Housing – Some Ideas
In July the Minister with responsibility for Housing Eoghan Murphy launched a public consultation seeking submissions on the plan to fix housing and any ideas on ways to improve it. I only heard about this Friday morning listening to the radio and that afternoon found the deadline for submissions was noon on Friday. So … I’m going to add some ideas here.
Proposed Change to Fair Deal Scheme
What really made me decide to post this was on waking I checked the few headlines I get on my phone and saw that the Minister is proposing a change to the Fair Deal scheme whereby people on the scheme who have left homes vacant to go into the nursing home will be encouraged to lease out their vacant homes. I strongly support him looking into this – very good idea – but I would like to suggest a slight change that might more simply and quickly free up that housing stock. Allow fair deal applicants to sell their primary residence and only 22.5% of the money they get from the sale will be taken into account when assessing their means for the scheme. I picked 22.5% because that basically is the value taken on their house, over 3 years, for the Fair Deal means test – so they’re not losing out by doing this and they and/or their family have access to that money straight away – and the house will be bought by someone who hopefully is going to make it their home. The potential issue with leasing the home is that in such situations it’s very difficult to know how long the lease will last so families might be a little hesitant to rent there. Similarly people eligible for HAP might be reluctant to move somewhere that will be for a very indefinite duration. So I think allowing an applicant sell their home and letting them (and their family) immediately benefit from that sale would mean that that housing stock would be freed up more quickly, the family would have adequate resources to pay all those extra charges come with being in a nursing homes, and perhaps this might be easier from an administrative and implementation standpoint too.
Renting Out a Room & Social Welfare
Every so often I meet someone who is on social welfare and they are having huge difficulties paying their mortgage. If you are wondering how someone on social welfare has a mortgage – well, they weren’t on social welfare when they got the mortgage but due to whatever set of circumstances that has been heaped on them they are now on social welfare and struggling to pay a mortgage. The question these people always have is “How will it affect my social welfare payment if I rent out a room in my house?” To which I have to reply “I’m really sorry but social welfare are going to deduct that income euro-for-euro from your social welfare payment.” If in Rent Pressure Zones social welfare recipients who are home owners were allowed to rent out room(s) in their house and keep 50% of the rent per week, up to a max of €50 per lodger (max two lodgers allowed), without it affecting their social welfare payment. This would free up rooms for rent at €400 per month, would take some pressure off people in very difficult circumstances and is an ideal way of accommodating people who do not have an immediate long-term housing need. I should mention that part of the credit for this idea goes to one of my colleagues – who shall remain nameless but credited nonetheless ;~)
Just about the Rent Pressure Zones, where landlords can only increase rents by 4% per year, this is one of the best measures introduced in recent years and does seem to be making a difference. Thank you.
HAP & Discrimination
HAP also seems to be working quite well so far and the fact that landlords cannot advertise a property stating they will not accept people on Housing Assistance or Rent Supplement is really great. However in order to ensure that the protection against discrimination is really effective then landlords should not be able to refuse to accept rent through HAP from an existing tenant. Of course landlords (and landladies – using the term generically) are entitled to choose who rents their property. But what happens if a tenant during the course of their tenancy finds that they need some assistance paying the rent, applies for HAP and the landlord refuses to register on the scheme? This is effectively making it impossible for that tenant to continue living there. If the only issue is the tenant’s ability to pay and that issue can be solved by having the Council pay their rent through HAP then how is it not discrimination for a landlord to refuse to accept HAP? Isn’t this as bad, or worse than stating on a advert that you won’t rent to people on HAP? HAP is merely a payment arrangement. It does not change the terms of the landlord’s lease with the tenant. The tenant must still abide by all those terms and conditions. All HAP does is allow payment of rent to be made from a different source. It shouldn’t change the amount of rent. If the rent is too high for the HAP scheme then the tenant will have to move out and find cheaper accommodation where they can get HAP. The tenant might see if the landlord is agreeable to a taking a reduction in the rent but the landlord can refuse to do this and rightly so. HAP does not alter the terms of the lease it is merely a payment arrangement.
Ensuring that people can’t be discriminated against because of their economic circumstances is key to creating a more cohesive society – well, narrowing the gap between rich and poor is the real key – but this really helps. It would be great if the Minister could issue a clear direction on the rights of tenants who find themselves in need of some housing assistance.
