Ireland’s Housing Led Approach to Homelessness: The Way Home or a Path to Nowhere?

EUROPEAN RESEARCH CONFERENCE
Housing First. What’s Second?
Berlin, 20th September 2013
Ireland’s Housing-led Approach
to Homelessness:
The way home or path to nowhere?
Dr. Dáithí Downey,
Deputy Director, Head of Policy and Service Delivery,
Dublin Region Homeless Executive.

Ireland’s ‘housing-led’ homeless policy turn
February 2013 What’s next…
1. At local level?
 Dublin’s Housing First
Demonstration Project
within the context of
housing-led policy turn
2. At national level?
 Ireland’s omni-crisis and the
great Irish housing disaster
 Challenges,opportunities,
prospects

The 2013 policy turn…
 Housing-led approach to effective resolution of
homelessness:
 Cost-effectiveness: “betteruse of scarce resources” to
move away from emergency and shelter type
accommodation
 Recognitionof lack of provision and access to “adequate,
sustainable and affordable housing” as a “root cause of
homelessness”
 Housing and Support(s) required to meet “individual
needs”
 Variety of supports: health; social welfare;employment;
justice; educationand training.

The 2013 policy turn…
 Commitment to end long-term homelessness by
2016
 Regional arrangements for policy implementation
 Protocol between central government (DECLG)
and local authorities
 Delegationof revenue budgets to lead local authority in
each region (Section 10, 1988 Housing Act)
 Reporting and monitoring
 Finance and expenditure (monthly & quarterly)
 Service delivery and performance (quarterly)

What’s next at local level?
 Development of service provision in each regional
area
 PASS - client management system; national roll-out led by
DRHE willbe completed in 2103
 National Quality Standards for Homeless Services
 Standard framework for all service types under housing-led
approach
 Service standards (including participation & voice
mechanisms; governance; funding; performance;
monitoring
 Project development in 2013 led by DRHE

Dublin Housing First Demonstration Project
 Housing First Europe (Peer City)
 Established 2011/12;
 Successes:
 Consolidation in 2013: new legal entity;
 Board of Directors; Advisory Group; Team Leader; Evaluation; Housing
team; Support team (ICM akin to NYC, USA)
 Establishment of service structure and teams; tenancies established and
maintained
 Challenges
 Widening intake beyond rough sleepers (minor)
 Access to accommodation (major):
 Attitudes to client group in market and among social housing providers;
 Cost and availability (location, size, facilities; congregate and scattered
site)
Homeless
Shelter
placement
Transitional
housing
Permanent
housing
Ongoing, flexible
supports

What’s next for Housing First at national level?
 Dublin’s Housing First model requires more formal
integration under revised Irish homeless policy.
 Not yet achieved. Housing First remains undefined in policy
 Results of Dublin Demonstration Project are nascent but
compelling.
 Growing realisation that adopting a housing-led
approach to the resolution of homelessness in
Ireland will require:
 Resolutionof the deficits of Irish housing policy
 Greaterrecognition that housing is at the centre of
Ireland’s omni-crisis

Ireland’s omni-crisis
 Economic
 Banking
 Financial
 Social
 Reputational
 Causation? Manifold…key process of urbanisation and the
urban growth model (esp. second era of the Celtic Tiger
economy 2000 – 2008)
 Pro-cyclical fiscal and housing policy;
 Light-touch (absent) regulation(housing finance);
 Facilitativeplanning and development;
 ‘positivebusiness environment’.

The ‘financialisation’ of Irish housing
Process
 Global capital flows
switchinginto Irish
urbanisation: asset bubble
and speculative
development
 The global credit cycle and
EZ monetary policy
 ‘Financial deepening’ of
Irish homeowners(equity
release)
 Predatory and fraudulent
lending
Financialisation effects…
 Negative impact on access
to housing for lower-income
and excluded households
 Changed inter-tenure
relationships
 The ‘locked in’; the
‘squeezed out’ and the ‘left
behind’
 Mortgage debt crisis:
transition from forbearance
to foreclosure
 Worsening housing security

Capital switching and Irish housing, 1975-2008
Source: Data compiled from DECLG Housing Statistics, various years
0
5
10
15
20
25
30
35
40
45
%
Capital formation in housing as a percentage of gross domestic fixed capital formation
Capital formation in housing as a percentage of gross national product (GNP)

