Government spent close to €900m on rent subsidies in 2021

HAP scheme payments rose to €542m – a more than 80% rise since 2018, figures show

The shift from directly building social homes to providing rent subsidies – the so-called bricks to benefits switch – has been one of the most significant recent trends in housing here and in other countries. Photograph: Bryan O’Brien

The shift from directly building social homes to providing rent subsidies – the so-called bricks to benefits switch – has been one of the most significant recent trends in housing here and in other countries. Photograph: Bryan O’Brien

 

The Government spent close to €900 million on rent subsidies in the private sector last year, according to new figures obtained from the Department of Housing.

This included €542 million on the Government’s main rent subsidy scheme, the Housing Assistance Payment (HAP).

Spending on HAP has risen by more than 80 per cent since 2018 amid criticism that the Government’s increasing use of rent supports is adding to pressure in the rental market.

Some 100,000 households, a third of the rented sector, are now reliant on some sort of State subsidy.

The latest figures, provided by Minister for Housing Darragh O’Brien in response to a parliamentary question from Sinn Féin’s Eoin Ó Broin, show Government spending on the Rental Assistance Scheme came to €122 million in 2021 while a further €123 million was spent on rent supplements.

An additional €107 million was also spent on leasing homes from private landlords for social tenants.

This brought the total outlay on rent subsidies and supports last year to €893 million, making the State the largest consumer of private rental accommodation in the country.

The shift from directly building social homes to providing rent subsidies – the so-called bricks to benefits switch – has been one of the most significant recent trends in housing here and in other countries. The average monthly rent subsidy in 2019 was €1,872.

Aggravating the crisis

Mr Ó Broin said the Government was absorbing a significant amount of the limited supply of rental accommodation, which was aggravating the State’s rental crisis.

“This is a direct consequence of their failure to provide an adequate supply of social housing,” he said.“This over-reliance on the private rental sector is bad for social housing tenants, private renters and the taxpayer,” Mr Ó Broin said.

“The Government must increase direct investment in social housing output and year on year reduce its use of the private rented sector to meet social housing need,” he said.

According to the Central Statistics Office (CSO), rents rose by 8.4 per cent last year despite rent rise ceilings being imposed in most urban areas as part of the Government’s rent pressure zone legislation.

Property website Daft.ie said there were just 1,460 homes to rent on its website as of November 1st last, the lowest number since its quarterly series on the rental market here began in 2006. This included just 820 in Dublin.

According to Daft, the average monthly asking price for rent nationally stood at €1,516 in the third quarter of 2021, more than double the €742 seen in late 2011, in Dublin the average was more than €2,000.

The Government’s new cost-rental scheme promises more affordable renting solutions. As part of its Housing for All strategy it will provide 18,000 cost-rental units.

The Daft figures indicate that repaying a mortgage on a standard three-bedroom home is now less expensive than paying rent on the open market in nearly every region in the country.

But paying high rents limits most from being able to save for a deposit. As a result, home ownership rates here have plummeted. According to the 2016 population census, 85 per cent of 65-year-olds owned their own homes, while an estimated 12 per cent of 25- to 39-year-olds – those of a prime working age – own their own homes.

A report by the Oireachtas Housing Committee recently criticised the Government’s increasing use of rent supports such as HAP, saying it was adding to existing pressure in the market.