Social housing output drops to new low as demand increases
Rising cost of rent is putting extra pressure on both low and middle income groups
Analysts expect the cost of private rented accommodation will continue rise in Dublin this year, putting extra pressure on both low and middle-income groups.Photograph: Frank Miller
Construction of local authority homes has fallen to a historic low at a time when almost 90,000 people who cannot afford to rent are on housing waiting lists, new figures show.
Last year, just over 253 homes were built in the first three quarters of the year. This compares to an annual output of between 4,000 and 5,000 social housing units in the years before the downturn.
The combination of a supply shortage of social housing, along with fewer homes available on the private rented market, is causing real problems for those on low incomes trying to find affordable accommodation, say campaign groups.
Jan O’Sullivan, Minister of State with responsibility for housing, said the fall in output reflected “financial necessity rather than political choice” and she hoped to increase output this year.
She recently announced a €100 million fund which will result in just over 600 homes over the next two years.
These will provide homes for people with disabilities and older people, as well as the general social housing waiting list.
This allocation funding, however, is significantly down on almost €1 billion invested in social housing annually during the boom years.
Groups such as the housing charity Threshold point out that most of those on waiting lists are in the private rented sector, but are being “priced out of the market” due to rising demand.
It says warnings by the banks that as many as 25,000 mortgage-holders face having their homes repossessed or forcibly sold will add further pressure to housing waiting lists and to challenges facing the private rented sector.
Analysts expect the cost of private rented accommodation will continue rise in Dublin this year, putting extra pressure on both low and middle-income groups.
Last year, rents increased in the capital by between six and eight per cent, depending on various measures. Average rent in Dublin last year reached €1,041, compared to €978 a year previously, according to third-quarter figures compiled by the Private Residential Tenancies Board.
Outside the capital, the rental market was more mixed, with rents declining slightly last year (down 0.2 per cent), but increasing in cities such as Cork and Galway.
In the face of rent increases in the private rental market, Ms O’Sullivan has floated the idea of rent control as a way of protecting tenants. Similar measures were in place in Ireland until the mid-1980s, until they were found to be unconstitutional following a legal challenge.
“Under such a scheme, rents would only go up by a certain percentage based on the consumer price index. This works in other countries and I want to explore the possibility of that,” she said.
There are no plans for rent control measures in the programme for government and any plans are likely to meet with significant resistance from landlords and investors.
The Irish Property Owners’ Association, for example, says any moves to cap rents will results in landlords not being able to afford to renovate or invest in rental homes.
The dramatic drop in social housing output, meanwhile, along with the rising cost of rent, is emerging as a major concern for groups working with the homeless.