People Before Profit activists in the Rathmines area of Dublin are helping to set up a Dublin Tenants Association. A launch meeting attended by Richard Boyd Barret TD, local councillor, Sonya Stapleton, and housing activist Gerard Maher will take place in Devitt’s Pub (upstairs) in Camden Street on Thursday 19th February at 8.30 pm. It is hoped a movement for rent regulation will spread outwards across the city.
Almost everyone acknowledges that there is a crisis in the rental sector, where one in five people live. Huge increases have brought rents up to a level they were at the height of the boom. It has now become impossible for people on the average wage to live in some parts of cities.
According to a recent report commissioned by the Private Rental Tenancies Board, a single person on the average take home pay will have to spend 55 percent of their income on their rent. This is simply not sustainable.
The soaring rental market also means that landlords will not accept tenants who are on social welfare. Even where these are accepted, landlords often demand an additional ‘under the counter’ payment over and above the rental supplement paid by the state. This has become one of the main factors leading to an increase in homelessness.
Yet the government has done very little to address the problem.
One possible reason is that a staggering 27 percent of TDs are landlords themselves. This means that they may be highly unreceptive to the very idea of rent regulation.
The politicians have failed to institute even minimal changes. The Residential Tenancies (Amendment) Bill 2012, which contains a measure that would prevent deposits being retained by landlords, has yet to be enacted three years after it was first published.
A private members bill drafted by Richard Boyd Barrett TD to amend equality legislation to outlaw landlords discriminating on the grounds of socio-economic status has yet to be heard.
Many other countries have responded to their housing problems by introducing rent regulation. Rent regulation exists in Belgium, Netherlands, Germany, Sweden as well as Ontario and New York. Yet there are no moves to introduce regulation in Ireland.
The politicians are sheltering behind arguments raised in a special report from DKM consultants that was commissioned by the PRTB. This report came out strongly against rent regulation.
However, DKM have a track record in embracing market fundamentalism and their report is based on this approach.
They acknowledge that there has been some ‘market failure’ but advance the standard arguments against rent regulation that were first developed by the gurus of neoliberal economic, Milton Friedman and George Stigler, in 1946. These are that rent regulations discourage investment and so lead to a shortage in supply. Interference in the free market is seen as leading to distortions and these have negative, unintended effect on tenants.
Bizarrely, the author of the DKM report even claims that an increase in rents may be needed as a way of improving supply. She states that, ‘The restriction on deductions and increased tax [including USC and local property taxes] charges may justify increases in gross rents of approximately 20% to 24%, depending on the personal circumstances of a landlord.’
Ireland’s housing crash was caused by de-regulation and an acceptance of market fundamentalist dogma of this sort. It is time to move away from this approach.
It is absurd that rents are rising so fast when 60 percent of Irish workers have experienced a cut in wages and have lost an estimated 15 percent of their income due to increases in PAYE and the Universal Social Charge.
A base line figure for rents needs to be imposed immediately based on a rental mirror. This means that a fixed rent is established based on criteria such as location, access to amenities, or quality of the accommodation. Once this rent is set, increases in rent must be linked to the Consumer Price Index.
The main objection to this policy can be dealt with easily. A fall off in supply will not occur if the state steps in to increase its supply of social housing.
One of the reasons why there is such a crisis is that local authorities have virtually stopped providing social housing. In 2012, for example, a mere 714 extra social housing units were provided in the whole country. Successive governments had claimed that a special provision known as Part V of the Planning and Development Act 2000 – whereby developers were supposed to allocate 20 percent of new stock to social housing- would solve the issue. But, in reality, most developers did not comply with this and instead paid over money to local authorities. This money was then used for other purposes.
We need to combine a policy of rent regulation with an increase in the supply of social housing. In the longer run, this also makes economic sense. Every three years, €1 billion of taxpayers money is handed out to private landlords through the RAS schemes. If there was a change in policy and there was an emergency programme to build social housing that money would come back to the state rather than being squandered in subsidies to landlords.
If you agree and wish to get involved with People Before Profit, text JOIN to 087 2839964
People Before Profit