Monday, June 28, 2010

Social Housing Leasing Scheme - a “bail-out for developers”

According to the housing and homeless charity Focus Ireland, there are currently in the region of 100,000 households on local authority social housing waiting lists across the State, 5000 people who are homeless at any one time and more than 93,000 households receiving rent supplement due to difficulty in paying their rent within the private rented sector.

At the launch of their annual report published last month,  they said that the Dublin government would fail to meet its public commitment to end homelessness by the end of this year.  They also warned that the absence of more effective action by government would only result in a deepening of the housing and homeless crisis as the need for housing is now greater than ever.
Describing those statistics as "shocking", Focus Ireland Life President and Founder Sr. Stanislaus Kennedy said that “these dramatic increases in housing need have taken place at a time when we have been building more houses than ever before.  How can it be that Ireland managed to build in the region of 250,000 homes that were not needed during the boom years yet we have still failed to provide enough homes for those who need them most?

Questioning the governments priorities and lack of investment in housing, Sr Stanislaus asked "how can the government secure €50 billion to bail out the banks but at the same time cut welfare payments and continue to underinvest in housing and essential services?"
In county Donegal there are around 500 families on the housing waiting list, while here in County Sligo alone there are in the region of 1400 families waiting to be housed by both Sligo Borough and County Councils. 

Last year, the Department of Environment, Heritage and Local Government introduced what is called the Social Housing Leasing Scheme.  According to the Departments website, the supposed aim of the scheme is to expand the options "available to local authorities for the delivery of social housing. Properties will be leased from the private sector and used to accommodate households from local authority waiting lists. Leased properties will be allocated to tenants, in accordance with the local authorities allocations schemes".

Under the scheme Councils are entering into lease arrangements with property owners for periods of between 10 – 20 years.  Among the benefits the developer will secure is that their properties will be tenanted, managed and maintained throughout all of this period by the local authority.

Even better news for the property owners is that the rent they receive from the council will be guaranteed for the entire time of the lease, and that rent will be an ‘inclusive’ one that includes all rates, charges and taxes that may apply to the leased property. The houses will also be provided unfurnished and on  a ‘repair and insure’ basis where the Local Authority will be responsible for the insurance, maintenance and general repair of the properties. 

However éirígí Sligeach activist Gerry Casey has dismissed the scheme as "no solution" to the housing crisis and "nothing more than another bail-out  for developers". 

Accusing Fianna Fáil and the Greens of ignoring the plight of the homeless and those on housing waiting lists, Casey said:

"This is yet another shameful bail-out of developers  cynically dressed up as a measure to tackle the housing crisis.  The only people to benefit will be those developers who will basically have their mortgages paid and have their investment maintained at tax payers expense for between 10 to 20 years before being handed back to them in pristine condition." 

He added:  "For those in need of housing, being allocated one of these properties  by the Council to rent will not offer any long term solution.  All it provides is uncertainty as families will have no security of tenure.  Once the lease between the council and the developer runs out, the families and individuals in question will  be put out of their home and once again be placed back on the waiting list and in need of housing.  This is an unacceptable situation for families to be placed in."

"What families need, and what this administration has failed miserably to deliver, has been not just a house but more importantly a home.  Security of tenure is central to that."

"This also makes the threats to punish those who refuse to take up the offer of one of these properties by having them lose their place on the waiting list all the more despicable.  Housing is a right, not a privilege."

éirígí Tír Chonaill spokesperson Micheál Cholm MacGiolla Easbuig also attacked the scheme describing it as "scandalous" and "unjustifiable".

He said:  “Having local councils basically paying the mortgages of property developers and maintaining their properties at tax payers expense for between ten or twenty years is a scandalous and unjustifiable move. The developers who built these houses, driven by greed and a belief that they could make themselves rich on the backs of working families by selling the properties at grossly over-inflated prices, have now been left unable to sell them as the economy collapsed.”

“Along with the policies of this government and the bankers, this unbridled greed by developers also contributed greatly to the current economic crisis. Now their Fianna Fáil cronies are rescuing them by means of this long term scheme which sees tax payers pay to protect these developers investments while the developer doesnt have to spend a cent or lift a finger.”

“Fianna Fáil are happy to see families lose their homes and hundreds of thousands of people lose their jobs. They are happy to impose savage cuts in income for low paid workers and welfare recipients. They are happy to see our young people emigrate once again and they are more than happy to shut hospitals and reduce and remove essential health services.”

He concluded: “However, when it comes to allowing developers take a loss or go out of business as a result of their greed, thats a step too far. Fianna Fáil insist that they must be protected, just like the banks. That's what this scheme is about. That's Fianna Fáil priorities for you.”


