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Voluntary housing body debt levels a ‘significant financial risk’

Provider of social and affordable homes warns liability in voluntary sector may curtail housing projects

A big provider of social and affordable homes has warned that the current levels of debt being carried by voluntary housing bodies is creating a “significant financial risk” for the sector.

Clúid Housing, one of the largest non-profit housing providers in the country, warned the Department of Housing that there had been a “very rapid and substantial increase”, in the amount of debt on the books of voluntary housing bodies. Voluntary organisations, known as approved housing bodies (AHBs), were in danger of having to curtail future plans to build social and affordable housing due to the debt levels, Clúid told housing officials.

In a September 2023 report, seen by The Irish Times, Clúid said the growing amount of debt being carried by AHBs was creating “significant financial risk” for the organisations, who make up a big plank of the Government’s plan to tackle the housing crisis.

The debt levels were now threatening to affect the sector’s pipeline of planned projects, “potentially delaying the start on site of a minimum of 40,000 social, cost rental and private homes across the country”, the report noted.


Clúid said concerns had been raised “about the high level of debt risk” voluntary bodies were now carrying. This was due to the current funding model where housing bodies borrowed the full cost of social housing developments, with up to 30 per cent coming from long-term loans provided by the State.

The report, released under the Freedom of Information Act, said the debt problem was a “real and present concern”, which Clúid feared could “restrict” the number of homes built by the sector in the coming years.

“Every delay of a week in AHBs being able to commit to a project has the impact of delaying the delivery of a housing project by three to six months,” it said. The report indicated that the knock-on impact on Government targets for new social and affordable homes might be felt “as early as 2024″, if AHBs had to cut back on homebuilding to manage their levels of debt.

Clúid chief commercial officer Eibhlin O’Connor said increasing debt levels could also limit housing bodies’ access to private finance. “We are rapidly approaching unsustainable levels of debt, from the point of view of AHB regulation and of our credit rating,” she said.

The debts were in no way related to a “lack of prudent financial management by the sector”, but a direct result of how AHBs were funded by the State, she said. The organisation is proposing the State provide up to a quarter of the cost of social housing developments through “non-debt financing”, such as upfront funding, rather than loans.

In the last three years, Clúid has built more than 3,000 homes, with plans to build 5,200 more over the next five years. Ms O’Connor said that output could be doubled if the debt issue was addressed by Government.

A department spokesman said a working group had been set up to examine debt levels in the voluntary sector and make recommendations for solutions. The submission from Clúid was being considered as part of the current review by the working group, which the spokesman said was ongoing.

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