Tuesday 15 October 2019

Rory Hearne: 'Some serious political noise needs to be made if our dysfunctional housing system is to be fixed'

'The average rent in Dublin is now €1,700 a month and almost a third higher than the peak in 2007. Nobody on an average wage can afford that.' Photo: Stock Image
'The average rent in Dublin is now €1,700 a month and almost a third higher than the peak in 2007. Nobody on an average wage can afford that.' Photo: Stock Image

Rory Hearne

For renters having to pay the highest rents ever recorded in this country, covering the basic costs of living is becoming unbearable.

The rental crisis directly affects a large section of the population - one-in-five households in the country. Some 750,000 people, hard-working people and families up and down the country, have insufficient money left after the rent is paid for the basics of food, childcare, and medicine.

St Vincent de Paul says we have an "affordability crisis" for renters, as many people they visit are struggling.

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The average rent in Dublin is now €1,700 a month and almost a third higher than the peak in 2007. Nobody on an average wage can afford that.

The rental crisis has spread across the country, with rents now higher than €1,000 a month in Co Galway, Co Kildare, Co Louth, Co Meath and Co Wicklow. Nationally, rents are 21pc higher than the previous peak.

This is a major societal crisis because renters are no longer living in private rental housing on a short-term basis.

For Generation Rent, the private rented sector is going to be their home for many years to come, and possibly for their entire life.

Generation Rent is mainly made up of people in their 20s, 30s and 40s, but includes some elderly people too, living in private rental accommodation. They are workers like nurses, gardaí, teachers, civil servants, academics, IT workers and cleaners, and pensioners who have been either locked out of buying housing or can't avail of traditional social housing.

They constantly worry about rising rents or having to move again if the landlord ends their lease.

Their life choices are affected, such as when and if they decide to have children, they can't save a deposit, plan for the future, or feel part of the local community. They can't put up a picture in their house or apartment.

They can't make their own permanent home - it's just a temporary living arrangement. Meanwhile, thousands more are being forced into homelessness, couch surfing, living in cars and tents.

And Housing Minister Eoghan Murphy wants to make it even more temporary and less like a home with his support for 'co-living', which are more like 21st century tenement pods.

The minister talks about us moving closer to European norms of renting - but without any of the European rental laws and regulations which ensure affordable rents, long-term leases, family- sized apartments and protection from eviction.

This is a crisis that has a knock-on effect for wider society and Ireland's economy. The lack of affordable housing reduces Ireland's attractiveness for companies, while rising rents add, understandably, to higher wages.

They mean a higher cost for the State on HAP payments, and increase inequality as low- and middle-income earners pay their rent to landlords and increasingly wealthy investment funds.

This crisis is not an accident. It results from policy decisions by Government. Rising rents and house prices were viewed positively by the Government as a way to entice the vultures, global equity funds and Reits to buy up toxic non- performing loans from the banks and Nama.

Reits and equity funds were encouraged to buy and build rental housing and become the new landlord class in Ireland. They were given tax breaks, infrastructure funding and reduced planning regulations. Rising rents were expected to stimulate this supply.

The Reits and vultures did buy up huge land banks, but they have hoarded them and watched their assets - and their profits - inflate in value. And they are building expensive build-to-rent property at huge rents, pushing up wider market rents.

To further stimulate supply and keep rental property attractive to investors, the Government stalled on introducing rent regulation, allowing rents to rise further, and failed to enact proper rent control.

The vacant site tax is also toothless, with very few sites registered and the rate too low to force the development or sale of land.

The problem is supply. The ESRI forecasts only 21,000 houses will be built this year, 15,000 below what demand requires. There is a cumulative deficit of more than 100,000 homes.

Successful housing systems ensure a sufficient supply of affordable and social housing. This is the core failure of the Government and housing policy here - it has utterly failed to construct social and affordable housing on the scale required. Its ideological belief in the market and aversion to the state providing homes, has blinded it from doing the right thing.

Its fawning relationship with the global equity funds and investor landlords hasn't helped, rather than using the huge state land banks to build high-quality affordable rental homes for a broad range of income earners, not just those qualifying for social housing.

Instead the Government pursues failed public-private partnership plans, resulting in the insane and disgraceful situation where most public land is lying idle and the few sites being developed, like O'Devaney Gardens, are being privatised to developers to build more unaffordable homes on public land.

The Government has got itself stuck in a trap of its own making. It won't do what's necessary to ensure Generation Rent has an affordable and secure home in the private rental sector - that is, freeze rents, provide lifetime leases, remove eviction clauses - because this might deter 'supply'. And it has made itself utterly dependent on private market supply because it has refused to build genuinely affordable and social homes on a major scale.

The Rent Pressure Zone legislation is clearly ineffective. Landlords ignore it or exploit loopholes. Tenants find it challenging to bring a complaint through the Residential Tenancies Board (RTB).

The RTB and local authorities do not have the resources to go out and investigate breaches. The housing charity Threshold consistently highlights tenants' issues.

But Generation Rent is the first generation in modern Irish history to experience a rupture in the social contract, whereby they no longer have the opportunity their parents had of affordable secure homes.

This is an unprecedented generational and economic inequality. And if it's going to change any time soon, then Generation Rent will have to make some serious political noise.

 

Dr Rory Hearne is a lecturer in social policy at the Department of Applied Social Studies, Maynooth University

Irish Independent

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