Why has the Government opted not to extend its moratorium on evictions? The decision has not so far proven popular, except among the relatively small and wealthy population group who are themselves private landlords. In the context of a housing emergency, in which many of those evicted will face the prospect of immediate and possibly prolonged homelessness, the resumption of evictions will not only be personally catastrophic for those affected: it will trigger an unprecedented escalation of a national crisis. Many people in the State, including many children, will be left with nowhere to live, through no fault of their own, as a direct result of this decision.
The wave of evictions expected to begin from the end of this month is not merely theoretical: we already know that during the period of the ban, tenants in the State sought advice on roughly 1,500 new eviction notices. In a few weeks’ time, if the Government does not reverse course, these evictions will be eligible to proceed. Minister for Housing Darragh O’Brien has even publicly accepted that homelessness will “very possibly” increase when the moratorium comes to an end.
Why would any government approve a decision that is by its own admission likely to force additional people into homelessness? In the Dáil last Tuesday, Taoiseach Leo Varadkar tried to explain that despite the short-term “respite” offered by the eviction moratorium, “it actually would have made things much worse in the medium to long term”. If the moratorium had been extended, he claimed, “it would have discouraged new landlords from coming into the market, who we need. We have lost 40,000 in the past five years and it may have caused, once extended, more and more landlords to leave”.
Not coincidentally, “supply” has also been the watchword of the Irish Property Owners’ Association (IPOA), a lobby group on behalf of landlords. In its statement welcoming the end of the eviction ban, the IPOA exhorts the Government to focus on “protecting the existing private rental supply that we have in place and [that] is housing hundreds of thousands of people”. The Government and its cheerleaders would like us to believe, then, that the eviction ban is forcing landlords out of the market, reducing the number of rental units available, and thereby causing long-term dysfunction in the housing system. If this really is the rationale underlying the decision to resume evictions during a housing crisis, it deserves very serious consideration.
There is some evidence to suggest that a higher than usual proportion of landlords have been exiting the rental market in recent years. A survey by the Real Estate Alliance indicated that 35 per cent of properties for sale in 2021 belonged to landlords; the average figure in previous decades was about 20 per cent. Statistics like these – suggesting an “exodus” of rental properties from the market – are reported to have influenced the Cabinet in its decision to lift the moratorium. But this data is easily explained without any reference to State intervention. Considering that property prices have reached extraordinary highs since the pandemic, and given that rental properties represent financial commodities rather than homes for the people who own them, it should not be at all surprising that landlords are choosing this moment to cash out.
Not only have successive Fianna Fáil and Fine Gael governments done nothing to break this cycle, they have on the contrary lavishly subsidised it, pouring ever greater sums of State money into the coffers of private landlords
It is a basic principle of finance that asset owners should sell when they judge that the price of an asset has reached its peak. Many investors may believe that property prices right now are as high as they’re going to get. Owner-occupiers – the other relevant participants in the housing market – typically have more personal reasons for selling up: they need to move for work, for instance, or they want to downsize, or they’re planning for a bigger family. These concerns are largely unrelated to shifts in the property market. Therefore, in periods of extremely high house prices, especially if there are broader signs of volatility in global commodity markets, we could rationally expect to see a higher proportion of sales from landlords than from owner-occupiers. This makes basic financial sense. There is no need to invoke State regulations to explain why landlords might be eager to realise the cash value of their presently very lucrative assets.
But a prolonged eviction ban with no definite end date may well discourage new private investors from entering the rental market: in which case, we need to figure out how this affects people who are in need of homes. Invoking the sale of 40,000 rental properties in recent years, the IPOA gives what appears to be a stern warning: “This stock is lost to the rental market. Private rented properties that are sold did not return to the rental market and instead are typically sold to owner-occupiers.”
This is a significant point. For all the talk of supply, the fact is that landlords do not and cannot increase the levels of available housing in the State. A given property that goes up for sale on the private market may be purchased by an owner-occupier, or it may end up in the hands of an investor who intends to let the property to tenants. In either case, however, the same edifice continues to exist, and will be used to house a person or group of people in need of a home, be they owners or renters.
Unless property is left vacant – a problem the Government can and should address urgently by means of targeted policies – the overall housing supply therefore cannot be affected by landlords entering or exiting the market. All that can change is the fraction of Ireland’s private housing stock held by owner-occupiers and the fraction owned by investors. Those two percentages will add up by definition to 100 per cent. Since the Government has expressed such “deep concern” around the exit of landlords from the market, perhaps it should provide us with a guideline of what exactly it thinks the ratio ought to be. How much of our housing stock should ideally be concentrated in the hands of private landlords?
