT THE CROSSROADS’. A MAJOR SOCIAL HOUSING STRATEGY IS PROMISED FOR THIS QUARTER. IN THIS ISSUE’S FEATURE, THE AUTHORS COMMENT ON KEY APPROACHES AND RECOMMENDATIONS, AND ASK WHAT WE SHOULD EXPECT OF A HOUSING STRATEGY.

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S O C I A L H O U S I N G S T R AT E G Y EDDIE LEWIS

In a recent article in CIH’s UK Housing Review 2014, Eddie provided an account of how the housing market in Ireland had been laid waste following the financial collapse in 2008 and the recession that followed. What was less clear, he says, and what was left open at the end was the future direction of housing policy. This article will look at some of the options available to government as it prepares a social housing strategy that must come to grips with the legacies of the housing crash.

IntroductionThe housing market is gradually recovering from the financial crash and recession post-2008. House prices have stabilised and are moving upwards, perhaps too fast in some areas. The number of house sales is increasing and there is evidence of long-term private investment in the residential rental market. Housing is affordable, or at least more affordable

than at any time since the turn of the century (Economist: House-Price Index). The number of unfinished estates and vacant dwellings are gradually working their way through the system1. Housing authorities, though hampered by a shortage of accommodation, continue to provide social housing support for upwards of 160,000 households2. But the aftershocks of the crisis are still with us and in many respects the housing market is still dysfunctional.

So what are the current challenges? Rent levels are increasing in Dublin and certain other urban areas, which creates an immediate problem for low-income families. Negative equity in residential properties is still dragging down the market and is seriously hampering the restoration of a healthy banking system. And most notably the supply of housing, after four years of limited investment with output substantially below long-term requirements, has become a

serious political concern and has led to demands for the restoration of subsidies to get the country building again.

Turning to the social housing market, there has been a build up of issues over many years. The figures for households on local authority waiting lists has steadily risen, many of those in receipt of social housing support have been provided with a poor quality environment in which to bring up families and the level of investment required to sustain the necessary level of housing support is putting a serious burden on the finances of the state.

So what should the response of government be? Two major reports have been published in recent months, Construction 2020 (May 2014) and Social Housing at the Crossroads (June, 2014) and a major social housing strategy is promised for Qtr. 3. But before commenting on the different approaches and recommendations, first we should ask what we should expect of a housing strategy.

The importance of strategyThere is a tendency common to most public policy strategy documents to assume a greater control over future events than exists in reality. Strategies often set out aspirational goals, commit to detailed targets, make multiple recommendations and purport to chart clear pathways to the

desired future. Suffice it to say such documents rarely survive contact with the real world. This is particularly true of housing, a particularly complex, dynamic and uncertain policy area. What is needed is a strategy, not a plan and still less a wish list.

The difference between a strategy and a plan is well articulated by Lawrence Freedman, in his book, Strategy, A History:

“(A strategy) differs from a plan, which ‘supposes a sequence of events that allows one to move with confidence from one state of affairs to another’, and instead describes a process of moving, in an semi-orderly fashion, through a series of states ‘each one not quite what was anticipated or hoped for, requiring a reappraisal and modification of the original strategy, including ultimate objectives’ (Freedman, xi).”

This point is reinforced by Richard Rumelt3 who argues that a strategy must contain at least three core elements: a diagnosis of the problems to be addressed; a guiding policy or approach; and a coherent and coordinated programme of action.

‘The core of strategy is always the same: discovering the critical factors in a situation and designing a way of coordinating and focussing actions to deal with these factors’ (Rumelt, p1)

Housing strategy therefore should be less about fixed targets, long term objectives and mission statements and more focussed on creating a framework within which policy decisions can be made in response to complex and changing circumstances. The strategy must be based on an analysis of the current situation, of the obstacles to change and of the choices available to address them.

Finally, it should seek to identify a limited number of key levers that, if introduced, will produce a cascade of actions that support the strategic direction to be followed. Needless to say, none of this is easy.

Determining the strategic directionPrior to the financial collapse in 2008 the structure of the housing market in Ireland was already undergoing substantive change. Home ownership rates were declining, the private rented market had almost doubled in size in less than two decades and the boundaries between the small social housing sector and the other sectors were gradually being eroded as rental assistance programmes made greater use of privately owned dwellings. But as the financial collapse was to expose, the housing market was simply not functioning to provide a sustainable balance of supply and demand.

The two reports produced so far this year highlight different aspects of a possible government response. Construction 2020 is focussed on the supply constraints in the market. It suggests a long-term need for an output of at least 25,000 dwellings per year to meet demand. As far as social housing is concerned the report notes the high level of need contained in the Summary Assessment of Need 2013 and points to specific actions taken by government to increase supply. Its general conclusion is, however, left open.

