Ireland

The Question: Will the rent-supplement increase help solve the housing crisis?

A 25 per cent rise should be part of the solution, but rent increases, unfair landlords, and market forces could all jeopardise its effectiveness

Change of mind: Minister for Social Protection Leo Varadkar says the Government is acting because more families are becoming homeless. Photograph: Colin Keegan/Collins

Kevin Courtney's face
Kevin Courtney
Sat Jul 2 2016 - 05:00

This week the Government finally announced a rise in rent supplement, to help more families keep a roof over their heads.

Until now the Government had baulked at increasing rent supplement, saying that it would just give greedy landlords an excuse to hike rents.

Last year, as minister for social protection, Joan Burton decided against a rise, despite the fact that rents were going through the roof.

So why the change of mind? Her successor Leo Varadkar told RTÉ that the situation was not the same as last year's. Yes, landlords fleecing their tenants was still a big problem, but more families were becoming homeless.

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He insisted that the rise would help tenants rather than landlords and that legislation preventing landlords from increasing rents for 24 months after an increase would give tenants rent certainty for those two years.

Rent-supplement limits at most councils will go up by more than 25 per cent.

So will all this help solve the housing crisis? Yes, but it's only part of the solution, according to Mike Allen of the homelessness charity Focus Ireland, which has been seeking such an increase for many years. He points out that an Oireachtas committee had proposed that the rise be in line with market rates and that this week's increase falls short of that.

“I just hope that this increase in rent supplement is not swallowed up by an increase in rents,” he says.

Then there’s the problem of landlords outright refusing rent supplement. Although it is now illegal, many online ads for rental property come with a “no rent supplement accepted” condition.

But it may be market forces rather than mendacious landlords that will test the new increases. Dr John McCartney of the estate agency Savills Ireland says that rent-supplement increases will drive rents up further, as people compete for a fixed stock of rented property.

But, according to this newspaper’s political correspondent Harry McGee, rent supplements have lagged market prices for a while, and the rise will help families on welfare to make ends meet.

Every little helps.

[BYLINE1]KEVIN COURTNEY[/BYLINE1]

Focus IrelandLeo Varadkar