Rising rents

A social and economic crisis

Rory Hearne09/11/2016

The Daft property website’s latest quarterly rental report shows rents rose nationwide by an average of 11.7 per cent in the last year. This is the highest recorded by the Daft.ie report since its series start in 2002. According to Daft.ie, Dublin rents are now 10% higher than their previous peak in 2008. The report is correct to state that “this is having a disastrous effect on social cohesion as well as on Irish competitiveness”.

On the social impact side, rising rents are leading to individuals and families becoming homeless, being unable to save for a deposit, going back to live with their family, situations of overcrowding with negative impacts particularly on children, and people sleeping on friends/families couches etc.
The lack of security of tenure and awareness of tenant’s rights in the private rented sector means that landlords (and bank appointed receivers of buy-to-let properties being repossessed, new vulture fund and REIT landlords etc) are evicting tenants who cannot pay increased rents or in order to sell the property.

The homelessness crisis is national emergency. It is shameful that in this centenary year of 1916 that thousands of children and their families are homeless. It is an utter policy failure and national disgrace. The level of homelessness results very simply from the neoliberal policy of reducing funding for local authority ‘council housing’ and the austerity cuts to capital housing budgets. This has meant a huge reliance on the private rental sector for ‘social housing’. 32% (96,000) of all private rented tenancies are in receipt of state subsidies for low income tenants in schemes such as rent allowance, the rental accommodation scheme and Housing Assistance Payment. The state is paying €524 million per annum to private landlords through these schemes. And rising rents have resulted in a growing gap between the amount provided by the state in these forms of housing support in the private rented sector and the actual market rent which has resulted in rising homelessness and families and individuals having to move to other parts of city away from schools, community, family, and employment.

The most recent homelessness figures show that nationally there are 4,283 adults and 2,426 children in emergency homeless accommodation (with the majority, 5,058, in Dublin). The rate of increase in homelessness is shown by the fact that in Dublin in July 2015 there were 770 families and 1185 children in homeless accommodation in Dublin but by July 2016, this had increased to 1,353 families and 2020 children.

In terms of rough sleeping in Dublin there are over 170 sleeping rough nightly in Dublin city centre. Also recent figures show that between 450-600 people (including families and children) are attending the Capuchin day centre for a free hot meal daily. Br Kevin Crowley of the Capuchin Day Centre, explained to the Irish Times that demand for the centre’s services is higher than it was 50 years ago. According to the Irish Times “He said his fear was that “things are getting worse”, particularly for those sleeping rough in cold weather.” He said that “It is absolutely appalling that in 2016 so many people should be coming in freezing with the cold…it is appalling to think that you see people queuing up. Nobody should be queuing for food in 2016. When you look back in 1916 we had poverty but to me I think we still have poverty and to me it seems to be getting worse.”

There are significant challenges faced by those becoming homeless as they have to source their own emergency accommodation in the various hotels and B&Bs. Many feel they are being blamed and stigmatised as if the housing crisis was their fault.

On a wider scale the rental crisis is leading to increased personal and financial stress for private renters as the proportion of renter’s income being spent on rent in Dublin is one of highest in European capital cities. It is estimated that rent costs between 35% and 40% of average monthly income in Dublin (and in many cases it is much higher).

These high rents are having significant economic impacts in terms of reducing Ireland’s competitiveness but are also reducing the economic potential and social capital capabilities of individuals and families across Ireland to move and access employment, particularly in the cities. But rising rents are also leading to rising levels of deprivation and poverty.

The Daft report clearly shows that this is not just a Dublin Crisis. It is a crisis across the country as the average rent nationwide has risen by 45% since 2011. In Galway they are now 14% above their previous peak. The Dublin commuter counties are particularly affected e.g. Meath had a 15.8% increase in the last year, Louth a 15.2% increase. But also Cork City experienced a 14.4% increase.

It is important to note that these are figures for new rental properties and not existing leases being renewed. A more accurate figure of the exact rents being charged, the increases, and what is the market rent is provided by the PRTB. And if a landlord comes looking to increase the rent, then tenants should use the PRTB figures to determine the local market rent rather than Daft.ie, which is not the official market rent. But the PRTB figures also show a similar trend in dramatically rising rents. Another report by Savills estimated that rents are expected to rise increase by between 22% and 26% in the next two years.

Increases such as this are just not sustainable socially or economically. A system of rent regulation limiting rent increases to inflation, affordability measures and property standards along with proper security of tenure (including unlimited leases for tenants and the removal of the eviction clause if a landlord decides to sell a property) is urgently required.

Posted in: Housing

Dr Rory Hearne     @RoryHearne

Rory Hearne

Rory Hearne is a postdoctoral researcher in the Maynooth University Social Sciences Institute (MUSSI), working on the Re-Invest Participatory Action Human Rights and Capability project in relation to social investment with a particular focus on homelessness and water infrastructure.

He has a PhD in political and economic geography from Trinity College Dublin. He is also a former policy analyst with TASC and has worked as a policy researcher and community development worker with Barnardos on social housing regeneration and human rights in Dublin's inner city. He was lecturer in human geography in the Department of Geography, Maynooth University and has researched and published extensively in the areas of housing and social housing, political economy, human rights, social movements, and politics.

He is author of Public Private Partnerships in Ireland (2011) and co-author of Cherishing All Equally (2016). He is also a regular economic and social analyst on various national media.



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