‘We will identify the best way to deliver social housing for the years ahead through the development of a comprehensive strategy for Social Housing, setting out a vision for the sector’ (14)

NESC in their report Social Housing at the Crossroads are less circumspect. The report proposes a radically new departure for social housing. Based on Kemeny’s analysis of dualist and

unitary housing markets4, it argues for a complete overhaul of the way in which social housing is funded. Among the recommendations are:

• The movement to a cost rental model (to replace differential rents)

• The ending of tenant purchase• Stock transfer from housing

authorities to the voluntary sector• A re-orientation of policy away

from support of mixed tenure developments

• Some measure of rent control in the private rented sector

• The introduction of some form of housing benefit

What do the two reports tell us about possible strategic directions for social housing policy? The key element in the former (in so far as it relates to social housing) is the emphasis on addressing supply constraints. It is silent on the functioning of the social housing market itself. That there is an acute housing supply problem in Dublin affecting all segments of the housing market at present is not in doubt but there remains a concern that an over focus on supply will crowd out consideration of more deep-seated problems.

The NESC report advocates that the state proceeds down a radical new pathway for social housing. It envisages public policy preparing the ground for a gradual movement towards a unitary rental market. This is a ‘courageous’ proposal with definite attractions but one for which there are few costings, huge implementation challenges and a very long (even multi-generational) lead-in period. The report itself questions the institutional capabilities to deliver such an approach. But is there any alternative?

Social housing has evolved over many years since the last major consolidation of policy produced by the Housing Act, 1966. The many legislative and policy changes since then have resulted in a system that is fragmented and losing

1 Figures collected as part of the National Housing Survey (2013) of Unfinished Estates show a decline since 2010 of 56% in the number of unfinished estates and 72% in the number of vacant units. 2 This figures does not include the number of individuals and families in receipt of SWA rent supplement of mortgage assistance, figure estimated at around 80,000. Approved housing bodies provide for a further 27,000 households.

3 Rumult, R (2012), Good Strategy/Bad Strategy: The Difference and why it matters. Profile Books. 4 Kemeny, J, From public housing to the social market, Routledge, 1994

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coherence. That there is a need for a radical overhaul of the traditional social housing model is hardly in dispute and was signalled in the two NESC Reports, Housing in Ireland: Performance and Policy (December 2004) and The Developmental Welfare State (2005). The direction of reform was set out in a series of policy statements during the 2000s5. Key elements were:• A broadening of the investment

base for social housing with less reliance on capital intensive public programmes

• A new approach to the assessment of need paving the way for the adoption of ‘life-cycle’ principles in the allocation of housing

• The introduction of greater elements of tenant choice

• Important changes to the tenant purchase process

• The reorientation of rent supplement as a housing support

• A reordering of the work of housing authorities away from direct service provision and towards the planning, regulation and management of the local housing market

By the time of the financial collapse the reform programme was proceeding but still far short of completion.

It is suggested here that this reform agenda can still provide a platform for a socially progressive housing policy based around the principles of equity and efficiency.

Setting the parameters for a social housing strategy Housing policy over the years has suffered from a failure to properly integrate it with broader economic and social objectives. Past policy is littered with examples of housing investment programmes poorly aligned to the macro-economic environment and house prices acting as a catalyst for spikes in consumer spending and asset price inflation. In terms of the welfare state, housing policy has frequently been framed with little reference to broader social policy objectives. The proposed housing strategy therefore should not treat housing in isolation but set itself to advance the broader social and economic objectives of the state.

In economic terms the strategy should set out a rationale for state intervention that goes beyond a consideration of market failure and sees housing policy:• Contributing to (or at least not

undermining) macro-economic stability

• As a means of reducing infrastructure costs, high housing costs being treated as a potential burden on the economy in the same way as a poor public transport system or a lack of broadband

• In the context of its impact on employment and the labour market

From a social perspective there is a need to affirm the importance of securing shelter for those who require

it but also, beyond this, acknowledging that the state continues to have overall responsibility for ensuring that the housing needs of those unable to provide accommodation from their own resources are met. The state should be clear about the impact of housing costs on poverty and set a general threshold e.g. 35% of net household income, as a basis for assessing housing poverty. Finally, the strategy should set clear community and personal goals based on the principles of ‘sustainable communities’ on the one hand and equality of opportunity and the development of human capabilities on the other.

The second important component of any strategy should be a coherent and coordinated programme of action. This means recognising that the housing system has to be considered as a whole and policies need to be delivered across a number of areas (see diagram).

The core elements of such a programme might be as follows:

Investment programmeThe strategy should make the case for a long-term commitment of finance to avoid the extremes of the investment cycle that social housing has suffered in the past. In order to achieve this, costs need to be spread over longer periods i.e. expand further the use of revenue funding.

RegulationA clear statement of purpose in terms of consumer protection, governance and the use of public funds; the financial viability and accountability of housing providers; and the opening up of access to private investment. This needs to be based on a statutory code that covers both the private and public rental sectors.

Social housing reform agendaThe key will be the objective and timely assessment of housing needs that will allow movement towards a ‘life cycle’ or ‘pathways’ approach to social housing provision. Linked to

this are changes in allocation policy, rents, tenancies, the housing of the homeless, purchase and succession policies and housing management.

Housing market equilibriumThe strategy will need to set out a clear message about what measures the government will take to ensure that the housing market operates within clear parameters in terms of supply, demand and cost. In Central Bank parlance – the government must provide some ‘forward guidance’ to the market.

