A Secure Tenancy Model for the Rental Sector - Irish ...
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
A Secure Tenancy Model for the Rental Sector
2 A Secure Tenancy Model for the Rental Sector
A Secure I reland’s home ownership and
rental profile has changed
dramatically in the last decade.
But now official policy dictates that the
housing needs are to be met primarily
by private landlords, with the cost
Tenancy Figures from both the CSO and subsidised by the taxpayer.
Model Eurostat, in December 2020, reveal a
That cost now runs into several
home ownership rate of some 69%,
hundred million annually and has
for the its lowest level ever and marginally
even exceeded the spend allocated
below the EU average (70%).1
Rental for building new homes.
In tandem with this, rentals now
This is an inefficient and expensive
Sector account for over 31% of the housing
waste of taxpayer’s money. It is a bad
sector, up from 20% in 2006.
deal for the State and for many of
House prices in Ireland are now some those who are housed in this manner.
77% above the EU average.
The State gains no asset (in
This arises from changing comparison to building new
demographics, more people renting, homes), national public housing
coupled with a massive failure of stock continues to decline and
official housing policy over the last tenants have no guarantee of either
decade. secure tenancies or decent quality
accommodation.
This failure has meant a collapse in
investment in public housing, a sharp Waiting lists and housing need
decline in public housing provision continue to grow; more people
and a severe shortage of affordable are forced into the private rental
housing. sector and are forced to stay for
longer; there is downward pressure
Perhaps the most significant pressure on accommodation standards and
results from the decision to effectively upward pressure on rents.
outsource public housing provision to
the private rented sector. According to the European
Commission, rents here have risen
In the past, the State and local by 23.4% since 2015, the highest
authorities built new homes. increase in the EU in that timeframe.
Investment Public Housing
Spending (€m)
House prices (€)
in Public 400,000 1600
Housing 350,000
300,000
1400
1200
Collapses 250,000 1000
200,000 800
150,000 600
100,000 400
50,000 200
0 0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
House Prices Spending on new public housing
1 https://www.independent.ie/irish-news/ireland-has-eus-highest-housing-cost-after-ten-years-of-surgingprices-39850377.html
A Secure Tenancy Model for the Rental Sector 3
In fact the main beneficiaries of
this newly privatised form of public
housing are landlords in the private
O ver recent years, faced with
growing demand and low
housing output - due to official policy
Public
rental sector and investors. - Government and local authorities
Provision
A study by Michelle Norris and
turned increasingly to the private Goes
rented sector for a solution.
Michael Byrne of UCD (see chart)
found that: “Government funding for But what may have begun as an
Private
new social housing provision fell by emergency response to escalating
88.4% between 2008 and 2014 and…. housing need quickly become
output of dwellings in this tenure entrenched as policy and, in turn,
declined by 91.5% concurrently.” 2 set in train the steady and expensive
privatisation of public housing
By 2019, the consequences of this provision.
choice were clear. That year, all local
authorities combined built just 1088 The Housing Assistance Payment
new homes. The four Dublin local (HAP) was established in 2014, with
authorities built just 228 (less than a limited initial roll out to seven
2018).3 local authorities. It was extended
nationwide in 2017.
Dublin City Council - with an estimated
social and affordable housing need The HAP was deployed to tackle
of some 20,000 - built just 45 new waiting lists, with tenants housed in
homes, but 24 of these were Priory the private rented sector and local
Hall rebuilds, according to analyst Mel authorities making direct payments
Reynolds. Dublin City Council owns to landlords (tenants also make
some 112 hectares of zoned land, contributions to the local authority
enough for 10,000 new homes.4 and many also make ‘unofficial’ top
up payments to landlords). The
The inevitable longer-term impact prevalence of such top up payments
of these policies were neatly and the financial pressures placed
summarised in the European on tenants as a result was confirmed
Commission’s 2019 country report by both Threshold and St Vincent de
on Ireland: “Rapidly rising rents, Paul, at a December 2020 hearing of
insufficient residential construction the Oireachtas Housing Committee.
