Over 400 providers of social housing face regulation for the first time under a new voluntary code introduced by the Department of the Environment.
The code which establishes financial accountability and governance rules for the not-for-profit housing sector is being introduced on a voluntary basis in preparation for the introduction of compulsory regulation of the sector by 2016.
Under the regulations, Approved Housing Bodies - those which qualify for Government funding - will as a minimum have to have a board of at least five members none serving more than two consecutive five-year terms; comply with companies law, submit annual reports and accounts; have a tax clearance cert and a sinking fund; and submit certain information to the department such as data on tenant services .
The regulations apply on a “tiered” basis, with all approved housing bodies signing up to minimum level of regulation, organisations with 50 to 300 housing units having more intensive regulation, and organisations with more than 300 houses, of which there are about 10 in the State, agreeing to more stringent requirements in relation to audits and financial planning.
The principal aim of the regulations is to put organisations on a better footing to secure private finance from banks and other institutions, Minister of State for Housing Jan O’Sullivan said.
“We will not be able to return to traditional models of large-scale local authority direct provision of housing any time soon,” she said “credible and proportional regulation can deliver long term savings to the sector in terms of lower-priced and more available lending.”
While the code is voluntary, Ms O’Sullivan warned only the organisations who were committed to “best practice” would get Government funding. “Engagement with this regulatory process will be an important determinant in all funding and strategic decisions by the department from this point on.”
There was scope, she said, for smaller housing bodies to band together in order to meet the regulations.
The Irish Council for Social Housing welcomed the code but said there was a need for an independent regulator of the sector to be appointed if organisations were to have real credibility with financial institutions.
“Ultimately there is a need for an independent regulator, separate to the Housing Agency or the department, that a bank can go to get relevant information on an organisation’s financial performance, such as the management of existing loans,” a spokeswoman said.