Let me put the same question another way. Would you, the person reading this article right now, rather be a tenant or a homeowner in Ireland today? For almost everyone, the answer is simple. In order to access their own homes, tenants of private landlords have to pay a recurring sum of rent every month, in perpetuity; and each rental payment consists of money that the tenant will never see again. Rent is simply the price of continuing to live in a given property, just as groceries and electricity have a price. Many homeowners also have to pay a recurring monthly sum, of course, in the form of a mortgage repayment. But unlike rent, mortgages are eventually paid off; and a homeowner can confidently expect to see some of that money again, if and when they choose to sell or refinance their property.
The differences are obvious. Very few people actually want their money to disappear every month instead of being added to a fund they can draw down at a later date. It stands to reason that the median net worth of a household of renters in Ireland is just €5,300, while the figure for homeowners is almost 60 times higher at €303,900.
[ Una Mullally: Government has lost control of the housing market ]
Even aside from the financial toll of renting, consider the psychological hardship of trying to make a life for yourself and your family in what is ultimately someone else’s spare house. Your home – your place in the world, your refuge, the stage for all the private dramas of your intimate life – can be taken away from you at any time, through no fault of your own, for the financial benefit of someone wealthier than you are. This is obviously not the life most of us would choose for ourselves.
So, if most tenants in Ireland would rather be homeowners, why don’t they just buy houses? Because they can’t afford to. House prices in Ireland are of course extremely high, and mortgages are difficult to secure, but that’s only one part of the picture. Between 2010 and 2021, property prices in Ireland increased roughly in line with the EU average. But during the same period, average rent payments in Ireland increased by almost 70 per cent, compared with an increase of only 16 per cent across the EU. What makes our housing market so dysfunctional is partly that our tenants are paying such excruciatingly high rents to private landlords every month. Average rents in Ireland have in fact become higher than average mortgage repayments – in other words, tenants are forced to pay a premium for the reduced rights and privileges they endure.
This is a self-perpetuating form of exploitation: the higher the rental payment, the harder it becomes to save up for a deposit, and the more time tenants have to spend paying extortionate rents as a result. This in turn feeds the cycle of escalating house prices, as investors with deep pockets are incentivised to buy up lucrative rental properties, pushing would-be homeowners out of the housing market and back into the rental system. Not only have successive Fianna Fáil and Fine Gael governments done nothing to break this cycle, they have, on the contrary, lavishly subsidised it, pouring ever greater sums of State money into the coffers of private landlords. More than half of our renters are now in receipt of State assistance, largely in the form of payments such as HAP (Housing Assistance Payment), which goes directly into the pockets of property owners without improving the living conditions of tenants whatsoever. The nice thing about being a landlord in Ireland today, as the late Margaret Thatcher might observe, is that you never seem to run out of other people’s money.
This patently absurd situation is the outcome of global changes in the property market, but also of our specific national history. Throughout the 20th century, as a result of concerted State policies, overall rates of home ownership in Ireland skyrocketed, passing 80 per cent of households in 2004. The figure among young people aged 25-34 was 60 per cent. Partly because of this emphasis on mass property ownership, and a relatedly small and short-term private rental sector, protections for tenants in the State have historically been weak. Private tenancy was perceived as – and to some extent was – a temporary arrangement for mobile population groups like college students, and legal protections for tenants reflected this dynamic.
[ Ireland’s housing crisis: why doesn’t the State step in and build? ]
But since the 2008 financial crisis, home ownership rates in Ireland have fallen sharply, and are now at their lowest point in 50 years. Today, only 27 per cent of people aged between 25-34 own their own homes. Private investors have in the meantime been empowered to buy up vast swathes of our housing stock and let it back to us at exorbitantly high rents. The light-touch tenancy regulations developed in the era of mass home ownership have proven completely inadequate for our present housing system, in which renting has become a long-term reality for a generation of people and families chronically shut out of the property market. The eviction moratorium was, in this context, a welcome step toward a long-overdue rebalancing of rights between tenants and landlords. But the Government now intends to strip renters of even this temporary protection and leave them once again at the mercy of the propertied class.
Is it merely a coincidence that crisis conditions in our housing system have emerged during the very same period that private investors have come to own an ever higher proportion of our housing stock? Of course not. The entrenchment of property in the hands of a small number of landlords is not a solution to, but in fact a source of, our present housing emergency. Landlords have no incentive to improve conditions in the housing market: their only incentive is to see rents and property prices increase. This is not because they are individually bad people, but because of the economic role they play as investors in the commodity market that is the Irish housing system. The more power landlords accumulate in that system, the worse we can expect conditions to get.
