Getty ImagesThe chief executive of the Northern Ireland Housing Executive has said she believes funding cuts for housing associations to build new social housing will not mean fewer homes.
Grainia Long said it “would be for each individual housing association to decide themselves how much private finance can they borrow, how much risk can they take on”.
She added that The Department for Communities (DfC), which oversees social housing in Northern Ireland, has “made a smart set of decisions”.
On Monday, Communities Minister Gordon Lyons announced that less public money will be made available to the companies who build those homes.
This shift will mean higher construction costs for developers, with some social housing projects likely to be abandoned or delayed, according to the Northern Ireland Federation for Housing Associations.
‘Smart set of decisions’
With almost 50,000 people on a waiting list for social housing, there is broad political agreement that more homes need to be built.
Social housing is typically funded by a combination of grants from public money and loans from private finance. Grants are offered on better terms than commercial loans, reducing costs for housing associations.
Monday’s announcement will see the grant provided to housing associations to finance the building of a new social home fall on average from 54% of the total cost, to 46% from 1 December.
In some areas already struggling with housing shortages, including parts of Belfast, the grant will now make up just 42% of the cost.
Speaking on Radio Ulster’s Good Morning Ulster programme, Ms Long said: “Housing associations play a crucial role themselves individually in deciding what scheme should go ahead, what is viable and what is less viable.”
She added that the department has “made a smart set of decisions but it is part of an overall package”.
“Housing associations have said for a number of years we need certainty and so the minister has introduced a housing supply strategy and that would give certainty over the level of ambition and the number of homes.
“The other key parts to this package of measures is two separate reviews and housing associations have also recognised that these reviews are necessary. They’ve called for them. The first one is to reduce the kind of constraints on associations in terms of the type of homes they design,” she said.
“So there’s a lot of additional costs in there for associations.”
Ms Long said that “bringing the grant rate down is in keeping with the ways in which social housing is financed elsewhere in the UK”.
“This is about creating the conditions for investment in social housing.”
PA MediaMs Long said housing associations now need to “go away and they need to do the sums”.
“This is about stretching public subsidy. It’s about ensuring that we get value for public money, but it’s also about doing it sustainably so that housing associations themselves have the long-term certainty.
“The public needs to know is that we’re using public money effectively.”
On Monday, the communities minister said that the “challenging financial context” required innovative thinking and that the changes “will achieve better value and more social homes for those who need them”.
Gordon Lyons also pointed to the possibility of building on government land to reduce social housing costs, and another means of accessing finance as possible routes to increased house building, in spite of the funding cut.