Sustainable communitiesThe term ‘sustainable communities’ needs to be more clearly defined so that it can provide an operational guide to policy makers around regeneration, mixed tenure / income communities, ‘living in the community’ (e.g. the movement of residents of institutions into the community), and the links between spatial planning and improvements in social infrastructure.

The final part of creating a good strategy is to find the right levers that will build a positive momentum towards achieving the overall goals of the strategy. Over many years the housing policy has worked through small incremental steps to address specific social problems. It is doubtful if this approach will work in the future. In this NESC are right – social housing is at the crossroads – and requires radical and hopefully life-saving surgery.

5 The key policy statements were Building Sustainable Communities (Dec, 2005) and Delivering Homes Sustaining Communities (Feb, 2007). Also important was The Way Home, A Strategy to address Adult Homelessness in Ireland 2008 – 2013 (Aug, 2008).

Eddie LewisLecturer and Commenta-

tor on Housing PolicyAuthor of “Competing in an

uncertain world: institutional change in the Irish state”

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I R I S H S O C I A L H O U S I N G - T O W A R D S A M O R E S U S T A I N A B L E M O D E L

T O W A R D S A S U S TA I N A B L E M O D E L DR RORY O’DONNELL

The Irish government is devel-oping a comprehensive strategy for social housing. The National Economic and Social Council (NESC) have recently completed a report that is being used in the formulation of that strategy1. It is also continuing to work on other aspects of housing policy, includ-ing owner occupation, the private rented sector and sustainable urban development. This article discusses the Council’s work on social housing.

Looking at the channels of provisionIn each of the three channels of provision — local authorities, housing associations and private rental sector — there are serious challenges.

In local authorities, there is almost total lack of new supply because of borrowing constraints and because costs are not covered by low (differential) rent. Although housing associations are seen in current policy as the main channel of future social housing provision, there has been limited uptake of the mechanisms introduced to promote this. In any case, this approach as currently configured

exposes the state to rising rents in the private rental sector. Increasing recourse to this private sector is also problematic, as seen by rapidly rising rents, exit of low-income tenants, risks of overcrowding and homelessness, state exposure to rising private rents and limited availability of secure, affordable, long-term tenancies.

In response, Irish policy must focus on three interdependent elements and it must develop an institution which can combine them, as depicted in figure 1. This is what is needed to move the Irish housing system in a desirable and sustainable long-term direction.

This work can and must be consistent with the immediate responses that are necessary to address the acute housing pressures now in evidence. New financial mechanismsIreland is different from other European countries in that the main providers of social housing (local authorities) are classified within the ‘general government sector’ as defined by Eurostat and used in applying the fiscal rules of the EU and euro area. Consequently, borrowing to fund new local authority housing represents an addition to the government deficit and debt.

Funding Irish social housing provision on the scale needed will require creation of public housing institutions capable of attracting finance without adding to the national debt. Such housing providers would need an adequate rental-income stream to meet Eurostat’s test of being in the market sector rather than the government sector.

In addition, other countries use a range of measures to help social housing providers access finance on favourable terms, including government guarantees and tax provisions. For example, The Housing Finance Corporation in the UK acts as a ‘financial aggregator’ funnelling the cheapest possible credit to the various housing associations.

Cost rentalCost rental provision with secure occupancy for a significant share of the population is the best available response to the dynamics of rental systems and housing markets. A movement in this direction will require complementary adaptation of housing assistance payments on two fronts: limiting the state’s current exposure to rising rents in the private-rental sector, and ensuring affordability for tenants currently paying differential rent.

Cost renting refers to a situation in which rents cover only the actual costs

incurred in providing and maintaining a dwelling. It differs from profit renting, where a landlord charges the maximum obtainable rent, regardless of the historic cost.

European countries with more stable, affordable and socially inclusive housing systems generally provide modest support for large-scale provision of secure rental accommodation, mostly by non-profit bodies, in which rents reflect costs, not the maximum that market pressures will sustain. They use modest levels of capital subsidy, combined with cost rental, rent regulation and housing benefit, to provide affordable long-term rental accommodation for a large share of their citizens. In some cases, the affordability of such rental accommodation reflects both a degree of subsidy and rent pooling across a large mature stock, much of it built at lower cost in earlier decades. The larger social housing sector, less distinct and segregated from private rental, makes it possible to combine a mix of income groups while also making adequate provision for those most in need.

In Ireland, social housing rents have traditionally been set below cost and do not support the financing of new social housing. When government capital spending is cut, as happened in the 1980s and again after 2008,

this leads to a very sharp fall in the provision of new social housing. Cost-based rents would be too high for typical social housing tenants. In other European countries, lower-income tenants in both the social and private rental sectors can avail of housing benefits and hence are in a position to pay rents that cover the cost of initial provision and maintenance.

Direct public influence on supplyExperience shows that in housing there are limits to reliance on passive, arm’s-length tax-based and other incentives, however smartly designed, unaccompanied by suff ic ient regulation and/or direct public policy action. If, as Government wishes, housing provision is no longer to be developer-led, it will have to be led by some other identifiable actor or actors. But in the current economic environment and institutional context it has become even more difficult to achieve plan-led development.

