Sarah Hamill: Change is coming for the private rental market
A protester during this week's eviction ban protest at Parnell Place in Cork City. The Government seem adamant that the ban will send soon. Picture: Cian O'Regan.
When is an eviction ban not an eviction ban?
Although the Government has made it clear that the ban on no-fault evictions is ending, all hope may not be lost for those affected. A close reading of the latest proposals suggests that, provided certain requirements are met, some tenants may yet be spared from a no-fault eviction.
The Government’s proposals were announced in response to Sinn Féin’s effort to continue the no-fault eviction ban. The proposals outline a range of initiatives aimed at reducing homelessness and preventing eviction.
While they fall far short of an eviction ban, the proposals target one of the main reasons for eviction: namely, that the landlord is selling.
One of the key issues with private rented accommodation is the number of landlords leaving the sector.
The issue is particularly acute among small-scale landlords who are increasingly selling up and evicting their tenants in the process.
Not surprisingly, the proposals announced last week contain several measures aimed at protecting a tenant’s home when their landlord is selling. The gist of these proposals is that tenants may not always be evicted where their landlord is selling.
Instead, what happens when the landlord is selling will depend on the tenant’s own circumstances. Tenants will be granted the right of first refusal and so may, if they can afford to, buy their current home. Supports under the First Home Scheme and an enhanced Local Authority Home loan scheme will be extended to support at least some purchases under first refusal.
If the tenant is in receipt of the Housing Assistant Payment (HAP) or other housing welfare payment, the local authority may be able to acquire the property and become the tenant’s landlord.
In addition, where a landlord is selling and the tenant is at risk of homelessness but not in receipt of any social housing supports, a housing provider will be able to use the tenant’s right of first refusal and then keep the tenant in situ via a cost rental scheme.
The result of these proposals is that the Government is significantly weakening one ground of no-fault eviction. All of which raises the question as to why the Government does not simply abolish a landlord’s intention to sell as a ground for eviction?
This ground of eviction is already limited for those landlords who are selling 10 or more properties in the same development, so why not simplify the law and remove it altogether?
In its place, there could be a procedure for landlords to apply to the Residential Tenancies Board for an exemption if circumstances warrant it.
Such a procedure would fit with the Government’s plans to further enhance the board’s role. It would also be essential for keeping further limits on a landlord’s recovery of possession constitutional by allowing for a balancing of landlord and tenant rights.
To be clear, the latest proposals to keep tenants housed are welcome.
The key question is whether the schemes will receive sufficient funding to be workable. That being said, the Government’s commitment to these schemes to keep tenants in their homes is evidenced by the fact they will begin operating even prior to the relevant legislation being passed.
By operating the schemes on a temporary, administrative basis the Government removes incentives for landlords to sell prior to the legislation coming into force. However, these schemes may yet have other unintended consequences.
It is right that Government should prioritise recipients of HAP and other social housing payments in the planned social housing acquisition scheme, but this could disincentivise the provision of affordable rented dwellings in the private sector.
In effect, it seems these proposals will ultimately result in the private rented sector no longer being used to provide long-term housing to social welfare recipients. Indeed, when coupled with the right of first refusal, it might be asked whether the private rented sector will provide long-term accommodation for anyone, or whether all long-term tenancies will ultimately become social, cost-rental, or owner-occupied units.
The Government is not, however, giving up on the private rented sector. The Government’s latest proposals promise further rights for tenants and additional tax measures for residential landlords.
As welcome as such measures are, the bigger issue is that residential properties are not always a good investment.
It is no surprise that so many landlords are selling at a time when property prices are at or near the old boom levels. Consequently, investing in residential property at this moment in time might seem like investing at the peak of the market.
Doubtless, the private rented sector will survive in some form, but it is hard to avoid the conclusion that there is a change underway. That change is a move towards increased social housing and cost-rental dwellings, both of which should offer more security and affordability for tenants.
Such a change is also a tacit admission that the private rented sector cannot offer secure, affordable housing. There are several thousand people facing eviction who could have told us that already. At least the Government finally seems to be listening to them.
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