Some good news – the Workplace Relations Commission who decide matters which fall under equality legislation (as well as employment legislation) have ruled that landlords cannot discriminate against tenants because of their need of financial assistance and so they cannot refuse HAP. Read more
Floating a Radical Idea for Emergency Homeless Accommodation
I came across this idea online a couple of months ago and although it’s really out-there idea I think it’s brilliant. The reason why I’ve been less aware of things than I should be is that I myself have been looking for accommodation this summer because I knew that at some point there was going to be some work done on the flat I’m in so I needed to move out for a few weeks – those few weeks are now as it happens. The search for accommodation has been been a complete nightmare – no exaggeration. At one point I considered buying a second hand caravan and went down to a campsite to see what it would be like – I decided it wasn’t practical – but I now know I would love a Winnebago or something like that. As I was contemplating that I also looked into getting a boat – turns out that’s very expensive – but while I was searching online I saw a post by a guy who has apparently submitted this idea to Dublin City Council but not received any response – buy a second hand cruise liner that can be docked in Dublin Port, moved in and out as necessary. He actually suggested buying a 400 berth boat but I was thinking of a slightly bigger cruise liner. People would be allocated their rooms by a lottery so they wouldn’t be staying long-term in a room, it would be emergency accommodation that would change nightly, but it would be pleasant and I believe easier to police and secure than other sorts of accommodation – which is something very important for everyone, but particularly for those with children.
I know at first glance this sounds like a crazy idea but how much money has been spent paying for hotels and B&Bs in the last 5 years? And how can we let a situation continue where it is possible that families may spend the night in a Garda Station because there was no emergency accommodation available? That is completely unacceptable and shameful.
I don’t know how feasible this idea is – and I’m sorry I can’t find the original post – but when I read it I just thought it’s a really great idea.
Sometimes Markets Need Serious Intervention
What are the most serious issues with housing in Ireland today? Simply a lack of affordable, good-quality housing. Tinkering with incentives to increase demand, by increasing the availability of credit for example, or with incentives to make it attractive to build and rent and thereby increase the supply, will not fix the underlying issues within our housing market. In 2007 property in Ireland was not just over-valued, it was often poorly constructed. We have seen house prices rise since 2013. And to some this may seem like a way of easing some of the problems of the housing crisis – you paid too much for your home? don’t worry the prices are rising again – but is this really fixing the underlying problems? I don’t think so. I think the answer to creating affordable good quality housing, and readjusting the market so that it remains affordable long-term, is fairly obvious but this obvious answer is being ignored because it will be expensive and unpopular with business sectors and people who have a lot of economic and political clout.
Before I state the obvious I’m just going to quickly state what I think affordable and good quality housing means. I’ve now retyped this sentence 5 times because I’m convinced no one will listen to someone who says the cost of the average family home (3 bed semi), even in Dublin, should only be 5 – 6 times the level of the average annual industrial wage (so between €180,000 – €215,000). I know that sounds – as things stand – totally unrealistic in today’s market. I realise also that housing is much cheaper in certain parts of Ireland I’m just giving this figure as the ideal maximum price so that owning a home would be easily achievable for average working families. So I will leave the price issue aside for the moment. Something that hopefully does sound reasonable is my definition of good quality housing; obviously built to the existing standards, plus insulated in so far as is possible, sound-proofed in so far as is possible (sound-proofed accommodation makes for good neighbours), and in so far as is possible, well serviced by public transport and all the facilities and services that a community needs to grow.
Stating the obvious. The impossible obvious.
We need large-scale public building of houses. It is hard to know why it is so expensive to build in Ireland but the best way to find out would be publicly built housing, that is built to the standards the old Guinness family would have been happy to be associated with. We should be building estates where a quarter of the accommodation is allocated to the local authority, the affordable homes scheme be reopened and a quarter of the properties be available through that, and the half remaining are available on the open market to buying who will use the residence as their principal private residence – so not to investors or landlords. The properties available on the open market should help recoup some of the costs the build but they will not mean that the project breaks even. Not if it’s done right. It will not be a case of build two houses and recoup the cost of the first one with the sale of the second – if houses are built properly and are affordable this will not happen. This will be expensive and deeply unpopular with developers, landlords and REITs, but if done right it will fix our housing market.
Impossible – unless the people demand it.
It’s really impossible to expect a political party or politician to introduce such an expensive and unpopular project. But if all the people who want to see our housing fixed, who want long term affordable houses that is built to last, stand together and demand this then politicians will be able to push this through. If we want Ireland to remain a good place to be we’ve got to narrow the gap between rich and poor – good affordable housing would be a significant step towards achieving this. Don’t you think?
There are talks about how to incentivise people to either sell or rent out second homes. Maybe reintroduce the Non-Principal Private Residence Tax and have it collected by Revenue this time? Any houses which are rented out to HAP recipients should be exempt from the tax.
So there’s a few ideas, for what they’re worth.