However, the State now has considerable land resources that can be used for social housing. This consists of land owned by local authorities and the Housing Agency, under the control of NAMA and owned by other public bodies. Direct influence on supply is critical to ensure that available finance is actually taken up in new projects that rent regulation works with, rather than against, the market. New institutional arrangementsNew institutional arrangements will be required to move policy on each of the three fronts. The creation of a ‘financial aggregator’ or special purpose vehicle to facilitate borrowing (off-balance sheet) and onward lending to housing providers, will help address the issue of finance. However, such a vehicle will require an engine capable of planning, driving, delivering, allocating, protecting and maintaining the supply of affordable rental homes.

1 NESC (2014) Social Housing at the Crossroads: Possibilities for Investment, Provision and Cost Rental, NESC: June 2014.

Figure 1. Elements of a more unified, cost-effective and sustainable model

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Regardless of what organisation we are members of, at times we ask ourselves: is it good value for money, what benefits do I get, are they enough, are there added benefits the organisations can give me? That's why if you're a CIH member and you stay in Ireland, you do get more for your money! Over the years we've tried give members more benefits. Right now the additional benefits of being in Ireland include:

• Housing Ireland – the triannual magazine

• One-off publications including good practice guides

• Member events • You also get a discount to the CIH

Annual Conference & Exhibition.

M E M B E R B E N E F I T SAs a member of CIH did you know that you get a whole range of benefits. These include access to local housing policy knowledge, up to date housing

news, and discounts on training and events in Ireland.

A key question that remains to be addressed is what body or bodies will be the engine, performing these roles or co-ordinating their execution by others? This question is critical because there are enduring doubts about whether several of the key housing functions can be adequately performed by the existing actors:

• Despite the important role of Ireland’s housing associations, a role which is likely to increase, there are reasons to doubt their ability to undertake the necessary scale of borrowing and development

• It is not clear what bodies have the responsibility and capability to analyse and plan the provision of housing, in line with the changing needs of the society and the economy

• Experience shows that existing rental, management and allocation policies make it extremely difficult to fund the upkeep of social housing and preserve the social housing stock

• It is not clear that the various construction sector actors (contractors, builders and developers) will be in a position to provide housing and urban neighbourhoods at the scale, quality and cost that is required

• Nor is it certain that the Irish banking system will be in a position to fund either public or private housing in a satisfactory way

• While there is, on paper, a strong logic for large international institutional investors who are in search of stable long-term returns to invest in rental housing provision, it remains to be seen whether this materialises.

To these doubts must be added uncertainty about whether any existing body will be capable of achieving integrated housing, mixing income groups, on a reasonable scale.

Consequently, further institutional and organisational changes are required. Ireland needs to create institutions

capable of achieving a resumption of provision by the local authorities or an equivalent body, such as a national housing trust. At the very least, this requires a combination of the capabilities developed in the Housing Agency, NAMA, the local authorities and other bodies — as is emerging in current policy initiatives.

Conclusion – a once in a generation opportunityThe conditions that made the elements of Ireland’s traditional approach — i.e. fully funded local authority provision, differential rent in a secure local authority tenancy and tenant purchase — effective and sustainable have largely disappeared. For several decades, there has been insufficient investment in new social housing provision. As a result, policy relies on a strong queuing system and greatly increased, and unsatisfactory, reliance on the private rental sector. There is a danger of an unstable policy compromise involving a wish to retain differential rent and tenant purchase, combined with budgetary pressure to limit spending on rent supplement and leasing.

NESC’s recent work suggests the importance of developing the institutional means of enabling a more constructive compromise between economic reality and social solidarity. Given the state’s high level of involvement in property, land, and finance and investment there is now a once in a generation opportunity to take on this challenge.

Rory O’Donnell, Director,

National Economic and Social Council

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on the local authority housing waiting list who will benefit).

• Clúid’s experience is that where a housing association was involved at design stage, the outcome was greatly improved, so joint approaches to local authorities by housing associations and developers should be specifically encouraged in guidelines issued by the Housing Minister. Housing associations should be able to get in-principle funding approval at a very early stage to ensure the process takes place speedily.

• The default position of land trans-fer should remain. Experience to date has been that too many local authorities availed of the cash option; perhaps because it was

simpler, perhaps because they were worried that wily develop-ers would outwit them in nego-tiations. So a financial contribu-tion should only be allowed in exceptional circumstances, and with express agreement of the Housing Minister.

• A strict timetable for arriving at Part V agreements should be adhered to and monitored by Housing Minister.

• Standard land and construction costs should apply. This would greatly speed up the negotiation process.

Part V has the potential to make a very significant contribution to the future supply of social housing. The

Housing Agency estimates that 80,000 new dwellings will be required over the next 5 years. If 10% of these were social housing that would mean 8,000 new social housing units – perhaps a third of a reasonable target for social housing. So if the government is serious about social housing, Part V operated by local authorities and housing associations must stay.