  1. Although as a general principle the critics of the Leasing Scheme are right, in practise we must make use of the leasing scheme as far as possible in the interests of housing houseolds in need and maing use of empty properties. There are a number of reasons for arguing this:
    - This programme is no more than an extension of what the Government has been doing for years through the Rent Allowance Scheme and the RAS scheme. It has been Govt. policy since the 1980's or before) to rely on reting privatesector properties raher than buildin public or social homes. This is fairly normal free-market "social" housing strategy - we don't like it, but short of a chane of goverment it is not likely to change.
    - the properties taken on under this scheme will be used, adn will be managed and maintaiined professionally by either local authorities or housing associations. hat is they will be wel used. This is better han then standing empty and deteriorating, wasting in efect a national asset.
    - there is no dout in my mind that the properties ust be used. To leave them empty as a sot o punsihment for developers and bankers seems to be pety and self-defeating. The alternative would be requision and handing ver to the pubic or social sector. Aain that is not likely to happen without a major polictical cange. We cannot ait until the revolution to make use of these homes..After the revolution we might get a better deal on this. Until then, this is the only deal on offer.
    - this impact of this scheme, in the biger picture, will be minimal. The scheme has ee going around a year ad around 200 houses have been used. There are 170,000 that are potentially usable and as you say, aorund 100,000 households hat are in evidenced need. It clear that additional measures are neeeded. We beleive a national Empty Homes Strategy, that reates a series of mechanisms to esnure maxmu use of empty homes is requried. This includes aryin out published surveys of empty homes in every local authority area, giving local authorities powers to requsition homes that are empty for more than 6 months and required to meet local needs, increasing tax on mpty properties, and community based co-operative schemes to bring properties into use and manage them locally, wth suport from FAS employment and training projects for consruction and housing management workers. These empty homes are a national assest that the pubic has now invested in heavily. They must be used in the most responsible possible way.

  2. Thanks for taking the time to comment. I understand where you are coming from and I too want to see these houses being utilised. I have never suggested that they be left empty. Again I agree with your suggestion that they need to be utilised in the most responsible way.

    The problem however is that this scheme is not the most responsible way by a long shot. There are a number of key problems including the fact that once again tax payers will be paying to bail out these developers.

    This was set up not as a solution to the housing crisis, regardless of what they might claim, but to protect developers investments at tax payers expense.

    The main problem for families on the housing list is that they are being threatened that if they refuse an offer of one of these houses, they will lose their place on the waiting list and have to wait even longer to get properly housed.

    For a family, security of tenure is of vital importance. When people eventually get housed by their authority, they want to know that they wont have to pack up and make home somewhere else. They are being denied the right to make these houses their homes and that is also unacceptable.

    Many of your suggestions at the end are excellent. You say however that many of the things needed such as taking these houses into public control wont happen without major political change. Then thats what we need to do.

    It is up to all of us to make that change possible by forcing change. Change wont happen on its own and it will never happen by accepting the status quo and not challenging it.

    We have a choice. We can stand up and fight for what is right or we can sit back and accept what is thrown at us. And look where that got us!!

  3. Thanks for the response. I agree that fundamental change to housing rights will not happen without a major polictical change. With this in mind it is important to ensure that those promoting change have a true picture about what is required and what is possible, now and in the future. Where we differ is on the issue of short and medium term solutions, or "reforms" . Leasing agreements and use of private sector properties are a good exampleof this. I do not support them in principle, it is bad public ecoonomy, but these arrangements have been the norm for some time. Social house construction has been dropping since the tur of the century, at the same time as private poduction has peaked. Even before the housing market collapse teh housing policies of past governments have been to realy on subsidising the private sector, through "turnkey" development and rent allowance for private rentals of often inadeqaute private sector homes (mainly for single people). But given the overall policy approach, such a scheme was vital for hundreds of thousands of people. The Leasing scheme is an extension of the same approach and has similar benefits and short-comings. Yes it benefits owners, becuase they get rent and the houses are protected, but it could also benefit thousands of houseolds in need. And it is better value for money than the massive bank bailouts, that we get nothing for in return for. We have to responsible about what are the real alternatives here and now. Yes we need polical change and many of us will also engaged a that level. But we also have to alleviate suffering of the thousands of households on housing lists by ensuring the use of these homes now. However, I would agree with you that persons on the housing list should not be penalised for not accepting a shotrt-term let. That is their position on the ousing list should not change becuase they have accepted temporary housing.