Rory Hearne: Budget failed to take radical action on the housing emergency
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This was a very disappointing budget that failed to take radical action on housing and offered neither hope of an end to the crisis nor any substantial immediate relief to those living the reality of Ireland’s housing disaster.
Renters will continue to face ever higher rents, and home buyers higher house prices. Adult children will remain stuck in their parents' box rooms, and increasing numbers of people will be pushed into homelessness.
For the one million people who are renting, it did very little of substance to tackle the rental crisis, their security of tenure, or provide them with a route out of the rent trap. The massive increase in rents by landlords in recent years has pushed more and more renters into poverty.
CSO data shows that 70% of renters find it difficult to make ends meet, 67% of renters in receipt of State support (eg the Housing Assistance Payment) are in poverty after they pay their rent, and 41% of those renting without support are in poverty after they pay their rent.
The renters' credit increase to €750 a month will help, but it is insufficient to cover rising rents. Rents have increased, for example, by 20% since 2020, equating to an increased annual rent of €3,228 nationally since 2020. In Cork, it increased by €2,496, and in Dublin by €3,636. A real measure of relief for renters would have been to introduce legislation, like the German capital Berlin did in 2020, to reduce rents across the board by 20%, and freeze them at that level for five years. This would require including all areas under RPZs to implement the measure.
It is also important to note that those in receipt of rental supports like HAP cannot get the tax credit. Rents are outstripping what is available from HAP, and these renters have to pay higher ‘top ups’. This is a factor in rising homelessness.
It is truly shocking that at a time of record homelessness — with the highest ever number of children and families homeless — that there was nothing new done to address this social catastrophe, such as reducing rents, introducing a rent arrears fund, and re-introducing the eviction ban on no-fault evictions for three years thus ensuring no evictions into homelessness.
19,558 households were given a notice to quit in the period from September last year. 85% of these evictions were for no fault of the tenant. So it was also surprising that there was no requirement accompanying the tax break for landlords to give longer tenant security.
No independent evidence has been presented to justify the introduction of that tax break for landlords. It appears to have been made based on the claims being made by landlord representatives and lobbyists. It is a retrogressive measure that redistributes public money to the already propertied and privileged groups in Irish society.
It is a wealth transfer to the already wealthy. The generation who can't even get a home of their home will see this decision in a very negative and unfair light, that their income will be taxed at a higher rate than the tax paid by the landlord on the rent from their income.
And, it is in fact highly unlikely to retain the landlords who are planning to leave the market. The Government should have expanded the tenant in situ scheme to buy up any property from landlords leaving. That would increase public housing stock and remove the problem associated with landlords leaving.
The Budget overall demonstrated a serious lack of vision and ambition in failing to use the budget surplus funds to fundamentally address the housing crisis by substantially increasing capital investment in the public capacity to deliver housing.
The Government accepts that the Housing For All targets of 33,000 homes per year are too low (most experts believe it should be closer to 60,000) so why wasn’t there an increase in targets for delivery in social and affordable housing using additional capital funding?
We should have seen a game changer such as investing in setting up a public construction company, expanding local authority and not-for-profit housing associations' long term development capacities, and investing in fast build factories.
Instead, the lack of additional capital funding allocated to housing in Budget 2024 means that, given inflation, there is effectively a cut in capital investment in housing in the midst of the worst housing crisis ever faced by the state, and at a time of unprecedented surplus in public finances. And we wonder why the crisis continues?
- Rory Hearne is associate professor/senior lecturer in social policy at the Department of Applied Social Studies, Maynooth University