Housing subsidies not providing value for money – PAC

Two key housing supports accounted for 27% of housing budget in 2017

Eoin Ó Broin, Sinn Féin housing spokesman, said housing supports now represented ‘an indefinite and ever-growing expenditure’ which could soon hit €1 billion a year.

Eoin Ó Broin, Sinn Féin housing spokesman, said housing supports now represented ‘an indefinite and ever-growing expenditure’ which could soon hit €1 billion a year.

 

The State is not getting value for money in return for housing subsidies worth hundreds of millions a year to the private sector, according to an internal document circulated among members of the Public Accounts Committee (PAC).

The document, which was prepared for the Oireachtas spending oversight committee, states that two key housing supports, which collectively accounted for 27 per cent of the housing budget in 2017, do not “represent value for money”.

The discussion document, which will form the basis of the committee’s next report, recommends that the Department of Housing “reviews current policies to ensure that long-term value for the State is created in housing provision”.

It also recommends that “housing stock funded by the taxpayer should remain for use by the State”.

The two schemes in place are the Rental Accommodation Scheme (Ras) and the Housing Assistance Payment (Hap). Both schemes, which involve payments to private landlords for eligible tenants, have grown significantly in recent years, in line with the housing crisis.

Hap payments cost the State just €15.64 million in 2015, but are projected to cost €423 million this year. The growth in Ras, which is targeted at people in need of long-term rental support, is less dramatic, but has still grown from €115 million in 2011 to €143 million in 2018.

Over-reliance

The two schemes are key planks of the Government housing strategy, but housing experts and Opposition politicians have criticised over-reliance on the programmes.

“It’s a short-term solution that has rapidly transformed into a semi-permanent solution,” according to Lorcan Sirr, a lecturer in housing studies at the Technological University of Dublin (TU Dublin). At the end of 2018, more than 43,400 households were in receipt of Hap, with more than 25,000 landlords or agents benefitting from the payment, which can be worth up to €1,900 per month.

Mr Sirr said the impact of the payments was such that those outside the social housing market were also being affected.

Sinn Féin housing spokesman Eoin Ó Broin expressed the same concern, saying: “It’s really bad for renters and first-time buyers because it pushes up demand, and pushes up the price of renting and buying, and crowds out thousands of families who can’t get into the private sector because those homes are being used for social housing tenancies.”

The Dublin Mid West TD said housing supports now represented “an indefinite and ever-growing expenditure” which could soon hit €1 billion a year.

Fianna Fáil housing spokesman Daragh O’Brien said corporate landlords were seeking out the payment due to the high levels available and the reliability of a State-backed rental payment.

“This emergency measure is now becoming permanent and is putting a massive strain on households,” he said.

A spokesman for the Department of Housing said the State would deliver more than 50,000 social housing homes under Rebuilding Ireland out to 2021. “Build activity is happening and scale is increasing. While that is happening, people will continue to be supported through schemes such as Hap, which offers an immediate, flexible housing support to households in an area of their choice.

“At the end of the six-year Rebuilding Ireland programme, we will have reached a point where build, acquisition and leasing programmes will be delivering more than Hap and Ras annually – delivering a sustainable and balanced supply of social and affordable housing over the short, medium and longer terms.”