In a series of findings handed down since September, five not-for-profit social housing bodies were deemed “non-compliant” with rules governing a sector that provides housing to tens of thousands of tenants.
The determinations were made after a form of audit conducted by the Approved Housing Bodies Regulatory Authority (AHBRA), which was established in 2021 to oversee hundreds of approved housing bodies (AHBs) that are funded with public money.
After rapid expansion, 438 AHBs now manage some 68,000 homes. Annual rents are approaching €2 billion on properties collectively valued at about €10 billion.
This means the sector is a major economic and social force, gaining in scale at a time when local authorities have come under pressure to boost housing output to reverse a drastic fall after the 2008 crash.
RM Block
AHBs built more social homes than local authorities in 2021, 2022 and 2023 but the number they built in 2024 (3,914) was exceeded, slightly, by local councils (3,957).
In a State grappling for years with a deep housing crisis, the expanding footprint of the AHB sector is little understood.
Some of the bigger AHBs now have operations on a par with large private companies, with assets counted in billions of euro and monthly rental income exceeding €10 million. At the same time, smaller operators have little prospect of growth but face tighter supervision.
Increasing regulatory scrutiny from AHBRA comes against the backdrop of turmoil and controversy in the Republic’s best-known AHB – the homeless charity Peter McVerry Trust – and a push to encourage mergers between smaller AHBs as they face demands to professionalise their operations.
“Aggregation and consolidation is a Government policy objective over the coming couple of years; you’re going to see more of that coming,” said a senior housing figure familiar with the work of big AHBs.
A recent report for the Government by an advisory group called the AHB Strategic Forum said the sector has identified risks such as deferred maintenance of older housing stock, funding gaps and “concentration risk” in delivery capacity.
“While the sector continues to expand, heightened financial risks must be managed to ensure long-term viability,” the forum report said.
The concentration of activity is indicated in figures showing how four AHBs – Clúid, Cooperative Housing Ireland, Respond and Tuath – were responsible for 71 per cent of AHB-built homes in 2024, a total of 2,794 between them.
“Four large AHBs are responsible for 67 per cent of projected growth, indicating sectoral reliance on a limited number of high-debt entities,” the report added.
AHBRA data shows each of the four largest operators are rated “compliant with improvements” in its most recent assessments, which means they met regulatory standards but were issued with recommendations to make improvements in some areas.
But the release this week of AHBRA’s 2024 annual report still showed more than half of the 33 AHBs it assessed last year were “non-compliant” and none were fully compliant.
Included among the non-compliant were five AHBs graded with a “statutory action required” assessment.
One official in an AHB directed to take statutory action said the assessment was “like getting a bad report in school”.
Yet there is more to it than that.
Such AHBs are required by law to submit a plan setting out a path to full compliance. They also lose new Department of Housing funding.
All told, nine AHBs have been deemed non-compliant since January – two this month alone, one in October and two in September.
Such findings follow the governance breakdown in the McVerry Trust, now under the control of a new board.
As a result, negative AHBRA rulings about other AHBs raised questions as to whether more trouble was on the way.
The regulator was quick to say none of AHBs selected for assessment were under investigation. But it said “many” AHBs, particularly smaller operators, would benefit from “more structured approaches” to risk.
Although the McVerry Trust is under special monitoring by the regulator, people working in the sector find the lack of penalties to be salutary.
“The speed at which people act and the speed at which the regulatory infrastructure works is at a snail’s pace,” said one AHB official.
“I think the regulatory concerns that many organisations might have are probably tempered by the fact that no action has been taken against Peter McVerry Trust, despite a clear lack of governance.”
Asked whether Minister for Housing James Browne was concerned about high levels of noncompliance, his department said: “Compliance among the largest delivery partners, who account for the overwhelming majority of delivery, is high.”
AHBs deemed to be “working towards compliance” remain eligible for department money but they were still required to satisfy funders that noncompliance was “not at a level that would cause risk” to the delivery of projects.
“No one could be comfortable in a sector that the State is reliant upon to deal with its housing and homelessness crises when you look at the results from the initial audits,” said David Hall, the mortgage debt campaigner who is founder and chief executive of an AHB called iCare, which owns 700 social homes.
AHBRA last year found iCare non-compliant but “working towards compliance” and issued a new assessment in September which found iCare “compliant with improvements”.
“There’s a seismic change looming in the sector as regulation enforcement creeps in,” Mr Hall said.
In July the regulator said Focus Housing, the AHB division of anti-homelessness charity Focus Ireland, was deemed “non-compliant” but working towards compliance.
“We certainly don’t describe the issues as trivial; they’re very important but they don’t raise questions over viability,” said Mike Allen, Focus director of advocacy.
“We were surprised when the report came out but it actually referred to an earlier period ... We are doing everything in our power to make sure we will rectify all the points they have raised – and in fact most of them have already been done.”
Donal McManus, chief executive of the 271-AHB member Irish Council for Social Housing, said the prospect of consolidation was “a natural progression” in the sector.
“We have moved from a voluntary regulation process 10 years ago to a statutory regulation process now,” he said.
“There has been some learning from the voluntary process but it has to be clear that a statutory process is different in terms of compliance.”
