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Housing Alliance Pre-Budget 2027 Submission

Executive Summary

The Housing Alliance is a collaboration of approved housing bodies (AHBs), representing seven of the largest social and affordable housing providers; Tuath, Respond, Oaklee, The Iveagh Trust, Cooperative Housing Ireland, Clúid and Circle VHA.  Housing Alliance members work with local authorities for the benefit of the local communities that we serve.   

At the end of 2025, Housing Alliance members managed 55,000 homes.  During 2025, almost 7,000 (6,934) social and cost rental homes were developed by Housing Alliance members with over 70% of these homes being developed utilising modern methods of construction (MMC).  The new homes developed during 2025 comprised 1,644 cost rental and 5,255 social rented homes.  

The twin objectives of the Housing Alliance are to increase the supply of social and cost rental homes and to continuously improve management and maintenance practices in service to our resident communities.    

Housing Alliance members orientate their activities to create integrated and inclusive communities. Our developments include social rented homes, (including general needs, age friendly and special needs homes) and cost rental homes, for low-income working households.  The Housing Alliance encourages the development of mature flourishing neighbourhoods.  

In the current context of huge housing need in Ireland, we wish to continue as a trusted partner in delivering additional social and cost rental homes. In the context of the forthcoming Budget 2027 announcements, the Housing Alliance wishes to outline some barriers to delivery alongside a set of proposed solutions.

We wish to thank local and national Government partners for their continued support in our ambition to increase the delivery of high-quality social and affordable housing.  We recommend that the following priority actions be undertaken, to assist us in supporting the achievement of national social and affordable housing targets:

1. Review current funding mechanisms

2. Address legacy funding issues

3. Protect forward purchase delivery and stage payment delivery mechanisms

4. Ensure access to state and local authority land

5. Expand retrofit funding

6. Ensure funding for communal areas

Policy Context

The continued high level of demand and need for social and affordable housing in Ireland is a pressing political, economic and social issue.  The lack of available housing affects all activity and works against maintaining our thriving economy.   

Rent levels are now at approximately double those seen during the Celtic Tiger era, with house prices around 25% higher than their Celtic Tiger peak.[1] Homelessness levels also continue to rise, now sitting at over 17,000 people.[2]  There are almost 60,000 households on social housing waiting lists across the country.[3] The significant increase in the delivery of social and affordable housing in recent years is applauded. The Housing Alliance intends to build on this momentum.

We welcomed the publication of Delivering Homes, Building Communities 2025-2030: An Action Plan on Housing Supply and Targeting Homelessness, with its ambitious aims to target the construction of 300,000 homes, including 72,000 social homes and 90,000 affordable housing supports to 2030.

t The Report of the Approved Housing Body (AHB) Strategic Forum (the Forum Report) sets out a ‘10-year transformative vision’[4] and policy reforms for the AHB sector. We note the report’s acknowledgement of the current challenges for AHBs.  Our proposals regarding Budget 2027, as set out below, aim to build on continued progress on key policy issues for the sector on a not-for-profit platform.

Realising the potential of the vision in the Strategic Forum Report will require continued collaboration and engagement with the sector, whose expertise, experience and ongoing involvement are critical to supporting effective implementation and achieving strong outcomes. The Housing Alliance are keen to play a positive role in these processes and to work collaboratively with all stakeholders to support the achievement of the shared goals of delivering high-quality homes, strengthening communities, and improving housing outcomes.

[1] Residential Property Price Index March 2026 – Central Statistics Office

[2] June 2023 Monthly Homeless Report and Homeless Quarterly Progress Report Quarter 2 2023 published

[3] Summary of Social Housing Assessments 2025 Key findings

[4] Report of the Approved Housing Body (AHB) Strategic Forum

Challenges and Proposals

Review current funding mechanisms

It is essential that the core current funding mechanisms for the AHB sector, the Capital Assistance Leasing Facility (CALF) and Cost Rental Equity Loan (CREL) are reviewed, to ensure viability is maintained by keeping pace with construction inflation. We appreciate the commitment in the Forum Report, to a review of the CALF and CREL funding models.

As funding mechanisms, CALF and CREL have been hugely effective in delivering very significant levels of social and cost rental housing in Ireland through AHBs. This has only been possible with the support of local and national stakeholders.   

As   both are principally debt-financing models, it is our view that an increased level of securitised State equity, would allow AHBs to deliver more social and cost-rental homes.  This would involve grant funding invested in homes which will continue to be available in perpetuity. It is de facto investment in critical infrastructure.

Social housing funding

We also would see merit in including an equity stake within the social housing funding mix.  Such a change would align CALF with CREL and would help to meet the challenge of gearing. resulting from high private borrowing requirements.    

