Tuesday 22 January 2019

Raise €50 council rents to fund more homes, say experts

Housing Minister Eoghan Murphy. Photo: Doug O'Connor
Housing Minister Eoghan Murphy. Photo: Doug O'Connor
Paul Melia

Paul Melia

Local authority rents should be raised well in excess of current levels to help fund quality accommodation for low-income households.

The Government also needs to call a halt to the tenant purchase scheme that allows families to buy their homes, with startling figures showing that more than 40pc of all council homes built since 1990 have been sold on at discounts of up to 60pc below the market price.

'The Future of Council Housing: An analysis of the financial sustainability of local authority provided social housing' report makes a series of radical recommendations aimed at improving social housing output, and maintaining what has already been provided.

It recommends the suspension of tenant purchase schemes; removal of successor tenancies that allow the children of sitting tenants to inherit homes; calls for construction of smaller council housing units to enable families to downsize after children are raised; and says council rents should be taken directly from social welfare payments.

It also calls for a 'cost-rental' model to be introduced, which would result in higher rents for tenants, but would help fund a stock of quality, well-maintained public housing.

It said that 'average' weekly rents stand at just over €50, and that a cap on the maximum that can be paid should be abolished.

Instead of Government funding the cost of building local authority homes, councils should be allowed to use the local property tax and borrowings, and repay the costs over time through this cost-rental model.

Rents would be based on the financing costs and ongoing maintenance of the units, and charged to the tenant. Households would still benefit from below-market rents, it said, with those on very low incomes subsidised by the Government under the Housing Assistance Payment or similar scheme.

Generally, a single person can earn €35,000 a year and a multi-person household €42,000 in the main cities and qualify for social housing. The limits fall to €25,000 and €30,000 in other areas.

The current model of providing housing is too reliant on government grants, with maintenance and improvement grants dependent on available funding.

The costs of deferred maintenance "do not simply accumulate, they multiply", it said.

The report also found that capital spending on new council housing declined rapidly after the economic crisis, falling by 94pc between 2007 and 2013.

Between 1990 and 2016, 43pc of the 82,869 council houses built were sold to tenants, in certain instances at up to 60pc discount on market value. Some people earning as little as €15,000 bought their homes, which they could not afford to maintain.

More social housing is needed, it added, and councils should be allowed to retain property tax revenue to fund housing.

Housing Minister Eoghan Murphy said while he was committed to people aspiring to homeownership, the recommendations were "radical" and should be subject to debate.

Irish Independent

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