The Residential Tenancies Board’s latest rent report shows the staggering heights rents have now reached and how shattered government housing policy and the housing market are.
Rents push tenants into poverty, homelessness, emigration and depend on soup kitchens and food banks to try to survive. Many tenants are families with children. It is a social emergency.
Rents are now 100% higher than they were ten years ago in 2011. Imagine if mortgage repayments had doubled in a decade? The owners would be outraged and the government would not tolerate it. But tenants have been treated like second-class citizens, left to be exploited by unscrupulous landlords and REIT investment funds.
In Dublin, rents were affordable at €985 per month in 2011. Today in Dublin they are totally unaffordable at €1,972 per month. This added €12,000 per year of additional rent to be paid by tenants.
In Cork, the average rent in 2012 was €688 per month. They increased by 81% to a shocking amount of €1,247 per month. In Limerick, rents have increased by 95% since 2011, to €1,203 per month. While rents have doubled over the past decade, wages have only increased by a tiny fraction of that.
The problem is that the private market does not provide sufficient supply or affordable supply. Many new investors charge $2,000 per month or more, driving up market rents. There are no new affordable homes in cities and towns across the country.
Time and again, the government has refused to put in place proper rent freezes because it wanted to keep property attractive to investors and landlords. Well, they succeeded.
The reduction in rentals described by the RTB is occurring for a number of reasons. Some owners leave the market and sell their properties, others transform them into short-term tourist rentals. Owners are taking advantage of the massive rise in real estate prices to “cash in” their investment assets. This shows the contradiction of the private rental market – housing is both the owner’s investment and the tenant’s housing.
People are also staying longer in rentals because they cannot find a home to buy, or they are in social housing as HAPs, and so there are fewer new rentals being created.
The failure to tackle the rent crisis reflects the government’s piecemeal approach to the housing crisis as a whole, which we see again in its response to Ukrainian refugees in need of assistance. Rather than take drastic and sweeping action to deal with what is now a triple housing emergency – refugees in need of accommodation, pre-existing homelessness, Generation Rent and lockdown – the government is instead putting in place implementation of weak temporary measures.
The temporary rehabilitation of public buildings will inevitably become longer-term housing situations. Ukrainian refugees will be left in warehouses, tents and gathering places for years, as will Direct Provision and the homeless in emergency accommodation and family centers.
Temporary responses become permanent, unlike real emergency responses that provide structural solutions. Covid has shown that a true emergency response involves funding and implementing new measures on a scale never seen before.
The government’s latest proposals – including public housing voids, pressure on local authorities to impose taxes on derelict buildings, the refurbishment of large public buildings and the construction of a few hundred modular housing units – do not constitute an emergency response of the magnitude necessary to deal with our triple housing emergency.
It will leave families and children in inappropriate and degrading conditions. This will translate into growing resentment as the housing crisis drags on.
The government appears unwilling to take the big, bold steps needed, as this will disrupt and disrupt the business interests of big investors and property owners who are cashing in on the housing crisis while those in need of housing scramble to find housing to rent, buy or, as more and more people do, to emigrate.
An emergency response would freeze rents including on new rentals, it would ban evictions from the private rental sector, it would buy out property from landlords who are selling, it would impose emergency CPOs on vacant and abandoned properties. The government should have a program in which it offers to buy back units from owners who leave the market, and therefore it would keep the leases in place and the tenants in their house.
It would direct private construction companies building hotels into building and renovating houses, as has been done in Covid on a temporary basis with public hospitals. He would take offers of vacant holiday homes seriously and ensure that offers are processed and delivered.
Those in society who can afford to contribute the most to this emergency should do so, such as the REITs of business owners who own 45,000 properties and owners of vacant and derelict buildings.
Where is the Accelerated Vacant and Abandoned Property Tax? Where is the emergency reassignment of staff in local authorities to undertake a rapid CPO program of large numbers of derelict assets? The market will never “solve” this crisis. The state must mobilize and intervene.
Why don’t we set up, in this emergency, a public construction company that could accelerate the renovation of vacant and abandoned houses and build affordable housing on a large scale? We need such major initiatives immediately.
There should be a three-year rent freeze on new rents, and a rent reduction strategy, as in Berlin, of 5% on existing rents per year.
The lack of new offers also shows the need for landlords to be able to evict tenants when selling the property to be removed, and a three-year eviction ban has been introduced so that existing leases are maintained. This would reduce the need for emergency accommodation, ensuring it is available for homeless people and Ukrainian refugees.
We have seen during Covid how every arm of the state and the economy has been brought to bear to deal with the emergency. Why don’t we see the same for an unprecedented housing emergency in Ukraine, homelessness in Ireland and the wider housing crisis?
- Rory Hearne is Assistant Professor of Social Policy in the Department of Applied Social Studies at Maynooth University