Rent supplement increase is good news only for landlords

Yesterday’s announcement that rent allowance levels are to be increased has been broadly welcomed.

Welcomed by TDs, welcomed by housing groups, welcomed by the great and good. Surely, with such endorsements, it has to be a good thing. It isn’t?

It is bad policymaking by a weak Government desperately clinging on for dear life.

Increasing rent supplement by up to 30% is short-termism, and another kick for the overstretched taxpayer. I have upmost sympathy for those struggling on the homelessness bill, but increasing rent supplement will do little to address that real crisis.

The Department of Social Protection has repeatedly warned that increasing rent supplement en masse, as announced yesterday, will do nothing to address the causes of the housing crisis, and will simply line the pockets of landlords.

A month ago, this newspaper detailed how a promised 15% increase in rent supplement, at a cost of €55m, would not deliver a single additional unit for those in need of a home.

Not one unit. And this was not contested by Fine Gael.

It was then acknowledged by Housing Minister Simon Coveney and Social Protection Minister Varadkar, and it was accepted, again, by Varadkar, yesterday.

On national radio, stalwart Fine Gael TD, Bernard Durkan, agreed the additional €55m spend on rent supplement would line the pockets of landlords. Durkan conceded that the additional spend would not improve the delivery of homes.

Fine Gael TD, Bernard Durkan

“Not one is the answer. Increasing rent supplement is not going to deliver one additional unit. Not one extra house will it deliver. It is merely bringing up the income of whoever is renting the house to an acceptable market level”.

So, if not one additional home is to be made available by increasing the levels by 15%, surely it makes no sense to increase it.

In fairness, in the teeth of much opposition, then Labour leader Joan Burton, her junior minister Kevin Humphreys, and deputy leader Alan Kelly, resisted the temptation to increase rent supplements, because they rightly felt this would primarily benefit landlords.

Mr Humphreys said: “Fine Gael have agreed with Fianna Fáil to increase the rent supplement by 15%, but how many additional units will that deliver? Barely none. To raise the rent supplement, and Fine Gael have accepted it will not create one extra single unit, it will cost €55.5m of taxpayers’ money. How does that make any sense?”

Kevin Humphreys

So why is it being increased? It is bad policy being progressed by a Government capitulating to the whims of opposition TDs and Independent ministers in order to keep the show on the road. And there was no shortage of people seeking to claim credit for this folly.

Fine Gael senators cheered it, Independent TD Boxer Moran claimed it as a victory for the Independent Alliance, as did Fianna Fáil’s Willie O’Dea, who said it was a key commitment wrung from the hands of Michael Noonan in the negotiations for government.

So, what we have is a bad policy, which gives the illusion of the State coming to the rescue of those in trouble.

The rent supplement has been, for many, the floor of the market at which the poorest people can enter.

Independent TD Boxer Moran

All increasing the rent supplement does is increase the entry point of the market.

The willingness of the two aspirant Fine Gael leaders — Varadkar and Coveney — to increase the rent supplement by such amounts leads one to believe that they know this Government won’t last.

It is as if they know they will be around for just one Budget, before they have to go back to the country in a general election.