Housing chief says benef it is fuelling rents but he insists it’s city’s only hope
GOVERNMENT policy is driving up rental prices and distorting the market according to the country’s largest housing manager – but it’s the only option available.
Brendan Kenny, deputy chief executive of Dublin City Council, told the Irish Mail on Sunday there is no doubt the 45,000 Housing Assistant Payments (HAP), are ‘distorting’ the market.
However, he says there is simply no alternative to the rent relief-style benefit because of the number of people in need of emergency accommodation, coupled with the slow pace of construction.
‘There’s no doubt about it, we are distorting the market and affecting ordinary people in the private rental sector, but there’s no alternative,’ he said.
‘We have become too reliant on the private sector and we shouldn’t be so reliant on HAP,
‘Without HAP we’d be really knackered’
‘A third of rentals are subsidised by State’
but without it we would be really knackered.’
The Government plans to increase the number of HAP payments to 83,760 by 2021 as they phase out other rental supports, such as the Rental Accommodation Scheme.
‘In our view, it’s been really successful – 45,000 HAP tenancies now in the country, about 10,000 of them in Dublin, 4,000 in Dublin city, and the reality is that with the crisis that’s been there, we’d be far worse off without it; there would be no hope at all,’ Mr Kenny added.
His view is at odds with that of the Department of Housing, with a spokesman insisting: ‘There is no evidence to support the assertion that HAP is distorting the rental market.’
He added: ‘HAP rates were carefully reviewed in 2016 and the rent limits took into very careful consideration market rents in each local authority area. The current benchmark for establishing appropriate limits is the 35th percentile of agreed rental values in place for local markets.’ Some campaigners have urged that funding for HAP should not be increased and instead, the funds put into capital investment. But Mr Kenny argues that there is no shortage of money and HAP can deliver a solution quickly. ‘You’ll hear some people saying: “Oh, you should take the money, do no more with HAP, and use it for building” but we have the money for building,’ he said. ‘There’s no problem; there’s plenty of money around these days. It’s not one or the other, it’s just HAP is there, it’s deliverable much quicker and we’re doing 200300 HAP new tenancies every month in Dublin.’
In addition to the HAP tenancies, there were 29,825 rent supplement and 19,388 Rental Accommodation Scheme payments in June last year, meaning that close to 100,000 rental homes are currently in receipt of some form of State aid.
Sinn Féin housing spokesman, Eoin Ó Broin, has said the Government’s continuous reliance on short-term solutions has led to the current crisis. ‘A third of rental properties are subsidised by the State then that obviously has a huge impact on demand and price,’ he insisted. ‘So if you’re a modest income worker, a couple or young professional not eligible for social housing support, one of the reasons why you can’t get a rental property or the reason rents are so high is because of the high volume of rent-subsidised social housing tenants in the private rental sector.’
Mr Kenny reiterated his belief that it will be three years before real progress is felt in the housing market. He conceded that the council is unlikely to meet its social housing targets this year, but claimed a new rapid-build framework will see the delivery time for apartment building halved, with 1,000 new social housing apartments due to be completed by 2020.
n0 choice: Brendan Kenny