Friday, November 25, 2011

Priory Hall, the apartment crash, Daft hypes again, and all that

2 interesting ones from Daft.ie this month:

First, Daft.ie have come up with yet another celebrity economist love-in, the usual blatant manipulation of statistics for the usual covert attempts to reignite the fear and panic so typical of the height of the boom. Early in the summer it was using UCD students to strike terror into the heart of 17 year old kids and their parents coming to college (curious, isn't it, when you consider the massive cut to students living up to 30 miles away who now presumably cannot even dare to think about living in Dublin or another university town, never mind paying the pretend increases which I doubt really materialised?) This time it was the usual about increases in rent. 0.1% to be precise. I was going to add a point to the usual celebrity economists blog that 0.1% of 800 a month is 80c, but I decided not to bother. On the flip side, rents in Dublin and Cork are indeed on the way back up - although thankfully not as bad as it was in early 2007 when there was literally nothing in Cork under 750 euro a month that didn't resemble Dachau. I wonder how much of this is in anticipation of the upcoming reviews of Rent Allowance which looks increasingly to be a hot target for welfare cuts. With even Labour ministers suggesting they want to move it back to its original intent as a short term measure, I would imagine that either rates will be cut dramatically or eligibility will be harshly cut.

At the same time, I do think its a good thing to force local authorities to taken responsibility for housing low income people, while at the same time, the problem does remain especially in Dublin and Cork, that social housing remains woefully underprovisioned, especially for single people and anybody who actually works, notably low earners. Its dreadfully unfair to think that differential rent will be introduced for those currently on rent subsidy schemes while so many low earners are at the mercy of the market (I often point out that in 2002, I was paying nearly 38% of my take home pay in rent for a place that was declared substandard - no running hot water, poor ventilation and no heating - despite earning about 2/3 of an average wage).

But I don't think that justifies the scandal that is Priory Hall. The council essentially has abdicated itself over time of forcing landlords to pay for essential services and urgent repairs. As a result, we know that many tenants live in places without complete hot running water, adequate light or ventilation. What is not pointed out is that even with the above, the vast majority of rented properties do not have effective and cost effective heating (which plunges even average earning tenants into either unbearable cold or huge energy bills), inadequate light and space, and Grannies 40 year old broken furniture. I think I've only ever lived in one place where the furniture was not either broken or just of such poor quality it actually hurt to sit or lie on seats or beds. Ironically, the one decent place was the one and only place where the landlady didn't register for PRTB or declare her tax income! Ironically, her husband was the letting agent!! Its interesting to note that none of my tax compliant landlords rented me a decent place at a fair place that was not a hovel.

And so there is the provision in law that the council should inspect homes and refer rogue landlords to court. But of course, very few councils do. Why? Because if they did, landlords simply wouldn't comply, and housing those tenants would fall to the councils.

And then there was Priory Hall.

This is the mother and father of all housing scandals. For 2 reasons. Firstly, it does seem that the plight of private tenants was simply of no interest to either media or state and that these lowly serfs simply don't deserve to be reported on. There was a little silent jeering at the rent allowance private tenants who were fortunate enough to get deposits from the council and in some cases, extra help, albeit at the courts forcing, should they be unable to get a place for the same price.

In contrast, it seems that private tenats just had to piss off. I believe that where rent was already paid for the month, it was not returned, nor were deposits. Let them eat cake. The total silence regarding private tenants paying their own way was typical of the biased and manipulated debate in the Irish media: private tenants are perceived as being rich, privliged and "lucky" to have not participated in ruinuous proroperty purchase. Nobody points out that the self paying private tenant is the true funder of NAMA, and paying twice: first through extortionate rents to the landlord class and secondly through taxation to subsidise banks, purchasers of tax discounted properties (including FTBs and section 23 owners). Nobody points out that the reason most rent is because they couldn't afford to buy. Nobody points out that even now, the average rental in Dublin now rents for nearly 3 times the typical mortgage cost over 25 years for an identical property in the same development. And ironically, its actually worse outside of the Dublin area, thanks to rent allowance.

It is however, thankfully, pointed out that rent allowance has a huge impact on job mobility for many on welfare. It doesn't end there, however, tenants who have had cuts in wages are forgotten while the media cries over RA cuts: the outcome is identical.

A lot of the problem is to do with perceptions regarding living with the Ma. I have a friend who managed to get herself social housing and now pontificates to me about living with Mum. In the last year, I've managed to pay off 3500 euro of loans, nearly 2400 of course fees, and at the same time, managed to save 7,000 euros. I contributed at home to the tune of about 60% of my previous rent, while on an income mostly 600-700 a month more. If you tot up the loans and savings alone, its interesting to note that figure including rent to my parents comes to about 18,000. Previously, I paid the loans, fees plus about 7500 a year in rent. I've since been able to increase my savings to about 10k a year. I simply couldn't countenance that while renting. But ironically, the gap between my savings and the CASH price of the lower end of the market is rapidly declining. I'm seriously wondering should I just wait another year or two and then put down what could be then be a 25% deposit? It may well be worth it!

You would like to think that at such a time those previously gouged by the system would at last have their day, but in fact we are simply being gouged even more, paying the real price for others greed while reaping none of the benefits.

Anyway this wasn't my point. My point is this: how can the city council get away with making nearly 187 families homeless while supposedly acting in their interest? How can they then have the audacity to walk away from their responsibility to both owners and tenants alike? Why is it that if the council successfully brings a case over a developer and landlord, it is the purchaser or tenant who ends up out on the street and out of pocket?

The question I have is how the same council granted planning permission and did not stop these homes being occupied in the first place. They say back for years while these places were sold and moved into. This is why I feel that the only answer to the problem of poor quality rented housing can only be solved by both licensing the landlord to remove bad characters from land lording, and there should be a certificate per unit judged on the basis of condition, limits placed on size per person to stop overcharging and overcrowding.

But hardly likely to happen in an environment where even paying PRSI brings the cry babies put.

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