Euro area credit growth Jan 1983 - Mar 2012 (€m)
Source: Data compiled from European Central Bank (ECB) Statistical Data Warehouse
0
2000000
4000000
6000000
8000000
10000000
12000000
14000000
16000000
1983Jan
1983Jul
1984Jan
1984Jul
1985Jan
1985Jul
1986Jan
1986Jul
1987Jan
1987Jul
1988Jan
1988Jul
1989Jan
1989Jul
1990Jan
1990Jul
1991Jan
1991Jul
1992Jan
1992Jul
1993Jan
1993Jul
1994Jan
1994Jul
1995Jan
1995Jul
1996Jan
1996Jul
1997Jan
1997Jul
1998Jan
1998Jul
1999Jan
1999Jul
2000Jan
2000Jul
2001Jan
2001Jul
2002Jan
2002Jul
2003Jan
2003Jul
2004Jan
2004Jul
2005Jan
2005Jul
2006Jan
2006Jul
2007Jan
2007Jul
2008Jan
2008Jul
2009Jan
2009Jul
2010Jan
2010Jul
2011Jan
2011Jul
2012Jan
2012Jul
Loans and securities (credit), total maturity, all currencies combined [Millions of Euro] Loans, total maturity, all currencies combined [Millions of Euro]

(1) Share of Irish pension funds' assets allocated to property, 2000-2007
(Source: Adapted from Christophers (2011); Irish Association of Pension Funds (note shares are for the start of each year)
(2) Total annual capital formation in Irish housing, 1975-2008 €m
(Source: Data compiled from CSO and DECLG Housing Statistics Database)
5
7,1
9,2
10,1
8,7
7,4
8
9
0
2
4
6
8
10
12
2000 2001 2002 2003 2004 2005 2006 2007
%
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
Capital Formation in Social Housing
Capital Formation in Private Housing

(1) Trends in Irish housing output by housing tenure, 1970-2008
(2) Trends in regional Irish house price inflation, 1970-2012, €
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
Local authority housing Voluntary and co-operative housing
Private housing
0
100 000
200 000
300 000
400 000
500 000
Dub 2Hd Dub N Nat 2Hnd Cork 2Hd
Gal 2Hd Cork N Nat N Gal N
W'ford N W'ford 2Hd L'rick N L'rick 2Hd

(1) Growthin Irish household liabilities, €m, 2003-2012;
(2) Household liabilities and leverage ratios (IE and EU average)
-
20 000
40 000
60 000
80 000
100 000
120 000
140 000
160 000
180 000
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Loans for House Purchase Consumer Credit Other loans

Post-crash credit crunch: annual percentage change in credit
advanced to households in the euro area, 2004-2012
-2
0
2
4
6
8
10
12
14
Other Loans House Purchase
EZ sovereign debt
crisis
(P/IE/IT/GR/CYP/EP)
EZ credit bubble
peak for housing
finance

Ireland's housing boom, bust & crash cycle in comparison with
other advanced economies, 2005-2012
Source: Data compiled from Bank of International Settlements (BIS) Property Price Statistics.
60,0
70,0
80,0
90,0
100,0
110,0
120,0
130,0
140,0
01.03.2005
01.05.2005
01.07.2005
01.09.2005
01.11.2005
01.01.2006
01.03.2006
01.05.2006
01.07.2006
01.09.2006
01.11.2006
01.01.2007
01.03.2007
01.05.2007
01.07.2007
01.09.2007
01.11.2007
01.01.2008
01.03.2008
01.05.2008
01.07.2008
01.09.2008
01.11.2008
01.01.2009
01.03.2009
01.05.2009
01.07.2009
01.09.2009
01.11.2009
01.01.2010
01.03.2010
01.05.2010
01.07.2010
01.09.2010
01.11.2010
01.01.2011
01.03.2011
01.05.2011
01.07.2011
01.09.2011
01.11.2011
01.01.2012
01.03.2012
01.05.2012
USA Netherlands Ireland Spain UK

The ‘locked in’ homeowners…
Negative equity
 Decline in values of 50 %
(2007-12) locked 240,000
households into a negative
equity positiontotalling €25
billion (Irish Central Bank, 2012)
 Reduces labour market
mobility (debt trap)
 Restricts housing market
recovery to new entrants or
those not in negative equity
 Eliminates ‘wealth effect’ of
homeownership
 Reduces debt-based
domesticdemand
Mortgage arrears @ March 2013
 I in 7 Irish mortgagesin
arrears of €3.04 billion
 12 % of value of balance
outstanding of all Irish
mortgages. Significant &
growing impairment on
banks balance sheet
 95,554 (12.3%) households in
arrears >90 days on
principal dwelling house
(PDH)
 29,369 (19.7%) of Buy To Let
(BTL) in arrears >90 days

