Is the HAP system fit for purpose?

The first major review of the Housing Assistance Payment system (HAP) since its introduction eight years ago has been completed by the State’s Housing Agency, with recommendations expected to be submitted within weeks to Minister for Housing Darragh O’Brien.

Under the HAP scheme, tenants who qualify for social housing source their own private rental accommodation, but have most of their rent paid directly to their landlord by their local authority.

The scheme’s rental caps have remained unchanged since 2017, and the review, a commitment of the Government’s Housing for All strategy, was focused on the base rates, but also the ability of local authorities to use their discretion to increase them in individual cases.

However, is the system itself, which is now supporting almost four in 10 private rental tenancies, fit for purpose or is it locking tenants out of long-term State accommodation?

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Labour’s Jan O’Sullivan, who was minister of state for housing when HAP was introduced in 2014, says the scheme as it operates today has strayed very considerably from its original intent.

[ Number needing social housing ‘may be double’ estimates, at 122,000 ]

“It was introduced as a job-activation measure. It was in the Action Plan for Jobs, not in a housing plan and was part of a number of measures to get rid of deterrence to people taking up a jobs.”

Most people who were in need of State housing support, but weren’t living in traditional social housing, were at the time in receipt of rent supplement, a payment administered since the 1970s by the Department of Social Protection. However, the payment was cut if a tenant took up work. HAP recipients were allowed to continue working without losing their housing benefit.

“HAP was never meant to be a substitute for social housing,” O’Sullivan says. “It was really just meant to be a substitute for the rent supplement scheme. That was its original purpose and I feel very strongly that it has turned into something completely different to what it was ever meant to be.”

HAP was rolled out to local authorities on a phased basis between 2014 and 2017. By 2018 the State was spending €277 million on HAP. This year it expects to spend €548 million.

HAP had been intended as a targeted, small-scale supplement, O’Sullivan says. “It shouldn’t have been a reason not to build social housing. It has been completely misused in my opinion since then as a substitute for real social housing.”

Wayne Stanley, head of policy with the Simon Communities of Ireland says, as a concept, there is nothing inherently “wrong” with HAP.

“If you were starting out designing your social housing system I think you would have a HAP element to it. It’s a very good immediate safety net that can be put into the private rental market for people on low incomes, particularly at a time of crisis.”

The difficulty, he says, lies in the extent to which the use of HAP has grown.

“The issue at the moment is the level of reliance on HAP and also the potential for growth in HAP. It needs to be a medium term support for people with a housing need it shouldn’t be a long term support. Our private rental system isn’t set up for long-term homes.”

Last year, 62,000 people availed of the HAP with the Department of Housing expecting that figure to rise to 71,000 in 2022. Currently, very few properties are available to rent within the HAP caps, with a couple with three children receiving up to €1,300 in Dublin or €450 in Longford. Local authorities can, however, pay up to 50 per cent more in Dublin and 20 per cent more outside the capital if the applicant is homeless or at imminent risk of homelessness.

“There are very few properties available even with the discretion local authority have about the rates. The commitment in Housing for All was to look at the discretion that local authorities have. It would be welcome if they were to increase it outside of Dublin where the available of private rental properties is even more acute,” Stanley says.

However, the county-by-county base rates also need to be increased, he says.

[ HAP case study: Cliff Daly and his flat in Wicklow ]

“The argument against doing that is you are setting too high a floor on rents in the private rental market, but HAP is so far away from market rates now that it is loading the weight of the housing crisis in the private rental sector on to the shoulders of the most vulnerable, in some sort of notion of protecting everybody, which isn’t working because the rents continue to go up anyway.”

Strengthening the protections against rent hikes for all tenants would be more productive, he says.

Increasing HAP rates, while necessary, is “not a panacea” for people in need of housing Stanley says. “It keeps people with a roof over their heads, which is dealing with the consequences of the housing crisis, but we won’t deal with making HAP the payment that it needs to be in terms of its role in the housing system, until we deal with the structural issues and the structural issues area lack of affordable public housing.”

Threshold’s chief executive John-Mark McCafferty said he is “mindful” increasing HAP rates could be an “accelerant to the market rent levels”, but focusing on individual cases could lessen this risk he says.

“We are pushing for a HAP protocol. How that would work is local authorities would refer a HAP renter, who is at risk of losing their home, to a HAP tenancy sustainment team.”

With support from Government, Threshold could provide this service, he says.

“The team would assess the validity of the rent paid on the property, and/or rent reviews if any, and ensure the household is availing of all supports to which they’re entitled. On verifying the validity on the rent that team would seek an increase in the HAP payment via the local authority.”

