The Housing Crisis and the Irish Rental Sector

Home Page // Features // The Housing Crisis and the Irish Rental Sector

Features, National

by Thomas G Maher

Currently the rental in Ireland is experiencing massive change, as rental rates increase unchecked and tenants are experiencing a diverse a challenging mix of problems.

These can be broken down thus:

  • Rental increases of up to 15% in Dublin and 5% nationwide in the last 12 months with no obligation on landlords to comply with any model of regulation.
  • Lack of security of tenure with most leases in Ireland between 6-12 months.
  • Illegal rent attention of security deposit by landlords.

The issues above outline the environment that tenants currently face within the sector.  Rent increases have been heavily influenced by two factors:

  • Lack of housing properties being made available within the rental sector itself (2011 47,000 properties available for rent, 2014 27,000 properties available to rent)
  • A lack of housing in general terms with an increasing population is especially notable in the Dublin metropolitan area.

The number of properties available has been affected by other factors such as:

  • Large number of properties being repossessed from the owners who have failed to maintain the mortgage repayments and have entered negative equity with the properties then being sold on and not returned to the rental sector.
  • New minimum standard regulations for accommodation which has resulted in a number of rental properties (previously known as “bedsits”) being left vacant. These properties are either reconditioned to comply with new regulations or are boarded up and left vacant. For example: 3000 properties are now vacant on the south side of the Dublin area alone.

These factors have largely influenced the homeless crises which we are now facing, not just in Dublin but also the country as a whole. As of December 2014 there were 3,000 people in emergency accommodation in Dublin with around 600 of these being children.  Focus Ireland claim that around 50% of homeless persons have been forced into homelessness in the last 12 months. The emergency accommodation while keeping people from “sleeping rough” (170 as of Dec 2014 for the Dublin area, 21% annual increase) offers little in the way of security for families and can have a very negative affect on the family unit as a whole by moving families from the area in which their children attend school and have grown up with their friends.

There are many issues which have contributed to these homeless crises including the following:

  • Rental rates increasing without any clearly defined structure.
  • Rent Supplement rates/caps being reduced by the current government, which have failed to keep up with the increase in the sector.
  • Refusal of Community Welfare Officers (CWO) in applying discretion in emergency cases where landlords have increased the rent with tenants facing the situation that they cannot pay the increases and when applying for an increase in the Rent Supplement are told by the CWO they will not only receive no increase to keep up with the rent rates that they will no longer receive any Rent Supplement payment as the new rates will far exceed the rental caps of the rent supplement.
  • These figures above do not account for the number of what is describes as the “couch surfers” and people who have returned to live with their parents.

The largest problem affecting all of the above is the lack of housing and the lack of social housing being made available for people who are on the housing list. One example in Dublin is the new Boland Mills property which has over 40 units and only 4 have been made available for social housing. Although this does follow the legal requirement of a 10% allocation, with the current crises this requirement is simply not fit for purpose.

The growing number of homeless and people placed into emergency accommodation is set to rise and tenants in private rented accommodation can expect more rent increases as there has been no cohesive effort on behalf of government to introduce regulation. In Dáil Eireann a number of TDs have raised these issues directly with the Minister for Social Protection, Joan Burton.

In December, just before the break for Christmas, two deputies directly addressed these issues asking the Minister to remove the rent supplement caps and to address the situation of the Community Welfare Officer applying the discretion to award the rent supplement where the rent exceed the rent supplement rates. In response the Minister guaranteed that “she had personally spoken with the CWO area managers and instructed them to apply discretion in emergency cases in order to prevent any further tenants facing homelessness”.

With all these issues contributing to the housing and homeless crises, it is apparent that a regulated regime of rent control is not only desirable but a necessity. Looking at other EU member states we see that rent control is the norm and has helped to regulate the rental sector and has led to a much more cohesive and structured rental sector. Germany, The Netherlands, Scotland and Wales all have different schemes and practices which ultimately result in the same end i.e. a fairer, safer and more secure home environment which benefits not only tenants but also landlords, as it attracts tenants to a property for a longer period.

The Private Residential Tenancies Board (PRTB) is the authority in Ireland which has the responsibility to regulate the sector; it offers a dispute resolution service and the registration service, now a requirement for all tenancies within Ireland. It is the national authority, but it not fit for purpose it has done very little to regulate the sector and has no power to cap rents.  The yearly crisis in student accommodation is a case in point, the deteriorating situation has been highlighted by many including USI but it has been ignored, while vultures in the private sector have been free to exploit the situation by renting unfit accommodation at ever increasing prices and as a result many students are forced to drop out of their studies.