Removing income supports will have 'disproportionate effect' on renters, ESRI warns

Removing income supports will have 'disproportionate effect' on renters, ESRI warns
The pandemic unemployment crisis has hit sectors such as accommodation and food, where employees are more likely to be renting properties, worst. The ESRI said removing income supports will have a "disproportionate effect" on these people. File Picture.

Any tapering of income supports will have a "disproportionate effect" on those already hardest hit by the public health crisis, a report from the Economic and Social Research Institute (ESRI) has warned.

The pandemic-related unemployment crisis has disproportionately hit sectors such as accommodation and food where the employees are more likely to be renting property.

The report said renters have seen incomes fall to a greater degree and warns this might exacerbate affordability pressures if incomes are slow to rebound.

“The continuation of income supports, and increased uptake of rent supplement, will be of particular importance to help renters during the phase of recovery,” it states.

The report explores the short-term implications of the Covid-19 pandemic on affordability in the rental market and was published under a programme of work between the Department of Housing, Planning and Local Government and the ESRI.

Before the pandemic, one-in-three renters faced considerable pressure but that eased over the period mid-March to mid-June. The “unique and extraordinary” circumstances that people found themselves in because of the public health measures means that it is unlikely affordability pressures worsened over the three months. This is due to the short-term fall in spending on services such as childcare and transport, as well as recreational activities, which outweigh the decline in incomes that were supported by the pandemic unemployment payment and temporary wage subsidy scheme.

One-in-ten households missed rent installments before Covid-19 with long-term pressures likely to worsen for renters 

However, many renters now face longer-term affordability pressures that are likely to worsen as necessary expenditure rebounds quicker than incomes.

It points out that survey data suggests that one-in-ten households missed rental payments before the pandemic but, given the affordability trends, this is unlikely to have risen substantially in the short term.

One clear finding from the study is the data gap for measuring rental arrears. No current, real-time national data is available at present, the report states.

“Addressing this data gap would be a very important step forward, although a practical solution may be extremely problematic given the fragmented nature of the private rental sector." 

The only national indicator of arrears is the Central Statistics Office's Survey on Income and Living Conditions (SILC) and there is a two-year lag between the reporting and the date of measurement.

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