Obviously, there are too few homes in Ireland to meet demand, and any comprehensive housing strategy must deal with the lack of habitable dwelling-places available. But landlords have no role in solving this problem either. They merely act as middlemen between existing homes and the people who want to live in them, a process that serves to inflate property prices, shut first-time buyers out of the market and exploit vulnerable tenants at the same time. The public has received no explanation from the Government as to how further expansion of this process can improve rather than worsen the crisis. Absurdly, Varadkar himself professed just last month to be “alarmed” by the continuing drop-off in home ownership rates in Ireland: the same Varadkar who is now emphasising so firmly the need for “new landlords” to enter the housing market. Does the Taoiseach understand that the entrance of new landlords into the market can only mean a further decrease in home ownership rates? Every landlord who purchases a property quite literally leaves one fewer available for owner-occupiers. Are those in power really so confused as to what a housing market actually is?
If we are serious about ending the housing crisis, then we must all be prepared to stand in solidarity with tenants – and of course with our homeless population – in the struggle for justice
Our Government’s rationale for lifting the moratorium on evictions appears in the final analysis to be as follows: in the short term, evictions are necessary, because in the longer term, we need to get more of our housing stock into the hands of private landlords. I am suggesting precisely the opposite. In the short term, evictions must be stopped. Tenants have already been exploited for unreasonable rents, prevented from accumulating any protective savings, and given no alternative accommodation options, all to protect the profit margins of private investors. To resume no-fault evictions during a housing emergency and cost-of-living crisis would be an unforgiveable assault on human dignity. The moratorium must be reinstated until the Government is certain that it can offer tenants reasonable and safe alternative accommodation in the event of eviction. This may admittedly take a while – but if new landlords are discouraged from buying up habitable properties as a result, this is a development to be welcomed.
In the longer term, the State needs to start moving our rental stock out of the hands of private investors, and into the hands of State housing bodies. The Government presently spends half a billion a year on HAP alone, money that flows straight to landlords. That significant sum would be better spent buying, building and maintaining an expanded stock of social housing. Unlike the private rental market, State-owned housing can offer tenants fixity of tenure, fair rents and peace of mind. It also gives us some democratic input into a fundamentally necessary part of our shared national life. The Government’s plan to cede even more of our already scarce housing stock to capricious private investors will escalate the crisis gravely in both the short and long term.
But the flimsiness of the Government’s stated reasoning – its apparent ignorance of basic economic principles and realities – inevitably raises the question of sincerity. The sight of investors fleeing the property market may well be a source of anxiety for Cabinet Ministers, but probably not for the reasons they have provided. If State interventions like a prolonged eviction ban discourage profit-seeking investors from buying up more Irish property, house prices will likely fall as a result. A downturn in property values would have no ill effects on tenants or homeless people, and would improve the lot of aspiring first-time buyers, but it would also damage the net worth of current homeowners and investors.
Curiously, these latter demographics happen to make up the key voter base for the governing parties. Among voters who do not own their own homes, only 9 per cent support Fine Gael, and only 6 per cent Fianna Fáil, according to a recent poll. Perhaps the Coalition has given up hope of attracting this slice of the electorate, and is instead appeasing the ownership class by trying to pump house prices continually higher and higher. This may offer a more convincing explanation for the otherwise perplexing decision to let the eviction ban elapse. But homeowners in the State are not automatons, mechanically voting in favour of higher house prices no matter what. They may soon judge the devastating human cost of our housing crisis to be more important than the on-paper cash value of their homes.
In any case, if those in power are sincerely committed to allowing hundreds or thousands of people to be evicted into homelessness in the coming months, collective community action will be needed. Tenants’ unions such as CATU (Community Action Tenants Union) will no doubt have an important role to play, not only in the fight against unjust and inhumane evictions, but in the longer battle to organise renters and confront the disproportionate power of landlords in the State. If we are serious about ending the housing crisis, then we must all be prepared to stand in solidarity with tenants – and of course with our homeless population – in the struggle for justice. We in Ireland have a proud national history of fighting evictions: our National Land League was founded in 1879 for the very purpose of organising resistance to evictions and forcing reductions in rent. Almost 150 years later, the fight must go on. If the Government won’t stop evictions, we can.
Copyright ©2023 Sally Rooney Sally Rooney is a novelist