It is Government policy to place the majority of those with a long-term housing need not in secure social housing tenancies but in the private rented sector (PRS) supported by the housing assistance payment (HAP) where they can be evicted for no reason. We need to face up to the fact that the policy is failing us.
HAP is a poor substitute for social housing. It pays the rent to the landlord, while the tenant pays a rental contribution to the local authority in the same way as social housing tenants. However, there is a cap on how much rent can be paid under HAP. In many cases rent simply costs more than is allowed under the cap. Tenants seeking a home must therefore make top-up payments to the landlord.
The policy is that tenants should not pay more than 30 per cent of their income in rent. However, a survey of Threshold clients published last month showed that many tenants in receipt of HAP are paying more than 30 per cent of their income on rent in an effort to secure a home in the private rented sector. With rents continuing to rise, this will increasingly become standard practice among HAP tenants. They are now spending essential household income on rent top-ups because of this shortfall.
Top-ups
We found that almost half of those in receipt of HAP are paying top-ups directly to their landlord because HAP does not cover their rent. They are paying up to an additional €575 a month on top of their rent payment to the local authority. Households living in or near urban areas typically pay top-ups of €300 or more per month.
One in five is paying more than 30 per cent of their net incomes on rent top-ups, despite receiving HAP. In 10 per cent of cases, households are paying more than 40 per cent of their net income in rent top-ups. It is not surprising that 45 per cent of those paying a top-up said they struggled to pay utility bills, buy groceries and pay childcare and school costs. Many were struggling with simple day-to-day expenses.
Those tenants who were eligible for HAP but still searching for a home said they were unable to find a property within the payment limits or could not find a landlord willing to accept it.
The Government has made the PRS the mainstay of Rebuilding Ireland. However, the PRS is unable to provide social housing which is either sufficiently plentiful or affordable and secure. In that context, HAP must be reviewed and reformed to meet the needs of tenants and reflect the private rental market. In addition, there needs to be a wider range of social housing options to reduce the over-reliance on the PRS.
Review
HAP was first piloted in 2014 and has not been comprehensively reviewed or assessed since. There have been enough well-publicised concerns in recent months to justify a review of HAP by the Department of Housing, Planning and Local Government. We need to confront the question of whether HAP meets the needs of tenants and is fit for purpose as a social housing support.
Caps on HAP payments were last set in 2016 and rents have increased by 18 per cent throughout the State since. There are a couple of options that can be considered to address the shortfall in HAP and reduce the payment of unaffordable top-ups. Caps could be reviewed in light of rent changes and altered accordingly on a scheduled basis. HAP payments could be flexible and paid to reflect market rents. There is a case for removing caps entirely. Removal of the cap would remove the possibility that an increase in caps would only drive up rents due the belief that the cap is the lowest point at which a landlord will set the rent.
Under Rebuilding Ireland, 61 per cent of all social housing provision between 2016 and 2021 will be sourced in the PRS via HAP. This is not sustainable at a time when the PRS is so unaffordable and insecure. It will leave a disastrous legacy, trapping people in poverty and unable to set down roots or establish the necessary security of home.
Ireland must reduce its reliance on HAP and realise that we must need more publicly funded housebuilding, either by local authorities or approved housing bodies. Relying on ever more complex and expensive schemes to engineer the private rented market does not and will not work.
John Mark McCafferty is the chief executive of the housing charity Threshold