Rents are on the rise again.
After a small drop due to Covid-19 restrictions in April, the latest data from Daft.ie shows a 0.6 per cent rise in average rents across Ireland in May.
Now a group representing six of Ireland’s largest Approved Housing Bodies (AHBs) is calling for the incoming Government to prioritise the provision of affordable, secure housing for long-term renters and people who do not qualify for social housing.
Declan Dunne, Chair of the Housing Alliance, said the average earner pays more for their rented housing than others do for alternative housing options.
“Many families and individuals need secure affordable rental housing,” he said.
“Currently, the only option open to them is to pay high rents in the private market. Though their incomes are relatively low or moderate, they do not qualify for social housing. We need an intermediate model of affordable rental homes at rents below these high private-market rents. The not-for-profit Approved Housing Bodies are already delivering homes in partnership with Local Authorities and are best placed to build and manage these affordable homes.”
The average cost of buying a home is €267,000 nationally, €374,000 in Dublin. To get a mortgage for €267,000, you would need a deposit of at least €26,700 and an annual income in the region of €76,000. However, CSO figures show that the median gross income per household is just over €45,000.
How would an Affordable Rental Scheme work?
The type of scheme being proposed by the Housing Alliance would see AHBs and Local Authorities acquiring and constructing housing developments specifically for long-term affordable rental purposes, with rents priced at up to 75 per cent of prevailing market rents. The housing – with long-term security of tenure – would be allocated to renters based on defined minimum and maximum household income eligibility limits.
“This model would not displace social housing. Rather, it would provide a valuable addition to the housing market for those on incomes above social housing income thresholds but still struggling to keep a roof over their heads,” said Mr Dunne.
It’s a plan that’s worked in other countries
The Housing Alliance cites the success of affordable rental schemes in other European markets. In Austria, for example, while two-thirds of the population live in subsidised housing, less than 7% receive any form of housing subsidy because there is enough competition from affordable rental housing to keep prices down in the for-profit sector.
In France, loans from the Intermediate Rental Loan Scheme can finance the purchase, construction or rehabilitation of a dwelling to be let at an affordable rent. This scheme is available from the public bank, Caisse des Depots et Consignations (CDC), or from other credit institutions signing an agreement with CDC.
“We envisage such a scheme having a stabilising effect on the broader private rental market. It would serve to counter the ‘boom and bust’ cycles that have plagued the Irish housing market in recent decades.” added Mr Dunne.