Means-tested mortgages - State failing on social housing

SOCIAL Affairs Minister Seamus Brennan has asked officials of his department to examine ways to help low earners get a foot on the property ladder, outside the social and affordable housing schemes run by the Department of the Environment.

He is currently considering the introduction of means-tested mortgage support to help low-income families purchase their own homes in the private property market.

The minister says, for instance, that he has asked his department whether it can come up with some scheme to help young people out by contributing to their mortgages. But he was at pains to stress that he does not want to start a new major scheme, because half the people in the country would like support with their mortgages.

Any new scheme introduced would have to be means-tested, he emphasised. We have major housing problems and the minister knows that he has to do something, but he clearly does not know what to do.

His idea is “only a concept”, he said.

In the time-honoured political tradition, he has passed the buck to the civil servants and asked them to come up with a report in the next few months.

There has been an increase of almost 41% in the number of eligible tenants needing Government help in supplementing the cost of their accommodation between 2000 and 2005.

The actual cost of supplementing that accommodation jumped by 144%.

There are more than 60,000 tenants receiving supplementary allowances to help pay their rents. This figure is up from 42,683 five years earlier, but the cost of this has jumped from €151 million to €368.5m, which means that the cost rose at three-and-a-half times the rate of the number receiving assistance.

The report of Comptroller and Auditor General John Purcell into the escalating expenditure of the Department of Family Affairs is expected to conclude that the scheme has drifted far from its initial aim, which was to provide a stop-gap measure to help private renters. It has had the impact, instead, of fuelling the property inflation for the benefit of landlords, while it has done nothing to meet the State’s responsibility to provide permanent social and affordable housing.

Mr Brennan has expressed amazement that tenants on rent supplement account for 40% of the private rented market. The State has become too involved in this rental market.

As a result, it is essentially propping up the rented sector, mainly for the benefit of landlords, instead of providing permanent social housing for tenants in need.

If rents were not being so widely supplemented, market prices would inevitably be forced lower. Ultimately, this does not help the needy near as much as the greedy.

Despite our current affluence, the State has been failing dismally in its responsibility to provide social and affordable housing. Some 6,500 social housing units were provided last year, instead of the minimum of 10,000 required.

When we had much less money, the State did a lot better. The aim now should be to help people to help themselves, by helping them onto the property ladder, rather than helping people to facilitate those already on the upper rungs of that ladder.