Housing and homeless crisis ‘out of control’

The Simon Community homelessness charity has warned that the State's housing and homeless crisis is "out of control" and will continue to escalate unless the Government increases rent supplement limits and introduces rent certainty.

The charity's warning follows the release of the latest rental report by property website Daft which shows the cost of renting in Ireland is up 8.6 per cent compared with the same three-month period a year ago. The national average rent was €934 between April and June, while there was an 8.7 per cent rise in rental costs outside Dublin.

While the cost of renting in Ireland fell slightly during the second quarter, average rental costs in Cork city rose 10.4 per cent to €889, while in Galway, rents increased 10.1 per cent to €818. Rents in Limerick city jumped 8.9 per cent to an average of €718 from April to June and in Waterford were up 8.2 per cent to €629.

Daft also reported the number of properties available for rent remains low, with just 4,600 units available on August 1st compared to 6,800 on the same day in 2014.

National spokeswoman for the Simon Communities, Niamh Randall, described the latest rental inflation as an “emergency”, adding that the crisis has spread nationwide impacting all parts of the country.

“People on low incomes and those in receipt of rent supplement can no longer afford rental payments,” said Ms Randall. “The Simon Communities are working with over 6,000 people annually and it’s inevitable that we will see even more people turning to us for help unless the housing crisis is urgently addressed.”

She warned the Government must “intervene urgently” before the winter weather begins to set in and said the decision to leave rent supplement limits unchanged must be reviewed.

“This decision is causing homelessness and will continue to do so unless addressed,” she said. “As rents continue to increase, the gap between the Rent Supplement levels and the market rate grows even wider.”

A Simon Community study carried out in May found only 12 per cent of properties surveyed in 10 areas around the country were available at or below rent supplement limits.

Two of the areas surveyed, Portlaoise and Athlone, had no properties available within rent supplement limits.

“The biggest challenge right now is access to appropriate, affordable housing and, unless urgently addressed, more people will suffer and more people will become homeless.”

Chairman of the Irish Property Owners’ Association Stephen Faughnan argues that the rise in rents is due to increased costs levied by the State on landlords and their properties. According to Mr Faughnan, 62 per cent of rent paid by tenants is spent on Income Tax, USC, PRSI and Local Property Tax, while another 15 per cent goes on rental business expenses.

Mr Faughnan said 70 per cent of landlords have loans while 71 per cent have insufficient income from their rental property to cover mortgage repayments, adding that commercial investors are “treated more favourably” in tax law than residential investors.

“This is an appalling statistic and unsustainable. The sector needs fair tax treatment, which will encourage investment and supply will increase. If the current tax treatment continues, we will face less rental property available and people looking for accommodation will suffer.”