The inter-tenure transfer of demand to rental
housing
Boom to Bust
 Boom: aspirant homeowners
transferred their housing
need to private rental due
to inabilityto access private
housing in preferred
location (Downey, 1998, 2008; Drudy and
Punch, 2005)
 Bust: distressed homeowners
renting out housing in prime
rental locations and down-
sizing and/ or moving to less
preferred locations (or back
to their parents!) (Downey,
forthcoming)
Results
 Greater relianceon private
rental market and deeper
segmentation between
residential enclaves of
corporate and professional
components and lower income
households
 Demand ‘transfer’ process
impacts disproportionally to
squeeze lower-income&
welfare dependent households
out of good quality housing in
inner urban and suburban
locations

The ‘squeezed out’ low-income renters…
Percentage difference between maximum rent subvention rates and rents in Dublin city for selected rental dwelling types, 2005-
2007 Source: Downey, 2008
Income inadequacy and rents
 Key issue here is relationship
between income
inadequacy, market rents
and income maintenance
(rent supplementation)for
low income households
 2005: 60,200 households
in receipt of rental
subsidy (€369m)
(€516m)
 40 percent (!) of Irish
private rental sector
Widening gap between rents &
income

Changes in Irish residential property prices and private
rents, 2003-2012 Source: CSO (2012c) RPPI and CPI
60
70
80
90
100
110
120
130
140
2003M
01
2003M
08
2004M
08
2005M
08
2006M
08
2007M
08
2008M
08
2009M
08
2010M
08
2011M
08
Aug-12
Private Rents Consumer Price Index (Base Dec 2006=100)
Residential Property Price Index (Base Jan 2005 = 100)
Rent stops
declining in
2009

The ‘left behind’ unmet housing need…
 Unmet housing need (households in need of housing support,
which cannot be accommodated through the existingstock
available to local housing authorities)
 2011: 98,318 households (75 percent increase)
 Two thirds (66.8 percent) ‘unable to meet the cost of
accommodation’
 Homelessness:
 March 2011: 2,348 households (1,089 in Dublin) (DECLG/ Housing
Agency)
 April 2011: 3,808 households (2,375 in Dublin) (CSO, Census 2011)
 Sept 2011 (reviseddata): 1,981 households in Dublin (DRHE and
HA
 2013 housing needs assessment underway now

Challenges? Dealing with the increased risk and
uncertainty of financialisation of Irish housing system
 The financialisation of home was neverdesigned to enable
homeownership: it was first and foremost designed to fuel the
economy
 This required the expansion of the mortgage market through wider access to
mortgage loans that in turn resulted in higher house prices
 However, access to mortgage finance does not equal affordability.
 Therefore the result of the expansion of mortgage finance ‘is
not improved access to homeownership but an increase in risk
and uncertainty’ (See Aalbers, 2008).
 Financialisation effects: multi-dimensional
 Social; Social-Psychological; Health; Administration;Financial; Political;
Organisational.

What’s next in 2013?
 Next stage in the financialisation process
 Installation regime of ‘accumulation by dispossession’ across Irish
economy (EU/ECB/IMF troika programme of privatisation and
marketisation)
 2013: ‘end of the beginning’ of the Irish housing crisis
 Forbearance turns to foreclosure
 ‘accumulation by repossession’
 Unmet housing needs: strengthen, deepen, broaden
 Structural routes into housing exclusion and homelessness increasingly
prevalent
 Fiscal crisis of the Irish state and austerity impacts
 Reductions in expenditure on homeless services in 2013/14 and on critical
public services
 ‘Crisis management’ continues to dominate homeless service responses
and development. Mitigate implementation of the 2013 policy turn?

What’s required? Revision of housing policy
 Irish housing-led approach is under-developed &
insufficient. Needs to be urgently rectified:
 Greaterhousing choice: general needs affordable rental
 Access to housing: residual income affordabilityof housing
needs to be resolved
 Labour market relationships: creating work and making
work pay
 Greatercoherence with other policy spheres: joined-up
especially withHealth, Welfare and Justice
 Government needs to re-think and act on housing
 Restructure and regulate the housing market for a
sustainable housing system as a central element of
national strategies for economic recovery from 2013

DR. DÁITHÍ DOWNEY
DRHE,
DUBLIN,
IRELAND
DAITHI.DOWNEY@DUBLINCITY.IE
WWW.HOMELESSSDUBLIN.IE
Thank you

Ireland’s Housing Led Approach to Homelessness: The Way Home or a Path to Nowhere?

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