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Dublin: 12 °C Wednesday 23 October, 2019
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Strengthening rent caps and 'first-class emergency accommodation': What the Budget means for housing

Almost 10,000 people in Ireland are homeless, with many priced out of the rental market.

WHILE DISCUSSING HOUSING during his Budget 2019 speech, Finance and Public Expenditure Minister Paschal Donohoe admitted: “Where we find ourselves today is not where we want to be.”

Almost 10,000 people in Ireland are homeless, with many priced out of the rental market and demand far exceeding supply in many areas. 

“There is much work to be done to reduce the level of homelessness, find permanent solutions for those in temporary and emergency accommodation and to improve affordability for those on low and middle incomes,” Donohoe acknowledged.

So what does the government plan to do to help tackle the problem?

A total of €2.3 billion has been allocated to the housing programme for 2019. When added to the additional €93 million in local authority funding for housing next year, Donohoe said this represents an increase of over €470 million or 26% on 2018.

Donohoe said the government has made some progress in the area of housing, stating that 5,000 households exited homelessness in the last 12 months and 70,000 “housing solutions” will have been delivered under the Rebuilding Ireland programme by the end of the year.

Of these, just under 12,000 will have been delivered through building, over 5,000 through acquisitions and 3,600 through leasing. A further 49,700 will have been delivered through the Housing Assistance Payment (HAP) and Rental Accommodation Scheme (RAS).

“More new homes will be provided this year than in any year in the past decade,” Donohoe said.

He added that the government has already identified a number of sites through which the Land Development Agency can deliver approximately 3,000 homes, adding: “We are in discussions with various State bodies in relation to land that could deliver another 7,000 homes.”

Speaking in the Dáil, Fianna Fáil’s finance spokesperson Michael McGrath said the government “needs to get things done when it comes to housing” and must focus on “delivery, delivery, delivery”.

“This can never be regarded as the norm or acceptable,” he said of families in emergency accomodation, adding: “Under this government, home ownership has become a distant dream for many people.”

Sinn Féin’s finance spokesperson Pearse Doherty said the Budget was one for “booming banks and vulture funds” and “failed” people living in emergency accommodation. 

Social and Affordable Housing

The government is allocating €1.25 billion for the delivery of 10,000 new social homes in 2019. These will be delivered through a combination of construction, acquisition and leasing and will bring to 30,700 the number of new social housing homes provided under Rebuilding Ireland since 2016.

There are about 86,000 households on social housing waiting lists nationally.

Donohoe said he is allocating an extra €121 million for the Housing Assistance Payment (HAP) in 2019 to provide an additional 16,760 new tenancies.

I am allocating €60 million extra in capital funding in 2018, much of which will fund additional emergency accommodation so that no one has to sleep rough this winter and for additional family hubs.

“Added to this, €30 million is being provided next year for homelessness services, bringing the total allocation for such supports to €146 million in 2019,” Donohoe stated.

‘First-class emergency accommodation’

In a later press conference, Housing Minister Eoghan Murphy elaborated on some of these measures. He said emergency accommodation is not ideal but is essential until more homes are built.

“We have to provide emergency accommodation until enough new homes are built … I want to make sure that our emergency accommodation is first-class,” Murphy said.

Source: MerrionStreetNews/YouTube

He added that the government wants to stop the use of hotels as accommodation for families experiencing homelessness, saying that, on average, most people exit family hubs and enter more stable accommodation within six months.

A number of charities have welcomed the additional funding being made available but criticised other elements of the government’s plan.

‘Not a game-changer’ 

Focus Ireland said the extra money is “not enough” and the Budget is “not the game-changer that people who are homeless needed”.

“Despite the last three budgets being mooted as ‘Housing’ budgets, they have essentially been firefighting rather than dealing with causes – as evidenced by the fact that the numbers of men, women and children experiencing homelessness has rocketed during this period,” the charity said in a statement.

CEO Pat Dennigan added: “In our pre-Budget submission we called for urgent action in the form of a €400 million investment in Social Housing in 2019, which would have delivered 2,000 homes.

This Budget falls significantly short and simply repeats the commitments already made in Rebuilding Ireland.

“We are disappointed that our call for the introduction of a vacant home tax to help bring units back into the active housing supply was not heard.”

Renting 

In terms of rent, Murphy acknowledged the difficult reality faced by many people in Ireland, stating: “Right now people are paying too much.”

He said Budget 2019 will see a 67% increase in Exchequer funding to strengthen the powers of the Residential Tenancies Board and greater local authority inspections in the sector.

Murphy also noted that rent caps “need to be strengthened quickly”.

He said legislation later this month will:

  • provide that any breach of rent caps can be sanctioned
  • strengthen the powers of the Residential Tenancies Board (an additional €4.5 million will be provided in 2019 to support stronger RTB capacity and local authority inspections in the rented sector)
  • further tighten the operation of any exemptions
  • enhance rental data from RTB registrations to provide more transparency in rents being paid
  • double the notice period for renters where a notice to quit is served after six months
  • seek to extend rent caps to student accommodation

The first Rent Pressure Zones are due to expire at the end of next year, and Murphy is considering an extension of this measure “given continuing conditions in the rental sector”.

Landlords 

He noted that 70-80% of landlords only own one or two properties., saying the government has to “introduce measures that will incentivise landlords to remain as landlords”.

Budget 2019 introduces the full removal of the restriction on the amount of interest that may be deducted by landlords in respect of loans used to purchase, improve or repair their residential property. The rate was due to be 100 per cent by 2021 but will now be effective from 1 January 2019.

Solidarity TD Paul Murphy said this highlighted the fact the Budget was “a landlords’ budget from a landlords’ Dáil”.

However, the Irish Property Owners’ Association “cautiously welcomed” the Budget.

Its chairman Stephen Faughnan said the restoration of mortgage interest relief to 100% was a “small start” on the long road of encouraging private landlords to either stay, or invest further, in the sector.

Affordable Housing

Murphy said Budget 2019 provides for a trebling of the Affordable Housing Fund from €100 million to €310 million over the period to 2021, meaning that at least 6,000 homes will be provided over the lifetime of the fund.

Donohoe earlier said he was increasing the planned funding for this scheme from €20 million to €89 million, which will bring the planned investment to over €100 million next year. 

The aim of the fund us to assist local authorities to provide homes at a reduced price. Central government will provide a subsidy of up to €50,000 per house to help build the property. People who are eligible to buy such a house could save up to 40% on the market cost.

The scheme applies to new homes, and for single people earning up to €50,000 and couples earning up to €75,000.

Murphy said that in the eight months the scheme has been up and running 1,134 loans have been recommended for approval, totalling some €236 million.

An assessment is currently underway that will consider some inconsistencies in decision-making that have been identified, the need to potentially broaden the application of the scheme, as well as the possibility of extending the affordable loan to vacant homes requiring refurbishment.

Sinn Féin’s housing spokesman Eoin Ó Broin has questioned figures in the Budget, saying some of the money allocated to housing had already been committed.

He said the €89 million allocated for the affordable housing scheme fund includes €75 million that was allocated in 2018 but unspent.

“This means that the actual increase in funding for affordable housing in 2019 is €14 million,” he said.

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Órla Ryan

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