Simon BrookeHead of Policy

Clúid Housing Association

P A R T V, M A R K I I SIMON BROOKE

Planning obligations are a tool for bringing a proposed develop-ment in line with public policy objec-tives. Requiring developers to con-tribute towards affordable housing within new schemes creates mixed communities and increases supply of this tenure.

For readers who may not be famil-iar with Part V of the Planning and Development Acts 2000 and 2002 (referred to by most people as ‘Part Five’), this legislation essentially says that up to 20% of the land of new housing developments can be reserved for social or affordable housing provided by a local author-ity or housing association. (Affordable housing, which was housing built by local authorities for sale at lower than open market value, was abolished in 2011. So we’re now only talking about social housing.)

The local authority or housing associa-tion pays the developer a price for the land that is based on its value before it was zoned for housing. In other words, a price is paid that is significantly less than current market value (although the discount wouldn’t be as great now as it was during the boom years because land prices have dropped). So essentially, Part V operates like a tax of up to 20% of the increased value of the land that arises from being zoned residential.

The government’s Housing Policy Statement published in June 2011

announced a review of Part V, and two years later in 2013 the then Housing Minister Jan O’Sullivan published a review carried out by DKM and Brady Shipman. Views on this review were sought by September that year. All went quiet until the government’s strat-egy Construction 2020 (published in May 2014) announced that the review would be completed by Qtr. 2 2014. We’re now well into Qtr. 3 as I write and there is no sign of the review.

There have been reports of wran-gling within the coalition with some elements of Fine Gael showing mark-edly less enthusiasm for Part V than Labour, but the overall message appears to be that Part V will survive in some form.

This is good news because Part V has three critically important features:

• It ensures the capturing of better-ment value that is consequent on planning permission being granted (i.e. the increase in the value of land that arises because the local authority has zoned it residential). The betterment value is entirely allocated to the provision of social housing, so the local community is the direct beneficiary.

• It provides for a supply of social housing that is directly related to the supply of private housing.

• It contributes to the creation of mixed tenure communities. There is a considerable body of evidence which says that mixed

tenure communities work much better than large social housing estates. The promotion of mixed tenure communities is current government policy (Housing Policy Statement 2011).

So Part V has a crucial role to play in the future provision of social housing, and so it is vital that its principle is retained.

As affordable housing has been abol-ished, it’s likely that the total Part V allocation will be reduced to 10% for social housing. Personally I’d prefer to see 20% for social housing – that would have the potential to make a serious dent in housing waiting lists – but 10% could have a sizeable impact. (Incidentally, this would reduce the ‘tax’ paid by the developer by 50%.) So, if the principle is retained, then we can learn from past experience and amend Part V to make it work better for everyone. This could include the following:

• Land transfers should continue to be possible to either the local authority or a housing associa-tion. Housing associations have access to finance that is currently not available to local authorities so they can provide very significant added value. Furthermore there may be a host of other reasons why it would suit a local authority for the housing to be provided by a housing association (don’t forget that in either case it is households

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completion) such analysis is limited in depth.

Construction 2020, produced by Government in mid-May in response to the Forfás Report on the outlook for the construction sector, aims to increase the ability of the state to increase the evidence-base of the property market. It seeks to bring data collection and analysis together under a Taskforce with the objective of bringing trans-parency and improving the monitor-ing of activity in the housing market by publishing “an annual … breakdown of projected supply against projected demand, and any actions required to address potential mismatches.”

The Taskforce, which will focus pri-marily on the deepest mismatch (in Dublin) will include government, indus-try and other partners responsible for the provision of infrastructure. In September last year, Property Industry Ireland which represents businesses working in the property and construc-tion sector, produced a report enti-tled “Towards a National Property Strategy”. It called for, amongst other things, a centralised property data-collection unit within Government and a Clearing House policy devel-opment group to oversee the state’s

response to any emerging problems in the market. Hopefully the Taskforce proposed by Government will be given similar policy-making and implemen-tation powers.

The Report commits government to consider any infrastructural require-ments which are needed to accom-pany new residential development to ensure that “viable and appropriate developments” are brought to market as efficiently as possible.

This is undoubtedly good news, as many otherwise viable housing proj-ects are currently delayed, waiting for public utilities and infrastructure to be put in place before construction can begin. In complex large developments, project sequencing is vital, and being able to identify infrastructural require-ments and provide them ahead of need is a key element of good project planning. This, hopefully, is recogni-tion by the state of its role in ensuring that it is not a barrier to the supply of new, viable, building projects.

The annual Housing Supply and Coordination Report will make fasci-nating reading for those with an inter-est in the housing sector. It will remove much of the guesswork on which the

Irish property market is founded and give everyone in the sector an inde-pendent set of up-to-date indica-tors on which to make projections. More importantly, it will facilitate real engagement with the property indus-try to anticipate, and resolve ahead of crisis, any looming issues of over or under-supply. While data collection and dissemina-tion might seem to be one of the more technical aspects of Construction 2020’s seventy-five recommenda-tions, it is, in my opinion, one of the most important initiatives to bring sta-bility and functionality to Ireland’s vol-atile property market. Underpinning property activity with timely and well-scrutinised data will help us achieve all other goals for a dynamic, evidence-led and responsive housing sector.

