Submission 2001

Submission to Working Group on NAPS and Housing: Review on Housing

1. Introduction

Comhairle has responsibility for the provision of information, advice and advocacy services so as to ensure that individuals have access to accurate, comprehensive and clear information relating to social services. It also has the remit of providing information on the effectiveness of current social policy and services and to highlight issues which are of concern to users of those services. Comhairle promotes and supports the development of Citizens Information Centres (CICs) around the country (there are currently some 85 such centres). These CICs provide feedback to Comhairle on the experience of people who seek information about rights and entitlements but for whom the services and supports available are inadequate or inappropriate. This Submission draws on this feedback to identify key issues.

2. Housing situation in Ireland

Housing policies and benefits have a lot of potential to reduce social exclusion and to improve the position of the worst-off in society. Housing costs are in most cases the largest single component in people's expenses, and high rent levels hit those on low incomes hardest: provision of accommodation and help in meeting accommodation costs is in many ways a key to reducing poverty and improving living standards. Help in maintaining accommodation in good repair is also important as damp and cold dwellings are the cause of many health complaints, particularly among older people. Ensuring that adequate, reasonably priced accommodation is within everybody's reach is one of the most effective ways of combating poverty, ill-health and social exclusion, and should be given high priority in government policies.

There is a serious housing crisis developing, particularly in Dublin, as rental and house prices are increasing. Over the medium and long term, the number of people living in rented accommodation in Ireland is set to increase considerably. There are two main reasons for this. Firstly, more and more people will be unable to afford a house or an apartment of their own. Secondly, many people will prefer rented accommodation for at least some part of their lives as they want to remain geographically mobile and flexible in organising their working lives. Living in rented accommodation does not necessarily have any negative social consequences. For instance, living in rented accommodation is typical in many continental European countries, and many people on average and even high incomes never own a house. In the Irish context, however, given that the attachment to home ownership is very strong, the majority of the people who rent in the long term are likely to be those on low incomes.

3. Addressing issues in the private rental sector

Evidence from CICs indicates that low (or even average) income individuals and families find it difficult to find accommodation of reasonable quality and price in the private rental sector. In many parts of the country, there is now a shortage of affordable, good-quality, long-term rented accommodation. As a result, many vulnerable groups have to settle for sub-standard rented accommodation because they cannot get local authority housing and are unable to afford good quality private rented accommodation. Moreover, such sub-standard accommodation is frequently over-priced, leading to financial difficulties and in some cases over-indebtedness among tenants.

Difficulties encountered by tenants

CICs around the country report that people in the private rented sector experience a range of problems and difficulties. These relate in the main to (a) inadequacies in both existing legislation and its implementation and ( b) problems with assistance under the rent supplementation scheme. Under existing legislation tenants have in theory a number of rights in relation to security of tenure, payment of rent and standards of accommodation. However, a number of problems are reported by tenants on an ongoing basis:

1. There is clear evidence of non-compliance by landlords of regulations in respect of minimum standards, rent and registration. Repairs and maintenance work are often not carried out. Many tenants do not dare to complain even in the case of extreme violations of their rights due to fear of eviction.
   
2. Notice to quit is often not given in writing and does not comply with criteria set out in legislation. It is frequently the case that short verbal notice is given following a dispute between landlord and tenant.
   
3. There is evidence of deposits being withheld by landlords for reasons other than those laid down in legislation, e.g. for general cleaning of a flat after the departure of a tenant.
   
4. There are issues about increases in rent by landlords and in what circumstances landlords are entitled to raise rents. The provision of rent books by landlords, as required by legislation, does not always occur. There is evidence of tenants having to purchase rent books themselves and give them to landlords as distinct from landlords providing the rent book in accordance with the legislation.
   
5. There is clear evidence that there is a reluctance on the part of some landlords to participate in the rent supplement scheme. There are situations where tenants cannot claim a rent allowance because he or she cannot get the landlord to sign the relevant form (often because the landlord wants to avoid paying tax). This can mean in some instances that a tenant cannot afford to pay the rent.
   
6. There are complaints by citizens about breach of regulations by landlords:
   • evicting tenants illegally;
   • entering the property without notice;
   • selling property while tenant still has a valid lease;
   • refusing to return deposits.
     