At current and projected levels of gearing the AHB sector will face near future challenges in accessing private finance. This at a time when it is acknowledged that the majority of funding to meet the housing challenge will need to come from the private sector. 

Cost-rental funding

Cost-rental is a growing and essential housing option for people who earn too much for social housing but not enough to afford private rental. Housing Alliance members advocated for cost-rental in Ireland, welcomed its introduction by Government and have pioneered its delivery.

However, it is not currently possible in many locations for us to cover development, management and maintenance costs, within the fiscal parameters of the CREL scheme.  

The growing viability gap could be mitigated in a number of ways:

  • By moving to a cost recovery model for cost rental to enable non-profit AHBs to provide cost rental accommodation without incurring losses.
  • By increasing state equity in AHB cost rental projects.
  • By extending the Housing Agency CREL loan payback period from 40 to 50 years, aligning it with the cost-rental designation period.
  • By expanding access to cost rental homes, particularly for lower income households who do not qualify for social housing, but cannot afford to pay market rents or purchase a home. A new revenue subsidy could bridge the gap between the 35% net household income and the discounted rent applied by AHBs.
  • By increasing the net household income thresholds, with a higher rate for all regions. 

Since the introduction of cost rental in 2021, Government has shown a willingness to adapt this new tenure to ensure its continued success in Ireland. The inclusion of 20% State equity in CREL in 2024 allowed a significant increase in delivery.  Implementing these measures would enable us to overcome current viability challenges and deliver thousands more cost-rental homes.  

Construction-specific models

Finally, our current funding models could be made more amenable to delivering housing via construction projects. Financing needs to account for increases in interest and inflation over the lifespan of the project, as well as meeting requirements regarding Debt Service Cover.  

Similarly, the different components of AHB developments –- social rental, cost rental, special needs housing and associated communal facilities – undergo a different assessment and approval process, despite developments being constructed under one contract.

The introduction of a joined-up funding model, designed specifically for construction by AHBs, would allow us to better manage costs and reduce risk,  resulting in projects proceeding more speedily, thus supporting the objective to increase the delivery of direct-build homes.

We are pleased to note the inclusion of a review of current sector funding models, including CALF and construction-specific financing, in the AHB Strategic Forum report.

What would help to deliver more homes? 

In the context of Budget 2027, we are calling for the following measures to be prioritised to boost sector output:

  • Moving to a cost recovery model for cost rental to enable non-profit AHBs to provide cost rental accommodation without incurring losses.
  • Increasing state equity in AHB cost rental projects.
  • Extending the Housing Agency CREL loan payback period from 40 to 50 years, aligning it with the cost rental designation period. 
  • Expanding access to cost rental homes  for lower income households who do not quality for social housing but cannot afford to pay market rents or purchase a home. A revenue subsidy could bridge the gap between the 35% net household income and the discounted rent applied by AHBs within the current model.
  • Increasing the net household income thresholds, with one higher rate for all regions. 
  • Including an equity portion within CALF funded social housing.
  • Developing a coordinated, construction-specific funding model, as recommended in the Report of the AHB Strategic Forum, to assist the sector in moving towards more direct construction delivery.

Address legacy funding issues 

It is vitally important that legacy funding issues within the AHB sector are addressed in a timely manner, to allow us to continue to provide a high quality of service to our residents and homes.

CLSS

In 1991, as part of efforts to increase the level of AHB delivery of social housing in Ireland, the Capital Loan and Subsidy Scheme (CLSS) was introduced, as a funding mechanism for the AHB sector. Over 10,000 homes were provided nationally, housing an estimated 26,000 people under CLSS. While the scheme was discontinued in 2009, it continues to make up a large proportion of AHB housing stock.

However, the income derived from CLSS homes does meet the management and maintenance and longer-term lifecycle capital costs of these homes. In other words, CLSS homes are financially unviable under the funding model. 

CAS

The Capital Assistance Scheme (CAS), introduced in 1984 to assist in the delivery of Special Needs housing by AHBs, and still in existence, also requires a review from a financial perspective.

We were pleased to note the inclusion of reference to both CLSS and CAS funding in the Report of the AHB Strategic Forum and look forward to continuing to work with our Government partners in resolving this.

What would help to deliver more homes?

In the context of Budget 2027, the Housing Alliance is calling for the following measures to be prioritised:

  • Increasing the management and maintenance allowance for CLSS homes.
  • Providing a cost recovery income stream for CLSS and CAS units, both for homes in mortgage and those properties now out-of-mortgage. 

