Housing policy: the need to empower tenants
Many European countries have made private renting affordable and attractive
The Government has already committed to developing a comprehensive strategy for social housing, but has yet to finalise its plans. The latest report from the National Economic and Social Council (NESC) - Home ownership and Rental: What Road is Ireland on? - will greatly assist the Government in redefining national housing policy. The NESC examines how different forms of housing tenure can best serve a housing policy – one that is both affordable and sustainable and based on equality and social inclusion.
Home ownership has been the main form of housing tenure in Ireland, peaking in 1991 when four fifths of all homes were owner-occupied. Since then the figure has dropped to 71 per cent in 2012, in line with the EU average, and reflecting the many social and economic changes since. This decline in ownership is accounted for by a range of factors – increased immigration, the collapse in property prices and falling incomes in the recession – and has resulted in increased reliance on the rental sector. Some 28 per cent of households now rent either from a private landlord or from a local authority or voluntary association. The decline in local authority construction in recent years, and the sale in previous decades of much of Ireland’s local authority housing by tenant purchase schemes, has left the State over-dependent on the private rented sector to supply far too much of the country’s social housing needs.
The NESC accepts that while private renting has some advantages – low-entry costs, no investment risk and flexibility – the disadvantages can outweigh those benefits. Private renting offers less security of tenure than renting from a local authority, while future rents are determined by market prices, which also creates uncertainty for tenants, as recent rent rises have far outpaced those of incomes.
But, as the report identifies, many European countries have made private renting more affordable and attractive, while also providing tenants with security of tenure and more predictable rents. The Government should seek to emulate their success.