Una Mullally: Yet another budget leaving tenants out in the cold
Why are all the benefits for landlords? Some 20 per cent of TDs own rental property
What happens when your rent is raised a couple of hundred quid a month? There is no buffer. Photograph: Susana Vera/Reuters
As I watched the details of last week’s budget announcements unfold, I waited to see whether, given the housing crisis the country is in, something would be announced for tenants.
It would be a long wait. The renting crisis is one element of the housing crisis. We all know how prices are being jacked up, how long the queues for viewings are, and how renters are being squeezed. It is something of a scandal then, that the only things that touched on this in the budget were to do with helping landlords out.
The mortgage interest relief deductibility for landlords will be increased by 5 per cent, from 75 per cent to 80 per cent. Furthermore, it will keep rising by 5 per cent until it reaches 100 per cent. For the Rent-A-Room scheme, which recently came to light with the tax wrangling of Airbnb hosts, the income ceiling will be increased by €2,000 to €14,000. A €28 million increase to funding for emergency accommodation was announced, more firefighting by a Government which (along with its predecessor) has not only been completely inept at dealing with the housing crisis, but has sat on its hands while people have screamed and roared about it.
As usual, there was nothing for tenants. My friends trade stories about how crummy the situation is, and how Government “initiatives” (such as the two-year rental freeze which permitted landlords to immediately raise rents) have been counterproductive. The latest example is the help-to-buy scheme, offering a tax rebate of 5 per cent up to €20,000. Common sense would tell you that this rebate will be artificially built into house prices, thus raising them. It will also push first-time-buyers into a market where there is little supply, increasing demand and therefore prices. Also, this rebate is only available on new builds, and how many of those are there?
The budget measures on housing are just another example of the last two governments’ ad hoc approach to the crisis. They need to stop throwing rocks into a river and hoping a dam will magically form. I’ve written before about the lack of cohesive thinking in tackling the housing crisis. Instead of a joined-up plan that looks at all areas, we get fobbed off with disjointed ideas and actions that often do the opposite of what is intended.
Conflict of interest
Why the benefits for landlords and not for tenants? Some 20 per cent of TDs are landlords. According to a report by Claire O’Sullivan in the Irish Examiner in May, Michael Healy-Rae – salt of the earth common man ‘pint of plain for me and whatever you’re having yourself’ – has two farmhouses and another property rented in Kilgarvan, an apartment and a house in Killarney, houses rented in Kenmare and Castleislandand student accommodation in Limerick.
Leaving aside the fact that most of us own fewer pairs of shoes than Michael has gaffs, should we perhaps question the fact that a fifth of our nationally elected politicians own rental properties? Maybe not, because as we know, politicians are virtuous, selfless and altruistic people who never look after their own interests first. Especially in south Kerry.
We know that building needs to happen, that more landlords need to enter the market, and that social housing needs to be built. We know that demand far exceeds supply, and that needs to be dealt with. But supply is only one aspect of the issue. What about the people being squeezed out of the rental market, those struggling to find a home to live in?
Trying to save for a deposit for a property while renting another one is a difficult balancing act. Maybe some of our politicians should try it. Every penny is counted. People forgo holidays, new clothes, a meal in a restaurant, a trip to the cinema. So what happens when your rent is raised a couple of hundred quid a month or more? There is no buffer. It kills your ability to save effectively. This is what’s happening across the country.
There also seems to be a wider issue regarding how the Government actually views the rental sector. Given the lack of rights for tenants, how leases in Ireland are nearly always short term (a year or two is viewed as a “long” lease), and how many apartments feel like temporary structures lacking in space and storage, there is a perception that renting is a short-term state.
It’s as if our political leaders think it’s something people do during college, and afterwards for a little while until we all get married, buy a family home and live happily ever after. But the rental market is not a sitcom. Plenty of people will never buy a home for many reasons: maybe they prefer renting, maybe they’d rather rent where they want to live than buy somewhere else; maybe they will never be able to afford to buy; maybe they don’t know where they’ll be in a few years.
You shouldn’t need an excuse for renting. It’s not a kooky new hairstyle or an eccentric pastime, yet successive governments seem to view it as something to grow out of, as if renters are all lifelong students, poor people, nomads or the type of people who say “bachelor pad” without cringing.
This is how over 700,000 people in the country live. We are not a small, immature constituency, and we’ll remember Fine Gael’s apathy at the ballot box.