activity and a lack of affordable
and social housing have driven up Crucially, households on Housing
homelessness especially in Dublin”5 Assistance Payment (HAP) are deemed
to have their housing needs met and
And despite repeated claims of major are removed from waiting lists.
progress in tackling the housing
crisis under the Rebuilding Ireland Some €400,000 was expended on
programme, overall housing need and HAP in 2014.
waiting lists remained have remained
stubbornly high at between 70,000- According to analysis from the
100,000 since 2016. Department of Public Expenditure
(DPER), that spending increased almost
one thousand fold to €382 million by
2 https://www.ucd.ie/geary/static/publications/workingpapers/gearywp201615.pdf
3 https://issuu.com/passivehouseplus/docs/ph_ire_issue_36_digital
4 Mel Reynolds, forthcoming article in Passive House
5 https://ec.europa.eu/info/sites/info/files/file_import/2019-european-semester-country-report- ireland_en.pdf
4 A Secure Tenancy Model for the Rental Sector
100
Expenditure Average
90
80
70
60
€M
50
40
30
20
10
0
Chart 2: Cumulative HAP Expenditure by Local Authority: 2014-2018
2019. Indeed, total spending on HAP borrowing “would cost approximately
to date stands at some €612 million on €800 per month.” This contrasted with
HAP, a massive transfer of resources the monthly cost of €1,244 for a HAP
from public to private.6 unit - with the State gaining no asset
for the outlay.
Between 2016-2018, HAP accounted
for a staggering 67% of all new social Budget 2020 saw this policy reached
housing provision by the State. its apogee, with some €806 million to
# F>',+/$"4), #€# N,+*+7$,%# ?9# F>',+/$"4),
local authorities for HAP#€#andN,+*+7$,%
similar#
Indeed,
/):&,)3J"the
" money expended
H!Q@OOO " NPO" W2*&,94,(" !@OOO" HK"
expenditure but just €789m allocated
onD4,J"D4+'*.
rental subsidies
" to landlords
NQ@OOO" XX" Y4'2A Secure Tenancy Model for the Rental Sector 5
R emarkably, despite the vast
amounts of money flowing into
the rental sector, the State and local
• 85% could not afford to buy a
home or access public housing; Lack
authorities make few demands on • 15% were renting ‘by choice’; of
private landlords under HAP and • 57% were were paying more than
have failed to even enforce the basic 30% of take home pay in rent;
Equality
minimum standards that do apply.
• 19% were paying over half take
For example, landlords who provide home pay in rent;
‘social housing’ under HAP can
continue to utilise provisions of the • 80% lived in the same home for
Residential Tenancies Act to evict less than six years.10
tenants on the grounds that the
Meanwhile, research consistently
property is to be sold, or is needed
shows that evictions are the single
for a family member, amongst other
biggest cause of homelessness over
reasons.9
recent years.
This is in stark contrast to the
A 2019 Focus Ireland survey
protections enjoyed by tenants in
revealed that 58% of tenants
local authority public housing and is
had left or vacated their previous
indicative of a wider failure in respect
accommodation due to the property
of regulating the private rented sector.
being removed from the market by
The question arises as to why the the landlord, or issues directly related
State has consistently failed to ensure to security of tenure.11
and enforce higher standards in
As we move towards an exit from
the private rented sector, perhaps
the Covid 19 crisis and emergency
the one possible upside of the
measures governing rent and
considerable financial leverage it now
evictions are ended, it is likely that
possesses.
we will see problems and pressures
This failure was captured in a 2018 within the sector re-emerge on a far
Threshold Tenant Survey which greater scale.
showed a sector that appeared almost
Dickensian in its underdevelopment.
It was updated in November 2020 and
revealed that conditions had actually
worsened in the intervening years,
with:
9 https://www.threshold.ie/assets/files/pdf/00881_hap_
survey_report_2019_-_web.pdf
10 h
ttps://www.irishtimes.com/news/social-affairs/co-living-
developments-may-be-the-slums-of-the-next-decade-
housing-seminar-told-1.4406675
11 https://www.focusireland.ie/wp-content/
uploads/2019/06/Long-et-al-2019-Insights-Vol-2-No-1-
Family- Homelessness-in-Dublin-–-Exec-Summ.pdf6 A Secure Tenancy Model for the Rental Sector
Low T he only demand local authorities
place on HAP landlords is to
meet ‘minimum standards’ of
In 2017, just 4.5% (16,261) of all
rental properties registered with the
Residential Tenancies Board (RTB)
Standards, accommodation (as set out in were inspected. A staggering 79%
Statutory Instrument 137/2019). failed to meet the minimum regulatory
Poor requirements.
