Lessons in Irish Housing by Frank Ryan

Author:Frank Ryan
Language: eng
Format: epub
Publisher: Oak Tree Press

3: THE POLICY VOID – RENTALS

The Housing Agency is a government-funded entity that deals with housing policy issues in Ireland. It suggests that, in large urban areas, some 50% of new housing supply should be directed to rentals. Equally, market and statistical evidence confirm that a large minority of households in urban modern Ireland may not have the economic resources to purchase, and that other new households may elect rental as their current preferred occupancy.

The equivalent statistics for urban London are stark – approximately 60% of all residential occupancy is in the rental sector, only 8% of renters have the financial capacity to purchase a home in London and some two-thirds of all renters are not British-born (Policy Forum for London, 2018). Hence, although no doubt it is a more extreme large urban area, London’s experience suggests that residential rental supply in large urban areas is the most important requirement in a fast-changing society, strongly influenced by surging net immigration. Dublin is on a similar journey.

Any objective overview of the Irish housing system would suggest there is an excess consideration of standard suburban housing for new owner occupation. A rational housing policy would strongly suggest that rentals should account for 40% of all national housing provision – and, because of stronger levels of housing ownership in rural / town locations, it would oblige policy to cater for rentals to make up to 50% of any new supply in large urban areas. Because Irish rental supply equates to 33% of all existing housing (instead of 40%), this suggests there may be an under-provision in excess of 70,000 rental units, mainly in our larger urban areas.

Notwithstanding the market stresses within the rental sector arising from the under-provision of rental accommodation, the imbalance in Irish housing in favour of ownership suggests that some existing households in the ownership sector have a seriously distressed mortgage status because they should have remained in the rental sector (Sibley, 2016). Housing policy imbalance raises prudential risks for the entire economy.

For the last 100 years, housing policy has encouraged and promoted owner occupation for the middle classes, along with new social rental provision for working class families. Together, towards the end of the 20th century, they made up some 90% of all housing occupancy.

Private house rentals, historically the most important housing supplier in urban areas, faded towards insignificance from the start of the 20th century because of legislation controlling rents and a policy priority that encouraged ownership. In essence, private rental has been a policy void for most of the period since.

Rental is not a perfect housing solution. Rent certainty and security of tenure issues will continue to dominate landlord and tenant relations. Of equal importance is the family’s ability to pay rental in retirement, or redundancy.

Nonetheless, private rental is the ‘safety valve’, the ‘go-between’ of a housing system. Notwithstanding that it should be a form of tenure of choice for some households, it is complimentary to social housing, in the event of inadequate supply of social housing or for families awaiting social housing.

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