Dr. Robert Sweeney:

I am not sure they have a role in driving up rental prices. Ultimately, the increase in rental prices has been driven by an underlying lack of supply in the market. Obviously, by availing of HAP, the amount of money that low-income households are able to spend increases, so there might be some small factor there in terms of driving up prices. Essentially, the Government is creating a demand for rental accommodation that low-income households would not be able to create on their own. However, the underlying factor is there are not enough houses being built. It could be argued there is an opportunity cost in respect of the amount of money the Government is spending on supports. If that money was spent on building houses, it would alleviate some of the rental price pressures. Of course, we need the temporary measures such as HAP until we scale up the building of public housing.

In terms of the reduced yields, rents have risen significantly in recent years, but the proportion of rent the HAP tenant pays to the local authority is based on his or her ability to pay. For instance, in 2016, the tenant paid about 28% of the total payment. That figure fell slightly in 2019 to around 26%. There has been some attempt to maintain the fact the tenant payment is based on his or her income and the local authority is taking up most of the slack in respect of the rising rents. Still, the tenants are paying more over time, but the local authorities do appear to be taking up most of that slack.