Homeless executive defends €500 ‘placement fees’ to estate agents

The Dublin Region Homeless Executive (DRHE) has defended its decision to offer “placement fees” of €500 to private letting agents in return for them securing tenancies for homeless families.

The DRHE said the move was designed to secure more rental accommodation for those on housing assistance payments (HAP).

“When an estate agent makes suitable properties exclusively available to homeless families, which includes not advertising them on letting websites and not holding open viewings, then when the agent has given five properties, the DRHE will pay the agent €500 per property plus VAT following the submission of a proper invoice,” the DRHE said in a statement.

However, the Institute of Professional Auctioneers and Valuers said the offer could be considered a conflict of interest if the estate agents were already contracted by landlords to rent a property on their behalf.

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The DRHE accepted its involvement in the private rental sector was distorting the market, but said “there is no alternative until the supply of social housing increases sufficiently to allow us to reduce that reliance”.

Under the HAP scheme the local authority commits to pay up to 87 per cent of the rent to the landlord on behalf of the State.

Figures released on October 24th show there were 9,698 people, including 3,829 children, in emergency accommodation in September.

Statistics

This does not include over 1,600 people who continue to access homelessness accommodation removed from homelessness statistics in recent months.

The figures represent a 15 per cent increase in the overall numbers since September 2017 - when there were 8,374, and a 22 per cent increase in the number of children.

There were just more than 32,000 active HAP tenancies in January this year. The figure is expected to rise to more than 80,000 by 2021 under the Government's Rebuilding Ireland strategy.

Patrick Davitt, chief executive of the Institute of Professional Auctioneers and Valuers told RTÉ's Morning Ireland: "We want to support HAP, there is no problem there."

“It is a very good social incentive, but if you are receiving a fee from two different parties that’s a different thing altogether.

"Some agents don't like it and they wouldn't take part in it without telling their landlords. Anyone that does would leave themselves open to a complaint to the Property Services Regulatory Authority or the professional institutes."

Fintan McNamara of the Residential Landlords Association told RTÉ's Today with Miriam show that the 1973 Auctioneers Act forbids agents from accepting fees from both sides.

‘Innovative thinking’

However, Mike Allen of Focus Ireland, said the local authority should be applauded for its innovative thinking. “It’s not the tenant, it’s the local authority, another agent, paying the fee.”

Increasing HAP levels has not driven up rents, he said. “They are being driven up by the lack of availability. There are simply not enough houses for people to live in.”

Fianna Fáil’s housing spokesperson Darragh O’Brien told Morning Ireland he was “massively taken aback” by the measure.

"They haven't told anyone about it. At the Oireachtas Housing Committee it hasn't been mentioned to us. We want to house families that are homeless. Is this the right way to do it?"

“It has potentially an unintended consequence of pitching one type of tenant against another. The real issue here is the lack of supply and a lack of a permanent solution to our housing crisis.”

Under HAP, local authorities pay rent directly to private landlords on behalf of social housing tenants and charge tenants a differential rent based on their income and ability to pay.

The 2017 figures show that local authorities paid private landlords a total of €193 million – up from €74 million in 2016 – and recovered €51 million from tenants, leaving the net cost to the State at €142 million.

South Dublin County Council paid out the most of any local authority. HAP tenancies in the county cost the State €22.1 million on a net basis – after payments from tenants – in 2017.

This was followed by Dublin City Council with €21.8 million, Cork County Council with €12.5 million, Louth County Council with €9.7 million and Kildare County Council with €9.2 million.