Local authorities need a "political signal" that they would be given support to borrow millions of euro for building social housing, the chief executive of the Housing Finance Agency (HFA) has said.
Barry O'Leary, addressing the Oireachtas housing and homelessness committee, said the agency could lend at a fixed rate of 1.75 per cent for 25 years.
The HFA was established as a State company in 1982 and lends to local authorities and housing bodies for house building. It raises funding from international markets.
The agency has a capacity to lend up to €10 billion, had a current facility of €6.3 billion and the European Investment Bank was keen to lend more money for house building, Mr O’Leary said.
International interest rates were so low at the moment, he said, that a “unique opportunity” now existed.
However, interest rates will not be this low forever, he warned.
“There has just got to be a political decision to do that . . . The primary objective has to be to get the houses built. We have been in contact with local authorities and the CCMA [City and County Managers Association]. They are interested, but they worry about their capacity to repay it.”
Mr O’Leary said local authorities needed a signal from the Department of the Environment that they would be supported in borrowing from the HFA. He also said EU fiscal rules made it difficult for local authorities to borrow, given the need to keep borrowings “off balance sheet”.
Bob Jordan, chief executive of the housing charity Threshold, said the key issues were growing unaffordability of rents and insecurity of tenure.
He said people went “to the ends of the earth” to pay their rent. Some were paying almost all their welfare payments on top of rent supplement to meet rent costs.
“They will forgo food and forgo bringing their children to the doctor to pay rent,” Mr Jordan told the committee. “People have been left to manage their own poverty. Now we’re in a situation where they can’t manage their own poverty.”
He called for targeted increases in rent supplement. There should be localised limits for different parts of Dublin and they should not be made publicly available, to ensure that landlords did not raise their rents in line with the supplement rates, he said.
Up to 50 per cent of dwellings in the private rented sector subject to inspections did not comply with fire safety standards in a recent round of inspections, he added.
