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Rent supplements and homelessness

The Seanad debated the operation of the rent supplement scheme (Seanad Eireann, Debates, 4th July 2012, 564-589 ).  According to Trevor O Clochartaigh (SF, agricultural), 500,000 people were now dependent on the private rented sector, 29% of the population and 94,000 people received rent supplement.  We were significantly failing to vindicate the right of citizens to adequate housing in this country, for between 90,000 and 100,000 people were on the waiting list, while extensive housing lay empty.  There was a veritable housing crisis taking place away from the gaze of the media.  He had come across single parents with children who had  been waiting for housing for ten long years.  In some households, three generations now lived under one roof.  Our public administration had long ago given up on the idea that the state should provide houses for those who could not afford their own.  Because of this, 94,000 people were now dependent on rent supplement, which was supposed to be a short-term scheme, but it wasn’t for those on it.


In the last budget, the government reduced the allocation for the scheme by €21m, so that new and lower rates of payment were introduced, often out of kilter with reality.  He had compared the new rates with the real rates in the commercial market in and it was clear that the rents demanded were way above that allowed by the department.  This flatly contradicted the government claim that the new rent caps were in line with the most up-to-date market data available.  People were facing limits which their rent supplement would not meet, but they had now received letters from the department about the new limits and that they must reduce their rent to these new limits.  They were asked to renegotiate their rent with landlords who were unable or unwilling to do so.  This was exacerbated by the way in which some landlords sought additional cash payments from their tenants, which was illegal. 


It was utterly unfair to expect tenants to re-negotiate rents.  These were not a category of tenants likely to wish to rock the boat.  It was often difficult to find landlords who would accept rent supplement.  He welcomed the minister’s commitment that these changes would not lead to homelessness, but his view was that these changes, if left unchallenged, would have devastating implications for individuals and families on rent allowance.  He quoted Threshold’s proposal that the department, rather than tenants, should negotiate directly with landlords to secure rent reductions.  The department was asking tenants to do the impossible, asking people who were vulnerable, not well informed of the rights and entitlements, to negotiate directly with landlords.


Senator Kathryn Reilly (SF, industrial & commercial) spoke of how the lowered rent caps were causing upheaval and anxiety and would oblige people to move out of their homes where they lived and where their children attended school.  Tenants were left in the dark, other than being told by their local social welfare offices to renegotiate their rents, receiving no advice or information.  The department was, at the end of the day, in a far better bargaining position than tenants in isolated, vulnerable and precarious situations.  Private landlords were being subsidized by the taxpayer by €500m.  It was well within the department’s gift to accept responsibility in this area.  The government must take the tenant out of the equation altogether and pay the landlord directly, which would reduce the tenant’s anxiety and cut out under-the-table cash payments.  Much of the difficulty came from chronic underinvestment in public housing.  It would be much more cost-effective to invest in social housing via NAMA or otherwise.  Where were people to go if landlords refused?  Some community welfare officers had suggested approaching homeless services.  The number sleeping rough had risen in Dublin, 20% and she presumed it had risen elsewhere.


Martin Conway (FG, administrative) admitted that landlords had been charging extraordinary rents to people on the basis that they were on rent supplement and there were anomalies.  With the introduction of the Rental Assistance Scheme (RAS) scheme, people on rent allowance more than 18 months had been moved to the local authority and this had worked reasonably well.  The new housing assistance scheme was moving in this direction, whereby the entire rent supplement will be in the full control of the local authorities.  Paul Bradford (FG, agricultural) spoke of how ‘we really need to move beyond the emergency solution that is rent supplement toward a real housing solution and policy’.  He hoped that use might be found for 2,000 NAMA properties – ‘but tens of thousands of people cannot afford a house and we require a bigger solution for this issue’.   RAS was a fine scheme and the only fresh thinking on housing policy in the past 10 to 15 years.


Paschal Mooney (FF, agricultural) said that the ultimate solution was to move the 94,000 recipients of rent supplement into permanent accommodation, either through the local authorities or by using NAMA properties to tackle the social housing waiting lists.  Even at the height of the celtic tiger, there were 60,200 people on rent supplement when the housing market was out of control.  Now with prices down 60%, there were 94,000 people.  The new rent limits are down -23% countrywide, but they range from -0.08% in Cork to a ‘staggering’ -44.9% in Roscommon.  