7. There appears to be a significant ‘grey area'in respect of the treatment by statutory bodies (local authorities and health boards) of tenants who are evicted or threatened with eviction. There is some evidence to suggest that on occasions there is an assumption that it is the tenant's behaviour that has brought about the eviction when this is not the case. There is also a practice in some areas of not processing any claims for additional assistance until the tenant is actually evicted as distinct from having been given notice of termination of tenancy.
   
8. In some areas there is a practice of health boards paying rent supplement (and deposits) directly to the landlord. While this may be desirable in some respects, a problem arises when the tenant wants to move and the landlord refuses to return the deposit. There appears to be no mechanism for health boards or tenants in such instances securing the return of the deposit. This can be to the detriment of the tenant as the health board may refuse to pay a deposit a second time.
   

Subsidising people in private rented accommodation

Given that the production of local authority housing is obviously not keeping up with demand, it is important to provide additional help for people to acquire accommodation on the private rental market. This help should be in the form of reformed rent supplement that should be made a free-standing housing benefit. Subsidising housing costs in the private rental market must obviously be accompanied by reinforcement of the standards of private rented accommodation. More comprehensive monitoring is necessary to ensure that the rented property is safe, warm and in good decorative order and remains so.

Rent relief in taxation

Rent relief in taxation for people in private rented accommodation should be increased. The current rent relief is very small, and is not proportionate to the very high rent levels at the moment.

Landlords' attitudes towards rent supplement tenants

The private rented sector has become a form of social housing through the operation of the rent supplement scheme. Many landlords are, however, refusing to rent their flats and houses to people who claim rent supplement. There is obviously not much that the government can do about the attitudes of private landlords. It should be possible, however, to furnish claimants of rent supplement with letters firmly stating that rent supplement has been granted. This may help to inspire the confidence of landlords. Information should be available in a manner which enables people who need rent allowance to have a clear idea of what they are entitled to at the outset, i.e. what the maximum reasonable rent is, how much they will get per month etc.

Rental Deposits¹

More help with paying deposits is also needed as most landlords will not rent a house/flat without a deposit which usually amounts to one month's rent (a considerable sum of money for low-income tenants). While deposits are usually available to those applying for them for the first time, tenants whose former landlords refuse to return deposits sometimes experience difficulties in obtaining a second deposit. It must not be assumed that the fault in these cases always lies with the tenant, and the possibility that the landlord is at fault should always be taken into consideration.

Rent supplement and work incentives

In recent years, a number of reforms in the rent supplement scheme have meant that certain groups of people entering into employment or training schemes are allowed to retain their rent supplement for a period of time (recipients of/participants in: Back to Work Allowance (BTWA), Revenue Job Assist, Jobs Initiative, among others). For many recipients, however, rent allowance is reduced or cut off as income from work increases², which in many cases creates a disincentive to take up employmen3. This is a particularly relevant issue for lone parents considering taking up employment: if virtually all the extra income they gain through work goes towards paying rent (previously covered by rent allowance), the incentive to work is reduced.

In order to remedy this situation, more help must be offered to low-income tenants in private rented accommodation. The income limits and conditions attached to rent supplement should operate in a way which ensures that the unemployment trap is eliminated. Rent allowance should be reduced gradually as income increases (but the reduction in rent allowance should, up to a certain income ceiling, be smaller than the increase in income), so that transfer from unemployment (or part-time employment) to employment (or full-time employment/more hours worked) always results in considerably higher income.

The situation is particularly bad for people on Community Employment projects whose rent allowance is reduced by 25 per cent during the first year, and by 25 per cent in the second and subsequent years. This is very unfair and creates a powerful work disincentive as the difference between payment for CE and unemployment assistance is not very big. The following Case Example illustrates the point:

Furthermore, the rent allowance for CE participants is not increased during the period in a CE scheme even if there is a rent increase. This has led in some instances to CE participants having to move into emergency accommodation⁵ or even becoming homeless. Such obvious and strong disincentives to train/work should be immediately eliminated by calculating the rent allowance on the basis of actual income and rent, and by making sure that work/training in no case leads to lower income than non-participation in the labour market/training. It is particularly inappropriate that the rent supplement is progressively reduced as the number of years on CE increases (while income from CE remains static!). There should be a clear financial incentive for people to participate in CE projects. The following case illustrates the disincentives and reduction in income created by reduction of rent allowance for people participating in Community Employment projects⁶:

M. came to Ireland with his wife and 4 children 4 years ago and found a 2-bedroom apartment. Initially the rent was £550 per month and M. paid £ 6 per week from his supplementary welfare allowance while the balance was paid as rent allowance.

