The EU Bank supporting social and affordable housing needs

Transcription

1 EUROPEAN INVESTMENT BANK The EU Bank supporting social and affordable housing needs Irish Council for Social Housing Biennial Meeting Kilkenny October 25, 2018 Cormac Murphy Head of EIB Group Office, Dublin 25/10/2018 European Investment Bank Group 1

2 Who we are EIB is the EU s long term lending institution 1958 Established to support longterm investments primarily in the European Union. We have over 50 years experience in financing sustainable projects. Shareholder s Owned by the 28 Member States of the European Union. Source of funds We raise longterm funds on the international capital markets and as a nonprofit organisation we pass favourable conditions to clients. AAA-rated We re triple-a rated by all major rating agencies and have a sizeable callable capital of EUR 221bn. Lending Loans of EUR 78.2bn in 2017 (> 90% in EU). Annually, we finance over 400 projects in over 150 countries.

3 Project Requirements EIB funds Projects that: Meet at least one of the EIB s policy objectives Are technically sound Financially viable Show an acceptable economic return Comply with environmental protection and procurement regulations Benefits of low cost of funding passed on to clients with signaling effect for other lenders. Technical knowledge and experience sharing/advisory support European Investment Bank 3

4 EUR 65.9 bn total project value EUR 18.6 bn total EIB finance 603 thousand renovated units 255 thousand newly-built units EIB funding of social housing since 2000 New Build 43% Renovation 57% European Investment Bank 4

5 Geographical distribution of EIB housing financing European Investment Bank Group 5

6 Public Investment in Housing in the EU (EUR m) Recent trends Source: Eurostat - code GF 06.1 Housing Development, European Investment Bank Group 6

7 Project requirements: Criteria for EIB lending for housing Financing of social and affordable new housing only Market housing and housing for sale are excluded Suitable policy framework Planning-led urban development Stakeholder involvement Tenure: Affordable-rental, with rent-to-buy and market parts Climate Action Importance of financial intermediaries where housing associations are often small European Investment Bank 7

8 Social Housing Counterparts Social housing companies Typically non-profit or limited-profit entities Typically regulated by the state (rent, profit caps, etc.) Typically public sector entities or social enterprises Cities Direct lending or municipally-owned companies Specialized housing finance entities Specialized national government finance institution Housing finance aggregators Banks National promotional banks Commercial banks European Investment Bank 8

9 Experience from other jurisdictions Affordable social housing with rents closer to market Lower government support (UK 90% to 15% since 1988). Direct funding from EIB e.g. Apex NI/Sanctuary in the UK Large housing bodies with track record and critical mass (Havensteder Rotterdam 44,000 units, Barcelona 1927). Municipalities directly (e.g. Germany and Sweden) or through agencies (e.g. Flanders). Also municipal owned limited liability housing bodies (Zaragoza, Barcelona) or commercial code companies (Poland), which are not consolidated Aggregators or support mechanisms to improve access to finance. e.g. THFC and Solinter in UK/FR or STG Waarborgfonds Sociale Woningbouw in NL. Affordability criteria are defined usually in terms of income and market rents (e.g. France regulatory rent ceiling 15% below market) but in some markets no criteria applied (Sweden). European Investment Bank Group 9

10 Operational context in Ireland Liabilities of Approved Housing Bodies classified by the CSO in December 2017 as non-market entities The EIB has funded through the HFA as efficient channel for funding of social housing at competitive rates First Social Housing PPP will create a new funding option Important role for Land Development Agency Pilots such as cost rental affordable European Investment Bank 10

11 Framework Loans I & II: Nationwide rollout EUR200m finance with HFA supporting EUR405m investment. It is expected that 1,400 new homes will be built and more than 700 properties upgraded in Dublin and across the country EUR150m finance with HFA supported construction of 1,302 new homes and retrofitting at 550 properties by eight different Approved Housing Bodies. Projects were located in Dublin, as well as Wexford, Louth, Meath, Waterford, Cork, Kildare and Galway PPP loans: Social Housing (Bundles) EUR 200m EIB Financing Social Housing 11

12 Affordable Housing Cost Rental Support for social housing being extended into affordable housing. Addresses an important social need by those not qualifying for social housing but are also unable to acquire a property of their own Helping increase the supply of housing in line with the mix of social, affordable and private housing common in many European countries. Affordable housing for rental rather than purchase means that affordable homes are also available for future generations of tenants. EIB is able to offer its experience from across Europe Pilot in Inchicore, Dublin with Department of Housing, Planning and Local Government and Dublin City Council. As a cost rental scheme, St. Michael s is using public land to build affordable rental housing. This reduces the cost of housing while using an existing city site will contribute to urban regeneration. To be followed by similar developments not only in Dublin but in other parts of the country where EIB is also ready to play a supportive role. European Investment Bank Group 12

13 Activity EIB advisory EIB contribution EIB Advisory Hub Advice on project development to support the Investment Plan for Europe URBIS JASPERS Advice to support better project preparation for European Structural and Investment Fund projects JASPERS support to resolve horizontal questions affecting a sector or projects across several member states JASPERS Networking Platform building a knowledge base EIB advisory instruments benefiting cities EIB direct contribution EPEC European PPP Expertise Centre ELENA European Local Energy Assistance FI-Compass to support development of Financial Instruments EIB experts present at sectoral meetings, workshops EIB to engage with most or all Urban Agenda partnerships EIB funding EIB funding for research and development, innovation in the public and private sectors EIA TA support for consultants and advisors European Investment Bank Group 13

14 Concluding thoughts on future supply Local authorities/ahb s development Private development of social and affordable rental housing Timing and cost? Opportunity due to de-risking and access to funding? Public private agreements for contracted delivery of social and affordable housing maximising share while minimising cost? Importance of planning and procurement Role of LDA European Investment Bank 14

15 EUROPEAN INVESTMENT BANK 100, boulevard Konrad Adenauer L-2950 Luxembourg

16 Loans to Housing Companies: Social housing in Hamburg (Rungestieg) Retrofitted housing with additional new construction including space for community/social activities on the ground floor Care services for elderly / disabled tentants EE KfW 70 standard In 2015 EIB signed a second loan with the city s social housing company SAGA GWG to finance integrated social and affordable housing across Hamburg.

17 Barcelona Social Housing funding to a Social Housing Municipal Company Construction of approximately 2,200 social housing units with ancillary infrastructure for rent in the city of Barcelona The project contributes to the the overall urban regeneration of designated areas. EFSI guarantee European Investment Bank Group 17

18 Poland Affordable Housing EIB funding via a National Development Bank EIB funding approved for a framework loan targeting affordable housing schemes Intermediated by BGK, Poland s development bank On-lending to TBS s (public housing enterprises) across Poland Incentivises schemes which optimise energy efficiency, revitalisation, affordability etc via scoring system and call for applications 18

19 Fingal County Council Investment Programme EUR 70 m EIB Framework loan to part-finance Fingal County Council's multi-year multi-sector investment programme originated under their Development Plan. The is intended to help improve the infrastructure of the county to cope with pressures associated with the fast-growing population as well as building on the county s attractive position for jobs and development of the local economy. The EIB financing focuses on investments in culture, heritage and tourism, environment and urban economic development infrastructure. Investments in road safety/sustainable mobility as well as small urban development schemes are also foreseen. 25 year tenor and a utilisation period of up to 5 years with the interest rate being set for each draw-down.