I M P A C T O F C O N S T R U C T I O N 2 0 2 0 DR PETER STAFFORD

Despite the many crises the sector has been through in recent years, data on the Irish residential property sector remains very poor. Because of the disjointed way in which state agencies gather and publish statistics on house-build-ing, it is almost impossible to track individual new developments through the planning and construc-tion process to completion. Once built, our knowledge about the own-ership status, age and occupancy of individual houses is sketchy at best. To give us an idea of the state of health of the residential property sector, we rely heavily on fragmented and incomplete infor-mation, and too often anecdote and conjecture take the place of statis-tics and datasets.

The result is confusion, contradic-tions and sheer guesswork. More importantly, poor data slows down

decision-making, undermines policy responses and distorts the market. The main problem in the housing sector is the speed of house-price increases, driven by improving con-sumer demand during a period of low supply. An important issue for policy makers and the industry is how we to use data to underpin that assertion when there are so many gaps in prop-erty market statistics. The lack of inde-pendent data on the market makes it very difficult to agree an appropriate level of new housing supply to calm price increases without overshooting the market.

At the time of writing, the national prop-erty database tells us, for example, that there were 8,877 housing transac-tions between January and May 2013 and 11,687 during the same period of 2014.

The Department of Environment

records 3,685 planning applications between January and May 2013 and 4,396 during the same period of 2014. We know from the Department of Environment that 2,816 houses were completed between January and April 2014, up from 2,390 in the same period of 2013. CSO data shows that between May 2012 and May 2013, house prices fell by 1.1% but during the period May 2013 to May 2014, they increased by 10.6%.

Putting all this data together, we can make an informed view that, over the remainder of 2014, the volume of future completions will slowly increase but at a slower pace than increases in transactions and prices. However, while information is incom-plete (house-price data, for example, only includes the 60% of transac-tions which involve a mortgage, and there is no ability to analyse the time-lag between planning permission and

Dr Peter Stafford, Director

Property Industry Ireland

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N E W B U I L D I N G R E G U L AT I O N S RUAIRÍ HAYDEN

Since the collapse of the prop-erty market in 2007, the reputation of the Irish construction indus-try has been in sharp decline. This is mainly due to poorly con-structed homes, pyrite damage and breaches in the fire regulations which left homeowners in vulnera-ble positions and many with large bills for rectifying their properties of building defects. The most high-profile of these cases was the order of the High Court to evacuate Priory Hall in North Dublin, as a result of major defects in the fire proof-ing. The government came under increasing pressure to ensure that the problems experienced by the residents of Priory Hall do not visit any future property owners. BackgroundThe modern system of building control in Ireland was introduced by the Building Control Act 1990. This Act and the subsequent building regulations

were introduced to promote good practice in the design and construction of buildings in the interest of the health, safety and welfare of people who use buildings. There has however, always been a question mark over compliance with these regulations. Up to now, the industry operated a system of “self-certification” where the person undertaking a development was responsible for compliance with the building regulations, but was not required to provide evidence of this compliance. The construction industry tends to be divided into two sectors, the house and apartment sector and the commercial and industrial sector. It is suggested that compliance with the regulations in the house and apartment sector tended to be less than that of the commercial and industrial sector. This is also evident from the projects that have been highlighted to be defective in the last few years.

The expected increase in construction

activity this year along with the current housing shortage will result in a greater number of projects commencing. These projects however are entering a much more regulated landscape and it is imperative that the construction professionals involved are fully aware of all the changes to the regulations. Some of these changes are:

• Building Control (Amendment) Regulations 2014

• Part L Conservation of Fuel and Energy (Technical Guidance Documents)

• Part M Access and Use • Construction Products Directive

New regulationsOn 1 March the new Building Control (Amendment) Regulations 2014 came into law. These regulations impact on all professionals, builders and specialist subcontractors within the construction and property industry. The regulations apply to any buildings and works that require a fire safety certificate, new dwellings or extensions with a floor area greater than 40m². As a result of the new regulations, the owner, designer and builder are responsible for ensuring that the projects they are involved in have certification for the design and construction. The key requirement of the Building Control (Amendment) Regulations 2014 is the increased level of certification and documentation. The building owner needs to ensure that the following certificates are completed:

• Cert i f icate of Compliance (Design), by the design certifier

• Certificate of Compliance (under-taking by person assigned to inspect and certify works), by the assigned certifier

• Certificate of Compliance (under-taking by builder)

• Cert i f icate of Compliance (Completion), by the assigned certifier and the builder

• Notice of Assignment by the Building Owner of a Competent Person as assigned certifier and appointment of a competent builder

Design certifierUnder the new Act, when submitting the commencement notice at commencement stage, it will be the design certifier’s role to submit the design certificate of compliance along with any plans, specifications and any other design documentation depending on the nature of the works. Along with this, the building owner will also have to submit the notice of assignment of person to inspect and certify the works, the assigned certifier, together with the assignment of the builder. The prediction in most cases is that the design certifier and the assigned certifier will be the same individual and this is confirmed to be the case from the building register on the localgov.ie website. These roles however, are separate and the responsibilities of each role are different. It is the design certifier’s role to ensure that all the design is compliant with the building regulations and to provide sufficient information to the assigned certifier to enable them to fulfil their role.