As soon as M. received asylum status he enrolled for a 6 month FAS course. During the course he continued to receive Rent Allowance as detailed above. In April 2001 M. joined a Community Employment scheme. When he informed his Community Welfare Officer of this, his Rent Allowance was reduced by 25%. Soon after this, his landlord increased the rent to £700 per month. On asking his CWO for advice, M. was told that his Rent Allowance could not be increased to cover a rent increase that had occurred after he had joined the CE scheme. As M. was unable to pay the increased rent, the family had to move to emergency accommodation, a small one-bedroom apartment in a hostel. With rising rents and a further cut of 25 % in the rent allowance (after one year's participation in CE), the family stands little chance of finding another flat or house on the private rental market.

The above dilemma is particularly acute for families living in areas where rents are high: in addition to financing a larger share of their (increasing) accommodation costs, they often need to pay for child care in order to be able to work or train. Lone parents (and other people) living in local authority housing are in a stronger position to take up employment than those living in private rented accommodation, as the rent they have to pay does not increase dramatically.

The design of the tapering of rent supplement should be determined by taking into account the family size and income. For parents on CE with young children, there should be less tapering of the rent supplement due to the lower income level of CE participants as compared to participants in full-time programmes (such as BTWA).

Criteria for rent supplement

Due to housing shortages and limited budgets, some groups experience difficulties in getting rent supplement. Young adults in particular are often not granted assistance on the grounds that they can stay in the parental home⁷. Even young single parents are reported as frequently being denied rent supplement because it is assumed that they should stay at the parents' home. The rules of rent supplement (housing benefit) should not assume that people in a certain age category are less in need of assistance than others: the criteria for rent supplement should focus primarily on the applicant's actual circumstances (income, number of children etc.). Young persons should not be denied rent supplement and other social welfare benefits on the grounds that they could have stayed at home. In many cases staying at home was not an option for these young people due to abusive parents, alcohol problems at home etc.

Reasonable Rent

Rent supplement is paid only when the rent paid by the applicant is defined as ‘reasonable'. The reasonable rent levels that are set by the health boards have not kept pace with rent increases. It is increasingly difficult to find accommodation on the rental market that fits the definition of reasonably priced. Also, while the same reasonable rent criteria applies in the whole health board area, rents in parts of the area (e.g. in Dublin and urban centres) may be considerably higher than the reasonable level. Arrangements should be put in place for regular monitoring of rent levels, and adjustment of reasonable rent criteria in accordance with fluctuating rents. Within an area, allowance should be made for the fact that rented accommodation is much more expensive in some ‘pockets' of the area. For instance, rents in parts of Co. Meath and Co. Louth that are within commuting distance of Dublin are higher than in other parts of the North Eastern Health Board area: despite this, the same reasonable rent criteria is applied in the whole health board area.

Legislation to protect tenants in private sector accommodation

Legislation for the private rented sector should be reformed as a matter of urgency in order to improve tenants' rights. Given that there are serious housing shortages in many areas, tenants tend to be reluctant to enforce their rights due to the fear of notice to quit. Help and advice must be available to tenants who have a grievance against their landlord, and all complaints must be addressed by local authorities. The sanctions for landlords who breach tenants' rights should be severe enough to deter abuse of tenants' rights. The security of tenure should be related to the length of time spent in rented accommodation: the longer the tenant has stayed in the property, the longer the minimum notice should be.

The Minister for Housing and Urban Renewal announced in January of this year that government proposals for major reform in the private rented residential sector are in preparation⁸. However, to date these proposals have not been finalised. The Government has in principle accepted most of the recommendations of the Commission on the Private Rented Residential Sector. These include establishing a Private Residential Tenancies Board to deal with disputes between landlords and tenants; legislation that grants a tenant, whose tenancy has not been terminated in the first 6 months, a right to continue in occupation for the remainder of a 4-year period unless the landlord needs to recover possession for specified reasons; extending the notice to quit requirement to a maximum of 16 weeks. Introduction of these measures is urgent in view of the current housing situation: the reform plans should be finalised and passed in the Dail as a matter of urgency.

