A double whammy of a tight private rental market and a shortage of supply in the social housing sector means those on low incomes are struggling to find cheap rented accommodation. Last week housing charity Threshold said a rental crisis was looming at the lower end of the market.
Donal McManus, executive director with the Irish Council for Social Housing, says that affordability has become a particular issue over the last year.
“The first thing that happens when there’s a shortage in the rental market is the rent goes up. That affects the lower end of the market first. Landlords become more choosy and won’t take people on rent supplement.
“In the past, the private rental market has been the safety net. But the reduction of vacancies means that’s no longer there. Social housing applicants are being squeezed out of the market.”
Third quarter figures from Daft.ie show that national rental prices in November were up 4.8 per cent year on year, an increase of 7.6 per cent in Dublin and 1.8 per cent elsewhere.
In particular, the price of a one-bedroomed flat has risen strongly in Dublin compared to other urban areas, possibly due to the ban on bedsits, which came into force earlier this year.
These price rises are largely driven by increased demand. While we might not yet be a nation of renters, the most recent census showed that the number of people renting their homes grew by 47 per cent between 2006 and 2011.
As a result, the current supply of rental properties is very restricted, particularly in Dublin. Stock in the capital stood at 1,500 in November, compared with 6,700 vacant properties in 2009.
Stephen Large, manager at housing advice charity Threshold, says they are currently receiving calls on two main topics: affordability and standards.
“The ability to access good quality accommodation at the lower end of the market is something that we’re facing all the time. One of the main complaints is that minimum standards are not being met,” he says.
“Our client group is at the lower end of the market and may be on rent supplement. It’s nigh on impossible to find accommodation within the rent caps and where the landlord is willing to accept rent supplement. Landlords can get more rent on the open market and they don’t have to deal with the bureaucracy.”
Mary Stephens (53) moved into her new apartment provided by Clúid Housing Association, on December 4th after eight years on the Galway City Council waiting list.
Waiting list
Unable to work because of health problems, she found it difficult to find good quality, cheap accommodation on the private market.
“Social welfare will only allow you so much rent allowance,” she says. “I moved out to Claregalway because it was cheaper but the place was freezing and I was always getting sick.
“I’ve been in about five different types of flat in the last 15 years; they were an absolute disgrace. To have accommodation like this has given me a boost in life.”
Latest figures show a slight decrease in the number of people on the social housing waiting lists, partly due to a change in how they are assessed.
But even given this adjustment, waiting list figures have increased from 56,000 in 2008 to just under 90,000 in 2013.
However, social housing is currently facing a supply shortage of its own.
In 2011, responsibility for providing social housing moved from local authorities to housing associations, which can leverage government money to secure financing for new homes.
Accordingly, social housing development by local authorities has decreased from nearly 5,000 units in 2008 to 363 in 2012, but procedural delays mean this demand has not yet been filled by housing associations.
“Local authority new build and purchase has collapsed,” says Simon Brooke, head of policy with Clúid. “In theory, the housing associations could bridge the gap. That hasn’t happened yet.
“When they made a similar change in the UK it took 20 years for them to make the change we were asked to do overnight.”
Brooke says those most affected by the abolition of bedsits and rising cost of one-bedroomed flats are single people or couples without children.
“The position for single people is bad _anyway because they can wait for years or decades before they get an offer. Social housing is seen as family housing.”
To tackle the current bottleneck, Brooke says he would like to see the continuation of social housing provisions within new developments as set out in Part V of the Planning and Development Act, which is currently under review.
“Another thing is that the Government needs to take action and make sure there is not another housing bubble. For borrowers there should be a maximum loan-to-value rate, for example 80 per cent. And the Government should say that no one is allowed to borrow more than a certain multiple of income.”
Social housing
From January, seven local authorities are trialling a new housing assistance payment in place of rent supplement. The key difference is that the new payment will not automatically end when the recipient gets a job, thus removing one of the current disincentives of returning to work.
Donal McManus says he welcomes the initiative. “It’s progressive in nature and will allow people to go back to employment. But there must be a good supply of social housing. Non-profit housing associations are being underutilised.”
The social housing sector currently provides new tenancies to 3,000 people each year through new lets and re-lets; estimates are that this could reach 4,000.
Jan O’Sullivan, Minister of State at the Department of Environmentwith special responsibility for Housing and Planning, has also announced a €65 million building programme during 2014 and 2015 for 650 houses in and around Dublin.
McManus says he also thinks attitudes towards renting need to change. “I don’t see a return to the high levels of home ownership that we saw during boom.
“We have to make rental an attractive and viable model. It is currently seen as transitional; we need to make it be seen as a long-term option.”
