A HOUSING charity believes it could become one of the largest owners of residential property in the State by the end of this year.
Private housing association Respond has 5,200 houses, most of which have been built by its own company for local authorities and large housing associations.
By the end of 2010 a further 4,000 recently built houses will be bought by the Waterford-based organisation to provide high-quality, community-based housing.
The expansion plan has been brought about by a decision by the Department of the Environment, to request private housing associations produce or procure social housing instead of local authorities.
The Incremental Purchase Scheme, legislation for which has yet to be enacted, has been welcomed by Franciscan friar Fr Pat Cogan, who is managing director of Respond.
“We are being asked to take on the responsibility of providing social housing for applicants to the State.
“And we’re doing that in a formula that has never been used before in any commercial dealing, to my knowledge, particularly with the draconian Charities Act hanging over our heads,” he said, in reference to a law which makes directors of registered charities personally liable for financial losses.
“It’s exactly like futures. We have to raise the mortgage privately, over 25 years, the assumed life of the mortgage. This is not strictly underwriting. But the leasing agreement is limited to 80 per cent of the market value of rents in that area,” he explained.
Because of the economic downturn and demographic trends, Respond said Ireland could be left with a lot of vacant residential property. However, the charity said it was seeking to purchase in viable communities, not ghost estates.
Respond has gone to tender with five banks for the provision of mortgages and is in discussion with one bank.
Fr Cogan described the planned change in the provision of social housing as the most radical housing development since the foundation of the State. “Up to now, for social housing purposes, houses were always provided by the local authorities or the Department of the Environment.
“In some cases houses were being bought by the local authorities from private developers; in other cases developed directly by the local authorities.”
Some of the direct development for local authorities over the last 25 years was undertaken by Respond, which has a 350-strong team of construction workers, designers, architects and technicians.
Its first building project was the construction of sheltered housing for the elderly in Francis Court in Waterford city.
Other projects include the provision of 97 houses in Fermoy in Co Cork and at Merchant’s Quay in Carlow.