4. Quality and cost of local authority accommodation

In addition to helping people to afford private rented accommodation, the quality of local authority accommodation has to be guaranteed. While most local authority accommodation is built to a high standard, it is necessary to ensure that maintenance and repair work is promptly carried out when problems emerge. Comhairle has received feedback from Citizens' Information Centres about cases where local authority tenants have ended up carrying out repair work at their own cost due to lack of response from the local authority. We have also received records of cases where repair work has been carried out by the local authority, but it has been inadequate or of poor quality. CICs have reported to Comhairle some instances of people receiving delayed or inappropriate responses to requests for maintenance and repairs. This has obvious negative implications for their health and wellbeing. The following case examples from CICs illustrate the problems in this area:

Local authority workers damaged a house over 15 months ago when upgrading the water system in the area. The CIC has been working/advocating on behalf of the client over the past 6 months to get the Local Authority to assess the damage and carry out the repairs (or compensate the client). Letters from the CIC are not answered and promises made are not kept.

A woman was threatened with eviction because of rental arrears which she told the CIC in question were due to having to pay back a loan which she got from a moneylender to carry out repairs which the Local Authority in question had failed to do for 5 years.

Local authority rents

Local authority rents tend to be increased as social welfare benefits increase. This means that benefits stay the same in real terms. In order to guarantee an increase in the standard of living of benefit recipients, local authorities should make sure that the bulk of benefit increases is not absorbed by rent increases.

5. House repair grants

If repairs that are needed due, for example, to damp or draughty conditions, are delayed, serious health consequences can follow for the inhabitants. Feedback from CICs throughout the country to Comhairle indicate that in many instances housing repair grants from Health Boards do not meet the demand for such grants from older people living in houses that need repairs. The Comptroller and Auditor General's review of Special Housing Aid for the Elderly⁹ has recently concluded that the scheme represents value for money as it enables many older people to remain at home (instead of moving into more expensive residential care). The review also acknowledged that funding available for the scheme is inadequate and should be increased. Action should be taken as soon as possible to allocate more money to Health Boards to enable them to grant more assistance for housing repairs. The same applies to the Essential Repairs Grant allocated by local authorities.

6. Mortgage interest supplement

The qualifying condition for mortgage supplement should be based on money earned, not on the number of hours worked (current limit is 30 hours per week). For instance, a person working for 31 hours per week at five pounds per hour is not eligible (due to number of hours worked) but someone working 29 hours a week at ten pounds an hour may be eligible (despite having a higher income).

7. Key recommendations

• The rent supplement in the private rented sector should be based on an assessment of housing needs, income, means and family size: it should not be affected by the applicant's age or assumptions about their family circumstances (e.g. it should not be assumed that young persons should always stay at their parental home.
  
• The level of housing benefit/rent assistance should be tapered i.e. grow/diminish in response to changes in the recipient's circumstances (e.g. unemployment/work, family size, two-parent/single parent household etc.). Working/training should always result in a considerably higher income level than ‘passive' receipt of benefits: the retention and only gradual tapering of secondary benefits such as rent allowance plays a key role in this.
  
• While rent tax relief would not be of help for people on the very lowest incomes, it does help low and average income households living in rented accommodation. The level of rent tax relief should be increased to reflect the rising private sector rents.
  
• Tenants' rights, and security of tenure in particular, need to be improved as a matter of urgency. This should be done through legislation clearly stating tenants' and landlords' rights and obligations, and adequate resources should be devoted to monitoring compliance with the legislation.
  
• The following administrative issues relating to rent supplementation need to be addressed in the context of transferring responsibility for rent assistance from health boards to local authorities:
  • Deposits should be more easily available.
    
  • The appeals process should be more transparent and speedy, and information about the appeals system needs to be made more readily available.
    
  • The practices in different health board areas should be monitored in order to pinpoint differences and to make practices more uniform and therefore fairer.
    
  • A mechanism should be put in place for pursuing landlords who refuse to return a deposit to the tenant for no valid reason, particularly as the failure to return the deposit affects the tenant's chances of being given another deposit by the health board.
    
• Increased resources should be provided to health boards under the Special Housing Aid for the Elderly Programme. Additional resources should also be provided to local authorities under the Essential Repairs Scheme. Local authorities should ensure that there is efficient and adequate maintenance of local authority rented accommodation.

Footnotes