Threshold calls for allocations in Budget to avoid rent arrears crisis

General News

Charity launches its Pre-Budget Submission 2021

Threshold seeks:

  • A €20 million rent arrears fund
  • More spending on homeless prevention
  • The ringfencing of 20% of Carbon Tax revenue for energy efficiency upgrades of rental properties
  • The State to fund and build 75,000 homes over five years
  • The reintroduction of the moratoriums on evictions and rent increases
  • A Referendum on the right to housing

National housing charity Threshold is calling for a €20 million rent arrears fund to be included in the forthcoming Budget to help tenants facing a rent crisis as a result of the Covid-19 pandemic.

Threshold’s Pre-Budget Submission published today proposes a number of urgent measures to tackle issues in the private rented sector and in the wider housing system. As well as seeking specific Budget allocations, the charity is asking for amendments to policy and legislation.

“The protections given to tenants during the Covid-19 crisis have had a significant impact in reducing homelessness,” says John-Mark McCafferty, CEO of Threshold. “However there is a major risk of long-term indebtedness among tenants and ultimately of evictions, and this is causing great uncertainty and fear.

Rent Arrears

“The job losses experienced on foot of the Covid-19 restrictions have had a disproportionate impact on private renters,” says McCafferty. “Private renters who lost their jobs are likely to have accrued arrears putting them at risk of homelessness.

“The loss of homes has only been staved off by the moratorium on evictions, which ran from March to August. The Residential Tenancies and Valuation Act 2020, which commenced in August, will delay evictions for some until January 2021. While this is welcome, without practical financial supports, private renters in arrears face eviction when the protection ceases.”

The €20 million fund Threshold is seeking would facilitate measures such as additional and enhanced financial supports for renters; long-term, low-interest, State-supported loans; and debt forgiveness schemes where necessary.

“Putting in place measures to allow tenants deal with their debt now will be more effective and less costly to the State than allowing tenants to be evicted for rent arrears and risk ending up in homeless services, whether now or in 2021,” says McCafferty.

Prevention Measures

Threshold says there is an imbalance in how Government funds homeless services and homeless prevention. The budgetary allocation for homeless services more than doubled between 2016 and 2020 from €70 million to €166 million. In the same period the proportion allocated to homeless prevention actually decreased in relative terms: it accounted for 7% of the homeless expenditure in 2016, but only 5% in 2019.

“Prevention is cheaper than emergency homeless accommodation, avoids unnecessary human misery and is the morally appropriate response to homelessness,” says McCafferty.

Carbon Tax Revenue

Threshold is also asking that 20% of the Carbon Tax revenue allocated to residential energy efficiency upgrades be ringfenced for upgrades to the energy efficiency of private rental properties.

“Carbon emissions from the residential sector made up 24% of Ireland’s overall CO2 emissions in 2018, second only to the transport sector,” says Ann-Marie O’Reilly, Policy Officer at Threshold. “Poor energy efficiency leads to energy poverty and negative health outcomes. Considering the consistently low BER ratings across private rented properties, it is vital that targeted action is taken to improve energy efficiency in the private rented sector.”

Building Activity

Threshold is also calling on Government to provide the necessary resources for Local Authorities and Approved Housing Bodies to build 75,000 homes over the next five years.

“The best way to stabilise Ireland’s housing sector is through State housebuilding, as committed to in the Programme for Government,” says O’Reilly. “The share of the national housing stock held by Local Authorities and Approved Housing Bodies must increase to 25% of the total housing stock by 2040. While the Programme for Government commits to building 50,000 homes over the next five years, Threshold is asking Government to set the more ambitious target of 75,000 homes over five years.”

Policy asks

Alongside Threshold’s asks for the allocation of funding in the upcoming Budget, its submission outlines a number of policy-related recommendations to further improve the private rented sector. These are as follows:

  • Reintroduce the moratorium on evictions
    The moratorium on evictions, introduced in March, had a positive impact on those experiencing homelessness, those at risk of homelessness, all people renting and worrying about losing their home and on the public purse. There was a 23% drop in family homelessness and a 21% drop in child homelessness between March and July 2020. According to Threshold, there is a need to extend the moratorium on evictions for at least six months, with a view to a further six-month extension based on the Covid-19 restrictive measures in place.
  • Reintroduce the moratorium on rent increases
    As the country enters an economic recession, Threshold proposes a further freeze on rent increases for an initial 12-month period. As of the first week of September 2020, over 200,000 people remained in receipt of the Pandemic Unemployment Payment and 360,000 were supported by the Temporary Wage Subsidy Scheme. Analysis by the ESRI has illustrated that a large proportion of those who lost jobs on foot of the Covid-19 restrictions are living in the private rented sector.
  • Permanently retain the flexibility introduced into the Rent Supplement and Housing Assistance Payment (HAP) schemes in response to the Covid-19 pandemic
    Since the onset of the Covid-19 pandemic the Department of Employment Affairs and Social Protection has made payments under the Rent Supplement scheme swiftly, ensuring they were sufficient to cover rents and sustain tenancies. Similar flexibility, as well as the application of greater understanding in the treatment of arrears, was shown for HAP tenants who lost their income because of Covid-19 restrictions. This flexibility must be made a permanent feature of both systems: this will prevent the accrual of rent arrears and in turn, the loss of homes.
  • Hold a Referendum on the Right to Housing
    This should be a referendum on the right to housing to underpin and solidify the protection of and respect for the homes of private renters and to ensure that all barriers to the development of homes are removed. The Constitution cannot be a block to resolving the homeless and housing crisis.
  • Avoid tenancy termination on grounds of sale
    Notice of termination on the grounds of sale of the property by the landlord is the most common reason tenants are evicted from their homes, as it is common practice in Ireland to sell with vacant possession. The Government must investigate measures to limit notices of termination on the grounds of sale.
  • Repurpose Student Accommodation
    Due to Covid-19 there is an expectation that many Purpose-Built Student Accommodation units will not be filled, as many students will attend classes virtually. The Government should repurpose unused Purpose-Built Student Accommodation as housing for key workers.

A copy of our Pre-Budget submission is available here

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