For the foreseeable future, HAP will need to be retained, he says, but it does need to be reformed.

“We’re pushing for stronger security of tenure. HAP is often referred to as a social housing need being met, but if you’re in an approved housing body house as a tenant you have a very different experience from someone who is in a tenancy in the private rented sector. There is much greater precarity in the private rented sector, and chances are, you are spending a lot more of your income on your housing costs compared to local authority or a AHB tenant.”

Minister for Housing Darragh O’Brien says his focus is on building and “reducing the reliance on HAP” but he says with more than 60,000 dependent on the payment, it remains necessary.

“Four in 10 private rental tenancies are supported through HAP. That is really significant so when people say we don’t do anything for renters they’re wrong, because that is a direct support and it is needed,” he says.

“There are some in the Opposition who will say this is some sort of support for the private rental market. It’s nothing of the sort, it’s actually a direct rental support to 60,000 households. It is probably a ‘necessary evil’ in some respects, but it supports real families. If we turn the tap off, well then what happens to 60,000 families?”

O’Brien says while he didn’t want to pre-empt the HAP review, his preference was for local authorities to have “greater flexibility” in relation to payment levels. “I think discretion in individual cases is more effective. I have seen where there is a high concentration of HAP tenancies it can have an unintended consequence of pushing the rent up in a given area.”

However, he says there may also be a case for general rate rises in some areas. “There will be some areas where the HAP limits, particularly in the regions, are particularly low. I think it will be a combination of both, but obviously I have to wait to see the report.”

He says he agrees with most housing advocates that HAP is not equivalent to a council or housing body home. “I said it in opposition and I believe it as a Government Minister while HAP is a necessary support I don’t believe it is, for most people, a permanent solution to their housing need.”

Sinn Féin housing spokesman Eoin Ó Broin also agrees HAP is not a permanent housing solution, but he points out, that’s not what the legislation says. “The 2010 housing Act defined for the first time in law what social housing support was. The legislation means tenants in RAS [the Rental Accommodation Scheme, a forerunner to HAP] or HAP accommodation are deemed to be housed and are taken off the social housing waiting list. They can apply for a transfer, but that is on a limited basis such as overcrowding, or medical priority. So while we see HAP as a temporary support, and tenants see it as a temporary support, the legislation defines it as a permanent support,” he says.

“Our problem is not that we have a housing benefit, our problem is Government designed into our system the permanent occupation of an enormous part of a private rental sector by social housing tenants. We would change the 2010 act and define rental subsidies as temporary supports and council housing, approved body housing and Traveller halting sites as real social housing.”

The problem of housing social tenants in the private sector is compounded by the ever-decreasing supply of rental properties, according to Ó Broin.

“We know the trend is semi-professional or accidental landlords leaving the market. We also know that a lot of the new rental stock that’s coming in is high-end and therefore above the HAP limits.”

While an increase in the limits is needed, it cannot be introduced in isolation, Ó Broin says.

“It would have to be accompanied by the three-year ban on rent increases, otherwise if you just unilaterally, across-the-board, increase HAP that will have a huge inflationary impact on the market. The biggest losers here are families on incomes €5,000 to €10,000 above the social housing threshold,” he says.

“HAP has had a really distorting impact on the private rental market, by this over-reliance on the private rental sector to meet social housing need. And the problem is, we’re going to have a continued demand for HAP but a dwindling stock of units in the price range HAP permits.”

The system is serving neither the tenant nor landlords, argues Margaret McCormick of the Irish Property Owners’ Association. “The system is not fit for purpose and it’s letting down the people who need it, and it lets down the landlord as well.”

A myth had perpetuated that landlords were guaranteed their rent because they are paid by local authorities and not tenants, she says. “The payments are not guaranteed. If they tenants do not pay their portion to the local authority, then the landlord is not paid.”

While the Department of Housing says there is a 99 per cent HAP payment rate, Ms McCormick says that is not the landlord experience.

“The relationship is still between the landlord and the tenant, not the landlord and the local authority. So if the tenant doesn’t pay, the local authority doesn’t pay the landlord and everything stops. The difficulty is local authorities do not communicate with the landlord until they send that letter saying the rent is being cut off because the tenant hasn’t paid.”

The landlord then has to follow the arrears process through the Residential Tenancies Board, which can take a year or more, McCormick says.

“The State abdicated its role to provide accommodation and they imposed it on the private rental market, but it’s a dereliction of duty of the State when the system they brought in isn’t fit for purpose. It lets down the very people who need it.”