Ireland: Financing Irish Infrastructure: Responding To Ireland's Housing Crisis And Review Of Budget 2018 Measures

Last Updated: 29 November 2017
Article by Aaron Boyle and Elizabeth Upton
Most Read Contributor in Ireland, December 2018

Ireland has a widely publicised, critical shortage of social and affordable housing. Next year the State expects to deliver approximately 4,000 units across Ireland. Currently there are more than 19,000 people on housing waiting lists for the Dublin area alone. Traditionally social housing was something provided by the State or local authorities. We are now in an environment where there is so much demand and so little supply that State capital spending is quite unlikely to be sufficient to respond to demand requirements in the medium term.

Contrast this with the "wall of capital" – infrastructure finance, currently available from funders and institutional investors to finance the development of infrastructure like social and affordable housing. This article looks at ways to incentivise access to this capital and considers the measures flagged in Budget 2018.

So What is Holding up Solutions to the Housing Crisis?


  • structural constraints: The combination of local authority and Affordable Housing Bodies ("AHBs") who principally deliver social housing means social housing supply is currently managed via 100s of organisations. This system cannot easily deliver projects of scale.
  • the planning system: while beyond the scope of this article, planning is broadly seen as a major inhibitor to infrastructure development in Ireland generally.
  • access to funding: the State remains fiscally constrained meaning there are limited sources of (on balance sheet) finance available (including Housing Finance Agency finance) to apply to housing. The balance sheets of the majority of AHBs are not sufficiently large to leverage significant amounts of corporate finance which limits the size of schemes they can provide.

Ireland has a widely publicised, critical shortage of social and affordable housing. Next year the State expects to deliver approximately 4,000 units across Ireland. Currently there are more than 19,000 people on housing waiting lists for the Dublin area alone.

Traditionally social housing was something provided by the State or local authorities. We are now in an environment where there is so much demand and so little supply that State capital spending is quite unlikely to be sufficient to respond to demand requirements in the medium term.


Streamline Structures: assessing a large volume of sites (and their suitability), a large number of contractors all adds time, cost and complexity. The more streamlined this is, the better. Establishing a centralised framework of contractors that are assessed to be in a position to deliver developments of a certain scale (and can be drawn on for a variety of developments) would offer a means of streamlining this element. For larger scale developments, centralising the site selection, planning and management process will also address multiple stakeholder engagement which can delay project procurement.


Scale: third party or project finance requires significant due diligence of the project so upfront costs can be higher than other financing mechanisms. To offset that, projects generally need to be of a certain scale (€30 to €50 million minimum). Any mechanism which combines or consolidates schemes centrally so that they are of sufficient scale would help.

Rent Certainty: Currently rent payments are linked to market rent which limits the pool of lenders/ investors to those who understand or are prepared to take the risk on market rent movements. More predictable bases of rent calculation would allow funders to profile debt and repayments in a stable environment. There are already examples of this approach being adopted.

Repayment Certainty: Structures which provide for payments to be made by the State directly would allow lenders to base their funding assessment on Sovereign risk. Ireland is seen as a very safe place to invest in from this perspective.

Indeed, once employed, project finance is an incredibly successful financing model. Examples of failed project finance projects in Ireland are very rare.

Social and Affordable Housing in Ireland – Snapshot


Social housing provision in Ireland is principally managed by local authorities and AHBs with support from the Housing Agency.

In order to be eligible for social housing a prospective tenant must satisfy the criteria contained in the Social Housing Assessment Regulations.

There are generally four forms of supply of affordable housing:

  • properties owned and managed by the local authority;
  • properties owned and managed by an AHB;
  • properties leased from a private property owner;
  • properties available under the Rental Accommodation Scheme.

There are supply issues across all of these areas currently in Ireland.


AHBs are independent, not for profit organisations. Many are registered charities. The Register of Approved Housing Bodies sets out a list of all the current AHBs (of which there are currently more than 500). Many of these are small organisations dealing with a small number of units.

Once approved as an AHB to make units available for social housing, the AHB must enter into a payment and availability agreement ("P&A Agreement") with the relevant housing authority which in turn makes the units available to housing authority nominees. In return for making units available, the AHBs receive either monthly or quarterly payments.


The RAS is an independent scheme allowing persons who have been in receipt of rent supplement (a State based support paid as a contribution to a person's rent) to reside in scheme-approved accommodation. Local authorities enter into contracts with landlords to provide housing for an agreed term. Under RAS the properties are provided by landlords (not by the local authority). Persons under the RAS may pay a contribution to the rent but that contribution is paid to the local authority. To be eligible for RAS, landlords must register with the Private Residential Tenancies Board. The properties must also meet certain minimum standards for private rental accommodation set out in the Housing (Standards for Rented Houses) Regulations, 2017 which came into effect on 1 July 2017.


The Housing Agency is effectively a centre of expertise and support function to assist local authorities, AHBs and the Department of Housing, Planning, Community and Local Government in delivering affordable housing. In 2013, the Housing Agency was given interim responsibility for regulating AHBs under a voluntary regulation code.


The Housing Finance Agency ("HFA") is a statutory company established under the Housing Finance Agency Act, 1981. The HFA provides loans to local authorities and AHBs. The HFA is a self-funding entity currently and sources funding from lenders and capital markets. HFA funding is currently considered to be on balance sheet.

Finance Mechanisms and Budget 2018


Currently a significant proportion of social and affordable housing is developed by AHBs using HFA funding.


The Capital Advance Leasing Facility ("CALF") is available to AHBs. It can provide up to 30% of the capital cost of a development upfront. The CALF loan can effectively be a cashflow loan available at the early stage of development of units to assist in securing more significant capital from either the HFA or private funders.


For tenants in long term rented accommodation in receipt of rent supplement, the Housing Assistance Payment Scheme ("HAP"), provides that a HAP payment is to be paid directly by the local authority to the landlord. This is notwithstanding that a HAP tenant's contract is directly with the relevant landlord not with the local authority (unlike other schemes). HAP tenants have to find their own HAP approved landlord and accommodation.

The HAP will effectively replace RAS (by combining the old rent supplement and RAS for long term accommodation need).


Build to Rent is not really an established mechanism in Ireland for house supply. The market activation measures to date in Ireland include a recent Government circular (Circular (PL 11/2016; APH 5/2016) from October 2016 where planning authorities are expressly required to "prioritise all necessary actions to deliver build-to-rent housing". To date no specific aggregated funding mechanism has been put in place to support this prioritisation (unlike in the UK) so this sector is still in its infancy/emerging here.


On 10 October 2017 the Government introduced a number of measures aimed at boosting house supply:

  • HAP to be increased by €149 million
  • HAP PlaceFinder to assist those in emergency accommodation to transfer to HAP approved accommodation
  • Additional €500m in capital expenditure for house building
  • Establishment of House Building Finance Ireland('HBFI') (using €750 million from the Irish Strategic Investment Fund).

The expansion of HAP, which provides for state payments directly to landlords will be attractive to investors and funders prepared to fund based on sovereign risk.

The impact of HBFI adds liquidity to a sector where liquidity does not appear to be an issue. If it is structured on an off balance sheet basis it does offer significant scope for further investment.

We will have to wait and see if, and how quickly, these measures improve housing supply.

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions