CORI (http://www.cori.ie) have come up with yet another hare-brained "solution" for Ireland's poverty issues. The latest is "cost-rental" housing. After an excellent review of housing inequity in Ireland (and believe me, I understand this, since I pay out 1/3 of my after tax income on very overpriced, poor quality rented accomodation), they come up with yet another totally unworkable solution. For a start nobody actually explains what a "cost rental" approach would entail. I've scoured the web and it appears that basically this would be either of two things: social housing with controlled rents, or renting out, for example, an entire apartment block and then renting to social tenants at subsidised rates. However, social housing is extremely under-resourced in Ireland, with a less than 60% success rate in local authorities reaching their own targets for completions. Also renting to social tenants is a highly profitable business for private landlords, and they may be unwilling to continue to rent to social tenants at all in a rent-controlled situation.
I would suggest the following points to improve the rented social tenant's predicament:
1. Force local authorities to bear the burden of their own failure to provide adequate housing:
At the moment local authorities build housing, fail to meet their own targets, but they are not penalised for doing so and have no real encouragement as it costs them nothing to fail. This is because health boards are responsible for paying housing supplements. This should be made statutory and transferred to the local authorities. This would have two effects - firstly it would prevent valuable income for the health boards from being pumped out of the health system, and secondly it would force the local authorities to provide more social housing as they would then be paying out more money in the long term to subsidise huge rents for welfare tenants. At the moment, a local authority could build a house for less than 100k. This is approximately the rent supplement for a family for a house over 10 years. It makes more economic sense for the authority to build the house because over a 30 year period they will save over 2/3 of the rent supplement costs.
This then needs to be followed up with laws like the UK law forbidding councils from placing families in bed and breakfasts in the long term - again this money is being placed into the hands of profiteering b&b owners - many are also landlords and also receiving huge subsidies for rent allowance.
2. Immediate Implementation of New Tenant Laws:
This is to prevent the recent phenomenon of huge rent hikes and unfair tenures. It should be changed to simplify things by registering the unit rather the individual tenancy. This would also discourage rent hikes between tenancies - one of the factors in the massive rent hikes of the late 1990s.
3. Removal of all tax subsidies for priveliged home-owners:
Tax subsidies should be removed for high earning home buyers. There is considerable evidence that tax subsidies unfairly benefit the better off whilst contributing nothing to lower earners. The student accomodation taxation scheme is particularly insidious as I see in Cork it is only developing hugely expensive student rents with massive tax breaks to maximise profits. The holiday homes scheme is not only insidious and unfair: it also poses a serious danger to the areas where these homes are built as it is creating a large volume of empty housing. Council taxes should be doubled or tripled on these homes in order to discourage them from proliferating.
4. Remove "unfair competition" for welfare tenants:
One of the biggest problems for welfare tenants is the difficulty in "competing" for accomodation with earning tenants. Much of the private rented sector at the moment is riddled with median wage earners who previously would have bought houses - as they are further excluded from home ownership this pushes back opportunies for welfare tenants as rents rise and they cannot get accomodation. Making lower cost small holdings for single people in particular frees up many units for low income tenants.
5. Encourage instututional investment in Social Housing:
Housing associations and fair deal investing should be encouraged. Tax breaks should be allowed for developers and organisations to build low cost housing for low income tenants. There is also a need for income diversity to prevent ghettoisation and marginalisation of poor tenants. Mixed tenacy schemes would be a clever idea and better off tenants could partially subside poorer tenants.