Social housing supports 'go into the pockets of private landlords', think tank warns

TASC has called for a doubling of capital expenditure and a doubling of public housing output to tackle the housing crisis.

Robert Sweeney, senior economic and policy analyst with TASC, said because of a demand for rental properties landlords are now able to "demand" and "extract" a high level of top-up rent.

The Government's current approach to social housing simply transfers money into the pockets of private landlords, a leading social and economic think tank has warned.

TASC is now calling for a doubling of capital expenditure and a doubling of public housing output to tackle the housing crisis.

Addressing the Public Accounts Committee (PAC) Robert Sweeney, senior economic and policy analyst with TASC, said there has been a "massive increase" in the amount spent on supporting people in private rented accommodation in recent years.

"For instance, in 2013, current expenditure was over double capital expenditure. Now, that has improved in recent years. So in 2019, current expenditure accounted for about 40% of total housing expenditure.

"But this is different to what we had, say in 2005, 2006, where current expenditure was less than half of capital expenditure and obviously, it's much more efficient from a public finance perspective, if you invest in social housing, which is what capital expenditure is, rather than pay all of these transfers, which essentially go into the pockets of private landlords," he told PAC.

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Asked about the €1bn now spent on rents and other such measures each year, Mr Sweeney said the latest data shows that it costs the State €450 more a month to support tenancies when compared to direct social housing builds.

He said the overreliance on putting people on the social housing list into private accommodation can be traced back as far as the financial crash when almost all building stopped.

"In hindsight, we definitely scaled back too much in terms of our capital expenditure, and not least, because when you wait for the economy to recover, it's going to be more expensive to build houses in a booming economy," he said.

He said because of a demand for rental properties landlords are now able to "demand" and "extract" a high level of top-up rent.

The Government has said that 28% of people receiving rent assistance also pay a top-up to private landlords, however, housing organisation Threshold has put this figure at as high as 48%.

"I would say there is insufficient supply relative to demand that is causing distortion and the ability of landlords to demand top-ups because they wouldn't demand it if they weren't able to get higher rent or equivalent rent elsewhere."