Ireland is in the midst of an affordable housing crisis. Figures published by the Department of Housing, Planning and Local Government show 6,497 homeless adults in late 2019 with a further 3,778 homeless children. In total, 1,721 families were in emergency or temporary accommodation including hotels, bed and breakfasts, hostels, and other temporary accommodation facilities. In addition, a large number of people are in private rental accommodation, relying on local authority assistance in paying rent.
A shortage of housing supply seems to be at the crux of the problem, particularly in the context of increased demand arising from improved economic conditions and an increased number of large multinational employers. Harnessing the power of pooled investment funds could help alleviate this crisis while also potentially providing returns to individual investors.
The proposed pooled investment fund would:
- Build a portfolio of residential properties, through acquisition and/or development. Initially, it is likely that the focus of the fund would be on purchasing residential properties, but development of suitable residential properties would also be possible over time.
- Rent those properties on long-term secure tenancies with transparent rules around rental increases either to tenants directly in receipt of the Housing Assistance Payment or directly to local authorities to supplement the local authority housing stock.
In this paper, Milliman consultants discuss the rationale for a pooled investment fund focused on social and affordable housing.