Ireland’s housing crisis has rightly focused attention on increasing the number of homes being built. However, recent developments involving Circle Voluntary Housing Association, an Approved Housing Body, raise another important question.
”As housing organisations continue to expand, are we asking every organisation to do the jobs they are best equipped to perform?”
Following a regulatory assessment, Circle Voluntary Housing Association acknowledged that it had “fallen well short” of a number of governance and financial standards and committed to addressing the issues. RTE News.
I would like to specify that:
- the organisation remains solvent,
- continues to provide services to tenants
- and has committed to strengthening its governance and financial oversight.
But the most important announcement, however, was that Circle intends to suspend development construction activity and move towards a delivery model focused on acquiring newly built homes instead.
While I was initially worried about the broader implications to the above (i.e. more and more AHBs possibly choosing to move toward buying newly built homes without increasing real supply), I believe this unique situation it may also provide an opportunity for us to reflect on how Ireland delivers housing more broadly.
Building Homes Is About More Than Construction
Large housing developments require far more than simply hiring contractors.
Successful delivery depends on:
- Governance and financial oversight
- Planning and procurement
- Project management
- Engineering and legal expertise
- Risk management
- Cost control
- Long-term organisational capacity
and plenty more.
Circle has acknowledged that while it experienced significant growth, its governance and financial systems did not keep pace. I do not want to dwell on the possible merits or demerits of that statement, but I do belive that this is an important lesson for any organisation undergoing rapid expansion, whether public, private or voluntary.
Why Would an AHB Choose To Buy Instead of Building?
I had to do a lot extra consultation on this because I do not fully understand why either. But from what I could gather, the decision is perfectly understandable from a risk management perspective.
Acquiring completed homes can generally reduce exposure to:
- Increasing Construction costs
- Project delays
- Disputes with Contractors
- Issues with procurement contracts
This may allow such an organisation to concentrate on what many would argue is its core mission – to provide and manage high-quality housing for tenants.
For many Approved Housing Bodies, that may be an entirely sensible strategic decision.
Does Buying Completed Homes Actually Increase Housing Supply?
EXAMPLE
If an Approved Housing Body buys 100 completed homes from a developer, those families still receive homes, which is undoubtedly positive. However, the overall housing supply does not increase because the homes already existed.
By contrast, commissioning or developing 100 new homes adds to Ireland’s housing stock. So adding to the developer above, we have 200 homes in stock now.
Initially, I thought that the decision for Circle to move to buying completed homes was not a good idea. However, after more reading, I realised that my approach was wrong.
In many situations, particularly where urgent housing needs exist or completed homes are available, this may in fact be the most practical solution to make existing homes affordable.
The broader question is whether Ireland can continue increasing housing supply, if more and more organisations gradually move away from development and towards acquisition.
Could Greater Specialisation Strengthen the System?
Kindly bear with me.
Instead of asking whether every organisation should develop housing, we might ask whether each organisation should focus on the areas where it can deliver the greatest value.
For example:
- Private developers, SMEs and contractors can bring construction expertise, innovation and delivery.
- Local authorities can identify land, secure planning permission and commission strategic housing projects.
- Approved Housing Bodies can provide long-term tenancy management, community support and affordable housing services instead of building.
Rather than every organisation trying to perform every function, could a more specialised system allow each organisation to focus on its strengths?
Where Dublin City Council Fits Into This.
Barely 2 weeks ago, Dublin City Council announced a €2.5 billion programme to commission approximately 4,000 social and affordable homes through private contractors between 2026 and 2030. My Little Home.
Under this model, the council would identify sites, secure planning permission and commission private construction firms to build the homes.
So
- The contractors provide the bulding expertise.
- DCC, The public authority, leads the programme.
This represents a different model from buying completed homes after construction. In this way the council is acting as the client, rather than simply the buyer.
The single biggest benefit here is that the State commissions additional housing rather than competing to buy existing supply. This actually helps to increase overall housing stock while retaining public ownership, and still relying on private builders for delivery.
Could the Apple Tax Windfall Play a Role?
Ireland’s €14 billion Apple tax windfall presents a separate but related policy question.
As a once-off capital fund, it differs from annual Government spending. Some economists argue that one-off income is best invested in long-term assets rather than recurring expenditure.
So if Ireland wished to strengthen housing delivery over the coming decade, one possibility would be to use part of such a fund to build more houses directly, or support the capacity of organisations that create additional housing supply.
That could include:
- Local authority housing programmes
- Public infrastructure (transport, electricity, water) that unlocks development
- Modern methods of construction
- Provide more Support for regional SME builders (HBFI)
- Refurbishment of vacant and derelict properties
Read more HERE.
Some Questions Worth Considering
Circle’s experience does not necessarily suggest that Approved Housing Bodies should stop developing housing altogether. Nor does it suggest that acquisition is the wrong approach.
Instead, I think it highlights a broader question about how responsibilities should be shared across Ireland’s housing system.
- As Ireland continues its efforts to increase housing delivery, should Approved Housing Bodies increasingly focus on housing management and tenant support, while local authorities expand their role as commissioners of new housing?
- Could private developers continue providing the construction expertise while public authorities lead more strategic housing programmes?
- And if Ireland has access to a once-off capital opportunity such as the €14 billion Apple tax fund, should part of it be used by the government to build homes directly? Or at least invested in strengthening the country’s long-term ability to build homes, rather than simply funding day-to-day expenditure?
There are no easy answers.
However, as Ireland continues searching for sustainable housing solutions, perhaps the discussion is no longer about whether the public or private sector should lead housing delivery.
Instead, it may be about finding the right balance, one where Government, local authorities, Approved Housing Bodies, private developers and contractors each contribute where they are most effective. All while keeping the shared objective firmly in sight: increasing Ireland’s housing supply for the benefit of current and future generations.
