The housing charity Threshold has warned that falling rents should not be used as an excuse to reduce the level of Rent Supplement paid to social welfare recipients, particularly in city-centre areas where rent costs remain high.
Threshold was responding to views expressed by a number of politicians this week – including the Minister for Social and Family Affairs – that the payment should be reviewed in light of falling rents.
According to Threshold’s Director, Bob Jordan, “The fact that rents are falling is welcome news. With more people falling on hard times, it is critical that rents are affordable. However, any reduction in the current level of Rent Supplement – particularly in high-demand areas within cities – could prove hugely
damaging by pushing more people to the margins of the rental market, and potentially increasing the levels of homelessness.”
As it stands, single people requiring accommodation in high-demand areas – such as Dublin city centre and surrounding districts – are obliged to secure accommodation with a weekly rent of no more than €130 if they are to qualify for Rent Supplement.
“Even in a climate of falling rents, reasonable accommodation at this price level is difficult to find, particularly in Dublin city centre and surrounding districts. In our experience, one in every bedsit five tenants are forced to pay their landlord a weekly ‘top-up’ from their welfare payment. Any reduction in their Rent Supplement
would require them to pay an even bigger top-up, and could push them out onto the streets,” said Bob Jordan.
A survey conducted by Threshold’s Access Housing Unit earlier this month shows that rents in the lower-end of the rental market only fell by 7 per cent, compared with a 12 per cent drop recorded by a property website.
Threshold’s survey – which examined 172 single bedsit units in Dublin – also showed that only 23 per cent of rents fell at or below the rent supplement cap of €130 per week. The majority of bedsit accommodation was rented out to tenants at €150 per week. Rent levels for bedsits in some parts of Dublin were as high as €169 per week.
“Historically, there has been a lag between the market rate for bedsit properties within high-demand urban areas and the level of Rent Supplement paid to tenants. Our statistics indicate that this lag is persisting, even with an overall decrease in rents.
“There is a real danger that – in light of statistics indicating an overall reduction in rents – Rent Supplement will be reduced as a rash, cost-saving measure. Any savings made in rent supplement as a result of falling rents should be redirected to support those who still find it difficult to meet rent costs in urban areas. Indeed, we would like to see some greater discretion awarded to Community Welfare Officers so that they can offer greater levels of support to people who are on the margins of the rental market.
“As it stands, there is not enough low-cost rental accommodation in urban areas to service current needs and, with increased unemployment, this problem is set to grow. Reducing the level of Rent Supplement would only serve to aggravate the problem.
“Before rushing to cut back on Rent Supplement, Threshold would strongly urge the Minister for Social and Family Affairs to undertake a comprehensive analysis of rent costs across all accommodation types, with particular emphasis on the accommodation available to those on low incomes. Directing cuts at some of the most vulnerable groups will not assist in our economic recovery; rather, it will reinforce poverty and disadvantage,” added Bob Jordan.