Thus, covers inspections by local
Compliance authorities of all new tenancies Yet just 1712 notices “for
within the first eight months of being improvements to be carried out” were
enacted. issued to landlords by way of follow
up and just five legal actions initiated.
But housing agencies report that
tenants have had a poor experience The picture was worse in 2019.
to date with the regulatory regime: The number of dwellings inspected
inspections happening much later in rose to 32,199 - still less than 10%
the tenancy or not at all; landlords of registered properties - but a full
failing to carry out remedial works and 93.07% of dwellings failed to meet
local authorities failing to follow up. minimum standards.12
These tally with the shockingly low Some 17,415 ‘improvement letters’
levels of inspections actually carried were issued and just 56 legal cases
out by local authorities over recent were initiated.
years.
...just 1712 notices
“for improvements
to be carried out”
were issued to
landlords by
way of follow up
and just five legal
actions initiated.
12 https://noac.ie/wp-content/uploads/2020/12/NOAC-LAPIR-2019.pdfA Secure Tenancy Model for the Rental Sector 7
T he key legislation governing the
sector - the 2004 Residential
Tenancies Act - has been significantly
Failure
amended on four occasions since its
of
inception: in 2015, 2016, 2019 and Regulation
2020.
The succession of changes were an
attempt to deal with the growing
impact of the burgeoning housing
crisis, as policy played catch up with a
rapidly changing situation.
Ultimately, the changes were
piecemeal and tackled individual
symptoms of the crisis rather than the
deeper problem.
To date, there has been no attempt to
fashion an overall, holistic solution to
the problems in the sector, in keeping
with the Secure Occupancy Model
advocated by NESC in 2015.
In essence, the failure of regulation
and of the overarching legal
framework appears to be rooted in
the simplistic and wholly inaccurate
casting of the landlord-tenant
relationship as that of a contract there has been no
between equal parties.
attempt to fashion
In reality, it is an imbalanced and
highly asymmetric relationship. an overall, holistic
Thus, the cornerstone of any solution to the
legislative overhaul should be on a
rebalancing of that relationship, in
problems in the
favour of the tenant. sector8 A Secure Tenancy Model for the Rental Sector
“Clearly, good regulation
should benefit both
landlords and tenants,
providing a more secure
investment for landlords
and investors and
offering greater security
and better- quality
housing to tenants.”10
Building Iand create adequate security for
t took a global pandemic to enact European standards for tenant rights
to ensure the private rental sector
tenants in the rental sector. represents a viable housing option for
a Secure The emergency measures introduced renters.”
13
Tenancy inalbeit
response to Covid 19 tackled -
on a temporary basis - the two
Legal ‘reforms’ to date have been
piecemeal and often caused more
key issues that cause the greatest problems than they sought to rectify.
Model hardship: security of tenure and rent
certainty. Absent has been a clear strategic
sense of a sustainable, secure and
These issues must now be tackled affordable sector as a key component
over the longer term. There can be no of a stable housing system that serves
going back to how things were. As a the needs of society over those of the
first step in the reform of the sector, market.
the Government must immediately:
This would be in stark contrast to the
• extend these measures for the current dysfunctional system that
full duration of the pandemic. has become divorced from its core
social purpose with the consequences
• commit to a complete overhaul visible daily on our streets.
of regulation of the rental
sector within the lifetime of this This can be achieved through the
Government. implementation of a Secure Tenancy
Model in the rental sector, which
Ultimately, the aim is to raise could be established by way of a
standards here so that we can, single piece of new legislation such as
as NERI points out, “converge on a Secure Tenancy Bill.