For the government, the Minister for Social Protection, Joan Burton, told the Seanad that 92,000 now claimed rent supplement at a cost of €436m.   The department now funds about 40% of the private rental sector in Ireland.  Although it was a short-term scheme, more than half, 55,000 had been on it more than 18 months.  The social housing capital budget in 2013 was €333.7m.  Changes in rent limits this year will save €22m and will have the effect of driving down rents for the rest of the sector.  A new review will be completed before June 2013.  The new limits will not cause homelessness for anyone and there was provision that they could be exceeded in certain circumstances, such as disability or homelessness.  Officials in her department and the community welfare officers go out of their way to help people who have problems with homelessness.  She did not agree with the proposal for her department to deal directly with landlords, because they would have an additional 92,000 businesses to deal with and they did not have the resources for that.   Her intention was to return rent supplement to its original use as short-term income support for the temporarily unemployed.  She agreed that the scheme must be changed and it was envisaged that it be transferred to local authorities who had housing departments and were equipped to deal with landlords.  The transfer to a housing assistance payment would allow for direct rent payments by local authorities to landlords and a condition of tenure was that tenants enter a household budgeting facility with rent deducted at source by An Post from the tenant’s welfare payment.


Aideen Hayden (Lab, Taoiseach nominee) pointed out this this was now the third attempt to transfer rent supplement from the Department of Social Protection to the Department of the Environment.  She still urged the department to deal directly with landlords – for example 20 of them received from €100,000 to €300,000 – it was not a good idea to put tenants in the front line to achieve savings, especially tenants who were vulnerable with health, language and literacy issues.  Moreover, the rent revisions did not take account of the particular issues in the bedsit end of the market.  She quoted a Threshold survey which found that 55% of tenants were paying more than the rent limit, some in Dublin and Cork up to €100 a month, affecting their ability to shop and heat.  For many people in rented accommodation, this was their home and the department should not say arbitrarily to people that he or she has to move because the landlord will not take another rent reduction.  Whilst she appreciated the minister’s commitment on homelessness, she cited the case of a homeless man trying to source accommodation in Dublin within the €475 rent cap, but all he could get was accommodation that was damp, or lacked beds or cooking facilities, or in which he could not stand up straight or in which the bed took up 50% of the floor space.  


Deirdre Clune (FG, cultural and educational) pointed out that we had 1.6 properties per landlord, which meant that we had very few professional landlords, probably people who had a second property that they had decided to rent. She spoke of how tenants were surrendering additional money to landlords, because the cap was €715, but the average rent was €770 a month.  Mark Daly (FF, administrative) presented accounts of rent supplement being higher than the rent actually being paid, with taxpayers being defrauded in the process, costing millions annually.  John Kelly (Lab, administrative) spoke of how, although it was a short-term scheme, he knew of people on it for 20 years.  Concluding the debate, Trevor O Clochartaigh told the house that Galway County Council would build only two houses over this and next year – ‘the possibility of a budget to make available houses for all those people on the waiting lists does not seem to matter.  We are not having a go politically’.  His motion was lost 25 to 11.


In the Dail, Richard Boyd Barrett (PBP, Dun Laoghaire) described it as an obscenity that there were 96,000 people on housing lists when there were 230,000 empty houses (Dail Eireann, Debates, 21st June 2012, 533-7).  He asked was it not an outrage that we were paying €500m to landlords, but if we provided people waiting with housing, we could save €500m and generate €250m in rental revenue.  He drew attention to a sample of the waiting list in the gallery:


Leanne Murphy, who has four children, was recently made homeless because of rent allowance cuts.  She is now separated from two of her children and sleeping on a sofa in a two-bedroom house with her grandmother and great-grandmother.  Mandy O’Brien, Nicola Lapraku and Elizabeth Martin were all recently made homeless as a result of the reduction of rent allowance caps.  Paul Corcoran was homeless for seven years and recently forced back onto the streets.  Michelle Murphy spent four years as §3 on the medical transfer list.  Peter Cleary faces homelessness.


Richard Boyd Barrett described the government policy as privatizing the provision of social housing and creating the conditions for a new slum landlord class and tenement housing reminiscent of that at the beginning of the 20th century.  ‘There are people in the visitors’ gallery who are homeless: does that not prove that its policy is a failure?’