International research and case studies suggest that using a ‘cost rental’ model is the most efficient method of ensuring an adequate supply of affordable, secure and inclusive, quality public housing.
The cost rental model uses public land and low cost finance as a supply-side support to cover costs. This ensures both affordability for end users and continuity of supply as the equity that accrues once loans are repaid, allows financing of further affordable housing programmes. It also makes public housing available to all including higher income earners which helps to avoid the creation of segregated areas of social housing occupied only by those on low incomes and dependent on welfare.
‘European countries with more stable, affordable and socially inclusive housing systems generally provide modest support for large-scale provision of secure rental accommodation, mostly by non-profit bodies, in which rents reflect costs, not the maximum that market pressures will
sustain’ (NESC, 2014).
This is quite different from the current system in Ireland which relies on the private market to supply housing and very expensive demand side supports to assist those who cannot afford to compete in this market.