Working Towards Delivery 27 th April 2015
Karen Kennedy New Business Director
Who we are Established in 1994 As an independent, not-for-profit charity Now the largest housing association in Ireland. We provide more than 5,000 of the 27,000 homes provided by all housing associations in Ireland. Clúid is one of only 10 organisations approved for funding via the HFA Clúid has delivered the greatest number of units of any AHB in recent years Cluid has delivered the most units through NAMA including the largest NARPS scheme (Belmayne, 125 units)
What we have done Examples.
PSL & NARPS Case Study 1, College Manor: Illustration of how Private Sector Leasing works by use of case study examples Case Study 2, Belmayne: Illustration of how leasing works under NARPS
College Manor, Dundalk
AHB 1. Source Properties and Manage negotiations with Private landlord 4. Submit Proposal 7. Take on properties when complete to standard 9. Manage tenants and maintain properties Landlord Pays Service Charge Pays Building insurance DoECLG 5. Approve Project and Confirm rents and terms in writing Local Authority 2. Confirm Need and support 3. Confirm Rents 6. Sign P&A agreement 8. Nominate Tenants 10. Monitor P&A Terms
College Manor, Dundalk
Prospect Hill, Finglas
Prospect Hill Market Rent Calculation 2 bed 870 x 14 x 12 = 146,160 3 bed 1050 x 14 x 12 = 176,400 Total Market Rent = 322,560 Proposed annual leasing payment to Property Owner 20% discount of 322,560 = 64,512 Total (with 20% discount) 258,048 Points to Note Structure of Property Responsibility of Property Owner Internal Repairs & Maintenance Responsibility of Cluid Housing Association Building Insurance Responsibility of Property Owner Service Charges (if any) to be paid by the Property Owner Specification To Apartments to be satisfied by the Property Owner
NARPS
Belmayne, Dublin
AHB 5. Respond to Request for Expressions of Interest 9. Sign legal agreements 10. Take on properties when complete to standard 12. Manage tenants and maintain properties, collect differential rent PAY SERVICE CHARGE Landlord - NAMA 1. Make units available 8. Issue legal agreements PAY FOR INSURANCE Housing Agency/DoECLG 2. Approve units for social housing 4. Issue Request for Expression of Interest, confirming rents and terms 6. Allocate Scheme to AHB Local Authority 3. Confirm need, rents and support 7. Sign P&A agreement 11. Nominate Tenants 13. Monitor P&A Terms
Differences between NARPS and PSL NAMA rents under NARPS are usually 83% P&A Agreements granted to AHBs are either 83% or 88% for apartments Additional 5% is to cover service charges longer and more onerous term than PSL (replace kitchens, bathrooms etc. within lease period) Lease term is 20 years, 9 months NAMA covers 50% reinstatement costs at end of end of lease term Option to purchase during leasing period.
Belmayne, Dublin
1,500 units in next 3 years
Built for Scale In-house feasibility: Senior Architect, QS, New Business & Development Managers, Technical team In-house Legal team Multiple supply channels: Acquisition, New Build, Regeneration, Mortgage to Rent, Leasing - NARPS/Private Sector, Management and Maintenance Low cost funding: Low cost funding, repayments linked to market rents or 100% capital grant funding Mixed tenure: private, social, special needs, older persons, homeless PRSA accredited Housing Management team
We need new and sustainable supply, at scale. It is in our interest to partner We have capacity and funding to deliver We have in-house expertise and experience More can be done by working together
Working Towards Delivery 27 th April 2015
FUNDING THE DELIVERY OF SOCIAL HOUSING CALF & P&A PARTNERSHIP l CHOICE l GETTING MORE FOR LESS PLAYING OUR PART l SOCIAL RESPONSIBILITY
CAPITAL ADVANCED LEASING FACILITY(CALF) CALF funding can be used for: 1. Acquisition 2. Construction 3. Mortgage to Rent Changing Housing for the Better
CASE STUDIES - PURCHASE SCOTCH HALL, DROGHEDA KNIGHTSBRIDGE, TRIM HONEY PARK, DÚN LAOGHAIRE 1.7m for 19 homes 15 CALF & Private Finance 30% CALF Loan Finance: Bank of Ireland 4 CAS Local Authority: Louth CoCo 0.85m for 6 homes CALF & Túath Reserves 47% CALF 53% Túath Reserves Local Authority: Meath CoCo 13.4m for 61 homes 35 CALF & Private Finance 30% CALF Loan Finance: HFA 19 social leased (30 year term) 26 CAS Local Authority: DLRDCC Changing Housing for the Better
CASE STUDIES - ACQUISITION & COMPLETION ROSEBERRY HILL, NEWBRIDGE MACROOM, CORK 1.1m for 7 homes CALF & Private Finance 20% CALF Loan Finance: HFA Local Authority: Kildare CoCo 0.6m for 6 homes CALF & Private Finance 30% CALF Loan Finance: HFA Local Authority: Cork CoCo Changing Housing for the Better
CASE STUDY NEW BUILD AN LEARGAN, GALWAY CITY 3.6m for 25 homes 12 CALF & Private Finance 25% CALF Loan Finance: Ulster Bank 4 social leased (5 year term) 13 CAS Local Authority: Galway CC Changing Housing for the Better