13 https://www.nerinstitute.net/blog/time-tackle-private-rental-sectorA Secure Tenancy Model for the Rental Sector 9
Creating Security Creating Rent
of Tenure Certainty
In order to create tenancies of Support for rent regulation was voiced
indefinite duration and provide tenants recently by a senior figure in a real
with long-term security, it would be estate investment company, who
necessary to remove the existing singled out the German model for
grounds for eviction of a tenant, as set praise.14
out in Section 34 and 34b of the RTA.
These include: eviction on grounds of As tenants in Germany enjoyed “more
a substantial refurbishment, sale of clarity over the rent that they will
the property, or use of the property by be paying……this means that price
landlord or family member. changes tend to be gradual, clearly
signalled and therefore manageable.”
This would mean that tenants could
not be evicted while they were fully in This encouraged stability and longer
compliance with their legal obligations tenancies and attracted institutional
and could only be removed for failure investors, such as “our pension fund
to pay rent, engaging in anti-social and insurance clients.”
behaviour etc. The regulatory framework in Germany
This can be achieved either by way is known as the Mietspiegel (or ‘rental
of amendment or by wholesale mirror’).
replacement of the RTA with a new This sees local authorities gather
piece of legislation tailored to the rental data over a four year period
creation of a secure occupancy model and this then becomes the reference
in the rental sector. that governs rents in the relevant
Such provisions would fully align with area.
the proposals set out by NESC in 2015. Aditional measures - known as the
Tackling poor quality accommodation rental price brake, or cap - were
could happen by way of a new legally introduced in major urban areas in
enforceable National Framework 2020, but only came fully into force in
of Accommodation Standards, November of that year and, in some
in tandem with resources for local instances, these saw landlords forced
authorities to carry out inspections to reduce rents that were considered
and a clear regime of penalties for excessive.
non-compliance.
14 https://www.ft.com/content/efe1f74c-3c1d-11e9-9988-28303f70fcff10 A Secure Tenancy Model for the Rental Sector
Further measures were introduced This data can be utilised to establish a
in 2015 - the Mietpreisbremse or reference framework, for each region
‘rental price brake’ - which limits rent or city.
increases in major urban areas, with
reference to inflation. The detailed data compiled by the
RTB would allow for the creation of a
The introduction of the Rent Pressure sophisticated, regionally-sensitive and
Zones (RPZs) in Ireland means the responsive framework, as compared
authorities have already conceded to the existing RPZ.
that rent regulation is a necessary
requirement of a functioning rental Given the high rates of rent increase
sector and that tenants are entitled to seen in recent years such a reference
rent certainty. framework could not be based solely
on local data, but also take account of
However, the RPZ model as the Consumer Price Index (CPI).
constructed has been shown to be
flawed and its effectiveness and also This would help tackle soaring rents
undermined by high levels of non- and deliver greater stability for
compliance, as the ESRI has shown. tenants and landlords alike.
Ideology aside, there is no compelling Rent Reviews would also take place
reason why the existing RPZ model on an agreed, periodic basis with
could not be repurposed to create a possible increases limited to a set,
National Rent Regulation framework, agreed percentage and with reference
which would see rents set with to both the CPI and data on rent
reference to the rates that apply in each levels, in any given area.
local or regional setting and inflation. A further crucial component of
The data required to carry out such an rent certainty measures would be a
exercise already exists and is updated National Rent Register - similar to
regularly, as part of the Residential the property price register - to provide
Tenancies’ Board Rent Index, which full transparency on rent levels across
exhaustively sets out rent levels by the country and aid compliance with a
country, local electoral area and regulatory framework.
region.15
15 https://www.rtb.ie/research/ar)A Secure Tenancy Model for the Rental Sector 11
Key Measures Needed for
A Secure Tenancy Model
An End to ‘no fault’ Evictions
Create Tenancies of Indefinite Duration
Establish National Framework of
Accommodation Standards
Introduce National Rent Regulation
Create a National Rents RegisterIrish Congress of Trade Unions
31/32 Parnell Square
Dublin 1
Ireland
Tel: +353 1 8897777 Email: congress@ictu.ie
www.ictu.ie
@irishcongress
Produced by
Trade Union labourYou can also read