Protect forward purchase delivery and stage payment delivery mechanisms

The current delivery framework for AHBs, in developing social and cost-rental homes, is a mixture of Forward Purchase (FP) and Stage Payments. FP involves acquiring homes through a single payment on completion whereas stage payments involves the AHB making payments throughout the development process, such as with construction projects. Currently our members use both FP and stage payment developments to deliver homes. In any changes being considered to the funding mechanisms discussed previously, it is important that both FF and stage payments continue to be supported if current rates of delivery are to be maintained and increased.  AHB acquisition often acts as a catalyst for delivering large developments.

What would help to deliver more homes?

In the context of Budget 2027, the Housing Alliance is calling for the following measure to be prioritised:

  • Maintaining support for both forward purchase and stage payment delivery into the future.

ensure access to state and local authority land

In Ireland, access to affordable land has increasingly become a key issue for the AHB sector. The cost of land is widely recognised as a major contributor to the overall cost of delivering social housing.

In alignment with the National Development Plan, the Housing Alliance supports a focus on delivery on infill, brownfield sites. This compact growth facilitates living closer to work and education and reduces the reliance on private transport.

However, land costs, notably in the larger cities and the surrounding commuter belt, have risen exponentially in recent years, due to the attraction of living beside employment, industry, entertainment, public services, and public transport.

While it is accepted that there is limited scope with regard to private land costs, beyond a more proactive land management approach, including zoning for affordable housing, there is a clear opportunity to unlock supply through providing AHBs with access to public lands at affordable levels.

AHBs, by their very definition, serve a social purpose, as not-for-profit landlords. By extension, lower land costs for AHBs serve a social purpose. Access to public land has the potential to reduce housing costs for residents of social housing, older residents and cost-rental households.

For cost-rental housing, specifically, higher land costs directly impact upon rents for residents, creating affordability challenges. Cost rents are comprised, simply, of the cost of delivery, management and maintenance, which includes land costs.

Higher land costs also necessitate greater financial investment from Government, for cost- rental and social housing. Lower-cost land results in lower financial investment. Providing access to affordable public land would greatly assist AHBs in developing a long-term pipeline, thereby driving efficiencies in the delivery of housing on a multi-annual basis.

What would help deliver more homes?

In the context of Budget 2027, the Housing Alliance is calling for the following measure to be prioritised:

  • Allocating a specific proportion of public land, at nominal cost, to the AHB sector, on a multi-annual basis.

Expand retrofit funding

As the energy and retrofit programme has been rolling out across the AHB sector, members of the Housing Alliance have been retrofitting at scale. Until earlier this year, SEAI grant funding for retrofitting of social housing by AHBs was capped at 50%, which was insufficient to cover costs. We very much welcome announcements, in January 2026, under the National Residential Retrofit Plan 2026, regarding an increase in grant value to approximately 75% of overall upgrade costs and support for the upgrading of developments in Approved Housing Body ownership. We also welcome the greater clarity, regarding these changes, provided in May of this year under the Communities Energy Grant guidelines.[1]

We note that funding for such retrofitting, from 2027, will emanate from the EU Social Climate Fund. In order for such funding to be made available, each Member State must submit a Social Climate Plan to the European Commission, setting out the measures planned for 2026-2032 to support those most affected by the green transition. We are aware that, to date, Ireland has not yet submitted a Social Climate Plan, and we look forward to its submission and adoption. This is vital to allow us to plan and budget for the coming year. We would also urge that the recent, positive changes made to funding for AHBs be reflected in the Plan.

We also call on government to consider the establishment of a standalone retrofit scheme for AHBs, given our scale, capacity and expertise. Indeed, such a recommendation was made in a recent ESRI study[2] and appears to be referenced in the Report of the AHB Strategic Forum, as a ‘Green Deal’ for AHBs.

What would improve social and affordable homes?

  • Submitting Ireland’s Social Climate Plan, reflecting recent funding improvements, as quickly as possible
  • Establishing an AHB retrofit scheme

Ensure funding for communal areas

Since 2024/2025, members of the Housing Alliance have experienced deductions on social housing schemes, which have included communal areas. This occurs even where provision of a communal space is required under pre-existing planning conditions. We know the value of communal spaces. In some instances, we are provided with a loan to purchase the communal space, but with no funding to repay this debt or the operating and maintenance costs of the communal space.

This can, in turn, affect our ability to utilise communal spaces in an effective manner to benefit our communities, and ultimately affecting the viability of the scheme itself.

What would help to deliver viable community spaces?

In the context of Budget 2027, the Housing Alliance is calling for the following measures to be prioritised:

  • Funding for the capital cost of delivering communal facilities
  • Funding for the current costs of managing and maintaining communal facilities, in recognition of their important role in developing sustainable communities.

[1] CEG-Application-Guidelines.pdf

[2] New ESRI review finds additional measures may be required to meet residential decarbonisation goals | ESRI