ROLE OF AHB Development Opportunity Arises Submit Private Finance Application Discuss with Local Authority Demand Market Rents Property Suitability Begin Acquisition/Construction Process Organise Independent Valuation Sign CAA/P&A/Continuation Agreement Instruct Condition Survey Drawdown of funding from LA/Lender Carry out Internal Financial Analysis Submit CALF application form LN008b Complete Acquisition/Construction Process Changing Housing for the Better
ROLE OF LOCAL AUTHORITY Provide relevant info to AHB Demand Market Rents Property Suitability Confirm support for AHB s CALF Application Formulate CAA/P&A and send to AHB Provide nominations for available units Issue Capital Advance Amount Facilitate P&A lease payments on completion Changing Housing for the Better
ROLE OF DECLG/HOUSING AGENCY (HA) DECLG receive CALF Application DECLG request confirmation of support from LA DECLG forward to Housing Agency HA assess application and advise DECLG HA recommend CALF amount/term DECLG provide AHB with CALF Approval which includes: Capital Advance amount P&A lease payments Conditions of approval DECLG provide Capital Advance/Lease Payments to LA Changing Housing for the Better
PARTNERSHIP WORKING LOCAL AUTHORITY Confirm Need Draw down CALF for AHB Sign P&A/CAA/Continuation Agreement Nominate Tenants Monitor P&A Terms * Finance accessed by AHB from Private Lending Institution / HFA DECLG Project Approval Funding Provision Túath Submit Proposal Finance Project Provide Properties Manage Properties Landlord to Tenants HOUSING AGENCY Application Appraisal Changing Housing for the Better
CONTRACTUAL FRAMEWORK Capital Advance Agreement (CAA) Agreement between LA and AHB 30% of Acquisition/Construction cost max Equity injection used to leverage PF required Payment & Availability Agreement (P&A) Agreement between LA and AHB Term 10-30 years Lease Payments 92/95% of market rents Payments available monthly/quarterly through LA Covers repayment of the Private Finance loan Continuation Agreement 3 way Agreement between AHB/LA/Lender Local Authority takes over loan repayments if AHB defaults on obligations Extra security for Private Lenders Changing Housing for the Better
CONTRAINTS WITH CALF/P&A CALF Assessment Process CALF & Turn Key/Design & Build CALF & Newbuild Payment & Availability based on OMR Changing Housing for the Better
PRIVATE FINANCE Investment appetite increasing P&A attractive terms Continuation Agreement Security Voluntary Regulation Code / Financial HFA / Bank of Ireland / Ulster Bank EIB funding Exploring Institutional Investment options Centrus appointed as financial advisors Changing Housing for the Better
BACK TO THE FUTURE Changing Housing for the Better WORKING IN PARTNERSHIP
Leasing Schemes & CALF in Practice Hugh Hogan Senior Executive Officer Housing Department 27th April 2015
Housing Expenditure 2007-2012 1,600,000,000 1,400,000,000 1,200,000,000 1,000,000,000 800,000,000 600,000,000 Current Capital 400,000,000 200,000,000 0 2007 2008 2009 2010 2011 2012
LOCAL AUTHORITY HOUSING OUTPUT NEW BUILD AND ACQUISITIONS 9500 9000 8500 8000 7500 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Series1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Series1 7000 1 2 3 4 5 6 7 8 9 10
Housing Lettings 2014 14000 14000 12000 12000 10000 10000 8000 8000 6000 6000 4000 4000 2000 2000 0 0 Stock 1 1 Let Stock Let List
Housing Stock 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 7000 6000 5000 4000 3000 1 General list demand 6310 80% 70% 60% 50% 40% 30% 20% 10% 0% 1 Homeless demand Series1 Series2 Series3 Series4 2000 1000 0 778 1249 708 7 3 1 bed 2 bed 3 bed 4 bed 5 bed 6 bed
Waiting list Nearly 8.5K on the list 5% have priority need 95% don t Waiting list Ground floor Medical Priority Homeless 8393 130 56 20 173 100 2% 1% 0% 2%
Types of Social Housing Council owned accommodation Voluntary Housing (CLSS & CAS) Leasing {Applicant Sourced Homes (ASH) and Rental Accommodation Scheme (RAS) } Private Rented Accommodation (HAP)
Leasing As of 31/12/2014, 547 properties have been secured under Leasing Arrangements. 2010 2011 2012 2013 2014 Total Privately Owned 19 110 40 47 72 288 Unsold Affordable 148 - - - 1 149 Payment & Availability with AHB's - - - 59 51 110 Total 167 110 40 106 124 547 Total 600 500 400 300 547 200 100 167 277 317 423 0
Rental Accommodation Scheme (RAS) December 2014 Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total Target 0 400 500 500 400 350 300 300 200 200 3150 Delivered 0 164 178 273 304 321 202 226 237 211 2116
Leasing Schemes and Calf in Practice Good Experiences Takes people off the Housing list at a rent they can afford Tenants usually get area of their choice Landlords in the scheme registered with PRTB Tax Clearance Creates good social mix Helps in filling vacant properties Properties Inspected Improved Health & safety Standards
Leasing Schemes and Calf in Practice Not So Good Experiences Changes in the economy landlords wanting to terminate the agreement Competing with the private rented sector Some landlords not carrying out repairs Rent reviews
Real issues for SDCC P & A Agreements ASB AHB Pepper potting Voids Cherry Picking Homelessness Capacity to deal with it National Capacity Where staff are based Reletting process Residualisation for LA
Working Towards Delivery 27 th April 2015
Lunch