More than half of households that rent their homes receive State support

More than half of households that rent their homes receive State support

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More than half of households that rent their homes receive some form of State support, a report reveals

The ESRI report, published on Wednesday, shows that almost 300,000 (293,673) households received support for their housing costs in 2020, up from 134,973 in 1994.

This works out at 16% of households overall and 54% of renters.

The timeframe has seen a "shift away from the direct provision of support — through local authority and approved housing body owned accommodation" — towards indirect subsidisation of housing costs in the private rental sector.

A combination of housing assistance payment (Hap), rental accommodation scheme (Ras) and rent supplement are used to assist one in three supported renters today, compared to one in five in the early 1990s.

The report finds that both direct and indirect supports do a "huge amount" to improve affordability for the households receiving them.

The authors estimate the median rent-to-income ratio is 0.147 for supported renters, compared to 0.230 for unsupported renters. This remains intact even after controlling for dwelling type, location, and quality.

However, the report says that there are questions about how well targeted these housing supports are.

It says that many low-income renters receive no support for their housing costs and face high rent-to-income ratios, while almost one in five of supported renters are in the top half of the income distribution.

Restrictive qualification criteria

It adds that qualification criteria for housing supports have become more restrictive in recent years.

"We estimate that the share of households eligible to apply to their local authority for support with housing costs fell from 46.8% to 33.9% between 2011 and 2019, largely because of a freeze to most income limits."

This means that the rent limits for Hap cover a very small share of properties, the report says, particularly in cities for single adults. 

Across Dublin, only 6% of one-bedroom tenancies registered in 2020 came under the maximum rent allowed for single adults claiming Hap, while only seven out of 31 local authorities had at least a quarter of one-bedroom tenancies below the limits.

"This is in part because rents for new tenancies increased by 24% between 2017 — when these rent limits were last revised — and 2020, but it also reflects differences in coverage across counties when introduced.

"There is substantial variation across local authorities in the level of support provided to otherwise identical households: more than nine in 10 supported renters have their rent contributions — and so their level of support — determined by their local authority’s differential rent scheme.

These vary hugely in their design across local authorities, leading otherwise identical households to receive different levels of support.

For example, a lone parent with two children earning €25,000 per year would pay a contribution of just €226 per month in South Dublin County Council, €313 per month in Donegal but €450 per month in Meath.

Barra Roantree, one of the authors of the report, said that the report raises questions about how well targeted these supports are, while Michael Doolan said "the anomalies created by a highly localised system of differential rents are likely to affect a growing number of households over the coming years".

Rachel Slaymaker, another author, said: “Our report highlights the chronic undersupply of affordable rental accommodation in many areas, particularly for low-income single adults.

"Addressing this is likely to require sustained investment in and expansion of the public housing stock for rent: something that will entail more than just increasing expenditure.”

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