After decades of decline, the private rented sector is experiencing a renaissance, writes Bob Jordan.
A new generation is emerging. It's oblivious to mortgage interest-rate hikes. Long-distance commutes to work are not an issue. Lifestyle issues are all important.
The growing "generation rent" challenges the notion that home-ownership is an essential aspiration. Those happily renting contradict the widely held view that paying rent represents dead money.
This generation has considered the advantages: renting provides more flexibility for families who need to move if a new baby arrives or a new job comes up. Leisure time increases with shorter commutes. Those renting in our cities have greater access to cultural and entertainment outlets. For people who are not DIY-minded, household repairs and maintenance are the concern of the landlord.
In an uncertain housing market, renting can be a safer option than ownership. Under legislation introduced in 2004, landlords are limited to one annual rent increase. This contrasts with the barrage of interest rate hikes for home buyers over the last 18 months.
High-earning renters currently have more scope to invest savings elsewhere than counterparts bracing themselves for further increases in mortgage interest.
After decades of decline, the private rented sector is experiencing a renaissance. It now attracts a wide range of home seekers, from high earners living in Dublin's trendy Docklands to immigrant communities living in Cork's Blackpool area. This trend is likely to persist, as Ireland becomes an increasingly urbanised and industrialised society.
The number of households renting privately almost doubled between 1991 and 2002. And much of the new accommodation delivered during Ireland's economic growth period comprises private rental, with at least 38 per cent of the current private rental stock built after 1990. Ireland is also fast becoming a nation of landlords. One in 17 Irish households contains a landlord. Since the enactment of the Residential Tenancies Act in 2004, landlord and tenant relations have been underpinned by rights and obligations, resulting in the sector becoming more business-like.
When Threshold - the national housing organisation - opened its doors in 1978, the situation was very different. Poor accommodation was tolerated. The sector was perceived as a "rite of passage" for students, a bus station for young couples who would soon buy their own home, and only a long-term home for people who did not fit in anywhere else.
The proportion of private rented housing in Ireland plummeted from 17 per cent in 1961 to 8 per cent in 1991. Conditions within the sector were dismal and tenants were unprotected. Threshold's first publication Private Rented: The Forgotten Sector highlighted the need for government regulation to curb the excesses of landlords who evicted tenants without prior notice. The vast improvements within the private rented sector are welcome. Most living in newly-built apartments and restored housing do so by choice.
However, people dependent on State rent supplement payments are forced to live in the cheapest accommodation, which is often substandard. Some of this is still reminiscent of what Threshold was set up to challenge almost 30 years ago. Last year, over 20,000 people sought Threshold's help with problems in the private rented sector. Seventy-five per cent of tenants assisted had gross incomes of less than €25,000 per year.
Their issues mainly concerned deposit retention, eviction, substandard conditions, repairs and access. However, not all the problems Threshold deals with are confined to the lower priced end of the market. Many apartment complexes built in the past decade were not designed with families in mind. They contain little or no storage for household items like prams, vacuum cleaners and winter clothes. Some families are prevented from doing a weekly food-shop because their home lacks cupboard space.
As Ireland moves to embrace a mainstream role for private rented accommodation, Threshold insists that two changes are fundamental to accelerate the modernisation of the sector. Firstly, old-style bedsit accommodation must be phased out completely. The notion that people can live with dignity in one small room - often affected by health and safety hazards - is defunct.
Bedsits should be replaced by good quality accommodation with storage space, proper cooking facilities and room to live comfortably.
In addition, affordability problems faced by low income groups need to be addressed. A housing benefit scheme that assists full-time employees on low incomes to cover their rent will not only improve lives, but will help eliminate poverty traps.
The rented sector is a critical and increasing part of Ireland's housing landscape.
The challenge now is to create the environment where people - regardless of income groups - can be guaranteed good accommodation standards at appropriate prices. Threshold will continue to spearhead campaigning work to make sure that benchmarks are created and adhered to.
Ultimately, a booming rented sector that is so evident in most cities across Europe will only happen if the legislator, landlords and renters all play a role.
Bob Jordan is the director of Threshold. The organisation is hosting a national conference to examine the role of the private rented sector in Dublin Castle today. Further information:
www.threshold.com