Assigned certifierThe assigned certifier should be competent to inspect and certify the works. The assigned certifier is also required to be one of the following:

• Architects on register pursuant to Part 3 of the Building Control Act 2007

• Building surveyors on register pursuant to Part 5 of the Building Control Act 2007

• Char te red eng ineers on

register pursuant to Section 7 of the Institution of Civil Engineers of Ireland (Charter Amendment) Act 1969

The assigned certifier holds a key role under the new regulations and is responsible for completing the inspection plan prior to any work commencing on site. The inspection plan is a risk assessment of the particular project pointing out all areas that may require inspection. It is unlikely that this would be fully completed at commencement stage on more complex projects, but will have to be updated throughout the project to account for all inspections. The assigned certifier will be responsible for completing inspections and coordinating inspections by others, the latter being completed through the use of ancillary certifiers. The ancillary certifiers will be responsible for providing the assigned certifier with certificates for works or design they may have completed. On larger projects it is envisaged that the ancillary certificates will make up a major part of the inspection plan.

On completion, the builder and assigned certifier certify that the building is constructed in accordance with the building regulations. The building cannot be used or occupied until the certificate is accepted and the building is entered on the register. All certificates must be uploaded to the new local authority online ‘Building Control Management System’ (BCMS). BCMS allows building owners, assigned designers and assigned certifiers to submit all documentation through its online system. A code of practice was published by the Department of the Environment, Community and Local Government (DECLG) to provide guidance with respect to inspecting and certifying works or a building for compliance with the requirements of the building regulations.

The local authority One of the criticisms of the new legislation is the role of the local authority in building control, with many believing that they should take a far more active role in ensuring

compliance with the building regulations. The local authority will be responsible for checking and assessing plans and specifications submitted through the BCMS and ensuring that all the documentation is validated on submission. It is important to note that validation does not mean approval; it is more an administrative than a technical assessment. As under the old regulations, the local authority are responsible for monitoring building works through inspections. An inspection rate of 12 – 15% of all projects has been set by DECLG. This rate would appear to be quite low, but inspections should be targeted so as to ensure that sectors where compliance has traditionally been deficient are inspected more frequently. The BCMS will allow the building control authority far greater visibility on what is happening in their area and what type of risks are involved. This should make them far more efficient.

The builderThe builder’s responsibility has changed under the new regulations and they are now required to sign the ‘certificate of undertaking by the builder’ where the builder undertakes to

“construct the building or works in accordance with the plans, calculations, specifications, ancillary certificates and particu-lars listed in the schedule to the Commencement Notice to which this undertaking refers and certi-fied under the Form of Certifi-cate of Compliance (Design)” The builder also undertakes to co-operate with the assigned certifier for the implementation of the site inspection plan and to ensure that any design carried by them or their sub-contractors is certified and submitted. The Construction Industry Federation (CIF) responded to a request from DECLG to develop the register of builders. This change is a vast improvement for legitimate contractors within the industry, as it puts a responsibility on contractors

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to ensure all the work is carried out as per the design. This register is the Construction Industry Register Ireland (CIRI) and it is anticipated that in the near future membership will be mandatory for all contractors completing works under the Building Control (Amendment) Regulations. CIRI’s objective is to separate competent construction companies, sole traders and builders from those who have given the industry a bad name. It is probably worth noting that CIRI can achieve its objective without being embedded in the legislation; however being embedded would bring about a full list of registered builders more promptly.

Building regulationsNot to be confused with the building control regulat ions, bui ld ing regulations deal with issues such as building standards, workmanship, conservation of fuel and energy and access for people with disabilities, while the building control regulations’ purpose is to promote observance of the regulations by setting out procedure and penalties available to the building control authorities. The building regulations have undergone some significant changes since the

collapse of the property market in 2007. The most significant of these are in the areas of Conservation of Fuel and Energy (Part L) 2011 and Access and Use (Part M) 2010. Also since July 2013 designers, specifiers and builders must be aware of and understand the new requirements under the construction products regulation. This regulation aims to ensure that reliable performance-related data is made available on construction products being placed on the European market. CE marking is now mandatory for all construction products placed on the market for which harmonised standards are in place. A new home under construction today is required to reach far higher standards than it would have in 2006 when we constructed nearly 93,000 houses. It is unfortunate that these regulations were not in place during the period of greatest construction within the country, however their implementation now is very welcome.

Conservation of Fuel and Energy (Part L)It is no longer sufficient to just depend on fabric insulation; all elements of the building that contribute to the energy use of the building need

to be considered, and guidance is given on each of these. The energy consumption rate (per m2 of floor area) of a proposed home is stated as the energy performance coefficient (EPC), while the carbon emission rate (per m2 of floor area) of the proposed dwelling is stated as the carbon performance coefficient (CPC). There are maximum rates that must not be exceeded in new dwellings. Changes have been made to the fabric insulation reducing the maximum u-value for elements of the building. Another major change to Part L relates to the use of renewables within new dwellings; each dwelling should have a minimum level of energy provision from renewable technologies.

