Top housing officials worried about billions of euro in debt racked up by housing bodies

The Department of Finance has raised serious concerns about the State’s increasing exposure to billions of euro in debt at non-profit housing bodies, raising sharp questions with top housing figures about the rapid build-up of risk in the sector.

The anxieties were set out by the most senior department official, John Hogan, after an approved housing body called Circle stopped two construction projects in Dublin.

“[In] light of recent developments and noting that there is now a live case with potential system implications, the absence of detailed information is a matter of concern,” Hogan said in a letter to his Department of Housing counterpart, Graham Doyle, during the summer.

Such correspondence is unusual but it reflects firm views within the Department of Finance that greater effort is required to control risks in a sector whose growth is considered to be “exponential”.

Approved housing bodies (AHBs) are not-for-profit organisations that receive public funds and borrow from the State to provide affordable housing to tenants. The sector is growing fast, with almost 77,000 dwellings owned or managed in 2025 and another 22,000 planned in the years to 2028.

After stopping work on its sites at Marrowbone Lane and Santry, Circle is in talks with Dublin City Council and Fingal County Council about the future of the two projects.

Hogan wrote twice to Doyle after Circle’s difficulties were made public but the department was already in “extensive” correspondence with the Department of Housing about “oversight, governance and risk management” in AHBs generally.

Many are funded by the Housing Finance Agency, a public body. In a May 28th letter to Doyle, Hogan stressed the agency’s €13.5 billion borrowing limit was underpinned by a guarantee from Tánaiste and Minister for Finance Simon Harris.

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“Given the level of State funding provided to the sector, and the treatment of AHB activity on the State balance sheet, there is also a clear interest from a taxpayer and public finance perspective in ensuring a full understanding of the State’s exposure in this area,” Hogan wrote.

Referring to Circle, he asked for a Department of Housing assessment “as to whether the circumstances in question point to any broader or systemic risk” in the AHB sector generally. Hogan also asked “whether any other AHBs are experiencing similar financial or delivery issues”.

Doyle sent an eight-page reply on June 5th, noting the sector was supervised by an independent watchdog known as the Approved Housing Bodies Regulatory Authority (AHBRA).

The correspondence was released separately by the two departments under the Freedom of Information Act but Finance and Housing each redacted large parts of Doyle’s letter.

“My department and the regulator are acutely aware of the risks inherent in the sector and the AHBRA has a number of regulatory tools – in particular, a well-developed assessment programme and investigative powers, which allow it to determine whether risk in the sector is being managed by AHBs,” Doyle said.

Hogan replied on June 18th, asking Doyle to indicate whether any further assessments were under way “regarding financial, organisational or governance issues in relation to individual AHBs”. This request referred “in particular, but not exclusively” to groups funded by the Housing Finance Agency.

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“I look forward to continued engagement between our departments on these matters, particularly in light of recent developments and the concerns I have previously expressed regarding the financial capacity and governance structures required to underpin the rapid increase in debt across the sector in recent years,” Hogan told Doyle.

“As I have previously emphasised, it is important to ensure that any significant balance sheet growth – particularly where driven by exposure to property development – is carefully monitored and that there is a comprehensive understanding of the State’s overall exposure across the sector.”