Guidance is also given on thermal bridging and air permeability to avoid excessive heat losses. To prevent local condensation problems, care should be taken to ensure continuity of insulation and to limit local thermal bridging. Compliance in these areas is very much dependent upon strong competent supervision on site to ensure that the quality of the build meets the quality of the design. The assigned certifier ’s role is imperative in ensuring that the site

Ruairí Hayden is lecturer in construction law and construction

technology at the School of Surveying and Construction Management,

Dublin Institute of Technology. In this article he outlines the Building Control

(Amendment) Regulations and the revised technical guidance documents

that give new home purchasers an assurance of a better quality home.

inspection plan takes these critical areas into consideration. Checks and assessments need to be properly in place and insulation that requires inspection should not be covered up prior to being signed off.

Access and Use (Part M) 2010Part M 2010 was introduced to improve the standards of accessibility and to ensure that facilities within a building are inclusive to all people with a wide range of abilities. The changes to the technical guidance document increase the opportunities for the participation of all within our society. Section 3 of the technical guidance document deals with access and use within housing, and focuses on the approach, access, circulation, sanitary and switches and sockets within a domestic situation. There are a number of changes to door opening dimensions and provisions for clear open space within circulation areas and sanitary facilities. The National Disability Authority has highlighted an unacceptable level of compliance in one off housing and private housing developments in their ‘Review of the effectiveness of Part M of the Building Regulations’. The new Building Control (Amendment) Regulations should

address this noncompliance, as the assigned certifier will be in breach of the legislation if construction work is certified, but does not comply with the regulations.

ConclusionThe legacy that has been left behind from the property boom of the last decade cannot be allowed to happen again and the correct implementation of the new Act should prevent another ‘Priory Hall’ taking place. There has been some criticism that the new system is self-certification and to a degree this is correct, however it is incumbent upon all professionals and builders within the industry to ensure that the projects they are involved in comply with the legislation.

DECLG is beginning the process of engagement with other departments, insurance providers and the broad industry on LDI (Latent Defects Insurance). It is predicted that this will gain some traction during the next twelve months. The view being expressed is that the building regulations will go so far, but that there needs to be some form of recourse (for householders in particular) when things go wrong.

The new regulations wil l be challenging at first with professionals and builders having to adapt their quality management systems to meet the requirements of the legislation. It will however provide owners with an assurance and security that their new home will be built to specified standards. There is little doubt that the new regulations and controls will bring about better quality and more energy efficient houses for all consumers. This can only be a positive for construction and needs to be embraced by all professionals within the industry.

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Now delivering in Dublin!CIH Level 4 Certificate for the Housing Profession (UK QCF)

ICSH and CIH have joined forces to offer a NEW housing qualification in Ireland.

Aimed at housing professionals aspiring to or working at management level, the course ensures

you have a sound understanding of the context within which housing organisations operate.

CIH Level 4 Certificate for the Housing Profession (UK QCF)*

This qualification will give you an understanding of the essential aspects of housing strategy, policy, law and finance, as the context for providing housing management services. You will also learn skills in how to manage people, change and risk.

Who is it for?

Housing professionals aspiring to or working at management level in the housing industry and learners who wish to build on prior housing qualifications.

This course gives housing practitioners the knowledge and analytical skills they need to work in a challenging operational environment

Donal McManus, ICSH Executive Director

Part-time study – online and onsite

Study online and onsite

This programme is delivered through a combination of face-to-face training sessions and self-directed learning through our dedicated e-learn site – giving you a great range of learning opportunities.

Qualification level and accreditation

This course is accredited under the UK Qualifications and Credits Framework (QCF) at Level 4, which equates to Level 6 on the Irish Framework. It carries a credit value of 36 credits. The Awarding Body is the Chartered Institute of Housing.

All course content, resources and assessment will be

This is an exciting new partnership between the ICSH and CIH,

increasing the range of support and expertise available to housing

The independent voice of housing and the home of professional standards | www.cih.org| 048 9077 8222The national federation for voluntary housing associations in Ireland | www.icsh.ie | 01 6618334

What you will learn

• Understand the history and development of the housing sector in Ireland and the legislation underpinning it

• Appreciate the wider financial environment for housing organisations

• Develop analytical skills in evaluating policies, their intended outcomes and impact

• Explore the socio-economic factors affecting housing need, demand and supply

• Understand the key functions in housing management and housing-related advice services

• Develop skills in managing people, risk and change

“Our 2014 course is already fully booked!

Register your interest now for the 2015 course delivery (limited places available).

Contact Catherine McGillycuddy at the Irish Council for Social Housing, 50 Merrion Square East, Dublin 2. t: 01 661 8334 e: [email protected]

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www.cih.org/northernireland

Chartered Institute of Housing in Northern Ireland

Carnmoney House, Edgewater Office Park, Belfast BT3 9JQT 028 9077 8222 | F 028 9077 8333 | E [email protected]

Registered as a Charity No: 244067/R

The independent voice of housing and the home of professional standards